The Hamilton Ave Journal 05.21.09: Volume 2 – Issue 87

Posted by JP Prag on 05.21.2009

Has the WWE found a home for RAW on Monday? And if not, are they still going to shut down your internet stream? Also, where will Eric Bischoff and Bill Behrens team up against Jimmy Hart and Colin Bowman? Is ROH done being on Time Warner? What are ratings like in the UK? And what is Christian Cage doing back on TNA’s top selling list? All this and more is answered in this week’s edition of the Hamilton Ave Journal!

THE HAMILTON AVE JOURNAL
By JP Prag

Volume 2 – Issue 87

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: RAW is KICKED OUT

The big story of the week by far is the WWE's battle with Kroenke Sports Entertainment, owners of the Pepsi Center in Denver, CO and the Denver Nuggets.

In August 2008, the WWE originally booked the Pepsi Center for Monday May 25, 2009. That date was reconfirmed by the WWE and KSE in early April before tickets went on sale, despite the Nuggets doing well and the potential for a playoff game then. As it turned out, the Nuggets not only secured playoff positions, but also won in a sequence that secured game 4 of their series with Los Angeles Lakers take place in that arena.

For the WWE, moving a venue is not an easy feat. They have 11 tractor trailers moving around the country carrying their television equipment, sets, material, and plenty more. Their paths are laid out well in advance so that their trucks and teams of people can move between locations with as much as ease as possible, especially when doing back-to-back tapings like they do every Monday and Tuesday night.

With the double booking, negotiations were underway between KSE and the WWE. The NBA opted to not be involved in the conversations and said it was up to KSE to solve the situation. According Darren Rowell of CNBC:

Even though the Nuggets are the main tenant of the building and the team is owned by the same guy who owns the Pepsi Center, Stan Kroenke, the lawyers representing the venue did not take into account that the Nuggets could still be playing the playoffs when they signed the contract with the WWE.

We know this because there is no sort of remedy provision that says that in the case of a conflict, this, this or that will happen. The only clause that is in most of these contracts is a force majeure, which basically would say that the venue and its operator is not responsible for any losses in the event something, like a force of nature, occurs.

But knowing how late the NBA makes its final scheduling of games in the playoffs, the folks at the Pepsi Center should have put in specific provisions for this happening.

Mr. Rowell was not alone in his opinion. A great number of media sources (including ESPN, ABC, the LA Times, the New York Times, and more) picked up on the story and overwhelmingly took the side of the WWE. They booked the arena first and KSE did not show faith in their team by booking the venue themselves even on a remote possibility.

The WWE took full advantage of the media frenzy appearing in as many outlets as possible. KSE remained silent until after things were resolved. Says Paul Andrews, Executive Vice President for KSE:

"Despite the propaganda campaign launched by WWE and Chairman Vince McMahon, the KSE team maintained a professional manner throughout this process. We had hoped for, and worked hard toward an amicable resolution - which we verbally had on Tuesday… We understand there will be many disappointed WWE fans in the Denver area. It's unfortunate and disappointing that WWE executives ultimately chose this path. The sensationalism employed by WWE in this instance is not surprising. The amount of publicity and coverage enjoyed by their group over the last few days has clearly become their new business goal instead of finalizing what we thought was a favorable solution and would have ultimately allowed their fans to attend the event."

Their press release went on to say that the WWE and KSE has agreed to host RAW on Sunday night instead, but that the WWE changed their mind overnight in order to just gain media attention.

This may well be true, but if so the WWE's plan worked. Now, much like storyline swerve, the WWE will be hosting RAW live at the Staples Center in Los Angeles, CA, the home of the Nugget's opponents. From the WWE's press release:

World Wrestling Entertainment has made arrangements, given innumerable logistical challenges and obstacles, to move its internationally televised broadcast, WWE Monday Night Raw to Los Angeles' STAPLES Center. The live televised event, which was scheduled to take place at the Pepsi Center in Denver this Monday, May 25th, will take place live at the STAPLES Center at 5:30 p.m. PT.

Tickets for Monday Night Raw in Los Angeles will become available tonight at 8 p.m. ET.

