The Hamilton Ave Journal 11.19.09: Volume 2 – Issue 112

Posted by JP Prag on 11.19.2009

On what station will RAW air for the next five years? Could SmackDown find a new home if Comcast buys NBC-Universal? Can Shane McMahon and Carl DeMarco find success with the UFC? What is happening to ECW’s audience? Is Beer Money the top selling act in TNA? 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 112

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 impresses the world

Coming off the heels of the WWE's impressive third quarter results, the street has reacted quite favorably. At first, WWE stock remained relatively stagnant, but shot up in the earlier part of this week to hit a 52-week high of $16.30 before closing Wednesday night at $16.26. What was the main catalyst for this sudden upswing, though?

While it does sometimes take time for the numbers and press releases to work through the financial community, it was another press release that set things in motion. From the WWE:

World Wrestling Entertainment® and USA Network today announced a four-year renewal agreement that will keep ratings juggernaut WWE MONDAY NIGHT RAW® on the network through fall 2014. WWE MONDAY NIGHT RAW, a cable mainstay for more than 16 years, continues to be one of the most watched regularly scheduled programs on ad-supported cable television, contributing to USA's status as the number one cable network.

"I couldn't be happier about continuing one of the most successful collaborations in television history," said Bonnie Hammer, President, NBC Universal Cable Entertainment and Universal Cable Productions. "Vince McMahon and his entire team are an invaluable part of the USA family."

"USA Network is a true partner and not just a network that distributes WWE's premiere television show, WWE MONDAY NIGHT RAW," stated Chairman and CEO Vince McMahon. "I am thrilled to have a long term deal with USA Network."

Despite rumors to the contrary, USA Network has been quite happy with the WWE's performance, especially at the beginning of "guest host" cycle. Being with NBC/Universal has given the WWE a number of unique opportunities and outlets that they did not have before, so the relationship has been mutually beneficial.

Of course, there are much bigger factors going on that drove this deal to be completed sooner and announced at such an early date. Right now, NBC Universal's parent company GE and major shareholder Vivendi are negotiating amongst themselves to find a dollar amount to sell controlling interest in the media giant to Comcast. By locking up key properties at an earlier date, GE-Vivendi can drive up the price of their deal.

How the Comcast potential purchase could affect the WWE in the future remains to be seen, but Comcast could be an important partner in the WWE starting up their own network in the years to come.

The other item of note is that WWE SmackDown on MyNetworkTV comes up for renewal at the end of next year. A Comcast backed NBC Universal could want SmackDown to be in their family with RAW and ECW. Since Comcast also owns stations like Comcast SportsNet, Versus, and G4, there are plenty of potential homes that they may want to put a ratings powerhouse like SmackDown. While SmackDown's ratings are not impressive on networks, compared to other syndicated shows and cable television, the show is an extremely attractive brand.

Where another media merger does limit options for consumers, it may actually open up doors for the WWE. For now, it is a wait and see game, but this will be a story to watch in about September of next year.


Newsbites

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

TNA has decided to once again quasi-poll the customers by sending out two different surveys. The first is an application asking people what town they would like TNA to tour to next while the second was a general check box questionnaire about which wrestlers and personalities people like. Looking at the latter, it seemed more of a demographic gathering session as the only other questions were related to age and gender. This is most likely to provide a comparison point to an earlier survey that asked the same thing.

The WWE has been granted an extension to respond to case brought against them by Jody Hamilton for the defunct Deep South Wrestling. As covered in the Journal, almost all charges except breach of contract for not giving 90 days notice have been dismissed by the earlier courts. For that, the WWE was given until November 16, 2009 to respond. No word at this point what their response has been, but most likely it was an attempt to dismiss the last charge. Assuming that the courts do not agree, this will most likely start to see trial in about four to five months.

Two major former WWE figures met with the UFC last week. First up, former President of WWE Canada Carl DeMarco met with the company, though no details have been released. Most assume that Mr. DeMarco would help the UFC get sanctioned in Canada and increase their air presence in the country, but Mr. DeMarco was also responsible for much of the WWE's growth in Latin America and China.

The other person to meet with the UFC was Mr. DeMarco's boss and former WWE Executive Vice President of Global Media Shane McMahon. Mr. McMahon brings many of the same skills as Mr. DeMarco for international growth and the two have worked well together in the past. Again, no details have been released from the meeting but except any role either of these two men to have the UFC to be in a behind-the-scenes office capacity.




