wrestling / Columns

The Hamilton Ave Journal 10.21.10: Volume 2 – Issue 160

October 21, 2010 | Posted by JP Prag

By JP Prag

Volume 2 – Issue 160


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.


The WWE decided this week that enough was enough and they were going to fight back. Fight back against whom? Well, according to WWE Chairman and CEO, certain media outlets and political candidates were saying unfair and biased lies about the WWE and he was prepared to change that image.

It is no secret that the WWE has spent the better part of the past two years changing their image in Washington and Hollywood, in advertising circles and in network boardrooms. They have hired public relation firms of various kinds to help get the message out about what the WWE and the size of the audience the $490-million a year company has. And much it has been met with success as they have been able to get new sponsors like Burger King and K-Mart; get more favorable programming deals despite lower ratings; and increase the sale of various types of merchandise across the board.

In order to continue to emphasize how the WWE has been accepted and used, the week began last Thursday October 14, 2010 when the WWE issued a long press release going over how many politicians and government officials have interacted with the WWE. From that release:

President Barack Obama, Secretary of State Hillary Clinton, Senator John McCain, former President George W. Bush, and Speaker of the House Nancy Pelosi have embraced and lauded World Wrestling Entertainment® (WWE) in the past. Therefore, current negative criticisms concerning WWE from some groups would seem to be inconsistent and hypocritical including the recent ad paid for by the Democratic Senatorial Campaign Committee.

In addition, other prominent Democrats such as former DNC Chairmen Howard Dean and Terry McAuliffe, House Majority Leader Steny Hoyer and Senator John Kerry have utilized WWE as a platform to convey their messages or have supported WWE and its “Smackdown Your Vote!” initiative over the past 10 years.

This seemed at the time an exuberant, but fair analysis by the WWE. The WWE as a company has never taken a side of any political party, though many of the wrestlers have actively campaigned for parties or candidates. For instance, Kane has been a strong supporter of the Libertarian party for years. All the WWE was trying to say here is that the Democratic Party should not attack the WWE because the WWE has been a beneficial partner for them in the past.

The next day, Mr. McMahon decided to take it a step further. From that press release:

World Wrestling Entertainment, Inc. (WWE) today announced that CEO and Chairman Vince McMahon has extended an invitation to First Lady Michelle Obama for this Monday, October 18 while she is in town, to visit the company’s corporate headquarters in Stamford, CT, and discuss WWE’s corporate outreach initiatives. These programs include outreach to at-risk youth, support for military troops and their families and partnerships with the Make-A-Wish Foundation, Muscular Dystrophy Association, The Young Adult Library Services Association and others.

“Given President Obama’s previous appearance on ‘Monday Night Raw’, and WWE’s dedication to giving back to the community we welcome the opportunity to speak candidly with the First Lady and educate her about WWE’s initiatives that focus on children and families,” said Vince McMahon, WWE CEO and Chairman. “We hope to learn more from the First Lady about the important initiatives she is leading.”

There was no response from any political or media camp, so the issue seemed to pass for the weekend. That was until Monday October 18, 2010 when the WWE launched a “Stand Up” campaign with a video from Mr. McMahon asking everyone to support the WWE through a variety of means and correct alleged factual inaccuracies. This was followed up by yet another press release:

World Wrestling Entertainment® is calling on WWE fans worldwide to “Stand Up For WWE” in a new viral campaign launched today on WWE.com and social networking websites, including Facebook, YouTube and Twitter. WWE invites fans to voice their support for the company because it has come under unfair and biased attack from certain politicians and media outlets. WWE will correct factual inaccuracies that have been reported about the company during this election season.

Videos will feature Vince McMahon, WWE Chairman and CEO, along with several WWE Superstars discussing various topics including WWE’s PG content, treatment of WWE’s full-time employees and its performers, and WWE’s Talent Health and Wellness Program. In addition, the videos will highlight WWE’s longstanding commitment to give back to communities through literacy programs, support of the military and their families, the annual “Tribute To The Troops” holiday special and the company’s more than 25 year relationship with the Make-A-Wish Foundation.

