wrestling / Columns
The Hamilton Ave Journal 10.29.09: Volume 2 – Issue 109
THE HAMILTON AVE JOURNAL
By JP Prag
Volume 2 – Issue 109
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 makes largest talent signing to date
TNA has been making waves this week when they announced the signing of the legendary Hulk Hogan to the roster. Whatever questions there may be of Hogan’s age, ability, politics, history, and creative view of the past, Hulk Hogan is the most recognizable name in the wrestling industry. More than that, he is the more recognized wrestling name outside the industry.
Mr. Hogan’s role in the company remains to be seen. Many have assumed that he would be wrestling, but that does not appear to be written in to his contract. Says Mr. Hogan:
I’m not exactly sure what I’m going to do, but I’m going to contribute as much as I can. I’m going to try to take this business to a whole another level.
Hulk Hogan will be wrestling during his upcoming tour of Australia in November, a tour which has not been affected by this signing. Mr. Hogan has stated that he is wrestling and is using the trip to see if he can still go in the ring, so it is reasonable to assume that at some point he will be wrestling with TNA.
This is not Hulk Hogan’s first foray into TNA. In the early days of the company, after wrestling in Japan Hogan shot an angle with Jeff Jarrett where Jarrett hit him with a guitar during a press conference. This was supposed to lead to a match between the two at the inaugural Bound for Glory. Actually, the concept of TNA having a major PPV after the end of the weekly PPV era came from the possibility of this match. From Pro Wrestling Wiki:
Plans for Bound for Glory were originally discussed in 2003, and an angle featuring TNA mainstay Jeff Jarrett assaulting free agent Hulk Hogan with a guitar following a New Japan Pro Wrestling show at the Tokyo Dome was filmed on October 13, 2003. For several weeks thereafter, TNA hinted at a future match between Hogan and Jarrett, possibly as the featured match for the planned event. It was also rumoured that Kevin Nash and Scott Hall would be brought in for the event. However, Hogan opted for surgery to get a hip replacement for his ailing hip, and the Bound for Glory plans were scrubbed.
It appears that this time TNA has learned their lesson and actually signed Hogan to a contract before putting him on TV and starting an angle. Working with a wrestling without a contract has been a major fault of TNA in the past, so it would appear that they are finally working with stronger contracts, whatever the details of that contract may be.
With Hulk Hogan come some interesting possibilities. Already, Ric Flair had been signed to Hulk Hogan’s touring company. But with Hogan going to TNA, where would that leave Mr. Flair? Flair has talked to TNA in the past but has shown no major interest. Though with his funds drying up, he may be more inclined to work with the organization if the WWE cannot get him something more permanent. Now that Hogan has signed with the organization in some capacity, the WWE may be more interested in locking up any and all talent they consider a threat.
The other side of this is that Eric Bischoff is involved in the deal. Mr. Bischoff’s Hervey-Bischoff Entertainment company actually brokered the deal along with other undisclosed agreements. One part that is known is that the company will work for TNA to shop around shows that Spike TV passes on. As part of TNA’s new deal with Spike, if Spike passes on a show idea that TNA presents, TNA has the right to shop that show around to other networks. With the connections to those other networks and experience in selling shows, Bischoff-Hervey Entertainment could play a pivotal roll in getting more TNA programming on the air.
Meanwhile, TNA is not the only one expecting to see an immediate impact (no pun intended) from Hogan joining their organization. The WWE is set to release a three-DVD set of about Hogan in just a few weeks. Given production timelines, the DVD is not only complete, but has most likely already started to ship to warehouses and distributors. The WWE will be forced to promote Hogan while he is with a rival promotion unless they want to just take a hit in sales.
When Mick Foley joined TNA, he was immediately erased form the Legends of WrestleMania video game that was in late development. Despite not being the focal point of the game nor TNA, the WWE was not please with his decision and took swift action. In this case, the WWE was too late and Mr. Hogan has already taken advantage of the situation. It is unknown if he was going to receive a cut of the DVD sales, so if not then there is nothing lost for him.
