wrestling / Columns
The Hamilton Ave Journal 09.13.08: Volume 1 – Issue 51
THE HAMILTON AVE JOURNAL
By JP Prag
Volume 1 – Issue 51
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.
WHAT’S NEWS
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: WWE on the International Scene
A few weeks back, WWE Vice President of Global Media Shane McMahon visited Mexico in an effort to secure prime-time programming for the company on a premier network. Initial reports were that he was quite unsuccessful, but the WWE sent out a press release this week saying they had signed a new deal with Televisa.
According to the deal, WWE RAW will air on Galavision Sunday afternoons at 3pm starting October 5, 2008. Says Shane McMahon:
“WWE delivers ratings success to our network partners around the world and we intend to continue to build the same level of success with Televisa in Mexico. WWE is very excited to be bringing RAW to Mexican viewers who have a rich lucha libre heritage and who consistently show great enthusiasm for the WWE brand and its Superstars.”
But is this deal as good as being purported? According to Mexican readers of 411wrestling.com, Galavision in Mexico is the equivalent of MyNetwork TV. Although owned by a large network like Televisa, Galavision is more of a small, less watched network. This is similar to MyNetwork TV which is owned by News Corp, the parent company of FOX. What is also interesting is that the WWE already airs in Mexico currently:
So how does getting RAW on another network on Sunday help the WWE? If anything, it might cannibalize SmackDown by putting too much wrestling on one day. Unless there is a financial programming gain, it seems unlikely that this new timeslot and station is of any benefit for the WWE.
Mexico, though, is not the only country the WWE is expanding in. Recently, the Associated Press, Business Week, MSNBC, and other have picked up on the WWE trying to expand their presence in Japan.
Although the WWE does not release revenues by region, Japan is the only country outside of North America to have its own regional office dedicated to one country. Unlike many other countries in the world, Japan actually has its own long history of professional wrestling. In Japan, the style has been more mat and competition based. Crowds tend to be quite during matches and clap for impressive moves. The idea of loud, boisterous crowds and over the top antics were not very commonplace. But according to WWE wrestler and Japanese representative Shoichi Funaki:
“Japanese fans are changing. The key is to give them more opportunities to watch WWE. If they see it, they’ll get it.”
WWE Vice President and General Manager of Japan Ed Wells goes on:
“Even if you’ve never watched it before, you can jump in and start watching because it’s good versus evil. We always refer to ourselves as sports entertainment. We created that genre in the U.S. and it’s something that we are now, as of this year, taking really worldwide.”
Not all are convinced that the WWE can just port their product to Japan. Atsushi Oonita is a Japanese wrestler, former legislator, and a well respected public figure. He feels that the WWE will need more Japanese stars and ideas that appeal to Japanese viewers, like a sumo wrestler. He goes on to say:
“Japanese are a very suppressed people. And so it takes a special kind of performance skill to fire up their passion. You can’t overdo it. But I wish WWE all the best.”
As can be seen by any of the recent WWE financial results, non-domestic revenues are the growth market. The USA is saturated and appears to even be shrinking now. With that, countries like Japan and Mexico will be pivotal to the WWE’s growth. Beyond these regions, Italy, Spain, India, Australia, New Zealand, UK appear to be some of the key battleground areas. In countries like India, TNA rivals the WWE in ratings, so the WWE will have to be fast and put their resources into oversea growth to not lose out to TNA or even NWE.
Signature Pharmacy thrown out, wrestlers still suspended
The government’s case against Signature Pharmacy has been dismissed. The cast involved years of sting operations on the mail-to-home pharmacy alleging that the company was providing illegal substances—including steroids and HGH. When Sports Illustrated released a list of alleged customers of Signature, it led to the suspension of ten WWE wrestlers. Former WWE wrestler and current TNA talent Booker T was on that list and always claimed that it was a mistake. Denying that he should have been suspended, Booker T chose to leave the WWE completely.
According to USA Today:
Albany County Judge Stephen Herrick rapped county prosecutors for their handling of “the complex and unwieldy case” against Orlando-based Signature Pharmacy.
Herrick wrote that prosecutors gave such incomplete information and insufficient instructions to grand jurors that they “have impaired the integrity of the grand jury proceedings to such a degree that a dismissal is warranted.”