“The nearly 600 full-time WWE employees, as well as its 140 Superstars, all work for one reason – to put smiles on people’s faces,” said Vince McMahon, Chairman and CEO, WWE. “The inaccurate media reports about our company are not only an injustice but an insult to our millions of fans worldwide.”

The issues really began here because Mr. McMahon stated in the opening of his video that the impetus for this campaign started because of his wife’s Linda McMahon’s run for Senate. Although he did not say that he was working with the campaign, he said responses from her Democratic competition warranted a return response from the company they were attacking.

But the idea that the “Stand Up” campaign was tied in to Linda McMahon’s senate run immediately set off the Democratic Convention who questioned the legality. Under national and Connecticut laws corporations cannot actively support a candidate through messages to the public and coercion of employees. While a corporation can provide financial support to a candidate, they are barred from coordination with said candidates and campaigns. The Connecticut Democratic Party on Tuesday October 19, 2010 put out this statement:

Linda McMahon’s $50 million attack machine now has corporate reinforcements, thanks to the ‘Stand up for WWE’ campaign launched by her husband Vince McMahon. No coincidence, it looks a lot like her political campaign… except this one is probably against the law.

WWE Spokesperson Robert Zimmerman was quick to respond to the allegations on the same day:

“It had absolutely nothing to do with the Linda McMahon campaign… It’s trying to correct inaccuracies that have been reported. … The attention that’s been put on WWE by Linda’s opponents have focused media attention on the company.”

Connecticut Democratic Party spokesperson Katie Hansen then gave a more specific view for the party:

“Linda McMahon’s claim that her husband’s aggressive public relations campaign is independent of her own political campaign is unbelievable, particularly after Vince McMahon specifically cites the Senate race as the reason for the offensive.”

While proving collusion is usually difficult, when the candidate and corporate head live in the same house it becomes easy to prove contract and sharing of ideas.

While the WWE saw its campaign gain 25,000 fans on Facebook and other social networks, the Democratic Party began filing paperwork. Then yesterday, October 20, 2010 that complaint went in. From the Washington Post:

Nancy DiNardo filed a complaint with the Federal Election Commission two days after World Wrestling Entertainment began an Internet-based campaign dubbed “Stand up for WWE” to combat what the Stamford-based company calls unfair attacks in the Senate race.
“Linda McMahon’s $50 million attack machine is calling in corporate reinforcements with no respect for the law or the voters of Connecticut,” said DiNardo, referring to the amount of money McMahon has said she’ll spend on the race to win the seat now held by Democratic U.S. Sen. Chris Dodd.

Ed Patru, McMahon’s campaign spokesman, called the complaint “utterly baseless.”

“This campaign scrupulously complies with all FEC regulations and has not and does not coordinate with WWE concerning its various corporate activities,” he said. “We look forward to the FEC promptly dismissing this specious complaint.”

By day’s end, the top five stories on WWE.com were related to the “Stand Up” campaign to the detriment of current programming, PPVs, and merchandise. After the complaint was filed, the WWE pulled out one more press release:

Due to what the WWE® considers malicious and misleading attacks reported by some members of the media, the company on Monday began a global initiative to defend itself called “Stand Up for WWE” which has resulted in yet more false allegations.

“World Wrestling Entertainment will not be bullied or intimidated by whining allegations intended to censor our freedom of speech,” said Vince McMahon, Chairman and CEO of WWE.

WWE will fervently fight against any attempt to muzzle or trample its First Amendment rights. Our fans, employees, and performers are united in this grassroots effort to “Stand Up for WWE.”