When it comes to sales, one has to wonder how TNA is paying for Hogan’s contract. He would not sign a contract exclusive to another organization for cheap, so TNA and Spike must be footing the bill together, just like Spike did for Sting. TNA is a slightly profitable organization right now but cannot afford to stop being frugal. Hogan will be a major expense for the organization, so additional restructuring may be required.
If Hogan can increase ratings, attendance, merchandise, and buyrates even by a small percentage, then he may just pay for himself. But if his long term affect is the same as many others who have come to TNA, then TNA has gone nowhere again but in circles.
Newsbites
Some items of note in the rest of the wrestling business world:
The 25th Anniversary of WrestleMania microsite won a “Web Award” for “Outstanding Achievement in Website Development” from the Web Marketing Association.
Congratulations to the WWE’s web and marketing teams for the recognition of their efforts.
THQ noted that WWE’s action provides the company with increased flexibility with respect to the renewal of the videogame license.
The 25th Anniversary of WrestleMania generated a $49.8 million dollar economic windfall for the greater Houston area… Despite one of the biggest economic downturns in recent history, local and state governments collected $5.7 million in taxes.
As would be expected, these type of numbers are the exact reason why so many cities are fighting for the right to host WrestleMania.
The WWE will have to be careful with this type of behavior. Blocking another organization from competition goes against many anti-trust acts in the United States. If the WWE was successful in barring them from hosting a show, they would open themselves up to civil litigation.
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 October 28, 2009, here are the current standings of our shows:
RAW
Close (This Week’s Rating): 3.7
Open (Last Week’s Rating): 3.3
Percentage Change: ▲ 12.1%
52-Week High: 4.5
52-Week Low: 2.9
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: 2.3
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): 1.0
Open (Last Week’s Rating): 1.1
Percentage Change: ▼ 4.8%
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): 1.1
Open (Last Week’s Rating): 0.9
Percentage Change: ▲ 17.0%
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: ▲ 3.4%
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:
After weeks of decline, RAW saw a large 12.1% jump back up to a 3.7 this week with their NASCAR tie in. They did not lack competition for the evening, so it would appear the WWE can compete even during this season. Whether this can be maintained into another week remains to be seen, but momentum is on their side.
Meanwhile, iMPACT returned to it’s normal 1.1 rating after the lower rating during the three hour show. Obviously, with the big news of Hulk Hogan signing with the organization hitting the airwaves this week, it will be interesting to see if there is any immediate jump in ratings this week, even if it is a one-off. Obviously, this episode of iMPACT was already taped the prior week so Hogan will not be appearing in the iMPACT Zone, but TNA is promoting it like he will be.
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. Triple H Eversoris T-Shirt ($28, on sale $17.98)
2. John Cena Attitude Adjustment Baseball Cap ($20.00)
3. John Cena Attitude Adjustment YOUTH T-Shirt ($22.00)
4. John Cena Attitude Adjustment T-Shirt ($25.00)
5. John Cena Attitude Adjustment Basics YOUTH T-Shirt ($9.99)
6. Survivor Series Anthology Vol 1 and Vol 2 ($199.90, on sale $59.99)
7. D Generation X Army Dog Tags ($10.00)
8. D Generation X Basics YOUTH T-Shirt ($9.99)
9. D Generation X Worlds Biggest Member T-Shirt ($25.00)
10. D Generation X Army Skull Cap ($20.00)
11. Hardys Purple Logo Pendant ($10.00)
12. John Cena Ruthless Aggression #38 Action Figure ($17.99, on sale $13.99)
13. Jeff Hardy Purple/Black Armbands ($15.00)
14. D Generation X Army Pendant ($10.00)
15. Hart Dynasty T-Shirt ($25.00)
16. John Cena Attitude Adjustment Pendant ($10.00)
17. Rey Mysterio Long Gloves ($20.00)
18. Are You Ready: The Unauthorized History of D Generation X Paperback Book/DVD Package ($50.95, on sale $19.99)
19. Hardys Green Pendant ($10.00)
20. WWE Illustrated Superstars Stocking ($15, on sale $4.49
The question was asked if Batista and Rey Mysterio could maintain their spots on the list and the answer has quickly turned out to be “no”. Batista completely dropped off the list while Mysterio held on to one spot. Taking their place is a swath of John Cena merchandise and some more DX ones. But the interesting item on the list is the Hart Dynasty T-shirt, the first time in many months that a new person or group has broken through the ranks. How will the WWE react to these sales figures? Will they feature the Hart Dynasty in a more prominent roll? Or is this just an odd week that will be completely brushed aside?
