wrestling / Columns

The Hamilton Ave Journal 03.05.09: Volume 2 – Issue 76

March 5, 2009 | Posted by JP Prag

By JP Prag

Volume 2 – Issue 76


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 Hamilton Ave Journal


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: Employees tossed out

In the top story of 2008 for the Journal, former WWE wrestlers Scott Levy (Raven), Christopher Klucsarits (Kanyon), and “Above Average” Michael Sanders filed a class action lawsuit against the WWE. The suit contended that the WWE violated the contracts of the individuals and all similar persons by improperly categorizing them as “independent contractors” instead of “employees”. By this mis-categorization, the WWE would not have withheld correct taxes, denied benefits to individuals, and in basic form violated the terms of the original contract.

No specific monetary damages were every claimed, but the two sides have been a fierce battle or legal paperwork trying to dismiss each other’s claims. And in this part of the story, it looks like the WWE has scored a successive blow.

According the Stamford Advocate, Senior U.S. District Judge Peter Dorsey agreed to the WWE’s motion to dismiss and the case was ended in count.

Many believe that this is the end of the story, but it is far from it. The case was dismissed without prejudice, which means that the group can always bring the suit up again. The Judge actually specifically noted in his dismissal that it had more to do with the plaintiff team’s legal complaints that needed further clarification. He was up to hearing the case, but only if specific damages were outlined and if a more clear definition of the laws that were violated were outlined.

The plaintiff team said they were still considering their options. At this point, they could ask the judge to reconsider his decision, make an appeal to a higher court, or reclassify their suit and try again. The bottom line is, Scott Levy, et al. are not done with this case by any means.

Plenty of cases that have been dismissed at one point or another have ended up in a favorable determination in the long run. The Journal stated at the beginning of this that the case is most likely going to be 3-5 years. This is still well within the first year of the case, so there is plenty more action to come. Per usual, the Journal will keep a close eye on any developments.

WWE 2008 Results – Part 2

Last week, the Journal took a look at the WWE’s Q4 results. As expected, the WWE saw a drop in revenues pretty much across the board, though costs were down in comparison to the rest of the year. There were also several impairments associated with lower exchange rates, so the true numbers were in a bit of a murky zone.

But with Q4 in the books, the total year could be looked at in great detail. For the entire year, the WWE increased revenue 8.4% to $526.5 million. But at what cost? Net income actually dropped 12.9% to $45.4 million. As was seen throughout the year, the WWE was able to increase revenue (except in the forth quarter), but only after greatly increasing costs to get there. So the bottom line is the WWE spent most of 2008 making less money off of more sales. Since the end of the Q3 in 2008, the WWE has been committed to cutting cost and thus far have done so. But it remains to be seen if they can cut operating costs and cost of sales down as those still continued to rise as a percentage of revenue.

For the entire year, Operating Income was 13.4% of revenue compared to 14.1% in the prior year. Similarly, Net Income was 8.6% of revenue compared with 10.7% of revenue in the prior year. This stands in line with the statements made above and not unexpected given how the WWE operated in 2008.

Meanwhile, what is more interesting is the asset situation. Cash on hand dropped from $135.8 million to $119.7 million, showing the WWE spent more money paying out their dividend than they took in. Since cash from operations was not enough to offset the dividend, that means that WWE had to shed quite a bit of dollars. Short term investments also saw a large drop, going from $130.5 million to $57.7 million.

Over on the other side of the coin, short term liabilities decreased from $71.6 million to $58.2 million. This is still a large amount of debt, but paying down any debt is beneficial to a company in this client. The quick ratio (Current Assets to Current Liabilities) at the end of 2008 was 4.80 compared with 4.86 at the end of 2007. Overall, that is not much of a change and shows that the WWE could pay off all their debt tomorrow with little troubles.

At the end of the day, the WWE is still sitting on a large pile of cash and was profitable last year. Though they did not do quite as well as in 2007, the WWE is still in a strong position. The company is in no danger of going under and should look forward to a number of years of sustained existence.


Some items of note in the rest of the wrestling business world:

  • Never looking too late for a marketing partner, the WWE and Kmart have come to an agreement for advertising WrestleMania 25. Says Michelle Wilson, Executive Vice President of Marketing for the WWE:

    “Kmart has been a fantastic retail partner for WWE. This partnership offers WWE fans one more way to purchase merchandise commemorating this historical WWE event… Kmart is a valued partner whose participation will help make the 25th Anniversary of WrestleMania an even bigger success.”

