The Hamilton Ave Journal 04.02.09: Volume 2 – Issue 80

THE HAMILTON AVE JOURNAL
By JP Prag

Volume 2 – Issue 80

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: WrestleMania fixes the economy

With WrestleMania just a few days a way, the Houston Chronicle took a look at the expected economic impact that the event will have on the local economy.

Last year, WrestleMania 24 generated an estimated $50 million for Orlando, FL. Although not as much is expected this year, any additional revenue would be beneficial. Says Greg Ortale, president and CEO of the Greater Houston Convention and Visitors Bureau:

“It couldn’t come at a better time… The hotel industry has been in free fall…”

With business travel cutting back, the Houston economy has been hit particularly hard. Still, when WrestleMania was in Orlando last year there was hardly a hotel room left. Orlando is a much larger tourist destination city and has more rooms than Houston, so any rooms available means that there are less people staying long periods of time. Stan Skadal, Senior Director of Sales and Marketing for Houston’s downtown Hyatt Regency (the official “fan headquarters” for the WWE) said that 800 of their 977 rooms were filled.

While having 82% occupancy is generally an impressive number, having any availability for a mega-event like this one is not the best of signs.

It is already known that WrestleMania, the Hall of Game, and the Fan Axxess are not sold out. And of the 70,000 people expected to converge on the events, a large number of them than normal appears to be coming for a one-day visit. John Sabor, Senior Vice President of Special Events for the WWE said Houston’s central location makes it much more of a drivable event compared to last year’s event in Orlando.

Mr. Sabor was quite optimistic about this year’s WrestleMania, despite the setbacks with the economy. He has already noted that Houston is in contention for another WrestleMania between 2011 and 2014.

The Journal will be on hand for WrestleMania this year to experience the event first hand and judge the economic activity. This reporter has been at the last two WrestleManias, so there is a basis for comparison.

Newsbites

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

One of HDNet’s largest carriers Time Warner Cable has been at an impasse in negotiations. Although Time Warner has agreed to continue carrying the station while they negotiate, they do reserve the right to pull the station at any time. HDNet is the home of the new ROH television show, so losing a major provider like Time Warner would be a severe blow to the upstart network and wrestling promotion.

The SciFi Channel (soon to by SyFy) sent out a press release touting their ratings climb and how they are now in fifth place among basic cable networks. The press release, though, did not mention the most consistently high rated show on the network: ECW.

In a continual effort to expand PPV availability abroad, the WWE struck a deal with Cablevision in Mexico City, Mexico to start providing PPVs beginning with WrestleMania 25. Cablevision is available in 600,000 homes in the Mexico City area.

The WWE Encyclopedia debuted at number ten on the New York Times best seller list. The WWE has been very successful in their books division and have had many of their releases make it to the top of the best selling list.

TNA has released a wrestling game for the iPhone and iPod Touch. The game is available for download from iTunes App Store. The game plays more like a turn-based strategy game than like TNA iMPACT: The Video Game. Pictures of the game can be seen on TNA’s website here.

TNA President Dixie Carter recently spoke with The Sun UK in response to Vince McMahon’s comments that TNA’s TV-14 programming led to some “reprehensible” programming. She had to say:

“I think it’s wonderful that Vince watches TNA iMPACT.

“And I agree with him that things such as the brutal beating of a sixty-year-old man, a vicious home invasion and gratuitous man-on-woman violence can be seen as reprehensible – and that’s just the last three Monday nights.”

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 April 1, 2009, here are the current standings of our shows:

RAW
Close (This Week’s Rating): 3.6
Open (Last Week’s Rating): 3.5
Percentage Change: ▲ 1.4%
52-Week High: 4.1
52-Week Low: 2.6
All Time High: 8.1
All Time Low: 1.8

SmackDown*
Close (This Week’s Rating): 2.0
Open (Last Week’s Rating): 2.1
Percentage Change: ▼ 4.8%
52-Week High: 2.5
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.

ECW
Close (This Week’s Rating): 1.3
Open (Last Week’s Rating): 1.3
Percentage Change: ▲ 4.0%
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: ▼ 3.0%
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

Analysis:

In the last week before WrestleMania, ratings are not seeing any type of spike. As the WWE officially shifted their audience, it was expected that ratings would decline for a while before a rebound. RAW hit its low point over the summer, but now is back to where it was by this time last year. Still, that number hardly speaks volume compared to the drop in buyrates last year. With the economic conditions much worse this year than last, not having a ratings boost before WrestleMania is not a beneficial indicator.

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. Legacy Born Better T-Shirt ($25)
2. WWE Ultimate Rivals Trading Cards ($2)
3. Triple H Eversoris T-Shirt ($28)
4. John Cena HLR Academy T-Shirt ($25)
5. Jeff Hardy 3 Armband Package ($60, on sale $20)
6. WWE Encyclopedia Hardcover Book ($45, on sale $39)
7. Randy Orton Gas Mask T-Shirt ($25)
8. 25th Anniversary of WrestleMania Silver T-Shirt ($25)
9. 25th Anniversary of WrestleMania Logo T-Shirt ($20)
10. Jeff Hardy Immune to Fear T-Shirt ($25)

The week before WrestleMania looks like a good one as the WWE is selling lots of high prices, high margin items. T-shirts are about as high a margin as you can get since they cost $2.50-$4.00 per unit to produce and are being sold for $20-$28. In this list, T-shirts represent 70% of the items and therefore dollars straight to the WWE’s bottom line.

