wrestling / Columns
The Hamilton Ave Journal 03.18.10: Volume 2 – Issue 129
THE HAMILTON AVE JOURNAL
By JP Prag
Volume 2 – Issue 129
ABOUT THE JOURNAL
The Hamilton Ave Journal is the only wrestling news report focused solely on the business of wrestling. Here in the Journal we not only look at the stories that are important to the investor and business-minded person, but also delve deeper into stories that most fans of wrestling would overlook. That is because the Journal is about getting the heart of the matters that affect the companies and outlooks of the wrestling world.
And where is Hamilton Ave? That is the location of the WWE Production Studio in Stamford, CT, and thus the most powerful place in the wrestling world. Besides, The East Main Street Journal just does not have the right ring to it.
Who am I? I am JP Prag: consultant, entrepreneur, businessman, journalist, and wrestling fan.
Now, ring the bell because the market is open.
The Journal’s front page area known as What’s News isn’t just about telling you what has happened. The stories in this section are about what will have an effect on the wrestling industry, individual federations, and the wallets of the fans.
LEAD STORY: Another Journal
The WWE strong financial results and subsequent stock performance have gotten them some attention from the mainstream financial outlets. Another paper known as the Journal (called the “Wall Street Journal”) recently reviewed the WWE’s international expansion and how the product is shaping up. According to the piece:
WWE’s fastest growth has been abroad: Between 2000 and 2009, the public company, founded in 1982 by chairman Vince McMahon, increased its revenues outside North America from $9 million to $127 million. International income now accounts for nearly 27 percent of WWE’s total revenue, and it is televised in 145 countries, in 30 languages.
WWE CFO George Barrios participated in the Roth Growth Stock conference on March 16, 2010 where he reiterated the international growth goals. Mr. Barrios said that he and the company expect revenue to grow from $127 million in 2009 to $175 million in 2012 with 64% in Europe, 27% in Asia/Pacific, and 9% in emerging markets like Latin America and China.
But as the article states, the WWE is not just looking to export Americana but also use local stars to build the brand. Says Executive Vice President of Creative Development and Operations Stephanie McMahon:
“We are making more of an effort to recruit from other countries.”
As part of that, Ms. McMahon stated that the company is actively looking to recruit someone from China. Though China is only expected to make up a small proportion of international revenue by 2012, the WWE does see it as the biggest market for growth and wants to be prepared for when that time comes.
Today, though, the WWE second biggest market is India. As the article went on to profile certain non-American born stars and others that simply pretend to be, the Journal profiled the Great Khali:
Whenever the Great Khali walks onstage, Punjabi music plays, and he once gave a fellow wrestler goats and chickens as a peace offering. Khali, born Dalip Singh Rana in Himachal Pradesh, is often portrayed as an oaf, but he’s hailed as a hero at home. When he visited in 2008, he was greeted by President Pratibha Patil. “He’s like a god over there almost,” Stephanie McMahon says. Good news, since India represents WWE’s second largest TV distribution agreement outside the United States.
Others stars that were profiled included:
On the subject of how the WWE affects global audience, the article noted the cultural change in Japan:
Japanese crowds, who used to clap politely, now imitate American audiences, chanting “you suck” when a villain appears.
While not presenting too much new information, this article in the Wall Street Journal certainly introduced the company to many investors and business minded people in a positive light. As a tie in, the Wall Street Journal magazine did an interview with Triple H, which can be seen here:
Newsbites
Some items of note in the rest of the wrestling business world:
“You have to go where the money is…”
O’Donoghue brings more than 12 years of experience as a business executive and attorney within the sports and entertainment industries. Most recently, O’Donoghue was Managing Director, Business Affairs at the United States Tennis Association (USTA), where she worked on the US Open, the Olympus US Open Series, Davis Cup and Fed Cup and handled business affairs for the USTA Billie Jean King National Tennis Center. Prior to her tenure at USTA, O’Donoghue served as the Chief Legal Officer, Head of TV & Business Affairs at the Women’s Tennis Association. She began her career as an attorney with the law firm Proskauer Rose in theirSports Practice Group.
