The Hamilton Ave Journal 12.31.09: Volume 2 – Issue 118

Posted by JP Prag on 12.31.2009

In the last news report of 2009, where can you see Bill Goldberg, Chris Jericho, the Undertaker, John Morrison, Kofi Kingston, Evan Bourne, John Cena, and Jeff Hardy all in one place? Will SmackDown lose millions of viewers in one day? Can the WWE and K-mart strike a big deal? 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 118

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: SmackDown to lose millions of viewers?

Since 2001, the company that is currently Time Warner has been a bane of the wrestling world. After AOL bought what was then Time Warner, the company took a different direction and decided to cancel their highest rated programs in WCW. After that, they sold the company at a fire sale price to their main competition in the then WWF and kept anything wrestling related off of the large array of networks for the rest of the decade.

One of Time Warner's main assets at that time was Time Warner Cable, a local provider of cable television to dozens of markets. The cable giant was spun off from the parent in March 2009 and supposedly has nothing to do with them anymore, however some of the same mentality seems to have crossed over. Whether intentionally or not, wrestling has an issue staying on in anything dealing with Time Warner Cable.

Earlier this year, Time Warner Cable announced that they were dropping HDNet, home of ROH. Citing fee increases that they did not want to pay, Time Warner Cable chose to completely drop HDNet rather then put them on a more expensive tier.

While the change in their 14.6 million subscriber base was a drop in the bucket, it should have been a sign of things to come.

Now, Time Warner Cable is once again in negotiations with a broadcast partner, but this time it is one with much bigger teeth. NewsCorp's (FOX) agreement with Time Warner ends on December 31, 2009 and thus far the two have not been able to come to an agreement. The basic dispute is that NewsCorp wants Time Warner Cable to pay $1 per subscriber for Fox while Time Warner Cable wants to pay their current price: zero. Apparently, it has been traditional for the broadcast channels to be free even on cable while the cable stations receive a programming fee. NewsCorp is looking to change this as less ad revenue is available and over-the-air broadcasts stations face bigger competition from cable networks.

And in what way does this affect wrestling fans? Well, NewsCorp also owns MyNetworkTV, home of SmackDown. Should a deal not be able to be reached, all Fox stations save the business and news station (Fox, MyNetworkTV, FX, Speed, Fuel TV, Fox Reality, Fox Soccer, Fox Sports en Español, and FSN) will be pulled from Time Warner Cable, including the incredibly large and important New York City market. The Time Warner Cable outlets include:

Oceanic Time Warner Cable (Hawaii)

Time Warner Cable Albany

Time Warner Cable Austin

Time Warner Cable Central New York (formerly Syracuse and Binghamton Divisions)

Time Warner Cable Charlotte

Time Warner Cable Eastern Carolina (Wilmington)

Time Warner Cable Greensboro

Time Warner Cable Kansas City

Time Warner Cable Los Angeles

Time Warner Cable Mid-Ohio (Columbus)

Time Warner Cable National (non-clustered systems)

Time Warner Cable New England (Portland, ME and Berlin and Keene, NH)

Time Warner Cable New York and New Jersey

Time Warner Cable North Texas (Dallas-Fort Worth) (formerly Comcast)

Time Warner Cable Northeast Ohio (Akron & Youngstown)

Time Warner Cable Chosica

Time Warner Cable San Antonio

Time Warner Cable San Diego

Time Warner Cable South Carolina (Columbia)

Time Warner Cable Southwest (El Paso, Wichita Falls, Corpus Christi, Laredo, Border Corridor, Golden Triangle, Kerrville, Rio Grande Valley, and South Central)

Time Warner Cable Southwest Ohio (Miami Valley & Cincinnati)

Time Warner Cable Western New York (formerly Buffalo/Niagara and Rochester Divisions)

Time Warner Cable Wisconsin (Milwaukee & Green Bay)

As of yesterday, Time Warner Cable submitted a request to NewsCorp to have their issue be arbitrated by the FCC, but NewsCorp refused. Senator John Kerry (D-MA) sent a letter to both companies to resolve their issues, but NewsCorp sent back their response as:

"[T]hese discussions do not belong in the hands of a third party…"

Obviously, FOX has a lot of power in this negotiation since they have top rated shows in American Idol, NFL games, House, Simpsons, Family Guy, and others. Unlike with HDNet, should the sides not reach an agreement in time there could be a mass exodus of subscribers to satellite, telephone cable providers, or other options.

