The Hamilton Ave Journal 01.07.10: Volume 2 – Issue 119

Posted by JP Prag on 01.07.2010

Who won the Monday Night War? Has the WWE finally admitted they hate “wrestling”? What is happening to all of the wrestling shows in Canada? Was Bret Hart able to sell more t-shirts than John Cena? 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 119

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: The ratings are in

After weeks of build up, speculation, and side-bashing, the first head-to-head Monday night in nearly nine years happened as TNA iMPACT aired a three hour special that went up against WWE RAW. TNA pulled out all the stops bringing in surprises and trying to create a buzz as the show went on. This ended up with the company getting a record rating of a 1.5, beating the 1.3 last seen October 29, 2009.

The first hour by itself did a 1.7, showing a 30% growth over TNA's prior top audience. The show actually peeked in the 9:00-9:15pm quarter hour (Hulk Hogan's speech) with 2.9 million viewers, or roughly a 2.2 rating. The previous high was 1.97 million viewers in April 2009, so that would mean at its peak the Hogan segment brought in nearly a million extra people.

The news was not all good as the show dropped immediately in the second and again in the third hour, doing 1.4 and 1.2 respectively. That means that TNA did still do their prior top number of a 1.3 in the head-to-head hours showing that TNA's audience is truly unique from the WWE's. The WWE has suffered from dropping later hours recently, but it would appear as the show went on some of the audience had their fill.

And how did the WWE do during this timeframe? RAW scored a 3.6 average rating (the same as the prior week) based on hours of 3.51 and 3.73. So for the combined audience the rating was a 4.9 during the head-to-head hours—and about the same in the individual hours. The last time RAW had anywhere near an audience of this size was in March/April 2002. Actually, the peak came on March 25, 2002 with a 5.4 rating. From there, the ratings started trending downward and never came near those numbers again.

From the perspective of combined audience, it shows that much of the audience that has been lost over the past seven years may still exist. As a comparison point, in the same week in January 2001, Nitro scored a 2.1 to RAW's 4.6 for a total audience of 6.7. If RAW's rating on that night was scaled down to a 3.6, that would have made Nitro's rating a 1.7, meaning that iMPACT was off 0.4 rating points from a comparable Nitro number.

Although some would like to say that TNA "lost" the rating was last night, few were actually expecting them to defeat the WWE in ratings. Spike, though, was ecstatic with the results as it showed one of their properties could not just maintain against their main competitor, but actually perform better. Of course, Spike's main competitor is USA; for them it does not matter what is on Monday night so long as it can perform and help the station. Spike TV executives were actually in attendance at iMPACT, as was Panda Energy President Bob Carter. Panda Energy is the majority owner of TNA Entertainment.

Since the rating have come out, TNA has sent out several press released touting their success of the night. As expected, TNA President Dixie Carter tweeted her thoughts:

Thank you, thank you for helping TNA set RECORD ratings in every way last night. We ALL won

Interestingly enough, going back in time to 1995 the total audience for the first RAW vs. Nitro standoff was a 4.7, so there were already more comparable viewers last night then the beginning of that war ("Comparable" being that a ratings point equals more viewers today then 15 years ago). Nitro won that night with a 2.5 versus a 2.2, but would go on to lose the next two weeks 2.4 to 2.5 and 1.9 to 2.7 before returning with a win of 2.7 to 1.9. There are several things to consider from back then, however. RAW was not "destination" television and was mostly squash matches designed to bring people to house shows. Nitro brought the idea that television should be a priority and that ratings and advertisers mattered. Also, WCW has a large built in audience from years of being on TBS and inheriting the history of the NWA. Although the company itself was truly less than 8 years old, the history it inherited and territories bought along the way gave it the appearance of being a 50 year old organization.

Even with that, it took a long time for Nitro to gear up. When there were nights without competition due to tennis tournaments or dog shows, Nitro did not immediately inherit RAW's audience. The first time this happened they show scored a 2.5 rating, which was actually less then the prior week's 2.7. But just two months later in February 1996 Nitro was able to score a 3.7 rating when going unopposed.