Ms. O’Donoghue is the second recent hire from the USTA as Executive Vice President of Marketing Michelle Wilson (hired February 2009) also hails from there.
WWE has eliminated using folding metal chairs to “strike” an opponent in the head. The WWE penalizes through fine and/or suspension the following:
– The intentional use of a folding metal chair to “strike” an opponent in the head.
– Any blow to the head that is deemed an INTENTIONAL act
– The Fine and/or Suspension will be directed by the EVP of Talent Relations (John Laurinaitis).
It would appear that despite publically denying the findings of the Sports Legacy Institute on the long term effects of concussions, the WWE is on board to make a chance to their policies that is in line with the institute’s findings.
In the Marketplace we look at the trends in television ratings. This section is less for critical analysis by the Journal but more for the reader to see what is really going on and to draw their own conclusions.
As with stocks, here in the Journal we track the progress of television ratings. If ratings are the barometer by which we judge the product, then over the course of 52 weeks we should be able to see patterns, trends, and anomalies.
For the week ending March 17, 2010, here are the current standings of our shows:
RAW
Close (This Week’s Rating): 3.7
Open (Last Week’s Rating): 3.4
Percentage Change: ▲ 9.1%
52-Week High: 4.5
52-Week Low: 3.1
All Time High: 8.1
All Time Low: 1.8
SmackDown*
Close (This Week’s Rating): UNAV
Open (Last Week’s Rating): 2.0
Percentage Change: N/A
52-Week High: 2.2
52-Week Low: 1.6
All Time High: 5.8
All Time Low: 1.0
* SmackDown! ratings may include fast overnight if final ratings are not posted. Also, SmackDown! ratings are for the prior week as overnights are not available before this article goes to print.
TNA iMPACT**
Close (This Week’s Rating): 0.8
Open (Last Week’s Rating): 1.0
Percentage Change: ▼ 14.3%
52-Week High: 1.5
52-Week Low: 0.7
All Time High: 1.5
All Time Low: 0.6
** TNA iMPACT’s are for the prior week as ratings may not be available at the time of the Journal’s posting
SuperStars***
Close (This Week’s Rating): 0.8
Open (Last Week’s Rating): 0.9
Percentage Change: ▼ 13.8%
52-Week High: 1.1
52-Week Low: 0.7
All Time High: 1.1
All Time Low: 0.7
*** SuperStars ratings may include fast overnight if final ratings are not posted. Also, SuperStars ratings are for the prior week as overnights are not available before this article goes to print.
NXT
Close (This Week’s Rating): 0.9
Open (Last Week’s Rating): 1.0
Percentage Change: ▼ 10.0%
52-Week High: 1.4
52-Week Low: 0.9
All Time High: 1.4
All Time Low: 0.9
Analysis:
Obviously, the big news on the rating front is TNA iMPACT and the 0.84 rating for the show. This is the lowest rating since December 31, 2009 which was the four hour iMPACT on New Years Eve that averaged out a 0.7 rating. Before that it was February 15, 2007 when the show–not in its usual timeslot–scored a 0.6 rating. But before that it was January 24, 2007 with a 0.8 rating.
As one would think, for TNA this is a disappointing number. However, one has to look at what Spike TV was doing in that timeslot beforehand and judge to that. Spike TV has been average around 1 million viewers in prime time and TNA is still besting that number. Spike’s goals are to move up the chain from 22nd place hope to advance on the numbers Disney and USA receive.
RAW’s rating were up this week to a 3.7, pretty much in line with two weeks prior. It would appear that not even Stone Cold Steve Austin and a number of big advertised matches could move the dial that much. While comparing iMPACT to RAW would make iMPACT look terrible, iMPACT’s rating are still rather high for cable. Even RAW is regularly beaten by Hannah Montana, Pawn Stars, Spongebob Squarpants, iCarly, NCIS re-runs, and now Sonny with a Chance (a show that premiered after the Hannah Montana season finale to a record 5.9 million viewers).
