The Hamilton Ave Journal 10.07.10: Volume 2 – Issue 158

THE HAMILTON AVE JOURNAL
By JP Prag

Volume 2 – Issue 158

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.

Newsbites

With few major stories breaking this week, here are some items of note in the wrestling business world:

WWE stock has taken a pounding in the past week hitting as low as $13.27 before closing at $13.48 on Wednesday evening. A number of reports have been hitting official business channels recently, including the WWE losing ground to the UFC in PPV buyrates, the company having teamed with Girl’s Gone Wild years ago, are revaluations of the WWE stock price in terms of revenue. Even though most of these are very old issues, some investors do not know much about the product and the company and thus react to anything that comes out.

More so, it looks like the WWE hit some sell thresholds because automated messages were sent out when the company trended below their 50-day moving average. This triggered a secondary selloff, thus sending the stock down some more.

Of course, stock price has little effect on the daily running of the WWE and the company will continue to perform as normal. The main issue will be around executive compensation as many higher ups have bonuses that include stock purchases.

As far as recent insider trading goes, the directors of the company just received a stock payout on October 1, 2010 and Stephanie McMahon Levesque acquired 5,000 shares on September 6, 2010. The last sale by an insider was on August 30-31, 2010 when WWE Executive Vice President of International Andrew Whitaker sold off 11,377 shares for $159,218.

Speaking of the UFC as competition, the company has been trying to avoid having a PPV on a day after a Saturday UFC PPV as they have noticed lower buyrates when that happens. Unfortunately, that will not be the case for Bragging Rights as the show comes the day after a major UFC event and goes again a popular Sunday night NFL game. Additionally, the MLB National League Championship Game Seven could potentially air on that night, making a very difficult weekend of competition for the WWE. With just three weeks to promote the show and being the third PPV in six weeks, the WWE pay have burnt their audience for this one.

Also on the WWE cutback front, by the looks of the current schedule in November/December, it does not appear the WWE will be going to Iraq or Afghanistan for the Tribute to the Troops show. The show was certainly a money loss for the WWE given that they gave up time and talent but had always been good on the publicity front. It remains to be seen if the WWE will do a show for troops within the United States, however the WWE regularly gives free tickets to troops at arena shows and airs for free on the Armed Forces Network already.

New competition appears to making its way to the United States as New Japan Pro-Wrestling has announced they are planning on having shows in the Northeast sometime in Q2 2011. They appear to be working with Jersey All Pro Wrestling as the latter has announced several talents to appear.

Coming from the south, AAA will be releasing their first ever video game on October 12, 2010. From the press release:

The first-ever AAA Lucha Libre video game “Heroes Del Ring” will be released this coming Tuesday for PS3, PSP and XBOX 360. A Wii version will roll out in November. The game, released by Slang, marks an interesting piece of history as the first video game ever developed by Latin American designers to be distributed and released in the United States and Canada.

News got out that the masks that were supposed to come with the pre-orders are not going to happen, so make of that what you will.

ROH has also started making changes as they have removed some talent from regular circulation and their roster pages. This comes just as the company is getting more distribution with the expansion of HDNet on Comcast in some large markets. However, the company is getting a bit more serious with controlling their talent appearing on the television program of other companies, even those like NWA Hollywood.

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 time we should be able to see patterns, trends, and anomalies.

For the week ending Wednesday October 6, 2010, here are the current standings of the shows:

Analysis:

Of course, everyone wants to know how SmackDown did on its premier on SyFy this past Friday. The show came in at a 1.74, pretty much in line with the rating of 1.70 from the prior week on MyNetworkTV. However, a network rating is not equivalent to a cable rating and represents more viewers. So while SmackDown may have had slightly higher ratings, total viewship did slip a little.

Whenever the WWE has moved a program, ratings and viewers tend to slip for a bit while people rediscover the program. It does seem odd, but there is a percentage of people that do not know how to follow a program’s move. And if those people happen to be Nielsen families, it makes an immediate impact upon the ratings.

After last week’s way down ratings, this week took a major uptick in comparison as RAW jumped 23% to a 3.33. This would be the highest rating RAW has seen since the 3.5 on August 30, 2010. Can the WWE maintain this level against their Monday competition? If last year is a trend then the answer is yes, however last week’s severe and rare low makes this much more questionable.

TNA iMPACT also jumped back to 1.2 for the first time since August 7, 2010 (1.21), a one week rise of 18%. SuperStars basically held on to its rating despite iMPACT rising, showing there is little connection between the shows.