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 November 18, 2009, here are the current standings of our shows:





RAW
Close (This Week's Rating): 3.5
Open (Last Week's Rating): 3.1
Percentage Change: ▲ 12.9%
52-Week High: 4.5
52-Week Low: 3.0
All Time High: 8.1
All Time Low: 1.8

SmackDown*
Close (This Week's Rating): UNAV
Open (Last Week's Rating): 2.0
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): UNAV
Open (Last Week's Rating): 1.0
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): 1.1
Open (Last Week's Rating): 1.1
Percentage Change: UNCH
52-Week High: 1.3
52-Week Low: 0.9
All Time High: 1.3
All Time Low: 0.6

** TNA iMPACT's are for the prior week as ratings may not be available at the time of the Journal's posting

SuperStars***
Close (This Week's Rating): 0.9
Open (Last Week's Rating): 0.8
Percentage Change: ▲ 12.5%
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 having their lowest rating of the year, RAW rebounded to a 3.5 this week, a gain of nearly 13%. And though SuperStars saw a similar percentage rise, it's numbers were only 0.1 higher to be a 0.9. Overall, SuperStars and iMPACT have seen relatively no movement aside from the odd up or down week over the past several months. SmackDown has been on a slow rise to have a 4-week rolling average of a 2.0 for the past 6 weeks after spending 23 weeks out of that neighborhood. RAW has been a rollercoaster as of late, but ECW has sharply declined in audience. For the past five weeks, ECW has had a rolling average of a 1.0. This is by far ECW's longest stretch in this ratings range (the next one being just two weeks), and the trend has been moving downward for ECW. What will become of the third brand in the lean month of December?




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. Superstars Collectible Cup ($1.99)
2. WWE 2009 Topps Trading Cards ($3.00)
3. John Cena Holiday 2009 Youth T-Shirt Package ($26.99)
4. D Generation X Basics YOUTH T-Shirt ($9.99)
5. Hardys Green Pendant ($10.00)
6. DX Holiday 2009 Youth T-Shirt Package ($55, on sale $26.99)
7. DX Holiday 2009 T-Shirt Package ($29.99)
8. D Generation X Worlds Biggest Member T-Shirt ($25.00)
9. John Cena Attitude Adjustment Basics YOUTH T-Shirt ($9.99)
10. Jeff Hardy Holiday 2009 Youth T-Shirt Package ($52, on sale $26.99)
11. Are You Ready: The Unauthorized History of D Generation X Paperback Book ($16, on sale $10.53)
12. Gift Wrap Pack ($6, $3.99)
13. Jeff Hardy Holiday 2009 T-Shirt Package ($29.99)
14. John Cena Holiday 2009 T-Shirt Package ($29.99)
15. Hulk Hogan Unreleased Collectors Series DVD ($34.95, on sale $19.08)
16. Triple H & Shawn Michaels Adrenaline Series 24 ($29.99, on sale $24.99)
17. Jeff Hardy Black/White Armbands ($15.00)
18. Hardys Sweatband Set ($12, on sale $5.98)
19. Survivor Series Anthology Vol 1 and Vol 2 ($119.90, on sale $59.99)
20. Rey Mysterio PPV #20 Action Figure ($19.99, on sale $14.99)

The low priced items have left much of the list this week, but still dominate the top two items. While this does not speak well for the volume of the rest of the list, the items are showing the same diversity of the past two months. At this point, most of these items must be reaching near saturation point, with the exception being the new Hulk Hogan DVD. Since the WWE will only advertise that on a limited basis because of Hogan's association with TNA, the sales volume will not be as high as other anthology sets.


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

1. Don's Insane Brown Bag Special ($19.99, on sale $18)
2. Don West's Vintage Celebration ($59.97, on sale $10.99)
3. Beer Money (Take A Fall) ($0.99, on sale $0.89)
4. Sting Plastic Mask ($4.99, on sale $3.99)
5. Complete 2008 PPV DVD Set & Autographed Sting Card ($240, on sale $71.99)
6. Sting "Discharge" T-shirt ($19.99, on sale $14.99)
7. Beer Money - Daily Buzz Shirt ($19.99, on sale $14.99)
8. TNA Logo T-Shirt Special ($24.99, on sale $22.49 to $24.99)
9. TAZ Beat-down Hoodie ($39.99, on sale $29.99)
10. No Surrender – 2009 DVD ($19.99, on sale $14.99)

TNA continues their trend of clearancing out older items with not one, but two clearance packages at the top of the list. Other then that, Beer Money continue to prove their worth by taking two spots in the Top Ten, showing the team's lasting selling appeal.




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
22 (Nov) WWE Survivor Series (Washington, DC)	23 RAW (Hershey, PA)	24 SmackDown / ECW (Bridgeport, CT)	25	26	27	28 RAW Live (Johnson City, TN) SmackDown / ECW Live (Upper Marlboro, MD)
29 RAW Live (Charlottesville, VA) SmackDown / ECW Live (Hampton, VA)	30 RAW (Baltimore, MD)	1 (Dec)	2	3	4 WWE SuperShow (Texarkana, AR)	5 WWE SuperShow (Bossier City, LA)

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, Think wanted to know how everyone else see's the true debut of Hulk Hogan affecting TNA's ratings:

Question to anyone out there:

Assuming TNA is doing a slow build to Hogan's first appearance, which is pretty smart, what will TNA (or fans) expect that iMPACT rating to be?

1.5? Maybe a 1.8? Large 2.0?

