The Hamilton Ave Journal 05.28.09: Volume 2 – Issue 88

Posted by JP Prag on 05.28.2009

Are WCW’s former owners getting back into the wrestling game? Where can you watch ECW now? Can Jeff Jarrett continue to outsell the WWE in DVD sales? Did RAW’s ratings hold up against their nemesis in the Denver Nuggets? And are those same rating in the UK even comparable? 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 88

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: Time Warner's old fashion rasslin'

Time Warner has a long, storied history with professional wrestling. Long before the company's current incarnation, TBS was part of the Turner family and hosted Championship Wrestling from Georgia followed by NWA World Championship Wrestling. After a brief affair with the WWE (which saw a ratings disaster), Turner purchased Jim Crockett Promotions and made it into WCW. This would last until 1996 when Time Warner was able to complete their purchase of Turner broadcasting.

Time Warner inherited WCW as they were just moving towards their peak performance from 1996 to 1998. Due to the large corporate overhead but little synergies, a lot of people wanted to get involved and take credit for WCW's success. They expanded programming (adding Thunder and third hour of Nitro again then WCW President Eric Bischoff's wishes) and pushed their own ideas on the product. The results was messy and eventually forced Mr. Bischoff to leave the company.

As things got worse for WCW, AOL purchased Time Warner, creating AOL-Time Warner. The new company wanted nothing to do with wrestling and cancelled their top rated shows in 2001, thus securing a bargain basement deal for the WWE to purchase WCW's assets. The new company was equally unsuccessful in almost every area as it was discovered the people who ran an ISP had no idea how to run a multi-national media conglomerate. As the 2000's moved on, dial up ISPs also became more passé with the advent of affordable broadband. Eventually, pieces of the company were sold off and they returned to the new Time Warner with a different set of directors.

With this new band of leadership over the years, Time Warner's focus has been shifting into various other forms of media. This past week, Time Warner made a big to purchase part of the assets of Midway Games, makers of TNA iMPACT the Video Game. This is not the first time Time Warner has been involved with Midway Games. In 1996, Time Warner sold their division "Time Warner Interactive" (formerly Atari Games, the arcade division of Atari) to Midway games. So essentially they are buying back what they sold to Midway, just as they bought the division back from NAMCO in 1994.

Unfortunately, according to the press release:

Under the agreement, Warner Bros. Entertainment would acquire substantially all of the Company's U.S. assets including its Mortal Kombat franchise and its development studios in Chicago and Seattle for a purchase price of $33,000,000, subject to adjustment as of the closing for changes in inventory, plus the agreed value of the Company's U.S. account receivables. The agreement does not include the Company's development studio in San Diego and the TNA franchise games, nor does it include the Company's development studio in Newcastle which had developed the Company's recently released Wheelman game.

In other words, should the deal go through—a deal which the bankruptcy courts will have to agree to—Midway will be broken in two with Mortal Kombat and other franchises going on way and TNA with other small franchises going another. If this were to happen, it is unknown if Midway would try to rebuild as a smaller company around these titles or would try to sell that part of the company to someone else as well. But at the end of the day, Time Warner has again snubbed adding wrestling to their portfolio.

At the same time, as reported in the Journal last week, Time Warner Cable officially dropped HDNet, home of ROH. Says Robyn Watson, director of corporate public relations for Time Warner Cable:

"There's a limited appeal for the programming. In a world with more than 100 HD channels, being in HD is not enough. We are adding other channels in HD to give our customers more choice."

Owner of HDNet Mark Cuban had this to say:

"[T]here are millions of viewers who enjoy our unique and exclusive programming. We are not a cookie-cutter network like those from the big media conglomerates. HDNet's viewers do business with providers specifically to get our programming."

How Mr. Cuban could possibly know there are "millions" of viewers is an interesting question since HDNet does not record Nielsen ratings. Also, given their limited number of availability having "millions" of viewers would give them a higher percentage of potential available audience than most major networks.

Either way, it means that ROH is no longer involved in the Time Warner family. Whether by knowledge or coincidence, Time Warner has once again snubbed on the dreams of professional wrestling in a variety of ways.