Meanwhile, now that NXT is off the air it has been delisted from this weekly exchange. However, the ratings will live on in perpetuity in the all-time chart.

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. Nexus Logo T-Shirt ($25, on sale $19.95)
2. Randy Orton Viper T-Shirt ($25.00)
3. John Cena Cenation T-Shirt ($25.00)
4. John Cena Cenation Sweatband Set ($11.99)
5. Nexus Armband ($8.00)
6. John Cena DELUXE Youth Halloween Costume ($42, on sale $16.80)
7. John Cena 2010 YOUTH Halloween Package ($64, on sale $36.99)
8. John Cena Cenation Baseball Cap ($19.99)
9. The Miz My Name Is T-Shirt ($25.00)
10. John Cena Never Give Up Unisex Flip Flops ($12.99, on sale $2.50)
11. John Cena Cenation YOUTH T-Shirt ($22.00)
12. John Cena Never Give Up T-Shirt ($19.95)
13. D Generation X Army Cadet Cap ($3.00)
14. WWE Red/Blue Reusable Bag ($3.99)
15. Rey Mysterio 619 Warrior Football Jersey ($49, on sale $34.95, on double sale $9.80)
16. John Cena 2010 Halloween Package ($67, on sale $39.99)
17. Kofi Kingston Boom Squad Backpack ($39.95, on sale $4.99)
18. D Generation X Army Pendant ($10, on sale $2.50)
19. Triple H Return to Fear Baseball Cap with Mask ($25, on sale $6.25)
20. Randy Orton Viper Hooded Sweatshirt ($39.99)

Do people believe Vince McMahon is disappointed in the sale of Nexus merchandise? With John Cena in the group, their products have skyrocketed to number one and give, broken up by John Cena and Randy Orton. Mr. Cena took nine spots of this own, though, so no one else really compares in the sale department. All those people buying John Cena Halloween ensembles will have to update it with a Nexus armband if they want to stay up to date.

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. Jeff Hardy “The Ring Is My Canvas” T-shirt ($19.99)
3. Mr. Anderson………People Are Fake T-Shirt ($19.99)
4. Jeff Hardy Enigma T-Shirt (Glow In The Dark) ($19.99)
5. TNA Knockouts Special ($29.99)
6. Jeff Jarrett Autographed Bound For Glory Poster ($19.99)
7. Kurt Angle “Warrior” T-shirt ($19.99)
8. Slammiversary – 2010 ($19.99, on sale $14.99)
9. RVD – Video Wall T-shirt ($19.99)
10. Mr. Anderson “Donkey” T-shirt ($19.99)

Biggest PPV of the year… why would you want to advertise your key items?

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 upcoming weeks? The Personal Journal answers that question.

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. Now, let’s break down the topics from last week’s commentary section:

Independent Contractors

I’ve been kind of on the fence about the whole Independent Contractor status, there are certainly arguments to be made for either side; however, I really think WWE shot themselves in the foot with this recent rule. Making broad sweeping declarations about what wrestlers can or can’t do or say in social media outlets is clearly getting into employee territory. Essentially they’ve hamstrung their “contractors” from seeking other business, self promotion, or legitimately expressing themselves. It seems like a bad time to push that particular envelope too, given they’re being investigated.
– Last_Rider

I assume the comments about personal decisions was made as to who they do(n’t) sympathize with.

I can understand contracts covering travel, if it is clearly understood in the contract that wrestlers are working for the company at during their travel time. I would believe that would push the hours up there though.

The wording of the social media rules looks bad. I can understand limiting what wrestlers do in character or what is implied to be in character. That is owned by WWE. What they do in their own time should not be so easily controlled by a private employer. Although I do understand some of the instances where employers fire workers for what they have posted.

But I wouldn’t be surprised if the investigation quietly disappears after November 2.
– Guest#3459

Of course, Linda McMahon’s camp is correct in that the timing of the investigation is quite suspicious. However, you are right in asking why to push the envelope into another area? You’ll see in the arguments below people talk about these people adults who signed contracts, but where in the contract does it stipulate that the WWE can make new rules on the fly and fine/suspend talent? This particular issue goes far beyond the independent contractor question and hits right on contract law.

I have no issues with the ’employee’ or ‘independent contractor’ issue.

The person in mind SIGNS the contract. Thus, no issue. Nobody puts a gun to their heads to sign on the dotted line.

If the contract reads that you have to perform 5000 days a year for $30,000, and you get no food or drink, and YOU STILL sign it-I would still have no issue with it.

