A good argument for the fact for only one federation satisfying market demand is the current war between WWF and WCW. Neither of them can share success with each other, as one will be on top of the market, while the other one suffers losses in profit. Let's look at some cases with the WWF and WCW.
In the late 80s, Ted Turner saw how the WWF was dominating the market for wrestling. He noticed how the programs were doing great on NBC, syndication, and Pay Per View. WWF was very profitable in the 80s, so "billionaire" Ted put wrestling on TBS, and the great NWA, which then became WCW tried to eat into the WWF's profits. So you could say that the WWF now had some stiff competition, eh?
That's not exactly the case. WCW was struggled in the early 90s, failing to become the top federation as intended. It somewhat became uncertain if WCW would survive those early 90s, since they had to cut costs every so often. However, WCW had a stroke of luck. The WWF started to really self-destruct in the mid 90s. The steroid trial, the weak booking, the demand for their product, and elevating guys like "All American Lex Luger" was really lowering WWF ratings, merchandise, and ticket sales. The star for the 80s and early 90s, and still top draw then, Hulk Hogan also left the WWF since he didn't want to put over any other wrestlers.
The stage was now set. WCW then hired Hulk Hogan, and they challenged the WWF in 1995 with the creation of Monday Nitro. I'd say when Nitro hit the scene, the two federations were about equal. Both were getting the same ratings for their shows, and about the same attendance for any event as well. So one will sink, and one will swim if the 'monopoly' argument is correct, right? Indeed.
In 1996, Nitro was running their shows live, and the WWF was still taping their shows. Nitro increased their time to 2 hours, and the WWF kept using the same formula they were successful with in the 80s/early 90s. Also by then, WCW had a handful of past WWF stars, like Ray Traylor, Hulk Hogan, Macho Man, and a few others. However, they weren't what was needed to dominate the wrestling market. The WWF had a decent roster of a few wrestlers who fans really loved watching. Then, in a remarkable move, two of those WWF stars, Scott Hall and Kevin Nash signed on with WCW!
Hall and Nash was exactly what WCW needed! The even competition was then over, as the Outsiders/NWO brought incredible ratings to WCW. So from mid 1996 to the spring of 1998, WCW was on top...non stop! The WWF was now getting crushed, wrestlers were unhappy, and their profits were disappearing. WCW, on the other hand, was very profitable, even with the Million Dollar contracts they were paying their wrestlers, and even with the high production costs. The WWF, the former monopoly of wrestling, fought back in late 1997.
Sure, the WWF was putting on a stronger product, but WCW began to self-destruct itself in late 1997. Their main event club became very exclusive, and wrestlers became power hungry as well. Hulk Hogan, who helped fuel the new WCW revolution, developed an ego to where he must have the World Title at all times, and no younger wrestlers can take 'his spot'. This effect began to affect the WCW product in whole, and the interest for the WWF product grew.
In 1998, the WWF, with fresh angles, storylines, and the great Stone Cold Steve Austin, finally broke the monopolistic barrier. In fact, they increased the demand for wrestling, setting all time highs in television ratings! Arenas were selling out again, merchandise sales exploded, and a lot of this came at the expense of the dwindling WCW product. WCW tried to remain on top with a special Goldberg vs. Hulk Hogan title match at a Georgia Dome Nitro, but the politics of the earlier year lost interest in the whole product, despite the record numbers for that Nitro. In fact, after this Nitro, RAW has never lost a Monday night battle. WCW went straight down, and the WWF went straight up. Same thing in 1995-1996 folks!
For today, the WWF's ratings are still strong, but WCW is achieving all time lows. WWF achieved all time lows in 1996-1997 as well. WWF was losing money then, thus reasons why guys like Bret Hart were asked to get out of their contracts. WCW, right now, is on pace to lose over $60 Million this year alone! Many talent has been unhappy this year, and it seems that whatever WCW does, the WWF still rules the ratings. Why? The WWF satisfies the market demand for wrestling, and WCW doesn't for now. One federation dominates! Thus, a monopoly!
I'd also make the case that the WWF and WCW, together, are a monopoly. Just look at the other wrestling federations trying to make it onto television. Some federations go out of business even trying to compete with these two, and the closest competition, ECW, can't pay their wrestlers, trying to become the top federation. ECW really has to fight for any television shows because many cable networks are high on WWF or WCW. WWF and WCW flood the cable network, thus making it harder for other independents, even ECW, to get a powerful deal.
But for the most part, I'd say that only ONE federation will stay on top. Through mistakes or just stronger competition, they can lose that spot. But whoever becomes that top federation wins all of the profits of the wrestling market, while the others suffer losses. The WWF put themselves in a strong position as the top wrestling monopoly, with their deal with Viacom. They are looking to continue growing in the market, despite what other federations do. WCW is now trying their best to grab WWF viewers, and/or new wrestling fans. Whether WCW can challenge the WWF again...well, only time will tell. But in past cases, the monopoly must crumble to really win.
WWF rules most of the wrestling profits, and WCW, right now, will fight to do whatever to get profits....especially after the early 2000 WCW lost so much money.
Economics of Wrestling