Herrick added that the charges — presented to two different grand juries a total of four times — were not well defined. The defendants faced a combined 31 felony and two misdemeanor counts.
The ruling prevents Albany County District Attorney David Soares from seeking new charges against the husband-wife owners of Signature, Stan and Naomi Loomis, pharmacist Michael Loomis and associates Kirk Calvert and Anthony Palladino.
So in the end, the suspensions were meaningless because the prosecutors had not made a case. The WWE, though, reacted to the public attention and suspended wrestlers on an accusation. Some of wrestlers on the list admitted to buying their legal prescriptions from Signature before the Wellness Policy went into affect (which banned using mail-to-home services like this). They were still suspended anyway just for the accusation. It remains to be seen if the WWE will retract the suspensions or even apologize to the wrestlers involved, but that is highly unlikely.
Newsbites
Some items of note in the rest of the wrestling business world:
MARKETPLACE
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. Please note that gaps in the chart below are due to data not being released/available.
For the week ending Thursday September 11, 2008, here are the current standings of our shows:
RAW
Close (This Week’s Rating): 3.0
Open (Last Week’s Rating): 2.9
Percentage Change: ▲ 3.4%
52-Week High: 4.1
52-Week Low: 2.5
All Time High: 8.1
All Time Low: 1.8
SmackDown*
Close (This Week’s Rating): 2.4
Open (Last Week’s Rating): 2.3
Percentage Change: ▲ 4.3%
52-Week High: 2.9
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): 1.4
Percentage Change: ▼ 7.1%
52-Week High: 1.6
52-Week Low: 0.6
All Time High: 2.3
All Time Low: 0.6
TNA iMPACT**
Close (This Week’s Rating): 1.0
Open (Last Week’s Rating): 1.1
Percentage Change: ▼ 9.1%
52-Week High: 1.2
52-Week Low: 0.9
All Time High: 1.2
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:
With the holidays now behind, it was hoped that the wrestling world would recover, but that was not to the case. Both TNA and ECW slipped a bit in ratings this week, but not outside of their normal ranges. SmackDown gained back a bit as well, but did is still below where it was at the beginning of this year. This is especially concerning as SmackDown will most likely see a small drop after their move to the MyNetwork TV in just a couple of weeks. So starting low going into the move will not help SmackDown in this time of need.
But the real story is RAW, which only saw a 3.4% rebound to a 3.0 rating. This was after a far down Labor Day rating of 2.9. As covered in the Journal last week, RAW median averaged a 3.6 rating on Labor Day for the past five years, so dropping down to a 2.9 was shocking. On the following week, then, to only score a 3.0—after a PPV—is a plain terrible number for a show that scoring a 4.0 just a couple of years ago.
Some are trying to blame Monday Night Football; and while Monday Night Football does have some effect, it cannot be held responsible for this much of a drop from even 5 weeks ago. RAW has problems, but luckily for the WWE their contract with USA is locked in until the end of 2010. The WWE is not hurt by lower ratings as USA pays them a straight programming fee while the channel itself sells ad space to make up the cost. Given that, though, USA will most likely come down hard on Mr. McMahon and his staff for not living up to expected performance levels. This could results in USA de-emphasizing RAW in their advertising and end up hurting the WWE’s negotiating power on all fronts.
MONEY AND INVESTING
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. John Cena Hustle Bracelet ($3)
2. WWE Ultimate Rivals Trading Cards ($2)
3. The Life and Times of Mr. Perfect DVD/T-Shirt Package ($54.99, on sale $23.99)
4. Jeff Hardy Armbands ($15)
5. Randy Orton Age of Orton T-Shirt ($25)
6. WWE Black Gift Bag ($3)
7. Triple H Hammer T-Shirt ($25)
8. Hardys WWE Shop and Jakks Pacific Exclusive Action Figure ($34.99, on sale $24.99)
9. SummerSlam 2008 DVD/T-Shirt Package ($21.99)
10. Randy Orton Oblivion T-Shirt ($25, on sale $14.98)
The Top Ten list week proves one thing: exposure definitely leads to sales. Randy Orton has made a number of appearances for the first time in months, showing up multiple times on episodes of RAW and at Unforgiven. With that, he already got two items into the Top Ten and pushed former World Heavyweight Champion CM Punk out.