Personal choice. Have to be held accountable for yourself. Sorry.
– Suppan

I don’t see why there is a debate over the employee-vs-contractor argument.
It doesn’t matter WHAT you consider yourself.

If you sign a contract stating you agree to the terms outlined above, then you agree to the terms.

If it says they will pay you X per year/month/show, then you get will get paid. If it says you get Y benefits including situation1/2/3, then you get it.

By signing your name, you agree to work for said company, regardless of an exclusivity clause. If that is present, regardless of employee or contractor, you agree to working exclusively and any other restrictions placed upon you.

Bottom line: If you don’t agree with it, don’t sign it.
– MPMoore

The issue isn’t that they signed a contract. The issue is whether or not that contract is legal. If I sign a part time employment contract with a major company who then works me 50 plus hours a week, I’m a full time employee regardless of the contract. If they contracts they sign are inherently illegal then they aren’t binding.

I’m all for personal accountability, though I’m not sure how that argument comes into play. I’m more interested in the legal arguments and if “They signed a contract” is the best that can be brought, there’s plenty of holes in that logic.
– Last_Rider

Right, let’s forget the questions of workers’ rights because that has very little to do with being an employee. Just because someone is an employee does not mean that the WWE has to provide most benefits like retirement coverage or dental insurance. The employee vs. independent contractor debate is of interest to the government for one reason and one reason alone: TAXES.

If the WWE had employees, they would have to pay a matching amount of FICA, SUTA, and FUTA to the United States government. As independent contractors, the WWE pays nothing and the wrestlers pay only the high individual rate in quarterly estimates. The government is set to make a lot more money if the wrestlers are made employees. Will the wrestlers be afforded more protection like worker’s compensation and OSHA protection? Yes, those will be a side effect of what the government is trying to accomplish. But let us not kid ourselves here; even forgetting the election the government is looking for revenue and this is a way to do it. The crackdown on businesses abusing the term “independent contractor” is not being done for workers’ right, but is being done to make money.

Exclusivity in the UK

It’s very possible that the exclusivity runs both ways. NBC Universal may have the right of first refusal or something over WWE programming in the US. Superstars on WGN isn’t a threat, but say Smackdown on Fox or on ESPN could be. (Pure speculation).

For WWE on USA/NBC Universal, WWE wanted Universal badly enough to sacrifice Heat and Velocity.

It could also be that Sky-WWE exclusivity simply dates back to the WWF-WCW era, a hard-won chip for WWF that has just been carried forward as contracts renewed. (Another possibility is that WWE would waive exclusivity for some other concession–better timeslot for Raw?) In other words, WWE paid for that right back in the 1990s, since then it’s been a dead issue as the contracts rolled over for more or less money.

Could also be that as Impact emerged as UK programming, WWE used the leverage of their 5+ hours of TV as a package to get exclusivity.

All speculation, but speculation based on the relative weight of the players in the game.
– John Bragg

Actually, we do know the terms of the WWE/NBC-Universal deal because both companies were quite open about it when the deal was made. The WWE cannot have a program on a cable station outside of the NBC-Universal family in the United States. However, they are free to pitch anything they want to network stations and in syndication, as well as put whatever they want online.

What you are describing is Spike and TNA’s deal. Spike has a first right of refusal for any new TNA programming. Should Spike pass on it, TNA is free to shop around their new shows to whatever network they want.

Sticking with this subject but skipping the personal attacks on this reporter…

On a first point, [this article] has consistently emphasized that the Journal deals in facts not rumor nor supposition or gossip.

Secondly whilst not doubting your sincerity (though indicating the value of the new WWE/Sky deal would greatly enhance your standing), basically you’re saying you work with Sky but not under direct employment, and in a marketing capacity not in contract negotiations or finance, which leads to the question why would ad agencies have or need knowledge of specific terms outside of the basic C2DE/penetration/exclusivity to Sky etc.?

As an aside the claim of a WWE veto in the UK looks strange stood against NBC’s veto in the US. Why would WWE submit to tighter constraints in the US where there are more broadcasting options open to them but feel strong enough to impose prohibitive terms on their only viable partner in the UK?
– V

Different markets have different things to offer. The NBC-Universal deal may be a two way street as perhaps NBC-Universal cannot sign on any other wrestling promotion. We know this is not true in the Viacom world (owners of Spike and MTV) as Half Pint Brawlers and Viva La Lucha have premiered in the same family as TNA.

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

Till then!