The Hamilton Ave Journal 07.09.09: Volume 2 – Issue 94

Posted by JP Prag on 07.09.2009

Can another former sports executive bring profits to the WWE? Will changing PPV names increase buyrates? Is AAA about to be translated into English? Has RAW given up any more of their ratings since Donald Trump’s appearance? Are Beer Money the top sellers in TNA now? 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 94

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: WWE goes all pro with new hire

On July 7, 2009, the WWE announced the hiring of Jim Connelly as the new Senior Vice President of Consumer Products. According to the press release:

Connelly will oversee WWE's Global Licensing, Home Entertainment, Book and Magazine publishing. He will report directly to Donna Goldsmith, Chief Operating Officer.

Mr. Connelly spent nearly 25 years in the NFL before leaving the organization in 2007 to found his own company. During his stint in the NFL, he had at one time been a Senior Vice President of Consumer Products before eventually ending up in his last role of Managing Director of NFL Europe. Says Mr. Connelly's new boss, Ms. Goldsmith:

"We are thrilled to be able to tap into Jim's extensive experience in marketing, consumer products and branding… As a proven and recognized business leader both in the U.S. and in Europe, Jim's business acumen will be an asset in furthering our consumer products business globally."

Ms. Goldsmith was the former Senior Vice President of Consumer Products before being promoted to COO on January 1, 2009 when Mike Sileck left the company. You can read all about Mr. Sileck's departure and the influence he had on the company in Issue #60 of the Journal.

Ms. Goldsmith herself is a former NBA executive. Also among recent hires is Executive Vice President of Marketing Michelle Wilson (covered in Issue #73) who worked with the USTA, XFL, and NBA. The WWE's top executive positions have been shifting away from financial and operations people and have been focusing more on people with sport marketing expertise. This would seem counter-intuitive to the WWE's policy that they are an "entertainment" company, not a "sports" company, but that is the direction they have chosen with their hires.

Obviously, Ms. Goldsmith's influence in the company has been growing as recent hires reflect her sensibilities. Under Ms. Goldsmith, consumer products took an even large place in the WWE's pantheon, so it can be seen why she is well respected within the company. Still, Ms. Goldsmith has shown some naïveté when it comes to the business, as this piece from Issue #90 shows:

The other piece of news that may have helped was WWE COO Donna Goldsmith speaking at the Noble Financial Emerging Growth Equity Conference. The presentation was the typical one that is usually given by WWE CEO Linda McMahon, with a few twists. Most interesting was Mrs. Goldsmiths' comments on her company's competition:

"The MMAs have definitely been gaining popularity. And can you say the take a share of dollar? [Shrugs] Maybe on the PPV front… umm… which is tough business, the PPV. We have not felt it in our other areas, and the reason being they do not have real stars. They don't have a storyline. Someone gets knocked out or hurt, that may the last you ever see from them again."

She continued:

"As far as the PPV goes, we need to find new ways to innovate to get that share of dollars—we are competing for the same share of dollar! But I must tell you, up until this point we have really not felt any of that pain…. I think it is somewhat of a difference audience; we're still learning because it is still relatively new…"

Perhaps Mrs. Goldsmith needs to be reminded of the Top Ten North American PPV buyrates from 2008:

1. Boxing: Oscar De La Hoya vs. Manny Pacquiao, Dec. 6, 1,250,000
2. UFC: Brock Lesnar vs. Randy Couture, Nov. 15, 1,010,000
3. Wrestling: WrestleMania, Floyd Mayweather Jr. vs. Paul "Big Show" Wight, March 30, 670,000
4. UFC: Georges St. Pierre vs. Jon Fitch/Lesnar vs. Heath Herring, Aug. 9, 625,000
5. UFC: Lesnar vs. Frank Mir, Feb. 2, 600,000
6. UFC: Quinton Jackson vs. Forrest Griffin, July 5, 540,000
7. UFC: St. Pierre vs. Matt Serra, April 19, 530,000
8. Boxing: Felix Trinidad vs. Roy Jones Jr., Jan. 19, 500,000
9. UFC: Chuck Liddell vs. Rashad Evans, Sept. 6, 480,000
10. UFC: B.J. Penn vs. Sean Sherk/Tito Ortiz vs. Lyoto Machida, May 24, 475,000

UFC took 7 of the 10 spots, with one PPV doing 1 million buys domestically alone (not including international contributions). Mrs. Goldsmith seems too eager to dismiss MMA and the long term implications on the business. It is not "some" of the same dollar, but all of the same dollar. People have limited funds per month, and the more they spend on MMA, the less they potentially have for the WWE.