The question now is are these newest allegations false? What started out as simply the WWE touting their accomplishments and connections with various political units has ended up in a question of potential illegal political collusion. On one hand, as agreed by the Supreme Court in January of this year, corporations have a right to free speech and can say what they want (so long as it is true) about any candidate, so long as they are not working in conjunction with that campaign. But that is the other hand; should that connection be found then the rights of free speech for corporations do not apply.


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

  • MavTV apparently did not like the lighting and look of the latest episode of Wrestlicious and opted not to broadcast the show. Meanwhile, Wrestlicious has been in discussions with MTV2 to also add their show to that network. Meanwhile, MTV2 has been rumored to be in discussion with another “all female wrestling promotion”, which certainly limits the list of possibilities. But there is nothing available to substantiate those rumors or why the MTV networks would be looking in to more wrestling when they already have Lucha Libre USA. Besides that, MTV is part of the Viacom family which owns TNA’s home Spike.
  • Recently, the WWE cancelled their planned shows in British Columbia, Canada sighting scheduling conflicts. Slam! Sports, on the other hand, believes there is another reason:

    The disagreement stems from a recent series of decisions that are part of a city bylaw change that came into effect in April of this year. Before then and indeed, for the past 25 years, the WWE and the City of Vancouver have enjoyed the benefits of healthy relationship. Canada is a huge market for the WWE and when the events come to town, always do well. The city has been host to numerous television tapings and a few pay-per-views. As well, there is a potential bid for Vancouver to host an upcoming Wrestlemania but the recent bylaw changes have put the success of that bid — and all other wrestling events — in doubt.

    With the rise in popularity of combat sports — specifically mixed martial arts — city councils nationwide have had to grapple with the issue of allowing these events within their city limits. In December of 2009, the City of Vancouver decided to implement a two-year trial on allowing these events. The June 11th UFC event at GM Place was approved by the VAC and the City in March 2010. Then, in April, the city enacted a bylaw change that altered how these events would be handled in the future. Of these changes, two immediately raised red flags for Mladenovic — a seat tax increase and a demand for separate and distinct medical coverage for the athletes.

    The WWE has pulled out of other markets before for similar issues, and the WWE will not back down from its position. Says Rich Hering, WWE Vice President of Governmental Relations and Risk Management:

    “Basically, they wanted things no other jurisdiction requires… Unfortunately, these new rules and regulations do not make it conducive for a promoter to promote in the City of Vancouver. Some of these issues came up after the show had already been scheduled. We explained this and they said they would look into these issues and get back to us and they did not do that in time. So we had to pull the date and move the event.”

  • With NXT off the air in the USA, it was thought that the WWE would be spending their time searching for a new home for the show. However, it now appears they have another option as Deadline Hollywood reports that USA Network is looking for new reality series and on the docket is Tough Enough. Follow up reports say the show would either air after RAW or on Tuesday during NXT’s old slot. Should the WWE start to produce Tough Enough again, they most likely will end NXT in international markets and replace it with Tough Enough there as well.
  • Despite often speaking out against concussions causing behavioral issues, the WWE is apparently changing their tune. Not only have they added a section concerning concussion and brain health to the Wellness Policy, but Christopher Nowinski of the Sports Legacy Institute said on WEEI radio that Vince McMahon and the WWE were looking into joining in with the SLI’s supporters.
  • Mattel, a strategic partner for the WWE, posted their Q3 results, beating the street’s estimate on earnings. The WWE was a large part of that top and bottom line as the toys from Mattel continue to sell well all over the world.
  • In the video game world, Mad Catz has signed a deal with THQ to produce accessories related to the WWE All Stars series for several undisclosed years. No word on how the WWE itself fit in to the negotiations, but considering the that Mad Catz will be using WWE intellectual property, the company will most likely be getting a cut under its existing licensing deals.
  • WWE will report their 2010 Q3 results on Thursday November 4, 2010 before markets open. Some have questioned the timing as the election is on Tuesday November 2, 2010, however the WWE always announces their inter-year quarterly results on the first Thursday of the second month after the quarter ends. As always, the Journal will have complete analysis the following week on November 11, 2010.