Newsbites

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

On the list of companies that don't quite exist yet, Wrestlelicious has yet to secure any type of TV or distribution deal. Talent have been told, though, to expect a TV taping over the summer.

In the continual expansion of their product into other media, the WWE has made two major additions recently. First, full episodes of SmackDown (apparently with some editing) are not available on Hulu.com a day after the US broadcast. On the other end of the spectrum, main events from ECW can now be watched on Sprint TV in the SciFi Channel area. No word from WWE's mobile partner AT&T on how they feel about the WWE offering content to another company.

In an interesting shift in selling patterns, TNA has had two titles in the Billboard Top 10 Recreational Sports DVD listing for the second week in row. The UFC also had 2 while the WWE had 3 this past week. Still, TNA DVDs continue to be a big bread winner for them, with the Jeff Jarrett DVD hitting #4.

Despite their own success, TNA also tried to latch on to the WWE's controversy with the Denver Nuggets in order to sell more tickets to their house shows in the Colorado area. Says TNA President Dixie Carter:

"It was sad to see the WWE pull out of all their scheduled shows in Colorado recently because of the scheduling conflict with the NBA playoffs. I want everyone in Colorado to know that TNA Wrestling is coming and we hope to see you at our first shows ever in your state. For WWE fans that paid for any of these cancelled events, we are offering you $10 off the purchase of tickets to come see us and enjoy the best fan experience in pro wrestling."

Basically, people who showed their WWE tickets would get a $10 discount on the TNA event. No word if the ploy worked at all, but it was an interesting marketing effort, to say the least.

The WWE may not be seeing much ratings success from their issue in Denver (see Marketplace below), but the news has peaked investors' interest. WWE stock closed at $12.16 yesterday, and has been posting some of its highest numbers in the past three months.




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 27, 2009, here are the current standings of our shows:





RAW
Close (This Week's Rating): 3.2
Open (Last Week's Rating): 3.6
Percentage Change: ▼ 11.1%
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): UNAV
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): UNAV
Open (Last Week's Rating): 1.1
Percentage Change: N/A
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): 1.1
Open (Last Week's Rating): 1.2
Percentage Change: ▼ 8.3%
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): 0.8
Open (Last Week's Rating): 1.0
Percentage Change: ▼ 15.8%
52-Week High: 1.0
52-Week Low: 0.8
All Time High: 1.0
All Time Low: 0.8

*** 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:

Wrestling took another backslide this week as SuperStars saw its lowest rating ever (0.8); iMPACT slipped back to a 1.1 for the first time since February 5, 2009's 1.0; and RAW lost to their competition of the NBA playoff game between the Denver Nuggets and LA Lakers (3.2 to 6.9). ECW's rating are delayed because of the holiday, but SmackDown's ratings have not been released again this week. Something must be going on with MyNetworkTV to be withholding ratings like this. There have been several preemptions in major markets recently, so perhaps it is just taking longer than usual to come up with total numbers.




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 Ultimate Rivals Trading Cards ($2)
2. Hardys Green Pendant ($10)
3. WWE White Gift Bag ($3)
4. Jeff Hardy PPV #20 Action Figure ($39.99, on sale $22.99)
5. John Cena HLR Academy T-Shirt ($25)
6. Jeff Hardy 3 Armband Package ($60, on sale $20)
7. 25th Anniversary of WrestleMania 3-Disc DVD/Silver T-Shirt Package ($64.95, on sale $23.99)
8. 25th Anniversary of WrestleMania 3-Disc DVD ($29.99, on sale $19.53)
9. Undertaker 25th Anniversary of WrestleMania Commemorative Plaque ($99)
10. Jeff Hardy Immune to Fear T-Shirt ($25)

WrestleMania continues to show just how big of a product it is for the WWE for months on end as it maintains two positions in the Top Ten. Also making a very interesting appearance is the big ticket Undertaker plaque with a $99 price tag. The WWE rarely has big ticket items make their way in to the Top Ten, and the longer it can stick around the better for them and the top and bottom line.