There was another theme going through this top ten, though: Cheapness. The top two items were less than $5 and only two items were at or above $25. That means that 80% of the Top Ten was made out of low priced or discounted items. When the WWE releases Q3 results it will be very interesting to see how much merchandise revenue has dropped in this tough economy. That, along with Unforgiven only selling 6,000 tickets and a show in Mexico being cancelled have shown that even the WWE is being hit by the hard times.
Do not worry too much about the WWE, though, they are quite profitable. But when they show a lower gross margin, rising G&A costs, and dropping revenue in their results there will be an unfavorable reaction on Wall Street.
TNA releases a list of Top Ten selling items, but the list has not been updated to current products in quite some time. Until TNA updates the list, the Journal will be take the list of featured products and sorting by most popular. When done so, the list comes up as:
1. TNA Global iMPACT DVD ($19.99 – OUT OF STOCK)
2. Bound for Glory 2008 FanFest Tickets ($40)
3. AJ Styles “Unim Phenomenous” T-Shirt ($19.99)
4. Complete 100 Card Set ($24.99)
5. Nash “Big Sexy Tour” T-shirt ($19.99)
6. Sting “Logo” T-Shirt ($19.99) ($19.99)
7. Samoa Joe “Drastic Times, Drastic Measures” T-Shirt
8. Blaster Pack ($24.99)
9. TNA Cross the Line T-Shirt ($19.99)
10. Curry Man T-Shirt (B) ($19.99)
After over a month, the AJ styles package finally sold out enough to drop off the list! At the same time, so did the Don West Post-Labor Day package. With two items gone it left room for a couple of other items to move up into the Top Ten. Returning to the list after a long time is the TNA Cross the Line T-shirt and, of course, Curry Man. And although Curry Man does sell well, we have often seen in the past that TNA does not necessarily push by sales volume. Look no further than when the Motor City Machine Guns dominated this list to know that TNA does not necessarily react to volume and trends of the audience.
PERSONAL JOURNAL
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 |
14 (Sep) |
15
|
16
|
17
|
18 | 19
|
20
|
21 |
22
|
23 | 24
|
25
|
26
|
27
|
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.
EDITORIALS
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, Guest#6563 wanted to touch more on the ratings:
This week’s Raw rating went up from the previous week, just like you said it tends to do on Labor Day. Only slightly up, but up nonetheless. I don’t think WWE complains over a rating improvement.
A ratings improvement, yes, but not to a level that is 15% below what they were doing three weeks ago. Look at the chart above and see how much RAW has trended down. A 3.0 is hardly up. The other issue was that Labor Day was down from a 3.6 in the prior years to a 2.9. That means that Labor Day was not the issue—the issue is RAW itself.
On the big subject of wrestlers becoming employees, Just Adam wrote in with:
Wow, this Jason Clinkscales pretty much blew my whole argument out of the water with just one sentence. Bravo for finding that out and clearing that up. I’m really interested to see where this case goes.
This reporter spoke with Mr. Clinkscales on Thursday night and he is greatly appreciative of the compliment. The Journal, as well, is very interested to see where the case goes. Unfortunately, it will most likely be three to five years before anything definitive happens unless the IRS decides to get involved. If they do, then they will push it through the court systems in order to collect their revenue. And with less taxes being collected, the IRS might be very interested to make that happen.
On the same subject, The Ratings Killer chimed in with:
What people don’t seem to realize is that WWE is about the only wrestling company big enough to absorb the costs if their talent were legally required to be contracted employees with benefits.
Vince could easily reduce the downsides along with bonuses and funnel that money into the required benefits. Effectively all that would mean in WWE’s case is they are managing the talent’s finances where as before it was left down to the individual. WWE wouldn’t lose talent for doing this because their pay is leagues ahead of anyone else in the business.
On the other hand there is no way TNA or the smaller feds could handle this, because the additional costs would be a huge increase in spending to them, and not something they could balance by reducing the already meager downsides most of their talent are contracted to.
If this lawsuit was successful, it would cripple any company from being able to close the gap on WWE and therefore would damage the industry more than it helps it. For that reason alone Scott Levy is a tremendously selfish individual.