    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 20, 2010, here are the current standings of the shows:


    There haven’t been a lot of positive things to say about ratings this year, especially in TNA with their move to Mondays. But coming off Bound For Glory and their new angle, the show scored a 1.4 for the first time since January 28, 2010. This is also only the third time ever the show has scored above a 1.3, the other two also coming in January of this year. While hardly earth-shattering ratings, this is a milestone for TNA in terms of the level of audience they have seen. Combine that with four straight weeks of rising rating and it looks like TNA has proven they can regain their lost audience. Now the question is can they maintain it on a weekly basis and then grow it? TNA has never shown a consistency for either, so it will be interesting to see how the follow up in the weeks and months ahead.

    SmackDown has also been the beneficiary of rising ratings since moving to SyFy with each week squeaking above the prior one. Their total audience has actually been slightly below what they had on MyNetworkTV, but SyFy has been quite happy with the results. From SyFy’s press release:

    The Friday, October 15 telecast of SmackDown leg locked 2.88 million total viewers, 1.21 million Adults 25-54, 1.13 million Adults 18-49 and a 1.9 HH rating. This was Syfy’s most-watched Friday telecast in more than five years (July 2005, the season two premiere of Battlestar Galactica).

    SmackDown was the #1 primetime cable entertainment telecast in both Adults18-49 and Adults 25-54. Since premiering on Syfy Friday, October 1, the telecast has risen 14% in Adults 18-49 and total viewers, and 13% in Adults 25-54.


    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 Cenation Sweatband Set ($11.99)
    2. John Cena Cenation Baseball Cap ($19.99)
    3. John Cena YOUTH Halloween Costume ($28, on sale $7.99)
    4. John Cena Cenation T-Shirt ($24.99)
    5. John Cena Cenation YOUTH T-Shirt ($21.99)
    6. Nexus Armband ($7.99)
    7. WWE Red/Blue Reusable Bag ($3.99)
    8. Rey Mysterio 2010 YOUTH Halloween Package ($36.99)
    9. Randy Orton Viper T-Shirt ($24.99)
    10. John Cena Never Give Up T-Shirt ($24.99, on sale $19.95)
    11. John Cena Never Give Up Sweatband Set ($11.99)
    12. D Generation X Army Cadet Cap ($3.00)
    13. Nexus Logo T-Shirt ($24.99, on sale $19.95)
    14. John Cena Never Give Up Baseball Cap ($19.99)
    15. John Cena Cenation Pendant ($9.99)
    16. Nexus 2010 Halloween Package ($63, on sale $39.99)
    17. Iron Sheik ADULT Halloween Costume ($52, on sale $9.99)
    18. D Generation X Army Pendant ($10, on sale $2.50)
    19. Randy Orton Lobotomy T-Shirt ($19.95)
    20. The Miz My Name Is T-Shirt ($24.99)

    Have John Cena will fly? Mr. Cena took up nine of the top twenty, and another three with Nexus if you could those. It’s tough to argue with numbers like that, but Randy Orton, The Miz, and Rey Mysterio try. But it was the Iron Sheik who made a surprise appearance in the top selling list, coming in at number seventeen. Don’t expect him to by humbled by that position.

    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)

    If they can take six and half minutes in two hours to wrestle, they could certainly update this.


    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:

    PPV in Review

    The Big 4 generate $109M/$195M, leaving $86M in revenues for the other 10 events.

    Big Events avg. $27.3M/event as is.
    The other 10 events avg. $8.6M/event.

    So let’s give the big events a reasonable increase in price of 10%, which would be another $11m, lowering the total revenues needed on the remaining events $75m total. Assuming you are still generating $8.6M/other event, you would need to run 8.7 other events, so basically eliminate 1 event.