MacDollarz, unsurprisingly, gave his thoughts on the subject:

I expect like a 1.8 almost 2.0 then going back to 1.5-1.6 if they are lucky.

The only way to compare is to look at Hulk Hogan in WCW. Since ratings were not catalogued like they are today and Nitro did not exist, the closes parallel is Clash of the Champions. The Clash before Hogan debuted scored a 3.0 ratings and the following one with Hogan scored a 4.5 rating. This was followed up with a 3.6 rating for the next one. Following that logic, there was initial 50% increase followed up a 20% decrease. If you were take TNA's average rating of a 1.1, then that would mean a 1.7 followed by a 1.3. Going by the upper rating of a 1.3, that would mean a max out of 2.0 followed up by a 1.6.

The question is what Hulk Hogan will be doing in his role in TNA. Depending on what he's doing, when he's on television, and how Spike and TNA advertise it will determine much of what happens next. Also, Hulk Hogan's drawing power in 2009 is quite different then in 1994, but that is what history tells us. Guest#8757 asks the truly critical question here, though:

Why the hell aren't they selling Hogan gear yet? Are they allergic to money or something? Hogan's merch will sell like crazy before dying out after the nostalgia wears down.

TNA is not the most timely when it comes to their merchandise, but to be fair no one in the company outside of a few people knew he was coming in. Merchandise needs to be designed, a test run needs to come through for final approval, and then a long run will have to be done. After that, the merchandise has to be distributed to all the proper channels. In America, it appears seamless that a team wins the World Series and then the next day their championship shirts are in the stores. What actually happens is that all of the up front work is already done and people are on standby all night waiting for the final results to begin a mass printing. Since there was no opportunity to do all of the up front work, the TNA merchandise team has a lot of catching up to do.

Leaving behind TNA, the WWE's financial success was quite the topic. Calm Down starts us off:

Once again, WWE is doing just fine money wise. I never understood how people actually think Vince will just let his company die. Whether we like it or not, he knows what he is doing.

The "or not" is the key to your statement. People judge a company by their personal preferences of the product, not how the company is actually doing. It is the same with the people who say that TNA will be gone in a year without understanding the intricacies of how TNA makes money. The other part is that most people are centric to where they live and do not see the impact of sales around the world. TNA and the WWE are highly leveraged in their international markets, so there is quite a bit more to understand.

Ryushinku had some thoughts in this and other areas:

What's happening in WWE during these tough financial times is the same thing that's happened at my work. Since revenue has been hit so hard, the bosses have concentrated on reducing costs as much as possible. It's been tough and some hard sacrifices had to be made, but due to doing that as quickly as possible we're on a stable and profitable model now, despite having less money coming in. Without those changes we'd have gone bust months ago. Once the economy begins to grow again we can ease back into things as they used to be.

Or, perhaps, the company will have learned a lesson and continue to act frugally for better long term growth and profitability. The WWE's problem was that in good times they stopped watching costs and they grew out control, forcing the WWE to make drastic changes. If they were smarter with their costs in the good times, they would not have had to make any changes at all.

There are changes coming, but that is because the revenue model is changing. Amab brings his thoughts on this one:

I think that PPV's are not a nice business model. The world is slowly going for more free stuff! Hence they are not sustainable in the long run. I believe Vince should be slowly looking to phase out PPV's,maybe only building to 4 a year!

That way PPV's which are not watched by most of the WWE's fans, due to lack of money reach everyone.

Brett was quick to respond:

PPVs may be going out, but not for a while yet, just look at UFC. If the WWE could get more advertising dollars and were actually paid those dollars, then you'd see WrestleMania on free TV or cable, but as it stands they make far more on PPV revenue.

This point was covered by the journal several months back, but even with lower buyrates the WWE could still not get advertisers to match what they make with PPVs buys. Also, the WWE has been very successful at cutting down the costs of producing PPVs, so they are actually getting more bottom line dollars this year then last year.

Closing us out this week is Dave G and a bit of his fantasy:

While throwing around some fantasy booking for the 'Global Title' story in TNA with some fellow smarks one idea that got floated was for TNA to establish a second show in a foreign country (Mexico, Canada, UK etc) and put up the GT as the main event belt, bringing in those American wrestlers who (kayfabe) were disgruntled with their lot in the Impact zone to pad out the World Elite base of the transition.

We figured that this would probably never fly with enough of the talent to actually happen, but it did make me wonder about whether it would be practical from a business PoV? And if so which country would be the most viable for TNA to try and set up in?

TNA has been testing the waters with shows not in the USA with "TNA Epics", but they are not at a point to produce a new content show exclusively for other markets. Despite getting a large portion of their rights fees from outside of the USA, the majority still comes from SpikeTV. With that, any new show they produce with original content will be one that can air the US first, followed by a global distribution. At some point in the future TNA may be able to handle what you are describing, but right now they do not have the internal resources to manage the logistics of the process.


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

Till then!