Several months later in September 1996, the same phenomenon was seen as before. On the head-to-head week Nitro had a 4.3 rating while RAW had a 2.9. The next week, with no opposition, Nitro had a 3.7 rating. The two shows together always seemed to grow the audience and it would be rare that when one aired alone that it would have significantly more audience.

So perhaps Monday night proved one thing: there is a whole audience that only exists with competition. And perhaps it also shows that there a large pool of people that are available that want to get back into the product but have not found the opportunity. While RAW and Nitro started out with a combined 4.7 rating, the shows peaked at a combined 11.4 rating. There is an opportunity for growth that does not include stealing audience from one show to another, but growing a whole new fan base or bringing back the 6 million people that have been lost to product over time.


WWE's ladies at it again

The top ladies of the WWE have been getting a lot of press in the past month. Of course, this story is not about the Divas in the ring, but about the three top executives in Chief Operating Officer Donna Goldsmith, Executive Vice President of Marketing Michelle Wilson, and Executive Vice President Creative Development and Operations Stephanie McMahon.

The trio received press in the CableFax awards, being named three of the most powerful women in cable. This was followed up with Ms. Goldsmith being named the second most powerful woman in sports by Forbes magazine. Now, Continental magazine has got into the mix and done a much more in-depth look as just how these ladies are running the world of the WWE, with a stress on the "E". Says the article:

There are two things WWE wants you to know. First, the operative word is "entertainment," not "wrestling." Second, watch how you refer to the talent. They're not wrestlers; the men are "superstars" and the women "divas."

For readers of the Journal and 411mania in general, this should be no surprise. The WWE often stresses how they want to present themselves with certain terms. But they have never been blatant about their perspective on this, and especially have not put it into print. That is not the case here, as Ms. Goldsmith said point blank:

Goldsmith, who moonlights as an extra in TV soap operas, says her biggest challenge is dispelling misconceptions about WWE. "One of those," she states, "is us constantly being called professional wrestling. That term just doesn't give us the credibility we deserve."

Credibility: this is the first time a WWE executive has actually said they are embarrassed by the term "wrestling" and wants to replace it with something else. Obviously, Ms. Goldsmith's viewpoint is shared by the people who control the WWE and how the company is presented, and the other two women were quick to back her up.

The article continued to praise the women executives and the WWE's financial success in general. They also put over that going TV-PG has helped the WWE attract more advertisers that they could not in the past, which of course means more money for the company in the end. For those hoping a rebirth of an "Attitude Era" like movement, the article let everyone know where that stands:

While marketing partners often have to be disabused of the notion that WWE is still in the "Attitude Era" that defined professional wrestling a decade ago, the numbers make a strong argument.

The WWE that existed a decade ago is definitely no more. And if there was ever any doubt. Ms. Goldsmith and Ms. McMahon sum it up:

The leading ladies are aware that people are sometimes surprised to hear WWE is not a male-dominated organization, but Goldsmith is adamant that there is no glass ceiling and everyone is treated equally. McMahon is somewhat blunter: "Women rule the world. We just let men think they do."


Newsbites

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

This past Monday was actually the first time Canada got to experience two wrestling shows on at the same time. During the late 1990's, TSN used to air RAW live and have Nitro on at midnight, so the shows never competed. Although RAW does not air live in Canada (it is on a 15 minute delay), the two shows still competed head-to-head.

Although ECW is thus far saved in the United States as it is still on the air, the show did not fair so well in Canada. ECW is no longer listed on Global TV's website and has disappeared from all television listings save one. ECW can be seen on the Calgary station at 3am starting on January 10, 2010. Given that the WWE has lost two major Canadian influences in Carl DeMarco and Shane McMahon, they may face an uphill battle getting their show back on the air. WWE.com is still listing the show on Global, however they are also listing the replace on X-treme which went under in September 2008.

As most readers will have noticed, SmackDown aired on Time Warner Cable as the company and NewsCorp (owners of MyNetwork TV and FOX, among others) came to an agreement to keep the stations on the provider. It take longer as usual as the sides agreed to temporary extend their existing contract until a new one could be reached, though it still came late in the day on January 1, 2010.