    What if you increase the price on the other events 10%. Assuming same buys, your per event revenue would increase to $9.5m. And if you still need to generate $75m in total, this would be now 8 events.

    Once you start going higher than 20% increase, I think you start to lose buys. But smaller increases really shouldn’t impact the overall buy rates (but remember that other factors like the product quality and the economy will have an impact).

    So increase costs 10%, remove 2 smaller PPV events (which would also reduce your need for the full revenue since that revenue level was needed to run 14 events, not 12 events). Revenue/profit levels should not suffer for these actions.

    Flip side – what if you did something like reduce the costs of “other” events by 20%-40% – do you think that you can generate that many more buys?

    And what would be the residual impact? It’s easier to justify spending $25 than it is to spend $40-$50. And by the time the next PPV comes, you’ve still got $15-$25 “left over” from last month, so you can buy another PPV this month. And so on.

    In my experience with people, this left over does not exist. It is a small enough amount that it gets spent elsewhere. A smaller amount might actually save the money. By the time the next PPV rolls around, that money is no longer a consideration.

    You are right that it is easier for anybody to justify spending $25 than $45. And some people will remember that they’ve spent $X already this year on PPVs. Just not that they have money left over from previous PPVs.

    Also, you cannot raise prices and assume no change in buyrates. Any change in price, even just once cent, is going to drop buyrates. Raising costs 10% is going to have a reciprocal drop in buyrates on a supply-demand curve. The higher the price, the lower the demand. The more you raise the price, the steeper the drop in demand. You cannot just say, “It I raise prices 10% I’ll lose 5% of the buys, so if I raise prices 20% I’ll lose 10% of the buys.” On the other hand, the curve of the demand lines makes it more like if you raised prices 20% you could lose 30% of the buys.

    Playing the supply/demand/price curve is what the WWE is doing. Remember: the game is not to maximize buyrates but to maximize profit. Even if PPVs were only $5 there is still a max number of people who are going to buy, say 1.5 million. So where does the point lie where the WWE can maximize the price where it meets people willing to buy to get the highest revenues as costs stay the same? They seem to think they are ok at their current price point, but that is up for debate.

    So in order to drop the average PPV price $10 the WWE would have to gain about 1.4 million buys for the move to pay off. That rough figuring but I think it’s close enough. My question is could they do it?

    And if not do you think that dropping the price $10 for the PPVs outside of the big 4 could have a positive effect?

    Not enough to maximize profits, no. There are other factors at work besides price, although it is a major one. Will it increase buys? To a degree, of course any lowering of price will yield some effect. But as noted in the example above of raising prices, lowering prices is also on the curve so just dropping the price will not necessarily increase the buys to make up for the difference.

    I always laugh when I see people recommend WWE go back to their “Big 4” or even “Big 5 – with Night of Champions or King of the Ring” – because while they would definitely bring higher PPV buyrates, it wouldn’t be anywhere near enough to counteract the revenue lost by dropping 9 or 10 others. Sure TV quality would likely improve, but they’re a business first, and they want/need to make their money to keep their stockholders happy.

    The same can be said for those who think they need to cut their programming, and have an “off season” – ignoring TV contracts aside – the loss of advertising revenue would be a big hit too.

    I do think a smaller decrease (10-12 pay per views) would help. Once a month, with may be 6 weeks build before and after Wrestlemania to accomodate both the “Road to Wrestlemania” climax and reordering the new feuds that come after the draft. The 2 weeks between Night of Champions and Hell in a Cell, then only 3 weeks after that for Bragging rights is just too close together and realistically. Someone who only receives 2 paychecks during that period of time just can’t afford to buy them. I’m no expert, and could be wrong, but it seems like a good idea to me.

    I wasn’t saying JUST the Big 4. They can have filler, maybe at most 1 a month. The problem is the product suffers from 2-3 weeks between PPVs. By having 14 shows a year, they are not gaining ground, they are staying the same or losing viewership. Numbers in general are down for PPV buys because people can’t afford it or don’t care about poorly structured programs/feuds in which the WWE throws together and rushes along to make it to the next PPV in 3 weeks. Hell, they don’t even give you a full card for the event 9 times out of 10.