This prompted BringTheNoise to have a quick response:
WWE probably is the only company who could afford this, but since they are the only company being sued, it’s only going to affect them – at least for the time being.
As for the smaller leagues – anything smaller than ROH are genuine independent contractor situations; turn up on the night, wrestle a match (which you probably laid out most or all of yourself), maybe cut a (non-scripted) promo, get your cash, go home. ROH probably fit that mould as well – I’ve never heard of them, for example, instituting a dress code.
This is absolutely true. As covered several times by the Journal, this one affects the WWE and will come to affect TNA should the IRS or Scott Levy chose to pursue it. ROH and the Independents are true independent contractor situations for just the reasons described above. The wrestlers have full control over their schedule, when/how/if they work, and what they can do when they are not at the “office site”. Now, the WWE can easily absorb the cost, but TNA will have a harder time of doing so. On one hand they may cut the roster by a bit; on the other hand it may force them to be smarter with their spending in other areas. As for any company starting up, unless they have contracts and control everything else about a wrestler’s time, then they have nothing to worry about. Should they decide to go down that route, then—just like any other company—they will have to be organized and pay taxes. That is the cost of doing business.
In another interesting yet misguided editorial is Law-Guest (not edited at all):
You are mistaken regarding the Drug testing and your interpretaion of the Law. Drugs, in sports, are illegal. You can’t condemn an organization for wanting it’s Indie contractors clean, while saying that it matters regarding their working status. That’s a non-issue, in this case.
The government, in general, has a motivation to keep WWE doing drug screening. Saying that those drug screening affect the working status of an employee/indie is hampering all their efforts to clean up the organization, just like any other Sport.
Being a lawyer, it’s a mute point, I wouldn’t even bother to comment on since it’s so obvious that claim is ludicrous.
To which I smell bullshit aptly responded:
As a lawyer, you should know that it’s MOOT point, not mute point. Also your spelling and grammar are horrible. Watching Boston Legal does not make you a lawyer.
And BringTheNoise again came to the Journal’s defense:
Also, law-guest, your credibility is suspect when you don’t know the difference between “mute” (unable to speak) and “moot” (irrelevant), so I’d like to see some citations for your point there.
But to be fair, the Journal will answer the question anyway. The WWE is not a sport, therefore there is no issue with “fair competition” and the like. As JO points out:
Instead of commenting on your poor writing skills like the others I’d like to point out one thing. The WWE is “Sports Entertainment” not a sport. Your argument about drugs being illegal in sports is, as you put it, a non-issue.
Drugs, in general, are illegal (with the exceptions of caffeine, tobacco, aspartame, aspirin, etc, etc, etc) and the government is responsible for enforcing any illicit use of them, not a private company. A private company requiring random drug testing on a semi-regular basis that was not agreed to in a contract is a sign of employer control, which is the point here.
Another interesting topic that came from this conversation was around wrestling unions. Carnivore chimed in with his thoughts:
On to the argument. Unions today, in my opinion, are not good for any business. Wrestlers today have the opportunity to make a lot of money.
Scott Levy wrestled for WWE during a boom period and I’m sure he made quite a bit of money. He also wrestled on many Pay-Per-Views and made special appearances, which means he received bonuses for those appearances. He also had quite a bit of merchandise in WWE and in TNA that he received royalties from. The point here is, this guy should be set for life. He could have invested, bought property, any number of things with the money he made. I’m positive his contract was equal to that of a Mr. Layfield at the time they worked in WWE together, and look what JBL did with the money he made.
I’m not suggesting that Raven should be a millionaire, I am however suggesting he is where he is because of his own bad decisions, not because he was an independent contractor instead of an employee. A man needs to take responsibility for his actions, and it seems Mr. Levy, and Chris Kanyon were not responsible.
Mr. Levy has, on many occasions, described poor personal choices that led to him losing most of his money. Not only did he have that time in the WWE, but he had several years in WCW and other years as a top grossing independent performer. There is something to be said for personal responsibility.
But what about new employees? How does a Kofi Kingston of the world protect his rights and make fair earnings? Does that change your argument in any way?
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!!
CLOSING BELL
This concludes Issue #51 (Volume 1) of THE HAMILTON AVE JOURNAL. Join us next week as we get ready to ring the bell again.
Till then!
