The Hamilton Ave Journal 09.10.09: Volume 2 – Issue 103

Posted by JP Prag on 09.10.2009

Will TNA drop having monthly PPVs? Can the Royal Rumble hold up to a major NFL game? How does Joey Styles feel about WWE.com ending the “Industry News”? Can Bob Barker deliver ratings? Has Don West changed how TNA does business? 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 103

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: TNA to drop PPV

On August 30, 2009, TNA President Dixie Carter continued her round of media circus by appearing on the Live Audio Wrestling Internet radio show. Along with her normal quips, Ms. Carter was asked about the current monthly PPV format. Says the President:

"I'm not a big fan of monthly PPVs, quite honestly, but you have contracts that keep you held in and bound at times… We're definitely talking about trying to shake things up and do things differently in the future."

TNA started as a company that ran weekly PPVs. After moving to Fox Sports Net in June 2004, they eventually dropped the monthly PPVs in entirety in September 2004. They were not gone from PPV for long as they launched their first PPV "Victory Road" on November 7, 2004. Unlike their predecessors and compatriots, TNA immediately went into a monthly PPV format that they have followed through to this day.

Putting on a PPV has not been an exceptionally profitable process for TNA. Last released numbers have PPV averaging 25,000 buys and maxing out at 50,000 buys. At $29.95 per PPV, at 25,000 buys the show would gross $748,000. From the top, 50% automatically goes to the PPV companies, leaving $374,375 for TNA. The satellite uplink time can cost anywhere from $50,000 to $200,000 and the cost for talent, the studio, catering, and all other ancillary costs puts a large number of these PPVs in the red.

When it comes down to it, TNA is not dependent on PPV the way the WWE. About 22% of the WWE's revenue and bottom line come directly and indirectly from PPV, but that is not the case with TNA. Instead, the vast majority of their money comes from television rights fees with secondary figures from merchandise and ticket sales.

Being not as dependent on PPV, TNA can adjust their model to not have as many in a year. Since TNA should focus more of profit then on top line revenue, eliminating or reducing a non-profitable division makes logical business sense.

As Ms. Carter started above, there are contracts in place that stop them from making any rash decisions; but eventually those contracts have to come to an end. So, how would fewer PPVs affect TNA?

Well, if there are 12 PPVs that average 25,000 buys as stated above, that is roughly $9.0 million in gross revenue and $4.5 in net revenue. If TNA were to drop to 8 PPVs per year, buyrates would have to increase to 37,500 buys in order to maintain the same level of revenue, an increase of 50%. Is this feasible for TNA? Normally, a 50% increase would seem plausible, but given the low starting numbers that remains in reason.

Moving down to a bi-monthly model (6 PPVs a year), buyrates would have to increase to 50,000 buys per show, an increase of 100%. While this number is less likely to happen immediately, it is more in line with TNA's long term plans. They should be able to get that many buys if growth projections remain true. It does mean a long period of less PPV revenue, something the company would have to ride out.

Being private, TNA does not have to report these numbers to anyone and justify their actions, a benefit the WWE does not share. Given that, TNA has a lot of leeway with what direction they decide to go.


Newsbites

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

In late breaking news, the WWE has announced the date of the Royal Rumble PPV and it will go head to head with either the AFC and NFC championship game. The WWE usually schedules the Royal Rumble between championship games, but that does not appear to be possible this year. This last happened in 2003, the buyrates decreased by a significant portion.

TNA had some issues last week when their name in programming guides again changed from "TNA iMPACT" to "TNA Wrestling" without warning. Some are blaming the lower rating this week (0.95, see below) on this occurrence since DVRs did not know how to make the switch, but DVR shifting does not account for more than 5-10% of the ratings.

After leaving the WWE a few months back, former WWE Executive Vice President and General Counsel has found new role at close WWE partner THQ as Executive Vice President, Business and Legal Affairs. It would appear the close relationships established between the two companies over the years helped lead to this position.