Last minute negotiations with Time Warner Cable, though, are nothing new. From CNNMoney.com:

The companies will likely come to an agreement, however. Last year Time Warner Cable and Viacom (VIA), which owns MTV, Comedy Central and Nickelodeon, were deadlocked in a similar battle but reached an agreement early on Jan. 1. To top of page

An agreement on January 1, 2010 will keep SmackDown on the air that night. Otherwise, expect SmackDown to take a major hit in the ratings starting right at that the beginning of the year.


Newsbites

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

TNA sent a video out on YouTube promoting the "Before the Bell" series on DirecTV station 101. As it appears, the show will be just like the Bound for Glory pre-show that aired on the station, except for the other PPVs. The show will contain profiles on the TNA wrestlers and promotional packages for the PPV itself.

WWE has set up a new partnership with K-mart going in to Royal Rumble. People who buy $35 worth of WWE merchandise in the store will get a $10 coupon for the PPV. The WWE had previously done a promo with K-mart leading up to WrestleMania, so that much have been successful enough to want to do another.

Jonathan Heller of TheStreet.com finally caught up to the Journal and has decided to endorse WWE stock because of financial factors. As has been covered in these pages, although the WWE has seen lower revenues, the cost control measures have worked to a very successful profit margin, giving the WWE their most profitable year in the middle of a recession. Couple this with a secure balance sheet with a large amount of cash, and the WWE looks like a sold buy to Mr. Heller. Unfortunately, Mr. Heller did not investigate the cash flow situation at the WWE where they are paying out more in dividends then cash from operations can support. Therefore, the balance sheet that he praises is actually in a precarious situation unless the dividend is finally lowered.




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 December 30, 2009, here are the current standings of our shows:





RAW
Close (This Week's Rating): 3.6
Open (Last Week's Rating): 3.2
Percentage Change: ▲ 13.2%
52-Week High: 4.5
52-Week Low: 3.1
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: 2.3
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): N/A
Open (Last Week's Rating): 1.0
Percentage Change: N/A
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): 0.7
Open (Last Week's Rating): 0.9
Percentage Change: ▼ 22.2%
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 many weeks of downward trending ratings, RAW managed to make a 13.2% gain to a 3.6 rating. This is the highest rating since November 16, 2009's 3.5 and October 26, 2009's 3.7. Believe it or not, but this is actually in line with last year's 3.6 rating on the same comparable day, so the overall averages for December covered last week stay the same. In other words, RAW is still back to exactly where it was at the end of last year, despite everything that has been done.

TNA did not have a show on Christmas Eve, but SuperStars did and held up decently with the first run showing a 0.7 rating. This ties their lowest rating ever on September 17, 2009 and August 6, 2009, but has to be considered a success given the night. The replay also did a 0.4 rating (higher than the average 0.2 rating), so it would appear that viewers simply decided to catch the second show rather than the first one.