WWE was forced to seek alternative arrangements due to the Pepsi Center's double-booking of May 25 for both WWE Monday Night Raw and Game 4 of the NBA Western Conference Finals. The event will now take place live from the home of the Denver Nuggets' opponents, the Los Angeles Lakers.

The move may prove profitable as the WWE will most likely advertise the event as being against the Nuggets to bring in Lakers fans. It was quite the debacle, but already the WWE has benefited from the press in more ways then one. WWE stock closed up at $11.74 yesterday from an $11.39 at opening on Monday.


WWE shutting down the feed

Amidst dropping PPV buyrates, the WWE had two directions to go. In one way they could try to improve the product to the point where more people want to buy. In the other direction, they could chose to try to go after what they perceive as the reasons that they are losing buys. And this week, the WWE has chosen to go the latter route by taking on internet streaming sites.

There is no doubt that streaming sites are stealing the WWE's content and the WWE is far within their rights to go after them. From Issue #78 of the Journal:

Although why PPV numbers are down is a question that often comes up. Matthew M wants to know:

**Is there any way you can research the impact of downloadable PPVs as it relates to WWE and TNA? We're all well aware that the illegal torrenting of PPVs cuts into revenue on both sides, but it would be interesting to know if an equivalent ratio of people downloading TNA/WWE product.**

One of the reasons why people like downloading PPVs is that they are nearly impossible to track. Overall, we do know that Bit Torrent traffic is up because so many ISPs are trying to limit torrent bandwidth. A recent search on a Torrent site showed the Journal that the Destination X Torrent has been downloaded about 5000 times and that last year's Destination X got about 20,000 buys. If that number holds true for this year, than downloading the most recent TNA PPV would be at 1:5 ratio.

The WWE latest PPV No Way Out looks to have been downloaded about 65,000 times. Last year, No Way Out had 329,000 buys, though that was an apparition as the year before it had 218,000 buys. If No Way out does about 250,000 buys this year, than the ratio would be about 1:4.

Overall, it looks like about 20-25% of the people viewing the PPVs are doing so via downloading instead of purchasing the PPVs, though this number cannot be substantiated. The WWE and TNA would look at these numbers and say they are affecting buyrates by 20-25%, but that is not so. Of the people who are downloading, not 100% of them would be winning to pay for the event at any cost. If anything, that number is probably closer to 5% as the remainder are only downloading because it is convenient or because the show is not available in their area, not because they would ever buy if given the option. Also, some of those people who downloaded may have actually ordered the PPV and just wanted to have a copy for prosperity. What that overlap is is also improbable to track.

So yes, there is an impact on WWE and TNA buyrates by people downloading, but not to the number of people who are downloading.

This led to many weeks of discussion on the topic of downloading and streaming PPVs culminating in Issue #84's hope that the WWE could learn something from Apple:

The WWE's Hulu page looks to have been up for longer than noted by the Journal (as Supro and Anonymous Smart Mark pointed out), but the Hulu page is part of the WWE's program to combat piracy. Tals makes another point around this:

**Another problem WWE has with piracy is that Smackdown is taped a day or two in advance so it can be aired in other countries before it airs in the US, these copies meant for countries like Australia end up on the internet before it airs on US TV.**

And vice versa. RAW and ECW air in the US before a number of other countries, so it works the other way as well. The WWE may want to consider stepping up the Hulu page and just maintaining full episodes of all their programs on there. At least then they'll continue to have the advertising revenue from the site.

Apple learned long ago that if you make something that is easy to steal even easier to buy, people will buy it. Despite thousands of websites and file sharing services out there, Apple is approaching 7 billion songs sold at the iTunes store (almost $7 billion in gross revenue). Buying at an iTunes store is actually now easier than trying to find illegal shares, so they are making money at it.

The WWE could take a page out of Apple's book and make getting a copy of their program though Hulu, WWE.com, YouTube, or wherever they can make money easier than a bit torrent site. If they do that, than they will have a new revenue stream and not spend so much trying to combat technology.

The WWE could have gone down the paths of making PPVs more available or easier to stream (at a decent price) than to steal. Instead they are just trying to shut down the streams. Since one shut down stream will only lead to another starting up, the WWE is just going to continue the cost battle of trying to keep up.