TNA sometimes releases a list of top selling items on ShopTNA.com. According to the site the top selling items were:
1. Sting “Discharge” T-shirt ($19.99)
2. Sting Plastic Mask ($4.99)
3. TNA Logo T-Shirt Special ($24.99)
4. Beer Money – Daily Buzz Shirt ($19.99)
5. TAZ Beat-down Hoodie ($39.99, on sale $34.99)
6. Hard Justice 2009 DVD ($19.99, on sale $14.99)
7. Don’s Insane Brown Bag Special ($100, on sale $20)
8. The British Invasion T-shirt ($19.99, on sale $17.99)
9. Sting Mask “Wall Art” ($49.99, on sale $29.99)
10. Complete 2008 PPV DVD Set & Autographed Sting Card ($240, on sale $79.99)
From new to old, TNA’s former big name Sting took over a good portion of TNA’s top selling list this week. It would appear that Sting perhaps taking his last bow has set off a spike in sales. Sting has generally done will on these charts, so he will most likely hold on to these spots for some time to come. If Christian Cage is any indication, he could be gone for six moths and still make the list in one form or another.
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.
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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, one of the core aspects of the Journal was questioned. Thankfully Guest#3863 had the response:
MDK: “Still boggles my mind as to why people care how many other people are watching.”
If you like the product, this is very important. More revenues mean that the product which you say you prefer will be mostly unchanged. Low ratings inevitably mean change as companies search for winning formulas.
It also speaks of wider acceptance of wrestling in society. During the Monday Night Wars, people actually talked about wrestling without feeling lowbrow.
Also, television rights fees are at the heart of both the WWE and TNA’s top and bottom lines (even more so for the latter than the former). Higher ratings yield better contract negotiations, which in turn make the product available. If we did not care who was watching, then the shows would disappear. This happens to many “critically acclaimed” shows. A show gets a lot of press and a core group of followers who wonder why it would be cancelled. But networks are not interested in developing art just for art’s sake; they want to develop art that will get them money. If a show has fewer viewers or does not match the network profile, then it will be gone.
Speaking of the WWE audience, who they are seems to be a topic of interest. Anonymous writes in with:
“Even if the majority of people are redneck/white trash”
They aren’t… unless you consider all white people to be white trash, which is probably common on this site after reading through the politics section.
Yes, the Journal was being sarcastic. But it was a point that even if the audience was the majority like that, it would only be a small majority. Obviously, there are just as many variations of white people as any other people.
There was also plenty of debate on who was a bigger star between Steve Austin and the Rock, but that is neither here nor there. Instead, let’s move on to BringTheNoise with some interesting insight into TNA’s new deal in the UK:
Regarding Impact on Virgin 1: This is potentially a very big move for TNA, and I’m surprised they didn’t emphasise this more in their press release. Virgin 1 is, as they note, available on Freeview (i.e. free-to-air digital broadcasting), whereas Bravo is only available to Sky/Cable subscribers. They have suddenly made their program available to a significantly larger number of people, and by the time that analogue TV is completely switched off in the UK in 2012 (this has already happened in some places), everyone in the UK with a TV will have access to TNA. This might give them a chance to become a bigger name in the UK than WWE.
TNA has already benefited in the ratings department from being on Bravo which is in a basic tier of programming unlike the WWE’s provider Sky Sports. This would be the equivalent of the WWE being on the NFL Network with TNA being on Spike and CW. The availability of the product could benefit TNA in all of the ways you have outlined.