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

1. Beer Money T-Shirt ($19.99)
2. Cross The Line Triple Pack DVD Set ($24.99, on sale $10.88)
3. Motor City Machine Guns T-shirt ($19.99)
4. Unbreakable 2005 ($9.99)
5. TNA Logo T-Shirt Special ($24.99)
6. Nash "Big Sexy Tour" T-shirt (2008 Version) ($19.99)
7. Main Event Mafia – Black T-shirt ($19.99)
8. Single Pack Of Five Impact Trading Cards ($2.49)
9. Kurt Angle - Champion DVD ($19.99, on sale $9)

In a rarity among rarities, TNA updated their list for the second week in a row. Perhaps someone got to them and said that having Christian Cage in the list—AGAIN—was not such a good thing? Still, this list is quite peculiar, featuring the return of the original Cross the Line DVD set, a PPV DVD from 2005, a T-shirt outdated by a year, and an on-sale recent item. How these items made it into a top selling list is a complete mystery to this reporter, especially when they are mixed in with many of the current TNA items. Somehow, though, this seems the most authentic list we have seen from TNA in quite some time.




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
31 (May) 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)
7 WWE Extreme Rules (New Orleans, LA)	8 RAW / Superstars (Lafayette, LA)	9 SmackDown / ECW (Biloxi, MS)	10 RAW Live (Helsinki, Finland)	11 RAW Live (Prague, Czech Republic)	12 TNA Live (St Josephs, MO) ROH Live (Manassas, VA)	13 RAW Live (Nimes, France) SmackDown / ECW Live (Binghamton, NY) TNA Live (Council Bluffs, IA) ROH Live (New York City, NY)

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, illegal streaming and downloading were again the topics du jour. First up, Last_Rider:

Personally I think WWE is really missing the point on fighting illegal streams and downloads.

It is definitely within their rights to do so, and I have no issue with them fighting something illegal; however, this seems like a pointless waste of funds and time. I can't speak for everyone, but how many people will buy the PPV if they can't find a stream?

Personally, I don't buy them for two reasons, one is I'm not that interested in the product, and two, I can't afford it.

Again, I can't vouch for anyone besides myself, but I seriously doubt that people who can't watch PPVS online will suddenly decide it's a good idea to buy them.

The WWE is going to spend money and man hours for something that inevitably won't gain them money. I don't know about the conversion rates, but people who normally watch PPVs online and then can't probably wont decide to shell out $45.

That is assuming of course, WWE can even manage to shut down the offending streams, which I seriously doubt they'll be able to do.

Agreed. The WWE seems to believe that by shutting down streams these people will suddenly switch to buying customers. A small percentage will, but a larger percentage will switch to nothing versus paying. With those figures, are the costs of going after the streams less than the small additional revenue? Iron Knee seems to think so:

The WWE makes money on older events via DVD sales and its On-Demand service. Thus, removing copyrighted material from illegal channels increases the value of their archived material. I don't think they're really worrying about thieves who steal the PPVs the day after. Instead, they're likely worrying about their archives losing value because you can steal anything that was ever recorded and uploaded.

Now that is an interesting point on the long term perspective. If illegal downloading is allowed now, does it devalue the library? That will take a little more pondering and debate to be sure. Of course, there is still the logistical question of this all that Guest#5116 brings up:

Not only that, but the WWE can only go so far when it comes to shutting down PPV streams. If the streams come from websites that have no laws against piracy, then the WWE would be unable to stop it, right?

Yes, if the streams are coming from the United States, Canada, or most western European countries that have strict rights on intellectual property, than the WWE could be quite successful. But if the streams are coming from China, Russia, some Easter European countries or the like where there is less protection and less resources to enforce any protections that do exist, the WWE may be fighting a one-way battle.

Think of it this way: the state of Massachusetts has very strict laws against scalping and mark-up on tickets. Texas, on the other hand, has no such laws. So people from Texas buy tickets to Red Sox games and sell them on StubHub for outrageous prices. Even though it is against Massachusetts law (and Red Sox rules on ticket sales), because it happens outside of their jurisdiction there is nothing they can do about it.

Aside from fighting against the streamers, BobbyC wants to take a different approach:

In a time when viewership is down (both TV ratings and PPV buys), I would think that trying to secure more viewers would be in WWE's best interest. I know that they tried to make PPV's unpredictable, making them "must see" events. But - you can only do that so many times in a row. Then things get stale. And right now - the WWE product is stale.