Still, Ms. Goldsmith mentioned the WWE needed to innovate PPVs, and that seems to be the plan…


New PPV strategy

With PPV buyrates dropping (most especially domestically) and stiffer competition from the UFC for consumer dollars, the WWE has been experimenting with different ways to increase viewship. As covered in the Journal, the WWE has already begun test marketing using theaters and bars with separate display areas to give a more arena feel, as well as considering going back to CCTV situations.

One of the more prevalent changes has been the renaming of PPVs. This has been going on for a few years, such as when "Vengeance" became "Night of Champions", but this year has seen the spend of the changes pick up. "Unforgiven" has already become "Breaking Point" (purportedly a submission themed PPV) and "No Mercy" has become "Hell in a Cell". Earlier this week, "Cyber Sunday" was changed to "Annihilation" but was changed back when someone in the company did not like the new name. A change is still expected as the WWE does not like the cyber concept and wants to have another theme in its place. Says WWE Senior Vice President of Distribution and Affiliate Marketing Peter Clifford:

"We've been doing these PPVs for a few years and we felt that some of the PPVs were a little flat in terms of what we wanted the titles to project, so we looked to see which ones we can rename."

According to Multichannel News, the WWE has not ruled out dropping some PPV events entirely and adding others, but that does not seem to be their main objective. Instead, they are looking to increase buyrates through an incentive program. Says Multichannel News:

The company is also looking to provide prize incentives to consumers who purchase consecutive monthly PPV events.

Consumers buying the Night of Champions and SummerSlam event will get a wrist watch that replicates a WWE championship belt.

Still, despite the drop in PPV buyrates and looking for increases, Mr. Clifford insists the WWE is actually on budget targets for the year. This, though, is because the WWE cut expectations. Mr. Clifford expounds further:

"We took into account the economy and cut back our expectations a bit, so we're pretty much on budget, which is a good thing for us."

So yes, it is easier to make budget plans when you cut expectations. That said, Mr. Clifford said something quite interesting when discussing using VOD and streaming web services to bolster PPV buys:

"One of the great things about the WWE is that our fanbase moves wherever we tell them to go."

And this underlines the overarching issue that has been covered when it comes to the WWE and technological delivery platforms. The WWE thinks that they tell the consumers where to go instead of listening to the consumers and delivering in the method the consumers prefer. The centric nature of the WWE thought process makes them not be ahead of the curve like they used to in the past, so when they catch up they pat themselves on the back.

Will the WWE learn their lesson and look to consumers instead of trying to shoehorn consumers into their preferred methods of delivery? It does not sound like from Mr. Clifford that that will be happening any time soon.


Newsbites

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

In an effort to advertise the brand, TNA will have a presence at the San Diego Comic Con by sponsoring the "Wrath of Con" party at the Hard Rock Café Friday July 24, 2009. This party is a private event, so only five attendees of Comic Con will be allowed to attend.

JAKKs Pacific employees were at the iMPACT Zone in Orlando, FL to begin scanning wrestlers for their upcoming action figure line in 2010. Meanwhile, JAKKs Pacific is still fighting to maintain the rights to WWE video games.

With AAA's continued expansion into the rest of North America, they have signed a deal with Canadian company "Cookie Jar Entertainment" to provide an English language version of their television show. No deals have been reached for English distribution yet, but Cookie Jar is looking to begin launching a program and related consumer products in 2010.

Also on the international front, the WWE has finally signed a new deal with Sky Italy. The three year contract allows SmackDown and ECW to be shown in full for an undisclosed sum. Also, the WWE will begin providing the HD feeds of their program when Sky Italy launches in August.




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 July 8, 2009, here are the current standings of our shows:





RAW
Close (This Week's Rating): 3.6
Open (Last Week's Rating): 3.9
Percentage Change: ▼ 7.7%
52-Week High: 4.5
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): 1.7
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): 1.2
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): 1.2
Open (Last Week's Rating): 1.1
Percentage Change: ▲ 9.1%
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): 0.9
Open (Last Week's Rating): 0.9
Percentage Change: UNCH
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:

With the Saturday holiday, most ratings have been delayed the past couple of weeks, resulting in SmackDown not being available in time for print. Also, with ECW airing out of order, those ratings will not come in until at least Friday. However, the most important one this week was RAW, which shed an additional 7.7% of their audience to go back to a 3.6. This is the exact same rating RAW had on the two week leading up to the commercial free RAW, so the WWE has proven one thing here: they cannot hold on an audience gain for more than a couple of week.

RAW has been all over the map the past 52 weeks. In July 2008, the show averaged a 3.4 rating, but then sunk as low as a 2.9 average in September 2008. By January 2009 they were at a 3.6, but by May 2009 that was back to 3.4. June 2009 has a 3.8 average rating, but that is the one that is going to be looked at as the anomaly compared to the other months preceding it. Overall, RAW has managed to bring back some of the audience since September 2008 (or replaced them with new ones), but the 4.5 ratings shows just how much audience RAW is not capturing on a regular weekly basis.