    WWE makes a good deal in merch to cover some of the gap, but they should take the gamble of reducing PPV shows to improve the quality and build of their TV shows and storylines.

    I agree, obviously PPVs are too lucrative to drop to 4 or 5 but 14 is a lot. 2-3 weeks is not enough time to build to a PPV or make someone care about a match. The lesser PPVs seem to be episodes in part of a bigger storyline and aren’t really worthwhile to pay 45 bucks for.

    Well, the Journal did this analysis back in Issue #97 with eight PPVs:

    Ok, we start off with the same assumption. The Big 4 PPVs bring in 2 million buys and about $106 million, leaving a gap of $2.4 million dollars. Assuming no change to the Big 4, at $34.95, the remaining four PPVs would have to do an average buyrate of over 590,000, higher than other PPV except WrestleMania. If the price were raised to $44.95, each PPV would need nearly 460,000 buys, still higher than every other PPV except WrestleMania and SummerSlam.

    Now, let’s say that the Big 4 all increase in buyrates by an astounding number like 20%. Even with that, the other PPVs at the $44.95 price point would have to do well over 333,000 buys a piece. That would be nearly as much as Survivor Series last year and close to Survivor Series after the 20% increase.

    You can see from this, then, that even the eight PPV model would be stretch for the WWE and audience. The WWE is still better off with lower buyrates across 14 PPVs then trying to get such an increase with fewer PPVs. More PPVs spreads the risk, and the WWE has that risk spread.

    True, it is a bit out of date and not the exact number, but the end result is going to be the same. Even with 12 PPVs, the WWE is structured in such a way that they cannot sacrifice the revenue and profits.

    As for merchandise spreading the risk, if the WWE could increase merchandise sales right now they would.

    More PPV Ideas

    I wanted to know how much does a PPV replay cost and how many people actually order that? I ask you this as for something like WWE NoC or Bragging Rights many won’t pay for the live feed but if the PPV is good they could order the replay.

    Now if you price it at the right points (half of the actual PPV $) you could really make a lot out of those replays. Again I don’t have the hard figures with me! But a good quality product will always generate word of mouth/ text. Your thoughts?

    As far as cannibalizing the live PPV itself hype it up well enough and those who want to see it live will never want the replay (Marketing 101). The replay is for those who are on the fence and end up seeing it on a low quality online stream.

    Sorry, no. Your ideas are on the right track, but if they drop the price of the replays immediately after (or even a couple of days after) the original run, nobody will watch it at full price, which would screw the WWE twice- first because they’d be making less money and second because they’d go into RAW without a single person knowing what happened the night before.

    To answer the first question, the WWE gets roughly 80 thousand extra buys a year from purchases of events after the live broadcast, and those are all at full price in their home markets. Billzilla is partially correct because dropping the price of the replay creates cannibalization, but it would not cannibalize all buys. PPVs come out on DVD just a month after the events now at a much lower price, so they cannibalize sales as well, just not all of them. There are always buyers who want the live deal.

    Planning TNA

    One quick TNA question also. They just turned their top merch seller heel while the WWE has been unwilling to do that with Cena for the fact that he is their top seller.

    Is there that much of a difference in percentage of revenue that merch is between the two companies? Is this an example of no one in TNA having an overall long-term business plan? Is this just a sign of TNA been more willing to and/or having to take more risks? Or is it simply because while Hardy does sell the most merchandise, his percent of TNA merch sold is nowhere near Cena’s percent of WWE merch sold?

    First off, merchandise in the WWE counts for a far greater percentage of Revenue and Profit than in TNA. For the WWE, Licensing accounts for 11.6% of the revenue and 19.2% of profit while Home Video brings in another 7.8% of revenue and 9.6% of profit. TNA gets the vast majority of their dollars from television rights fees, so losing out on merchandise is not as big of a deal to them.