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 January 6, 2010, here are the current standings of our shows:





RAW
Close (This Week's Rating): 3.6
Open (Last Week's Rating): 3.6
Percentage Change: UNCH
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): 0.9
Open (Last Week's Rating): 0.9
Percentage Change: UNCH
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): 1.5
Open (Last Week's Rating): 0.7
Percentage Change: ▲ 114.3%
52-Week High: 1.5
52-Week Low: 0.7
All Time High: 1.5
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): 0.7
Percentage Change: UNCH
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:

RAW vs. TNA has been well covered above, but there are a few other points. TNA's New Year's Eve iMPACT ended up with a 0.7 overall rating for all four hours. The first hour brought down the rating to give them their lower in the past 52-weeks. Of course this week they got their highest rating ever, so the increase was 114% week-over-week.

Meanwhile, SuperStars also held up well against New Years, scoring a 0.7 for the second week in a row. ECW, on the other hand, once again stayed at a 0.9, the first time ever since the show premiered on SyFy that it had below a 1.0 rating for two weeks in a row. Obviously since it is 2010 and ECW is still on the air the WWE and SyFy came to some type of agreement for the show. If it will change or not during this year remains to be seen, but right now and on every calendar it is still ECW.

Meanwhile, Smackdown three weeks ago appears to have once again done a 2.1 to 2.2 rating. The actual rating point was not available, but the total audience number was. That means that of the last seven known ratings, SmackDown has had a 2.0 or greater in six of them. SmackDown continues to show slow and steady growth, although its ratings remain delayed.




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. Bret Hart Emblem T-Shirt ($25.00)
2. John Cena Never Give Up T-Shirt ($25.00)
3. John Cena Never Give Up YOUTH T-Shirt ($22.00)
4. D Generation X Army Strong T-Shirt ($25.00)
5. Hardys Green Pendant ($10.00)
6. Kofi Kingston Basic Series #1 Mattel Action Figures ($9.99)
7. Stone Cold Steve Austin WrestleMania Heritage Series Mattel Action Figure ($9.99)
8. John Morrison Sunglasses ($10.00)
9. Shawn Michaels Ruthless Aggression #42 Action Figure ($14.99, on sale $9.99)
10. Randy Orton WrestleMania Heritage Series Mattel Action Figure ($9.99)
11. Undertaker WrestleMania Heritage Series Mattel Action Figure ($9.99)
12. Evan Bourne Basic Series #1 Mattel Action Figures ($9.99)
13. D Generation X Basics YOUTH T-Shirt ($9.99)
14. Hart Dynasty T-Shirt ($25.00)
15. Are You Ready: The Unauthorized History of D Generation X Paperback Book/DVD Package ($50.95, on sale $19.99)
16. The Great Khali Ruthless Aggression #42 Action Figure ($14.99, on sale $9.99)
17. John Cena Best of 2009 Deluxe Aggression Action Figure ($15.99, on sale $9.99)
18. John Morrison Revolution T-Shirt ($25.00)
19. Triple H Basic Series #1 Mattel Action Figures ($9.99)
20. Jeff Hardy My Life My Rules DVD ($34.95, on sale $23.58)

Bret Hart coming back may not have moved the ratings dial a ton, but it did move the merchandise. Mr. Hart came in at number one with his new t-shirt, but also had a peripheral effect on his relatives. The Hart Dynasty appeared for the first time ever on this list coming in at number fourteen—a strong first showing. They were not the only first timers on the list this week as the Great Khali broke in with his on-sale action figure. Also on the list with two items was John Morrison who now has his sunglasses and t-shirt on the list, the former of which moved up to number eight.

John Cena, DX, and Jeff Hardy still dominated the list, but the latter is going to prove a problem for the WWE right now. With Hardy either being in TNA or in jail in short order, his presence does not bode well for the WWE's list. Thankfully, some of their other newcomers also held on with Evan Bourne and Kofi Kingston maintaining top spots from last week. Is the WWE on a healthy revitalization of the people on this list, or is this just another off week?