Newsbites

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

Several months ago, JAKKS Pacific won their defense against the WWE's charges of bribery in state level court. The WWE appealed to the United States district court and they again ruled in JAKKS Pacific's favor. Says Jack Friedman, Chairman and Co-Chief Executive Officer:

"We are pleased that both the Federal District Court and the Court of Appeals for the Second Circuit have dismissed WWE's federal claims."

Also in the lawsuit world, many personalities are being called as "expert witnesses" in Sal Corrente's WrestleReunion's against Live Nation (formerly Clear Channel Entertainment). The case attributes that Live Nation did not live up to their contract to properly promote the event and that hours of footage that was paid for and shot is completely lost. These damages are being assessed at $500,000. Colin Bowman and Jimmy Hart will be testifying for WrestleReunion while Eric Bischoff and Bill Behrens will be testifying for Live Nation.

In honor of their Slammiversary PPV, TNA is selling a limited number of $7 seats to their show. It is an interesting marketing ploy by TNA who has had trouble selling tickets in the past. Plenty of seats still remain available at that price point, though, so the success of the promotion is difficult to judge. What are TNA's critical success factors? Is profit more important, or is this just about filling an arena and getting more people exposed to the product?

Time Warner cable has officially announced that they are dropping HDNet on May 31, 2009 (though may do so sooner). HDNet is, of course, home to ROH TV. Interestingly enough, Time Warner is replacing the station with MAV TV, which at various times has been host to the NWA, DSW, XCP, and many other regional promotions. There are rumors of another wrestling organization having a television deal with them soon, but no details have been announced. Meanwhile, Roddy Piper will be appearing on MAV TV series "Hot Daughters of Tough Guys". According to the show description:

In this episode, wrestling legend Rowdy Roddy Piper introduces his incredibly hot daughter.




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 May 20, 2009, here are the current standings of our shows:





RAW
Close (This Week's Rating): 3.6
Open (Last Week's Rating): 3.3
Percentage Change: ▲ 9.1%
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): UNAV
Open (Last Week's Rating): 1.9
Percentage Change: N/A
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): 1.1
Open (Last Week's Rating): 0.9
Percentage Change: ▲ 18.3%
52-Week High: 1.5
52-Week Low: 0.9
All Time High: 2.3
All Time Low: 0.6

TNA iMPACT**
Close (This Week's Rating): 1.2
Open (Last Week's Rating): 1.2
Percentage Change: UNCH
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

SuperStars***
Close (This Week's Rating): 1.0
Open (Last Week's Rating): 1.0
Percentage Change: ▼ 2.1%
52-Week High: 1.0
52-Week Low: 0.9
All Time High: 1.0
All Time Low: 0.9

*** SuperStars ratings may include fast overnight if final ratings are not posted. Also, SuperStars ratings are for the prior week as overnights are not available before this article goes to print.

Analysis:

It was a week of slight recovery with RAW and ECW both regaining some viewers after their recent lows and iMPACT and SuperStars maintaining relatively the same number of viewers as the prior weeks. ECW, though, is looking the worst after losing to iMPACT four weeks in a row. As has been noted in the past in the Journal, when the time came for iMPACT to defeat ECW in the ratings it would come more from ECW losing viewers than iMPACT gaining viewers. iMPACT has gained a relatively significant amount of viewers in the past couple of months, but ECW's loss has been nearly double iMPACT's gain.

The United States is not the only country having trouble with wrestling ratings. Recent reports from the UK have the live RAW dropping 33,000 viewers while the replays gained 14,000, a net loss of 19,000 viewers. SmackDown also dropped 20,000 viewers in the same week while iMPACT was up 23,000 viewers. iMPACT actually had just 2,000 less viewers than SmackDown that week. While the ratings in the US may have a large gap, TNA is quite serious that they are a forced to be reckoned with abroad.