TNA could apparently use the additional coverage. After several weeks of top ratings in the UK over the summer, they have seen their share fall significantly in the UK. For the week ending October 4, 2009, the live edition of RAW had 56,000 viewers, the live edition of SmackDown had 84,000, and TNA iMPACT did not officially list, meaning that fewer than 38,000 people tuned in. But still, Jack Conner thought much like you did:
I thought that. I also thought, it puts them more or less head to head with the first hour of Smackdown on a usual week, and head-to-head with the whole show on those occasions that Sky Sports air SD at 9/9.30pm
All that being said, I don’t think many people actually watch Virgin right now, but I do think TNA will be a huge ratings deal for them. Can you imagine all the old wrestling fans/young fans just getting into it who don’t have Sky/Cable suddenly finding a free wrestling show?
Maybe I’m just being optimistic
Perhaps, but MyNetworkTV’s entire platform is based around SmackDown, so the same thing could be seen on that side of the pond.
Going back to the WWE, BobbyC wants to talk about what the current product means:
Most major companies change their brand on a regular basis. Fast food restaurants became more health conscience, until there was a backlash at which time they introduced new items that were more unhealthy than anything before (Wendy’s – allowed you to choose baked potatoes or apple slices instead of fries – but then introduced the Baconactor).
The WWE has refocused their product numerous times – sometimes on a small scale and sometimes on a larger scale. What I call the “Doink the Clown” era was followed by the “Attitude” era, which was followed by the WCW/ECW acquisitions and the Raw/Smackdown eras. And now we are in the PG era. Will it last? How long will it last? Will they it make those non-PG moments more exciting?
The Journal covered this point when the WWE first announced they were going TV-PG. This is just the stage they are in to rebrand and gain a new audience. When the audience grows older, they will have to change the product in order to keep them. Will it be the “Attitude Era”? No, nor was the “Attitude Era” the “Rock and Wrestling Connection”, yet both were highly successful times in relation to what the company was beforehand. The WWE is actually a much stronger organization financially now then they ever were during the “Attitude Era”, so who is tell them that they are doing anything wrong? Buyrates and ratings were higher, but revenues and—most of all—profit were lower. Which is more important to the WWE: having a large audience who does not support the product or having a smaller audience that buys a lot of their add-ons?
Of course, Klaus does not completely agree with the Journal’s assessment of the past:
“The early 90’s, though, were not great financially for the WWE. After 1993, the WWE came under some real pressure and was on the verge of insolvency by 1996.”
Disappointed to see you’ve bought into the McMahon’s revisionist history on this, as they took on the might of Big Bad Ted Turner. “On the verge” is a BIG stretch, Mr Prag. Can I suggest you research properly and back up with stats rather than relying on hearsay?
That statement had a lot more to do with these factors:
More than that, the WWE’s revision of history says they were NEVER in danger of going under. Vince McMahon has said this many times on historical DVDs and interviews.
What you have to realize is how large companies work when things get tough—and sometimes when things are good. Usually, there is a line of credit that they take out to make payroll at the end of the week and then pay it back in a few days. But the WWE was not brining in revenue fast enough to pay off the debt, so they had to carry it and the interest. Those dollars were piling and up and were still on the balance sheet when the WWE went public in 1999.
On April 30, 1999 the WWE had $45.7 million in Cash and Cash Equivalents and had $46.5 million in Current Liabilities plus another $11.4 million in long term debt. That was a company that was underwater and if all their debtors came for them at once they would have to declare bankruptcy. If that is what it was like in 1999, imagine what it was like in 1995.
After the IPO, the WWE was sitting on $226.3 in Cash and Cash Equivalents. Current Liabilities also shot up to $89.7 million and long term debt went down to $10.9 million, but the WWE was in safe straights. Everything could be called that day and they would still have nearly $120 million dollars in the bank.
Having that type of financial leverage was everything to the WWE and gave them the impetus to become the organization they are today.
A lot has been covered this week, so Indiaguy will have you mull over this thought for next week when the Journal will respond as well:
Its an obscure biz type question… but what are your opinions on the Wrestling and MMA market vis-a-vis Shane maybe trying to enter these? Do you think they are saturated already? Stuff like barriers to entry, the economic conditions a small 6 factor / Porter like analysis… I mean for all I know he might just decide to chill for a year or two… but it allows me to get a business view and especially your view on these markets.
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 #109 (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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