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 ($20)
2. Bound For Glory 2009 DVD ($19.99, on sale $17.99)
3. Beer Money T-shirt ($19.99)
4. AJ Styles "Phenomenal Brand" T-shirt ($19.99)
5. Hard Justice 2009 DVD ($19.99, on sale $9.99)
6. Sting "Discharge" T-shirt ($19.99)
7. Beer Money (Take A Fall) MP3 ($0.99, on sale $0.89)
8. X Division Special ($120, on sale $24.99)
9. HOGAN JOINS TNA - Limited Edition of 210 Card/Plaque Set ($39.99)
10. TNA Trucker Hat ($14.99)

With Hulk Hogan now in TNA, the company finally updated their top selling list… and it looks mostly like the old one. Shoved in between the items that were on the list for the past six week, AJ Styles returned to the number four spot. Also making his debut at number nine was Mr. Hogan himself through the limited edition card and plaque TNA created. Surprisingly his t-shirt did not debut higher which is what one would except from Hulk Hogan. Still, this list is very preliminary, so it may take a few weeks for things to normalize.




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
10 (Jan) 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)
17 RAW Live (Chattanooga, TN) SmackDown / ECW Live (Florence, SC)	18 RAW (Knoxville, TN) TNA iMPACT (Orlando, FL)	19 SmackDown / ECW (Greenville, SC) TNA iMPACT (Orlando, FL)	20 TNA iMPACT (Orlando, FL)	21	22 RAW Live (Cape Girardeau, MO)	23 RAW Live (Evansville, IN) SmackDown / ECW Live (Hammond, IN) TNA Live (Glasgow, Scotland, UK)

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, ratings were obviously a big a question, starting with Burnout:

With this "Monday Night War" coming up you hear everyone saying "I'm gonna Tivo/DVR this show while I watch this show". Does the show still get the rating point if it's being recorded? With all this talk you gotta expect a few of us to be extremely curious about this question. Thanks man.

Guest#3002 answers this, of sorts:

No, the Nielson system has not caught up to the technology of the '80s. The recorded show is not counted for ratings.

However, for purposes of ratings what any non-Nielson family does is irrelevant. Now the question of how that company projects their measurements onto the viewing habits of the general public is questionable. Their most famous mistake was under-rating how many people actually watched the original Star Trek, which lead to its demise.

Actually, Guest, your information is a bit outdated. For instance, how Nielsen calculates ratings based on a sample audience came out after Star Trek, not before it. If Star Trek had used the Nielsen method, they would have seen much higher rating numbers and most likely would not have been cancelled. Nielsen actually pointed out how flawed the old system was.

That said, Nielsen is an imperfect system and the Journal has been highly critical of it in the past. As you said, only people with Nielsen boxes actually matter. The regular viewing public (99.9999% of the population) has no say on ratings whatsoever. However, Nielsen has started to record time-shifted ratings outside of the live rating. A study last year found RAW would have a 0.1 to 0.4 additional ratings points from their time shifted components. That number appears to have slowed down this year, but there are still plenty of people who time-shift the show.

Also of note is that Nielsen has finally started to use "people monitors". This device—which has been in the works for years—is like a pager worn by Nielsen members. Instead of depending on the box and journals, the monitor actually records any and all media around the person, whether they were listening actively or not. What has already been discovered is that what people put in their journals is way off from what happens in real life. For instance, men often say they do not listen to adult contemporary, but the monitors say otherwise. As it turns out, they are often in the car with their wives who do, but they do not personally count it as listening. Unfortunately for them, whether they want to or not they happen to be doing so.

Moving to the other side of the ratings house, Shane wants to know:

"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."
----------------------------------
So, will you retract that statement if the ratings spike? This WILL get the attention of many older viewers like myself who really don't care about today's product. This is tied to the single most popular storyline in wrestling EVER in the screwjob. I am not so much a believer in Bret spiking the ratings but I believe the storyline between him, VKM & HBK will spike the ratings - in the U.S. & Canada.

Well, since the Journal didn't make that statement and it came from a commenter in the Editorials section, no, the Journal will not be retracting anything. Of course, you could retract your comment now since Bret Hart's appearance did not spike ratings in the USA and ended up the same as last week.

Though, if you look it in comparison with the major competition on from TNA, football and other entertainment that night, RAW held up extremely well relative to their recent ratings. As noted above, those within the WWE were expecting better, but it should be noted that RAW actually did better in the second hour than the first—the first time in many weeks. RAW not only maintaining their audience but growing it during the show is certainly a positive trend that they have been missing. We shall see if they can keep it up another week.