Still, moving to Monday’s is already starting to look like it is cutting in to TNA’s viewership, but it is early yet. This is a long term experiment and the Journal cannot stress enough that a couple of bad ratings is not going to hurt TNA. The company has a three year contract with Spike and makes their money through rights fees and international distribution of their product. Given that, barring any massive expenditure or lawsuit payout TNA should be safe for at least these three years.
Not to be forgotten, since TNA left Thursday night SuperStars has also slid downward. The show did a 0.81 this week while the iMPACT replay scored a 1.0 (basically in line with last week’s Monday night rating). Meanwhile, NXT was the hardest hit sliding another 10% to a 0.9 rating. At this point, NXT is in line with or below ECW in ratings and looks not to be heading up anytime soon.
We all know that wrestling is a business, but we don’t often pay attention to what sells and makes money. Money and Investing looks into the top selling items in the world of wrestling and any interesting figures that may have come out this week.
What are the top selling items for the WWE? WWEShopZone.com releases a list of varying numbers to show what is selling for them:
1. John Cena Never Give Up YOUTH T-Shirt ($22.00)
2. Randy Orton Lobotomy T-Shirt ($25.00)
3. John Cena Never Give Up Sweatband Set ($12.00)
4. John Cena Never Give Up Baseball Cap ($20.00)
5. John Cena Never Give Up T-Shirt ($25.00)
6. John Cena Never Give up YOUTH Basics T-Shirt ($9.99)
7. Triple H Return to Fear T-Shirt ($28.00)
8. John Cena Never Give Up Pendant ($10.00)
9. Edge Throwback T-Shirt ($25.00)
10. Miz I’m Awesome T-Shirt ($25.00)
11. WWE Black Gift Bag ($3.00)
12. WrestleMania 26 White T-Shirt ($20.00)
13. Austin 3:16 T-shirt ($20.00)
14. WrestleMania 26 Football Jersey ($49.00)
15. John Cena Illustrated YOUTH T-Shirt ($9.99)
16. Bret Hart Emblem T-Shirt ($25.00)
17. WWE Slam Attax Trading Cards ($3.00)
18. John Cena Attitude Adjustment YOUTH T-Shirt ($25, on sale $11.98)
19. John Cena Attitude Adjustment Basics YOUTH T-Shirt ($9.99)
20. NWO Retro Logo T-Shirt ($20.00)
The John Cena dominance continues as Mr. Cena took control of 45% of the list. Of special note is how many of those items were “youth” related, including the number one item. It is rare that youth items make the list, nevertheless take up 20% of it. This just goes to show how the WWE’s PG program is not affecting the product they sell. The WWE does have to be careful, though, because their children’s items do not bring in as much revenue because of their price. The event merchandise numbers will be particularly interesting to watch out for next quarter.
Also there was a bit of retro action this week as not only did Steve Austin make the list, but so did the nWo. The former seems to be there for an obvious reason, but perhaps the WWE is capitalizing off a TNA program to make sales of their own?
TNA sometimes releases a list of top selling items on ShopTNA.com. According to the site the top selling items were:
1. Don’s Insane Brown Bag Special ($20)
2. “Hulkamania” T-shirt ($19.99)
3. Lockdown Fan Interaction General Admission Ticket ($55)
4. Hulkamania Bandana ($9.99, on sale $7.99)
5. AJ Styles “Phenomenal One” T-shirt ($19.99)
6. Beer Money “Live Event Shirt” ($19.99)
7. Desmond Wolfe Soccer Shirt ($29.99)
8. Hulk Hogan – Change T-shirt ($19.99)
9. Hulkamania Wrst Bands($9.99)
TNA appears to be getting on the ball as the list was updated for the second week in a row. While Hulk Hogan still dominated and Beer Money took their enviable spot, two others also made the list. Desmond Wolfe made his premier with a slightly more expensive soccer shirt and the heavyweight champion AJ Styles returned after a long hiatus. While AJ’s placement should be vindication for his spot, perhaps Mr. Wolfe’s appearance here will lead to additional screen time. As stated last and on many other weeks, though, TNA has not always listened to the numbers when it comes to the programs they want to do.