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. Rey Mysterio Best of 2009 Deluxe Aggression Action Figure ($15.99, on sale $9.99)
2. Adrenaline #38 Finlay/Hornswoggle Action Figure ($24.99, on sale $15.99)
3. John Cena Attitude Adjustment Basics YOUTH T-Shirt ($9.99)
4. D Generation X Army Strong T-Shirt ($25.00)
5. John Cena Never Give Up T-Shirt ($25.00)
6. Undertaker Best of Deluxe 2009 Action Figure ($15.99, on sale $9.99)
7. Shawn Michaels Ruthless Aggression #42 Action Figure ($14.99, on sale $9.99)
8. Hardys Green Pendant ($10.00)
9. John Cena Never Give Up Baseball Cap ($20.00)
10. Kofi Kingston Basic Series #1 Mattel Action Figures ($9.99)
11. D Generation X Basics YOUTH T-Shirt ($9.99)
12. John Morrison Sunglasses ($10.00)
13. Adrenaline #38 Jack Swagger/Christian Action Figures ($24.99, on sale $14.99)
14. Are You Ready: The Unauthorized History of D Generation X Paperback Book/DVD Package ($50.95, on sale $19.99)
15. Shawn Michaels PPV #21 Action Figure ($14.99, on sale $9.99)
16. John Cena Best of 2009 Deluxe Aggression Action Figure ($15.99, on sale $9.99)
17. Goldberg Classic Superstars #27 Action Figure ($19.99, on sale $8.99)
18. Jeff Hardy My Life My Rules DVD ($34.95, on sale $23.58)
19. Chris Jericho Best of 2009 Deluxe Aggression Action Figure ($15.99, on sale $9.99)
20. Evan Bourne Basic Series #1 Mattel Action Figures ($9.99)

In case you cannot tell from this list, the WWE is having a sale on action figures that is spurring sales. This has led to many people who do not normally end up on this list making an appearance; such luminaries as Evan Bourne, Finlay, Chris Jericho, Kofi Kingston, Shawn Michaels, and Bill Goldberg. One show also make note that some of the action figures are the new Mattel ones. As covered in the news above, it appears that Mattel is already shipping and selling the new figures, even though officially the contract has not begun yet. One must expect that JAKKS Pacific may have another lawsuit for the WWE because of this, although at this point JAKKS may be ready to just part with the WWE completely.

Also making an appearance this week was John Morrison and his sunglasses, fighting his way between the top selling John Cena merchandise and the on-sale action figures. Can Morrison bring in additional sales with his shirts and prove his place in a the main event scene through merchandise, or like the action figures is his appearance just an aberration?


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. Beer Money (Take A Fall) ($0.99, on sale $0.89)
3. Sting Plastic Mask ($4.99, on sale $3.99)
4. Sting "Discharge" T-shirt ($19.99, on sale $14.99)
5. Beer Money - Daily Buzz Shirt ($19.99, on sale $14.99)
6. TAZ Beat-down Hoodie ($39.99, on sale $29.99)

Two DVD sets left the list, assumingly due to a sell-out. Other than that nothing has changed on this list for the sixth week in a row.




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
3 (Jan)	4 RAW (Dayton, OH) TNA iMPACT (Orlando, FL)	5 SmackDown / ECW (Louisville, KY) TNA iMPACT (Orlando, FL)	6	7	8 RAW Live (Boston, MA) TNA Live (Westbury, NY) ROH on HDNet (Philadelphia, PA)	9 RAW Live (Lincoln, NE) SmackDown / ECW Live (Fargo, ND) TNA Live (Poughkeepsie, NY) ROH on HDNet (Philadelphia, PA)
10 RAW Live (Rochester, MN) SmackDown / ECW Live (Duluth, MN) TNA Live (Danbury, CT)	11 RAW (Minneapolis, MN) SmackDown / ECW Live (La Crosse, WI)	12 SmackDown / ECW (Green Bay, WI)	13	14 TNA Live (Johnstown, PA)	15 RAW Live (Jackson, TN) TNA Live (Reading, PA)	16 RAW Live (Birmingham, AL) SmackDown / ECW Live (Augusta, GA)

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, Guest#0325 asks:

I'm curious, Do you happen you have (or where I could find) the ShopZone lists of the bestselling WWE items for like 1998-2003 or so? I'm wondering how many items Austin and Rock sold in their prime Thanks!