    Now, does TNA have a long-term business plan? TNA President Dixie Carter, Jeff Jarrett, and Eric Bischoff all claim they do, but it is difficult to see it in action. Even if they do, the execution of it and how many major changes they do in a short period of time leave one to question the strength of their plan, or at least how it has been put into action. TNA, though, can take more risks just because they are private, smaller, and not locked in to any particular revenue stream except television rights fees.

    How to Stand Up to the WWE

    WWE has painted themselves into a corner as they have handcuffed themselves to driving profit margins. How do smaller companies like TNA and ROH thrive by taking advantage of these differentiators? They can make a more “quality” product by hyping up cards that are more spread out; abandon PPV for other more profitable revenue streams like TV ads; and target the most profitable market segment ever: young adults. There are so many ways to exploit the WWE right now by being seen as different, but the only one that seems to get that is the UFC.

    Differentiating product is not sufficient by itself. Very few people know about TNA and ROH, much less the indy companies. The market must know about and be receptive to your product before differences come into play.

    Neither is the WWE “handcuffed”. They are far less dependent on PPV revenues than in the past. Losing those revenues would hurt, but aren’t a definite killer. The WWE has spent the last decade diversifying.

    All businesses want to increase profit margins, regardless of ownership. Whatever the goal of the owners – creating “art”, helping the community, creating employment – profits pay for the ability to do so. Because without profits, the business dies and so does the ability to fund the owner’s goals.

    TNA and ROH should abandon traditional PPV not because the concept itself is not profitable or sufficiently profitable, but because they have not been able to do it profitably. Part of this again goes back to market awareness. There is only going to be a certain conversion rate from regular viewers to PPV buyers, after all.


    What are your thoughts on WWE eliminating house shows? House shows are really kind of useless now that everything big happens on TV. Yeah there is lost revenue, but you have to figure in how much revenue is lost due to shortened careers and injuries due to the heavy work schedule. If John Cena were to get a major injury or even a career ending injury, that could be millions of dollars in lost merchandising, PPV buys, etc.
    Scotty Flamingo

    Well, for the first half of 2010 Live Events and Venue Merchandise brought in $66 million in revenue for the WWE, or 26.9% of all revenue. Margins are lower than other streams yielding $21.4 million in profit contributions, or 19.7% of all profit contributions.

    You can pretty much double those numbers to get the year-end total, so no, the Journal is completely against the WWE dropping 26.9% of the company’s revenue and 19.7% of its profit amounting to something over $40 million. No elongated career is going to make up those kind of figures, nor additional merchandise and PPV buys. Now, if the WWE develops a few more streams and house shows are only a few million dollars, than it is a different story.


    Uh, so TBS isn’t a cable station? Because they claim to be a Superstation too.

    Semantics at its worst.

    Actually, TBS was a SuperStation until 2008 when they finally became a regular cable station. And it is not semantics; this is a definition that is controlled by the FCC that stations have to apply for. TBS was a satellite rebroadcast of WTBS, thus making it a SuperStation. Right now, WGN is the last national SuperStation, but there are a few other regional ones like WHGH.

    Ratings, too!

    Just wondering if you could maybe include yearly averages in the rating’s reports and to date, as I really liked those. Maybe include major jumps as well as from network or day. Also why are some ratings rounded to the decimal e.g. 1.5 when it was 1.45 and others precise?

    Sometimes the ratings numbers just come in more precise, which has become the norm in the past year. Prior to 2009, it would be odd to see a rating point out to the hundredth digit. However, sometimes ratings really are 1.50 and the chart just doesn’t show the zero digit.

    As for averages, from time-to-time the Journal talks about averages usually from a 4-week rolling average perspective. But we will take all suggestions under advisement.

    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 #160 (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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    JP Prag

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