Wrestling isn’t just about watching and reading. The best way to be a wrestling fan is to experience it live. Where is wrestling coming to in the next 2 weeks? The Personal Journal answers that question.
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Do you know a wrestling event coming up? Send one in to The Hamilton Ave Journal and we’ll be sure to add it to the list.
The Editorials section is designed for you, the readers, to respond to the views presented in the Journal, send an important news item, or talk about another overlooked business related item in wrestling. Just beware: the Journal reserves the right to respond back.
From the commentary section last week, some people still seem to be confused at the words written in the Journal, like pro life (who has been corrected for spelling, capitalization, and grammar):
Why don’t we all talk about the elephant in the room?
Hogan and Bischoff are killing TNA.
Thankfully, Guest#4567 was paying attention:
Because it has been addressed and isn’t in the room.
It was clearly stated that TNA has a new three year contract. So as long as they put out shows, Spike has to pay them a set amount. Now Spike may suffer in terms of ad rates because of the ratings, but TNA will not in the short term. In three years time, who knows?
But since Spike must pay or default, they will have a time slot for TNA.
The fact that TNA also airs in other countries has also been addressed in previous Journals. So they will be a viable business for some time.
The ratings for Hogan’s match may be low, but he is moving merchandise. Four of TNA’s top 10 selling items are Hogan related. So he is making them money now, while learning that “lacing up the boots” may not be so useful. As a one time thing it is relatively harmless.
That does sum it up. Perhaps people will stop announcing the death of TNA or the WWE due to booking decisions and pay attention to the bottom line… literally.
Now, there was an interesting conversation to how to view TNA’s future should things not go as great as they hope in three years time. When another Guest said that TNA would die if they didn’t use RVD correctly, Guest#3376 chimed in with:
No, they are a viable business with their domestic ratings. If they don’t improve they will merely be a distant number two. They don’t really have to improve except to fulfill their ambitions, unless the new contracts are huge.
And that seems to be the part that people are forgetting. So long as revenues are greater than costs then TNA will exist. That is all they need to happen. Sure, they would like to be getting 4.0 ratings and selling out 15,000 seat arenas, but they could just as well exist with 1.0 ratings and not selling out 5,000 seat halls. TNA could go on forever as a distant number two if they can accept that as their position. Right now, they want to become the top of the mountain and they are going all out to make that happen. They could very easily fail and just return to where they are and continue on for many years to come. So long as Spike is ok with their ratings and they keep costs under control, TNA can move forward as a smaller company.
And let us be clear: TNA is not a small company. They are smaller than the WWE, but they make more than $50 million in revenue and are profitable. Few companies ever reach that level of success, and fewer have reached the heights the WWE has gotten to. Both companies can easily exist in their own spheres and do well; the success of one does not equate to the death of the other. Guest#9192 follows up on this thought:
Between TNA’s domestic and international ratings (where they often beat WWE) they rake in more than enough revenue to be substantial. A lot of people seem to forget that a 1.0 is still a pretty big cable rating. Though I don’t know how people can’t see that, when WWE is only doing about 3X that much.
And to be fair, the WWE should be compared to the rating sit used to do (6.0). When you see that the WWE has lost half of its audience and yet it is at its highest revenue and profit numbers ever, one should be able to see that total audience does not necessarily mean success. Brett brings this all together:
They are the number two promotion in North America and probably the world, “distant” as they may seem.