After an over year long experiment, the WWE has decided to drop their "Industry News" section of their website. Not able to compete with other wrestling new sites and not wanting to demean their own company, the WWE rarely posted any information that was not available elsewhere and in greater detail. No word on how WWE.com directory Joey Styles feels about losing the section.




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 September 9, 2009, here are the current standings of our shows:





RAW
Close (This Week's Rating): 3.8
Open (Last Week's Rating): 3.6
Percentage Change: ▲ 5.6%
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): 1.9
Percentage Change: N/A
52-Week High: 2.4
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): 1.4
Percentage Change: N/A
52-Week High: 1.4
52-Week Low: 0.7
All Time High: 2.3
All Time Low: 0.6

TNA iMPACT**
Close (This Week's Rating): 1.0
Open (Last Week's Rating): 1.1
Percentage Change: ▼ 13.6%
52-Week High: 1.3
52-Week Low: 1.0
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): 0.9
Percentage Change: ▼ 11.1%
52-Week High: 1.0
52-Week Low: 0.7
All Time High: 1.0
All Time Low: 0.7

*** 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:

Ratings are delayed this week for SmackDown and ECW due to the Labor Day holiday, but the other shows did not make their best efforts. RAW was able to rebound to a 3.8 with Bob Barker's appearance, but both iMPACT and SuperStars dropped to near 52-week lows. iMPACT's ratings were covered above, but SuperStars continues to be all over the map. There does not seem to be a correlation between SuperStars' rating and the rest of the WWE and wrestling programming, so the show remains its own enigma.




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. Rey Mysterio 2009 YOUTH Halloween Package ($61.75, on sale $33.99)
2. John Cena 2009 YOUTH Halloween Package ($70.75, on sale $36.99)
3. John Cena 2009 Halloween Package ($73.75, on sale $39.99)
4. Jeff Hardy 2009 Halloween Package ($39.99)
5. Hardys Purple Logo Pendant ($10)
6. D Generation X Worlds Biggest Member T-Shirt ($25)
7. D Generation X 2009 Halloween Package ($72.95, on sale $39.99)
8. The Rise and Fall of WCW DVD/NWO Retro T-Shirt Package ($54.95, on sale $26.99)
9. Hardys Green Pendant ($10)
10. Jeff Hardy Purple/Black Armbands ($15)

In what has to be sour grapes for the WWE, 40% of the Top Ten is taken up by someone no longer with the company (Jeff Hardy) while another 10% belongs to someone out on suspension (Rey Mysterio). Obviously, losing these two will eventually hit the merchandise channels and start to go straight to bottom line. Interestingly enough, the number ten item for Jeff Hardy is brand new and will not be available until September 18, 2009. It is possible then that even though Hardy is no longer actively performing, he has worked out a merchandise deal with the WWE that is mutually beneficial to both. Given this, it seems more than likely he'll return down the road some day.

Meanwhile, the running theme of the big sellers were Halloween packages. These package, too, will not be available until late September or early October (including the Jeff Hardy one), so the WWE is doing a good job of getting some pre-sales into the end of this quarter. How this will help or hurt forth quarter numbers is a question we will not be able to answer until February 2010.


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

1. Labor Day 12 Pack DVD Set ($240, on sale $39.99)
2. Labor Day 3 Shirt Pack ($60, on sale $24.99)
3. Labor Day 6 Pack DVD Set ($120, on sale $24.99)
4. Slammiversary 2009 DVD ($17.99, on sale $14.99)
5. Sacrifice 2009 DVD ($19.99, on sale $9.99)
6. Single Pack Of Five Impact Trading Cards 2009 Edition ($2.99)
7. Sting "Discharge" T-shirt ($19.99)
8. TNA Stars 8 X 10 Extravaganza ($29.99)
9. TAZ "FTW" Shirt ($19.99)
10. Lockdown – 2009 DVD ($19.99, on sale $11.99)

With Don West taking a bigger role in merchandising, discounts and packages appear to be all the rage. One of TNA's strengths in the merchandise department has been their creative ways to clear out old inventory. Sure enough, they have come up with a few more sales to do just that. Hopefully this time around they'll clear themselves out as sitting on those items is not doing them any favors. Even recent DVDs appear to be seeing steep discounts as TNA looks to unload a lot of excess inventory and rethinking their stocking strategy, something that is two years overdue.