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. WWE Reusable Bag ($1.99)
2. 25th Anniversary of WrestleMania 3-Disc DVD/Silver T-Shirt Package ($64.95, on sale $23.99)
3. Jeff Hardy 3 Armband Package ($60, on sale $20)
4. Hardys Green Pendant ($10)
5. WWE Ultimate Rivals Trading Cards ($2.00)
6. WWE Superstars Party Pack ($27.99)
7. John Cena HLR Academy T-Shirt ($25)
8. 25th Anniversary of WrestleMania 3-Disc DVD ($29.99, on sale $19.53)
9. Jeff Hardy Basics YOUTH T-Shirt ($9.99)
10. Jeff Hardy PPV #20 Action Figure ($39.99, on sale $22.99)

Well, Evan Bourne could not hold on for a second week, but a number of other mainstays dropped off. Both Triple H and Randy Orton completely dropped off the list for the first time since the beginning of the year, leaving room for John Cena and Jeff Hardy. Also coming in this week was the beginning of the WrestleMania DVD packages, a big seller for the WWE.


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

1. Second 2 None - World's Toughest Tag Teams DVD ($19.99)
2. Jeff Jarrett - King Of The Mountain DVD ($29.99)
3. Single Pack Of Five Impact Trading Cards ($2.49)
4. Cross The Line Triple Pack 2.0 DVD ($24.99)
5. Christian Cage: The Instant Classic DVD ($19.99, on sale $9.99)

The good news? TNA updated their list in a relatively quick timeframe. The bad news? TNA has once again let Christian Cage be in their top five! It looks like they did not learn their lesson from last time and are again advertising the competition. It is particularly embarrassing that someone who left the company months ago is far outselling most of the rest of the roster, including the last three world champions.




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
24 (May) RAW Live (Loveland, CO) SmackDown / ECW Live (Las Cruces, NM)	25 RAW (Denver, CO Los Angeles, CA) TNA iMPACT (Orlando, FL)	26 SmackDown / ECW (Colorado Springs, CO) TNA iMPACT (Orlando, FL)	27 RAW Live (Monterrey, Mexico)	28 RAW Live (Monterrey, Mexico)	29 ROH on HDNet (Philadelphia, PA) RAW Live (Queretaro, Mexico) TNA Live (Pueblo, CO)	30 ROH on HDNet (Philadelphia, PA) RAW Live (Mexico City, Mexico) SmackDown / ECW Live (Chattanooga, TN) TNA Live (Cheyenne, WY)
31 SmackDown / ECW Live (Bowling Green, KY)	1 (Jun) RAW (Birmingham, AL)	2 SmackDown / ECW (Memphis, TN) TNA Live (Nampa, ID)	3 TNA Live (Kennewick, WA)	4 TNA Live (Kent, WA)	5 TNA Live (Abbottsford, BC, Canada)	6 WWE SuperShow (Pensacola, FL) TNA Live (Pentiction, BC, 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, McLovin exasperated:

Impact FINALLY passed ECW this week! Awwwww YEAH! The "Tuesday Night Wars" are SO ON!!!

Well, since iMPACT is on Thursdays, "Tuesday Night War" would hardly be appropriate. Also, TNA has defeated ECW for 6 of the last 8 weeks and had done so already 4 more times prior to that just this year, nonetheless the few times it did so last year. This is hardly a new occurrence, though the continued streak of domination is completely different.

Away from the ratings, the Journal covered the WWE Q1 results. Yet only one question came out of that extensive report via NoirFan:

What is "SG&A"? I didn't see it spelled out (I probably missed it).

elgrannoche filled in the missing answer:

SG&A: Selling, General & Administrative Expense. In a nutshell Selling refers to the expenses related to selling a product (from warranties and advertising to postage and interest charges) and the G&A is just that general/admin costs that aren't attributable to sales. (ie: rent, utilities, non-sales salaries...)

That pretty much sums it up. It's all the cost of running the business not directly related to a product. And yes, that would include all the salaries of those three dozen vice presidents.

Finally, USAUSA1 brings back the law:

Bryan Alvarez and Dave Meltzer both said Konnan and TNA ended in a settlement despite reports by pwinsider.

Part of the deal, both sides can't say anything bad about each other in the public eyes which means TNA paid Konnan to shut up.

It's quite possible that there is a settlement and those are part of the terms, but those two are hardly credible sources on it. The best bet will be to wait until Konnan actually says something about it. Since TNA does not have to release public records, then there is almost no chance of them revealing any details.


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!!

If you enjoy the Journal, why not bookmark 411mania.com and make it your home page? You can do that by clicking here.




This concludes Issue #87 (Volume 2) of THE HAMILTON AVE JOURNAL. Join us next week as we get ready to ring the bell again.

Till then!