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. John Cena Attitude Adjustment T-Shirt ($25)
3. Hardys Green Pendant ($10)
4. Jeff Hardy 2 Armband Package ($40, on sale $14.99)
5. Triple H Eversoris T-Shirt ($28)
6. John Cena Attitude Adjustment Baseball Cap ($20)
7. WWE Superstars Party Pack ($27.99)
8. Jeff Hardy PPV #20 Action Figure/Basics YOUTH T-Shirt Package ($23.99)
9. WWE White Gift Bag ($3)
10. Legacy Born Better T-Shirt ($25)

Oddly enough, in the post-holiday boom the party pack has remained behind, perhaps seeming some residual sales from the prior week. Meanwhile, the rest of the list is made up of John Cena, Jeff Hardy, Triple H, and a returning Legacy. It would appear the extra focus the team got this week on RAW did lead to some additional dollars of revenue.


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

1. Lockdown - 2009 DVD and T-shirt Package ($19.99)
2. Kurt Angle - Champion DVD ($19.99, on sale $17.99)
3. TNA Global iMPACT DVD ($17.99)
4. Sacrifice 2007 ($9.99)
5. World X Cup 2008 ($14.99)
6. MMG Dog Tags ($5.99)
7. Beer Money T-shirt ($19.99)
8. Slammiversary Autographed 7 Year Special Plaque ($299)
9. Cross The Line Triple Pack 2.0 DVD ($24.99, on sale $14.99)
10. Jeff Jarrett - King Of The Mountain DVD (Autographed) ($29.99)

TNA updated their list this week (more on this in the Editorials below) and showed an interesting trend: old DVDs still sell best for them. The most recent addition is LockDown at number one, but the other DVDs have been out for quite some time, culminating in Sacrifice from 2007. Showing some staying power over the update was specifically Jeff Jarrett, Kurt Angle, and Beer Money. The latter has been through quite a few shifts on the list without the price changes the other two have seen. TNA seems to have realized this sales potential (which they did not when the Motor City Machine Guns were making large numbers) and are looking to capitalize on it.




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
12 (July) TNA Live (Syracuse, NY)	13 WWE RAW (Orlando, FL)	14 SmackDown / ECW (Miami, FL)	15	16	17 RAW Live (Macon, GA) TNA Live (Johnson City, TN)	18 RAW Live (Aiken, SC) SmackDown / ECW Live (North Charleston, SC) TNA Live (Winston-Salem, NC)
19 RAW Live (Florence, SC) SmackDown / ECW Live (Greenville, SC)	20 RAW (Raleigh, NC) TNA iMPACT (Orlando, FL)	21 SmackDown / ECW (Richmond, VA) TNA iMPACT (Orlando, FL)	22 TNA iMPACT (Orlando, FL)	23 TNA Live (Bossier-Shreveport, LA)	24 WWE SuperShow (Salisbury, MD) TNA Live (Monroe, LA) ROH Live (Toronto, Ontario, Canada)	25 WWE SuperShow (Wildwood, NJ) TNA Live (Southaven, MS) ROH Live (Toronto, Ontario, 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, TNA's lack of updating was the first point brought up by macdollarz. Fair warning: this one is unedited:

you act like tna is losing money or someshit cuz they dont reset the sales chart every week.

who gives a fuck?who would really notice..?

After translating through, BringTheNoise brought the answer:

1. Update, not reset.
2. Grammar and punctuation are for winners.
3. It doesn't show that they're losing money, but it is fairly unprofessional.

Not so much that they are unprofessional, but that they do not actively manage the details. The small example of them not updating the list regularly is indicative of a greater behavioral issue in how the company runs. On top of that, when they do update the list they often times highlight items that they should not, like Christian Cage's DVD after he has left the company. It is this lack of paying attention to the details and effectively doing ones job that is unprofessional. Much like not using spelling and grammar, not paying attention to what you post makes you look bad.

Up next Rinsa provides a correction of sorts:

Wow! NEWS! Or it would be, had WWE Vintage Collection not been airing in the UK for over a year... do keep up.

Apologies for not knowing every show that the UK has, but Canada is a far better test market for the show than the UK.

Moving on to the big subjects of ratings, BobbyC requests:

As an alternate to the current ratings history chart (or in addition to), it would be good to see year over year comparisons for each show (at least 2 years, but up to 4 years).

I think that one people miss when talking about ratings is that there are certain periods where ratings increase or decrease. During the summer months, you have baseball as the only major sport to compete against, and you also have re-runs or summer replacements on the major networks - so spikes in the ratings are expected. Likewise - when you have powerhouse shows like MNF competing against RAW, ratings will be down.