Not probably; TNA is the second biggest wrestling promotion in the world. No one has the distribution and numbers they do except the WWE. While the WWE is stronger than them at home, that is true in many markets like India, Australia, the UK, and others.
Another guest in Guest#7621 was not completely clear on the timeline of TNA an WCW’s existences:
If we’re using the assumption that people were aware of WCW because of it previously being JCP, then really you can’t say people weren’t nationally aware of them until they reached PPV. Which was not until November of 1987. So really at best WCW was in existence under seven years then they launched Nitro. TNA has existed closer to eight years now at this point. Basically they have been around the same amount of time. Saying they’re younger is just silly.
No, it is not. First off, WCW is looked at my lost lay viewers as the continuation of the NWA, not just the JCP to WCW under TBS conversion. What you really want to look at is WCW Saturday Night. When TBS went national as a superstation in 1976, Georgia Championship Wrestling launched with it and the Saturday night show. Then, in 1982 at the request of Ted Turner GCW changed the name of the show to “World Championship Wrestling”. This is where the WCW brand began.
From 1982 on, “WCW” was the brand people recognized as wrestling, even as the company in the timeslot shifted around. So by the time a real WCW was formed in 1988, there was already six years of history of the name and another six years of indirect history through GCW. Plus all of the years of NWA dating back the 1940’s also played a role in how WCW was viewed.
By the time Nitro premiered in 1995, the brand of “WCW” existing for 13 years and the continuation of the NWA for over 50. At the same time, WCW has a show on Saturday and Sunday, as well as syndicated shows, PPVs, free shows (Clash of the Champions), and much more. So yes, WCW proper was younger than TNA when Nitro started, but WCW proper is hardly the true history of the brand “WCW”.
Guest#7020 also brought up a few points on this one:
Jim Crockett and the NWA was much more known at the time than TNA is now. It’s two completely different markets. When WCW came to TBS and got lots of press, TBS was one of only a handful of cable channels.
TNA entered Cable several years ago on Spike when there are literally HUNDREDS of cable channels.
TNA has to counter the myth that WWE ended wrestling. There are a lot of people that don’t know another wrestling company even exists after WWE put WCW out of business.
When JCP and WCW forged together, they were already well known and for a large portion of the country the name in wrestling
An interesting synopsis in that the market is much more fragmented now then it was in 1988 or even 1995. As far as TNA’s future goes, tstrike gives his thoughts on what to expect:
I have been waiting all week until I got your fiscal analysis. This tracks to my line of thought about this will be a long ways away from a Monday Night war.
I too, subscribe to the fact of TNA being a extremely viable business with solid backers (the Carters and Panda Energy), a solid business model (not being too dependent on PPVs (a key element of ECW’s doom), and just concentrating on their core elements: TV Ad revenue and International Distribution.
I feel that TNA is actually doing things in reverse of WWE:
1. There isn’t a territory hierarchy to acquire.
2. They are getting plenty of press from the International Markets. If they can turn their investments in that direction, the War may arrive faster than we all think.
3. Once Impact straightens out the kinks (1. Presentation, 2. Delivery, 3. Homegrown Stars), the show will be a force to be reckoned with. I forecast Spike ordering another show next year, but just for the International markets.
There is definite value especially if they can concentrate in the EU market, and attempt to expand in the Orient (by leveraging relationship with New Japan, etc…)
While TNA’s growth may be mostly in the international markets, Spike has little to do with that as Guest#9038 points out:
Spike has nothing to do with international distribution. Exposure of a show on Spike or any network makes it easier to sell a show to other networks, but Spike only has broadcast rights for a show within the US.
Really, as far as business goes, Spike could give a damn about other places TNA peddles their product. It doesn’t affect their bottom line or their goal of overtaking USA network.
Well, Spike would be happy if TNA is stable so they don’t have to worry about their product, so in that respect Spike does care about TNA peddling their product. On the other hand, yes, Spike’s goals are to be the top rated cable station, not just a home for TNA.