Also returning amidst these sales is Randy Orton (who was missing for two weeks as discussed last week). The new Legacy shirt can also be attributed to Mr. Orton, showing that perhaps he has been able to regain some of his sales luster.

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. Main Event Mafia – Black T-shirt ($19.99)
5. Autographed Sting Baseball Bat ($149)
6. Frontline T-Shirt ($19.99)
7. Cross The Line Triple Pack ($24.99)

Just removing Christian Cage from the list last week was enough of a change for TNA. That is almost too much for them to do anything else to the list for the next month!

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
5 (Apr) WWE WrestleMania 25 (Houston, TX)	6 RAW (Houston, TX)	7 SmackDown / ECW (Austin, TX)	8	9 ROH TV (Philadelphia, PA)	10 ROH TV (Philadelphia, PA)	11
12	13 RAW (Atlanta, GA)	14 SmackDown / ECW (Knoxville, TN)	15 RAW Live (Dublin, Ireland)	16 RAW Live (Dublin, Ireland) SmackDown / ECW Live (Cologne, Germany)	17 RAW Live (Glasgow, UK) SmackDown / ECW Live (Strasbourg, France) TNA Live (Elmira, NY) ROH Live (Montreal, Quebec, Canada)	18 RAW Live (Aberdeen, UK) SmackDown / ECW Live (Salzburg, Austria) TNA LockDown FanFest (Philadelphia, PA) ROH Live (Markham, Ontario, Canada)

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, Vince McMahon’s comments about TNA were a hot button topic. First from TAT:

I wonder if Vince will be making the same comments about TNA when his currently-PG audience grow up and demand a more adult-themed product?

It will most likely sound like these quotes from Vince McMahon throughout the late 1990’s and early 2000’s:

“Our fans today are sophisticated… Our fans know sports entertainment, they appreciate performances and story lines. It’s the closest thing to a live athletic sports soap opera you’ll find.”

“In America it’s live by the sword of freedom of expression and the will to die by it as well.”

“So we’re living by that sword, and we’re going to cut every now and then from it’s backlash.”

“The standards are being lowered, not just on the Internet, but in all of news and media.”

But yes, Mr. McMahon does has a history of changing his product and his mind about what battle he is fighting for. Donners follows up with his thoughts:

Putting aside the obvious hypocritical nature of McMahon’s comments, I am just astonished at the arrogance of telling another wrestling company what sort of product they should provide.

Will he also lecture RoH on hiring more muscular wrestlers, or CZW on employing rest holds?

He lectured WCW and ECW when they were around and continues to do so to this day.

Leaving behind Mr. McMahon, we move on to his prized product WrestleMania and its potential buyrate. Rob Rabies says:

Another thing you might want to take into consideration vis-a-vis buyrates is the fact the increasing saturation of HD sets in the household. This increases the chances of them selling the HD feed, which will net them more revenue. So, even if they had a similar # of buys compared to last year, if they have more HD buys as a percentage of total buys, they take in more revenue from the PPV stream. Then again, there is also a possibility that people will say “screw it, I’m buying WM, but I’m saving the 10 bones and opting out of HD.”

You have to also consider that in other countries WrestleMania is discounted. Also, the value of foreign currency in relation to the US dollar has fallen considerably in the last five months. The WWE even took a $4 million impairment charge for this last quarter. When you combine all of these factors, the average price of $55 seems to be in line.

The other questionable seller was Randy Orton who was dropped from the list for two weeks before returning this week. Guest#3590 hypothesizes:

To be fair, there may be a more obvious explanation for Orton’s drop out of the top selling items list: When he was in the list he was a tweener getting substantial face pops!!! Since then WWE has firmly put their weight behind establishing Orton as an uber-heel (its actually quite ironic Orton is facing HHH at ‘Mania with HHH as the superman babyface, as WWE very much seems to be developing Orton as the new HHH 2001-era mega heel!)

Heels traditionally don’t move merch like faces unless they are NWO-style cool & charismatic heels. Hence why you rarely see Chris Jericho or Edge on these lists, despite being 2 of the most over men on the WWE roster.

Well, this week would seem to contradict that idea. True, we do not often expect to see heels in the Top Ten, but Randy Orton had consistently been on the list until the push to WrestleMania. Brett proposed another theory that may hold water:

I have another theory why people may have stopped buying Orton’s shirt. Granted, I’m not saying it has nothing to with Trips, but just throwing this out there. The shirt has been selling well for like a month and a half, two months. Especially in this day and age, a month is a long time, so it’s possible that everyone that wanted the shirt already bought it. Just a thought.

Yes, market saturation is highly likely, though that would be more expected after WrestleMania. This should be the time of year when sales are on the uptick. To see a sudden drop in one item coupled with slouching ratings is not a good sign for that WrestleMania buyrate. Ryushinku sums up that thought:

I think if they get anything about 800,000 or better with Wrestlemania, they’ll be happy. Maybe that’s the wrong word, ‘satisfied’ perhaps given the circumstances at present.

That seems more like it. The WWE is looking to ride out the current conditions and remain profitable. So long as they can continue to do that and have an obscenely high dividend yield they seem to be content with business as usual.

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 #80 (Volume 2) of THE HAMILTON AVE JOURNAL. Join us next week as we get ready to ring the bell again.

Till then!