This is now the time for the WWE to try something radical. My recommendation would be to change the PPV prices for the rest of the year for the non-marquee events. SummerSlam and Survivor Series - keep as is. All other events - $9.99.

At that price (much like your iTunes model), you can attract PPV viewers, possibly turning them into regular PPV buyers. Then next year, you increase the non-marquee events to $12.99-$16.99. Assuming you continue to deliver solid PPV's - you can then attract and keep viewers on your TV product.

That only works is the amount of new viewers at that price exceeds the amount of lost revenue. At $39.95, if the WWE on average has 190,000 buys they get $7.6 million in revenue. In order to maintain that same level of revenue, they would need to get nearly 760,000 buys at $9.99, a difference of 570,000 buys. It is highly unlikely that a price drop like that will yield a 300% growth in purchases. Remember: this is not a game of getting new viewers, but a game of maximizing profits. In order to do that, sometimes you have to alienate large portions of the potential customer base.

Outside of PPVs and/or illegally downloading them, the ratings in the UK were a big subject. First up is Guest#4358:

"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."

To be fair, in the UK TNA airs on a standard cable channel, while WWE airs on a 'premium' cable channel which requires an extra fee. So I imagine the 'revenue per viewer' is substantially higher for WWE's shows.

We also do not know what the crossover is between RAW and SmackDown viewers. If somewhere between 30-50% are the same viewers, that would mean that the WWE has nearly double the amount of viewers. CockKnocker decided to take the positive spin on this one, though:

Hence why we deserve a TNA PPV live.

TNA took off because of the Wrestling Channel showing it for free. Then it moved to Bravo (which also shows UFC) on less than one week delay. TNA are considering holding actual PPV's in the UK.

WWF has been a mainstay on Sky since about 1989 so has had the best part of 20 years to cram Vince's crap down our gullets. We got one major PPV in that time in the form of Summerslam donkeys years ago and since then haven't had shit but some televised house shows passed off as exclusive PPVs and some TV broadcasts.

Way to repay a loyal public Vince.

Which is a shame as I'm willing to bet that the WWE, with the right foresight and planning, would have no problem getting 95K+ people into Wembley Stadium for a major PPV.

The Journal has been a voice is saying that the WWE and TNA spend far too much time focusing on America and pandering to US-centric audiences. Both are global companies that have nearly stagnant growth at home buy huge growth abroad. Every other country is where the focus should be for long term growth, not the US.

Although both Dragon Gate and Triple-A seem to think they can make headway in America. Most likely the American dollar has something to do with that.

Meanwhile, dAVE!!! wants to continue with the UK ratings talk:

"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. "

Couple of things:

1. Where did you get the figures from? I was looking for some UK ratings myself out of curiosity.

2. As someone else stated, TNA is actually more accessible over here than WWE. Also, last weeks Smackdown was moved around a bit due to some Golf game, so that may have had an affect.

It was actually not last week's SmackDown rating, but the one from May 1, 2009. ifight365.com tends to have slightly delayed UK ratings every couple of weeks. According to a report from them on May 21, 2009:

A mixed week in the latest round of UK television ratings for the week ending May 10.

TNA Impact on Bravo (the May 7 show on Spike TV) drew 48,000 viewers on May 9 - down 3,000 viewers on the previous week.

WWE Monday Night Raw on May 4 drew 46,000 for the live 2am broadcast.

A further 50,000 tuned in for an evening replay on May 7 - down 26,000 on the previous although this week's replay aired at 11pm rather than 9.30pm as was the case the week before.

Smackdown on May 8 drew 78,000, up 25,000 viewers on the previous week.

Replays on May 9 drew 28,000 (am) and 36,000 (evening) viewers.

The UK audience appears to be all over the map.

And finally, Sbre zeke ponders:

I wonder how much Hardy actually makes off all those merch sales?

You can bet that his take is a major sticking point of negotiations with the WWE. If you were consistently the #2 seller in the company for over a two years, even when out with injury or suspended, then you, too, would believe you deserve a bigger take the WWE's mystery formula.


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

Till then!