Another person to set others off was NotSoFast… with this comment:
Considering TNA has nothing but old WCW parts can you try not to compare them to the WWE…(as they are claiming to compete with them at the moment).
Just saying…financial information is more useful when proper comparisons are made. FYI, that isn’t one of them.
They are not a YOUNG WWE either. Not even close. They are a Smokey Mountain/ECW/WCW Hybrid (with all the worst habits of each).
While many had great responses to this, Guest#8640 sums up the best Journal-style response:
Your consideration isn’t a real consideration. The roster has nothing to do with financial comparisons.
WWE is the proper comparison point. They are TNA’s primary rivals, the leader of the industry, and only real comparison point of size.
In fact, international distribution and growth potential in markets that have been relatively unexposed to WWE or TNA means that TNA will be a contender for some time. Having a strong financial backer and a stable income base puts them on far stronger footing than WCW or the old territories.
Being reliant on television contracts that run for years means TNA has projectable and reliable income. As long as they stay within their means, they are fine for the short term. As long as they produce sufficient ratings for Spike or anybody else who would bid for their product, they have a long term future.
The international distribution is practically free money. They must make a show for Spike anyways. It would be like McDonalds selling the same hamburger over and over while only changing the wrapper.
In business, letting petty matters of prejudice and homerism color your decisions is a fast way to be poor. Objective thinking is far more useful.
Exactly the point the Journal is making. A reliable and steady income stream means much more to TNA than having the praise of all potential viewers. The WWE is the same way; if their networks are happy and paying then they are happy. That is why neither will ever have everything (or anything) that some viewers want. Now Monty takes a look at TNA’s execution of strategy while not being swayed by thinking the product will die based on a one week rating or booking decision:
While the Journal touched upon the fact that TNA will be just fine with a 1.0 rating becase they are guaranteed money from Spike regardless, I think that they need to rethink their strategy on Monday nights if they intend on making the impact (pun intended) that they want.
I think them deciding to start at 9 was a DUMB mistake on their part. The reason the 1/4 show got such a good rating is because of that 1st hour when they were unopposed. TNA should really move the show to an 8-10 timeslot. That will give them an hour jump on the WWE. Their diehard fans will watch regardless, but with that unopposed hour they can probably grab the attention of some WWE fans out there that will watch them until RAW comes on. And who knows? If they run an angle or match that is appealing enough near the 9 o’clock hour and RAW is in a funk, some fans may choose to stay tuned to Impact rather than turning over to RAW.
I think the move to Monday night was a good decision for TNA. God knows I barely watched TNA on Thursday nights since it came on the same time as many other shows that I prefer watching. But I’ve caught both TNA shows that have been on Monday. So for fans like me, having both of them on Monday night is more convenient. The only problem is that they insisted on running directly against RAW which is ridiculous in my view. Ratings may not mean much in terms of finances for TNA right now, but it could spell trouble down the line if their ratings do not grow or get even worse.
Move Impact to 8 on Mondays. Save your best segment until 8:55 to try and keep some of the new viewers that you have. It’s really that simple. If TNA expects to have a fighting chance in this “War”, they can’t expect to go up against a juggernaut without any momentum on their end. Better ratings = More advertising = Happy Spike TV = More Money. Period.
The strategy you lay out makes sense. TNA could also brand it as they are going on early to get the jump on Monday nights and get the action to the viewers sooner instead of a “backing off”. Moving to 8pm could easily be spun to a positive. The only trouble is now the show will be moving timeslots twice in a short period and that usually leads to lower ratings as viewers are confused about when to tune in.
Plenty more was written, so be sure to take a look. And if you enjoy the Journal, why not bookmark 411wrestling.com and make it your home page? You can do that by clicking here.
This concludes Issue #129 (Volume 2) of THE HAMILTON AVE JOURNAL. Join us next week as we get ready to ring the bell again.
Till then!
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