The only survivors from last week's numbers were Sting and Taz who both held their shirts in the Top Ten. For those who doubt the placement of older talent in the organization and why they get so much time, lists like this show they keep the company moving along in the short term. In the long term, this list would be better served to be filled with AJ Styles, Beer Money, Matt Morgan, and all the other talent that will encompass the company's roster in the future.




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
13 (Sep) WWE Breaking Point (Montreal, Quebec, Canada) TNA Live (Gainesville, GA)	14 RAW (Toronto, Ontario, Canada)	15 SmackDown / ECW (Hamilton, Ontario, Canada)	16	17	18 RAW Live (Saint John, New Brunswick, Canada) ROH Live (Dayton, OH)	19 RAW Live (Moncton, New Brunswick, Canada) RAW Live (Halifax, Nova Scotia, Canada) SmackDown / ECW Live (Bangor, Maine) ROH Live (Chicago Ridge, IL)
20 SmackDown / ECW Live (Portland, ME)	21 RAW (Little Rock, AK) TNA iMPACT (Orlando, FL)	22 SmackDown / ECW (Tulsa, OK) TNA iMPACT (Orlando, FL)	23	24 RAW Live (Guatemala City, Guatemala) SmackDown / ECW Live (Madrid, Spain)	25 RAW Live (Leon, Mexico) SmackDown / ECW Live (Nice, France) TNA Live (Nuremberg, Germany) ROH Live (Boston, MA)	26 RAW Live (Guadalajara, Mexico) SmackDown / ECW Live (Paris, France) TNA Live (Chemnitz, Germany) 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, the possibility of a women's only wrestling show launching caught the attention of WATRY:

How many 'women's only' shows will launch this year on TV? Zero. In the US. Overseas, or on PPV or some loophole, but nationally on cable in the United States.......never.

There are certainly enough companies trying. Would even a 5 episode pilot trial count?

Speaking of women in wrestling, TNA President Dixie carter shared some information about her experience in wrestling that seems contradictory to what she has said in the past. Ben Robinson (via e-mail!) helps clarify Ms. Carter's role:

When I was a marketing student at Ole Miss, I was fortunate enough to meet and interview Dixie Carter for a newspaper piece, so I think I can maybe clarify a little what she meant when she claimed to "book" wrestling in college.

You are right that it was more of a marketing thing than anything else. She was part of a student organization that organized events on campus, and on a few occasions when Dixie was in charge of coordinating these events she brought Memphis wrestling shows to the campus. She didn't actually work for the wrestling company, but rather promoted the shows.

She was really cool to talk to, by the way. Hope this helps.

That helps a great deal and certainly clarifies the point. As good of a leader as Ms. Carter has been for TNA, she does have an interesting way of warping facts to suit the needs of the hour. Guest#1921 was equally not impressed by this boastful attitude:

Dixie talks SO much crap it's not true, she doesn't have a clue & it's hurting the growth of TNA.

Perhaps on a creative front, along with merchandising, ticket sales, and PPV buyrates. On the other hand, Ms. Carter has brought TNA from nothing to profitability and has vastly increased their true bread and butter: television rights distribution fees.

Of course, the other item of the week was if Ms. Carter should be removing some people in order to help those other areas. Greg writes in:

I think Dixie already took care of firing the very people that were being blamed for the bad booking. If you haven't noticed the last two weeks, the young talent has basically been spotlighted the most.