Maybe not something that you do every week - but once a month with some commentary on that.

The Journal has done something similar in the past, looking at the three year average rating for RAW and TNA iMPACT, as well as doing rating predictions based on those year-over-year trends (see Issue #37 and Issue #53).

However, it has been quite some time since a long-term analysis and ratings trend has been done. There have been specific instances where we have needed to pull historical charts, but none in a main article. It will be added to the docket for a future main article.

Speaking of ratings, TNA president Dixie Carter spoke on hers. Guest#7763 was not impressed:

"We can't just say we're going to beat Raw (in the ratings). Right now, that's unrealistic. We had to start with a more obtainable goal to beat the ratings of our competitor's third-rated show, ECW – and we've done that."

Dixie, do you have any idea how pathetic that sounds.

Actually, it sounds more realistic than we normally hear from TNA. Usually it is that they are about to overcome the WWE in ratings, but this is the most realistic goal that Ms. Carter has stated. Jimbob Jones brings up this side of the debate:

There's nothing wrong with Dixie setting goals. There's also nothing wrong with her comparing TNA to WWE. Just like WWE compared themselves to WCW when WCW was in the lead. Or am I the only one who remembers HHH in a tank "attacking" Turner headquarters, or Huckster and Nacho Man skits? But I guess when WWE does it, it's "cool", but when someone else even mentions WWE, it's "pathetic"...

What's truly pathetic is how defensive WWE fans are over their beloved company.

A 7-year-old company beating the C show of a company that's been around for 50 years (and has meant "pro wrestling" for casual fans for 25) IS one hell of a feat.

They're still a long way off, which Dixie even says, but they're making up ground. As a company, they've done damn near everything right (despite a lot of their stupid-ass booking, which, trust me, drives TNA fans more nuts than anyone else).

The sad thing is, if somehow TNA finds the "next big thing", these same WWE "fans" will be slobbering all over themselves about how great they always thought TNA was. (I quote "fans" because I don't think for an instant that the trolly fans and "writers" here on 411 represent the mindset of most WWE fans, who can care less how well TNA does or doesn't do).

Absolutely, and as noted above, this is one of the few times TNA has given themselves an attainable goal. When the goal is sell out a 20,000 seat arena, they are out of their minds. But when it comes to beat the competitors third-tier show, that is well within their reach. Of course, the main reason why they have defeated ECW is because of ECW losing ratings, not TNA gaining as much. neverAcquiesce brings up this point:

I think Dixie can say she doesn't want to see WWEs numbers go down while flaunting the TNA-over-ECW numbers even if it's due in part to ECWs ratings dipping. She obviously wants to come across as a bigger person with the "there's enough for everyone" mentality, but I don't view it as a contradiction. Because while ECW is drawing fewer viewers than they were a year ago, TNA is drawing more. Those are facts, and while they may look a tad skewed, they're still the facts.

The WWE also posts a number of "facts" on every one of their shows on the week. Using misleading statements is still misleading. TNA's ratings are up, but not as much as ECW's ratings are down. The contradiction is that Ms. Carter said that she does not want to see ECW's ratings go down, yet that is the main reason TNA is in the lead. She now says that SmackDown is in striking distance, but that is again because SmackDown has dropped from a 2.8 average rating in early 2007 to a 1.8 average rating in mid-2009. TNA is making ground, but she needs to be honest with herself and her company.

If they are just happy with beating the competition, that is one thing. But if they want to compare the company against itself and all possible forms of entertainment, then that is a whole different barometer. Still, when it comes to TNA's size, some people still do not understand how big they are, like August:

"TNA is the second largest wrestling company in the world"

really?

Well, let's break it down:

TNA is available in 120 countries around the world. Only one other wrestling company has any more.

TNA had over $50 million dollars in revenue. Only one other wrestling company has any more.

TNA has a roster and staff of over 200 people. Only one other wrestling company has any more.

TNA has 12 PPVs on US television a year. Only one other wrestling company has any more.

TNA has a weekly average rating of 1.2. Only one other wrestling company has a higher rating on a consistent basis.

TNA has nearly 100 live events a year. A few other wrestling companies have more, but none with the average audience size of TNA. Some have larger audience sizes (see: Japan), but do not have large tours and television clearance.

If you do not believe the bullet points above, TNA does say such in their press release for licensees:

TNA is now the second largest wrestling company in the world that utilizes some of the world's best known and up-and-coming wrestlers in the ring today.

So yes, TNA is the second largest wrestling company in the world on most measures that count in business.


Plenty more was written, so be sure to take a look.

Also worth your time is the season finale of Hidden Highlights. And if that is not enough for your reading pleasure, be sure to check out this reporter in this week's Fact or Fiction: Politics discussing the "War on Drugs" and legalization of certain substances.

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

Till then!