Sure, just apply for a job in the WWE's data systems department, access the archive systems after hours, and pull some queries. You'll most likely be fired immediately, but that would get the information you will need.

On a serious note, data systems prior to 2001 are highly suspect to begin with and many older records like that may have been lost to time, even if they were archived. Even today we do not have access into volume information. The WWE released some limited information that is fair to investors, but beyond that everything is very tightly controlled.

Speaking of the data, Supro would like to make a correction from last week:

You made a mistake. Jakks were the ones who were optioning the renewal under the current contract, not THQ. THQ wanted to end the joint venture and become the sole proprietor of the WWE video game license.

Absolutely true, the Journal apologizes for the misinformation. But this error is not as bad as one TNA just made, at least according to Donners:

TNA made a major mistake with the Australian tour, which will be costly both financially and in goodwill.

They sent out three people for a promo tour, which got mainstream media coverage, had ads in print and on TV and even held tryouts for locals to appear during the tour, but still evidently could not sell enough tickets to make it viable.

Not only have they thrown away all that money (and no doubt racked up fees with the promoter) they have angered a lot of fans - and especially those who were to appear at the shows. The weak excuse does not help.

Ironically, at least part of the reason for their poor performance is likely Hogan, who announced his tour after TNA announced theirs, but had his tour's tickets go on sale first. That tour did quite poorly as well, but now he's collecting a paycheque from the company he ambushed. That's probably an even bigger mistake from TNA.

The Journal has been looking at Hogan's place in TNA as part of the marketing budget, not a part of the talent budget. From that perspective, Hogan is just about getting press and awareness and therefore he is doing his job well. But his tour may have had a negative effect on TNA as fans with limited incomes this year may have had to chose between Hogan's show and the TNA ones.

Also, while Australia has in the past not had that many shows, for a few years they have been getting at least one show a year in all major destinations, if not two. This has actually led to a glut on the market for availability. When the shows feel less special because they come so "often", ticket sales go down. The WWE experienced this when they started going to Europe more. Markets that use to sell out in minutes now still have availability when the crew gets there. While there are some economic factors, the WWE making the product more available (IE supply) actually lowered demand because it was too possible to get to a show.

Australia may be experiencing a similar phenomenon with so many options going through the country this year. Although cancelling the shows—as Donners stated—will not help their position when they want to try again.

Sticking outside the USA and with TNA, Guest#1952 let us know:

Setanta Sports Africa is a pan. It really doesn't mean a whole lot and creates a false impression of mass view-ability. Don't think millions are watching in each country as they aren't.

Same applies when TNA were on Eurosport that covers all of Europe and beyond. Eurosport didn't actually care, stripped the shows right down and filled a gap. We are in 50 countries though ~~~

Ideally you'd be on separate native channels (eg: RTL - Germany, Sky - UK, etc), than one pan, which is just a cheap way of saying you broadcast to lots of places with little affect.

The WWE does the same, but it is nothing to sneeze at. Even with a pan station that has limited availability in a lot of countries, it is more than most shows ever see. The important part of all of this is that TNA is getting more rights fees for an existing product and therefore are increasing their profits. Should, over time, the show gain enough traction in one of these countries to move to a domestic station TNA will do even better. They have to get introduced to a market somehow, and a pan station is better than no station.

And finally, back in the USA and WWE WWE=Boring wants to give his thoughts on January 4th:

Bret Hart is over rated. He may pop the ratings in Canada but he won't do anything for the ratings in the U.S.

Well, it is only a few days to find out for sure, but one must remember that Bret Hart was champion during one of the WWE's least profitable and least watched eras. Despite that, there is still some interest in the USA and it will be more fascinating to see what he does over several months as opposed to one night. Unlike most of the "pop the rating for one night" efforts, this one actually leads to a longer-term program. If there is a real plan and if that plan will mean anything will certainly be intriguing to watch unfold.


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

Till then!