It could be part of the impetus behind so many of the backstage changes recently and why Ms. Carter is getting more involved in creative. Perhaps she knows she has maxed out in some areas for now and needs to focus on other areas of growth to make them as successful.

Over in the WWE, sales are always an interesting topic. The Dutch wants to know:

For the Hardy's Pendent (and all the ones that don't specify Jeff) do both Matt and Jeff get that merch money?

One would have to image that each splits the cut for any item that is not specific to one or the other. It is the same way Shawn Michaels and Triple H split DX merchandise. If two or more people are involved, then the money they get just gets sliced into pieces.

But if you want to make more money, it always helps to have more things to buy. Rob H gives his theory:

Have been wondering about the potential merits and associated costs of moving some or all of the PPV's to 3.5-4 hours rather than the standard 2:45.

With all the product placement, advertising, music videos, video packages, and longer entrances, it seems like there's a lot less actual CONTENT (wrestling, skits, interviews, etc.) on the shows than there was 10-15 years ago.

I would think the costs to add another 45 minutes of broadcast time would be minimal, especially with all the talent usually at the arena anyway. Any other major costs? I would think the cable companies would be on board since they get 1/2 the revenue.

Any thoughts?

mogamer had the early response:

If a PPV lasts longer, doesn't it cost more to air? If that's the case, WWE/TNA would have to charge more for their events. But it is total BS that only about 1/3rd of a PPV's time is wrestling. It's not like a TV show with ads. I really hate the fact that your expected to pay to see crap. When you pay to see wrestling, you should get wrestling. Anything else is unacceptable. I wonder if PPV buys are affected by this?

Yes, the extra time to rent the satellite transmission (especially for a live show) would far outweigh anything unless the WWE raised the price. Also, you have to remember that when buying a WWE show you are getting "sports entertainment", so all that other nonsense that goes with it will be part of the show. During the Attitude Era, they used to have the long PPV matches with little talking, but that was in complete contrast to the television shows. The audience has been trained to watch a certain way and needs the same type of stimuli otherwise they do not respond the same.

Have you ever thought a PPV was going to a commercial break when someone fell out of the ring?

For those who have not been trained, there are alternative choices out there. The best way to any wrestling company is to speak with your wallet. Judging by recent interviews with Vince McMahon and Dixie Carter that they have at least realized there is a problem, even if they have not figured out what the source of that problem is yet.

Moving on to other properties, jeff wants to talk about the history of WCW:

"So when the WWE bought WCW, Turner Sports formed the "Universal Wrestling Corporation" in order to transfer all of the contracts in to."

Actually, the Universal Wrestling Corporation was the holding company created when Turner bought into (and eventually bought outright) Crockett promotions. It is similar to "Titan Sports" and the WWF in that, while the product was WCW, the company (under the Turner, then Time Warner banner) was the UWC.

Actually, the Universal Wrestling Corporation that was created as a holding company by Turner changed its name two times with the parent company, eventually becoming just "World Championship Wrestling". When they sold the WCW assets, they needed a name and found they already owned that one, so they changed it back.

And finally, some folks want to talk about the WCW's new programs for their "independent contractors". First up is Guest#2451:

Good that WWE took a page from major league sports and started life skills classes. Orton's early career certainly made him an example of why you want some of this stuff, especially if you want a professional environment. Hopefully this cuts down on the dysfunctionality.

Guest#1921 (the same as the one from above) also had some thoughts on this:

While it's a good thing WWE is offering it's talent "Life skills" lessons, how's about giving them employee benefits, the whole "Independent Contractor" thing is BS.

Unfortunately, the last case has too many holes thus far and no one else has stepped forward to try again, so it will be a long time before that is challenged. And even if it is, no one ever said you have to provide benefits for your employees; just certain taxes, disability, and workman's compensation.


Plenty more was written, so be sure to take a look. And 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 #103 (Volume 2) of THE HAMILTON AVE JOURNAL. Join us next week as we get ready to ring the bell again.

Till then!