  • As part of the changes associated with how the WWE does business, wrestlers can no longer take “draws” on their pay. Previously, wrestlers could borrow money ahead of time that would later be withdrawn from future paychecks. The WWE has decided to end this policy most likely to simplify accounting and make the company compliant with regulations.
  • The WWE also launched two international projects this week. First up, the WWE started airing SmackDown on March 2, 2009 in Turkey on the Fox network. Says Emre Mumcuoğlu, Director of Programme Acquisitions at Fox Turkey:

    “Fox Turkey is delighted to launch WWE in Turkey, one of the biggest entertainment shows in the world. We hope that it will receive the same success with the Turkish audience as it has worldwide.”

    Meanwhile, just a few days earlier on February 28, 2009 WWE launched SmackDown on TV4 in Sweeden. Noted Johan Kleberg, CEO of TV4 Sport:

    “It is with pleasure that TV4 Sport welcomes back WWE and SmackDown to Sweden. At TV4 Sport we understand that there are already thousands of WWE fans in Sweden. The launch of SmackDown on our network will mean creating an even bigger fan base.”

  • It was not all good press for the WWE this week. The Houston Press picked up on the story of the WWE pulling talent from Booker T’s charity show and cast a very negative light on the situation. Although Booker T works for the competition, going after a charity show does not bode well for the WWE’s image.


    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 Wednesday March 4, 2009, here are the current standings of our shows:


    Close (This Week’s Rating): 3.8
    Open (Last Week’s Rating): 4.1
    Percentage Change: ▼ 7.3%
    52-Week High: 4.1
    52-Week Low: 2.6
    All Time High: 8.1
    All Time Low: 1.8

    Close (This Week’s Rating): 2.3
    Open (Last Week’s Rating): 2.2
    Percentage Change: ▲ 4.5%
    52-Week High: 2.7
    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.

    Close (This Week’s Rating): 1.4
    Open (Last Week’s Rating): 1.4
    Percentage Change: ▲ 3.7%
    52-Week High: 1.5
    52-Week Low: 1.0
    All Time High: 2.3
    All Time Low: 0.6

    TNA iMPACT**
    Close (This Week’s Rating): 1.3
    Open (Last Week’s Rating): 1.3
    Percentage Change: ▼ 2.3%
    52-Week High: 1.3
    52-Week Low: 0.9
    All Time High: 1.3
    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


    Although RAW lost their top ratings, the drop was not as far down the scale as they have been in the past months. The real winners, though, were SmackDown and iMPACT. SmackDown scored their highest rating on MyNetworkTV (and hence MyNetworkTV’s highest rating ever) with a 2.3. This is actually very close to the ratings for SmackDown on the CW. The last few months of SmackDown on the CW had a mean average of 2.4, so the WWE is in striking distance of getting back to where they were.

    Over on iMPACT, they again set a ratings high 1.3, although there were less viewers this week than last. Many thought that this day would never come for TNA, so showing two weeks of continual strength is an incredibly positive momentum for the company.


    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 ten selling items for the WWE? From WWEShopZone.com:

    1. Jeff Hardy 3 Armband Package ($60, on sale $20)
    2. Triple H Eversoris T-Shirt ($28)
    3. Randy Orton Gas Mask T-Shirt ($25)
    4. WWE Ultimate Rivals Trading Cards ($2)
    5. Hardys Green Pendant ($10)
    6. John Cena HLR Academy T-Shirt ($25)
    7. Hardys Purple Logo Pendant ($10)
    8. WWE Heritage IV Trading Cards ($2)
    9. WWE The Best of Saturday Night Main Event DVD ($34.95, on sale $23.49, on double sale $18.79)
    10. WWE: The Music Vol 9 CD ($13.47, on sale $9.99

    Amazingly, the list maintained the same diversity as seen in the past month. Triple H, Randy Orton, Jeff Hardy, and John Cena dominate the Top Ten with a sprinkling of consumer products in between. Having four people selling as much will definitely help the WWE’s numbers in Q1 this year, something they need after the Q4 of last year.

    TNA sometimes releases a list of top selling items on ShopTNA.com. According to the site the top selling items were:

    1. 2006 Complete Year PPV DVD Set ($69.99)
    2. 2007 Complete Year PPV DVD Set ($69.99)
    3. TNA Logo T-Shirt Special ($24.99)
    4. Christian Cage: The Instant Classic DVD ($19.99, on sale $10)
    5. Main Event Mafia – Black T-shirt ($19.99)
    6. Autographed Sting Baseball Bat ($149)
    7. Frontline T-Shirt ($19.99)
    8. Cross The Line Triple Pack ($24.99)

    The good news? TNA updated their top selling list. The bad news? TNA left Christian Cage on the list! So for four weeks TNA has continued to advertise the ECW superstar. Although this list may be more accurate, there are times to not let your competition show up on your website.

    Also of interest, TNA has added in some large packages from DVD collection. One things that TNA has been good about is moving old inventory by packaging it into new products. This way, they at least get something for the products instead of leaving them in the warehouse and dealing with the carrying costs.


    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.

    Sunday Monday Tuesday Wednesday Thursday Friday Saturday
    8 (Mar)

  • NWA Showcase (Hollywood, CA)
  • RAW / ECW Live (Savannah, GA)
  • SmackDown Live (Columbia, SC)
  • 9

  • RAW / ECW (Jacksonville, FL)
  • 10 11 12 13

  • RAW / ECW Live (Odessa, TX)
  • SmackDown Live (College Station, TX)
  • TNA Live (Shepherdsville, KY)
  • ROH Live (St. Louis, MO)
  • 14

  • RAW / ECW Live (Lubbock, TX)
  • SmackDown Live (Beaumont, TX)
  • TNA Live (Cincinnati, OH)
  • ROH Live (Indianapolis, IN)
  • 15

  • RAW / ECW Live (San Angelo, TX)
  • SmackDown Live (Waco, TX)
  • 16

  • RAW / ECW (San Antonio, TX)
  • TNA iMPACT (Orlando, FL)
  • 17

  • SmackDown (Corpus Christi, TX)
  • TNA iMPACT (Orlando, FL)
  • 18 19 20

  • RAW / ECW Live (Rolla, MO)
  • TNA Live (San Juan, PR)
  • ROH Live (Elizabeth, PA)
  • 21

  • RAW / ECW Live (Topeka, KS)
  • SmackDown Live (North Little Rock, AR)
  • ROH Live (New York City, NY)
  • 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, the history of Japanese wrestling on TV was clarified quite a bit. First from scipio2009:

    Quick comment on the newsbites:

    -Pro Wrestling NOAH has only been around for a handful of years. I’m assuming that you’re trying to tie the history of Shohei Baba’s All Japan Pro Wrestling(AJPW) on NTV.

    I guess its an easy mistake to make.

    Furthermore, BringTheNoise added:

    To get 55 years, you’d probably have to include Rikidozan’s JWF. Anyway, there has been wrestling on the channel for 55 years, and as scipio says, an easy mistake to make.

    Thanks for the clarification. Now it would appear the story is that there is no wrestling on over-the-air television for the first time in 55 years.

    Outside of Japan, one of the big points was around how the WWE seems to be not be on the same page. Iron Knee asks:

    The disconnect between Vince McMahon, scouts, and Creative may point to a larger long-term problem with the WWE: who exactly is in charge? If Vince wants things done a certain way, then why aren’t they being done that way? Whatever you think of his mindset, he essentially is the WWE; so, who’s giving Creative and the scouts a different set of criteria? Is it Shane or Stephanie?

    You are correct. Whether we agree with the decisions Vince McMahon makes or not, they are his decisions to make. That said, the criteria he uses is not being conveyed to the other teams. Shane McMahon works in global media and spends most of his time trying to expand the WWE product around the world, so he is less concerned with the creative side. Stephanie McMahon is the head of creative, so it is likely that she has her own set of criteria as well.

    That said, the problem is not that people are being different set of criteria, but that they are most likely not being given any direction at all. Vince McMahon, Stephanie McMahon, people in development, creative, agents, and many others all have their own ideas about what they are looking for. But they have not come together and decided what it is they are all looking for. Without that consensus, than the problems and miscommunications will just continue.

    Plenty more was written, so be sure to take a look. And of course, a week would not be complete without a good dose of JP Prag’s own HIDDEN HIGHLIGHTS!!


    This concludes Issue #76 (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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