Jumping across the ocean, True wants to talk about taking TNA on the road and across the continents:

I think TNA just sees them as equal level with WWE trying to tour the different countries.

I believe you said that last week, but they can barely get 400 people at house shows (remember all iMPACT zone shows are free), so who decided to wake up and take the show outside of the US, whether they are more successful there or not? Just doesn't seem worth it...

TNA got 2,000 people at a recent house show, however they do struggle and book arenas that are way too big for the company. TNA has a big problem with awareness and marketing, and that is hopefully something that Eric Bischoff, Jason Hervey, and—to an extent—Hulk Hogan can fix. The thing about TNA's worldwide audience is that it is substantial, it is just spread out. They do not have 15,000 fans in a small area that can fill an arena; they have 15,000 spread out across three counties. When it comes to that, it is population density working against them, not overall population.

Speaking of the marketing side, Ben wants us to know:

TNA, just like the company who licensed the Hulkamania name for the tour, thought that Australian audiences would buy tickets to any wrestling event because it was indeed wrestling (and to an extent, because of the Hogan name). The ads TNA had in media outlets showcased the TNA logo with no details, so non-TNA fans didn't even know it was wrestling. During Hogan's interviews with Australian TV shows, they didn't even hype the show dates.

This is because they didn't have an Australian rep who understood the region (like the WWE who have offices down in Sydney), they instead used PR agencies who didn't 'get' the brand of wrestling. Australian's won't buy tickets to any old wrestling event, they need a lot of persuading to buy a non-WWE ticket. Which by designing dodgy ads and not hyping show dates, TNA and Hulkamania didn't manage to do a good job of.

TNA has yet to master domestic marketing, so non-domestic is going to be a challenge for them. Like you said, a local rep who understands the market would be much better for them. Perhaps that same rep could also help out with their merchandise distribution in Australia, which the Journal has covered as an issue in the past.

Moving past the speculative and into the financial world Probes asks:

I've got a question about the WWE Film department, apologies if you've covered this previously.

Firstly, how is the WWE Films SBU performing? Is it making money for the company?

Also, what is the main aim/reason behind WWE releasing films? Is it to squeeze more money out of their current fanbase, or to market a WWE product, and WWE superstars, to non-wrestling fans?

If its the former, do you think titles that are more focused on wrestling (like the Mania of Wrestlemania, and the rumoured new Wrestlemania documentary) would be more successful than third-rate action flicks?

Well, if you read any of the quarterly and annual summaries of the WWE the Journal has covered, you can see the current status of WWE Studios. As of the end of Q3 2009, the division had brought in $7.5 million compared to $19.5 million the year before. Now, this does not mean the division is doing "worse" as how they book revenue is counter-intuitive to most methods. The WWE does not actually book revenue until after everyone else gets their cut. So instead of booking total revenue for the film and then writing off payments to the studios, actors, networks, etc… as COGs, they actually pay out all the costs before paying themselves. In one quarter they booked $11.3 million in 2008, but that was an aberration because they just happen to be collecting revenue from three films from the past two years at the same time.

The other part of the Studio is the profit. For 2008 those three quarters had $6.3 million while 2009 has $3.7 million. That is a margin of 32% in 2008 and 49% in 2009. In other words, although revenue is down profitability is way up, so the Studio is actually performing better on lower revenues, which is what they wanted. The older films being in theaters cost the WWE a lot more then the newer ones that go straight to DVD.

As for the reason it is simple: more money. WWE wrestlers were going off and making movies with other studios (and sometimes leaving the company). The WWE felt if they could make their own films that they could make all of that money themselves. Since films generally have a wider audience then wrestling, they are looking to just tap into that market. It really is not about advertising the WWE to other markets (although that is a side effect) or getting more money from the WWE fanbase (although that is a sub-goal)—it is about taking advantage of another market. Just like the XFL, WBF, and many other endeavors before and after it, the WWE wants to more than a wrestling company and this is just another venture for them.

As for the wrestling related DVDs, that is a totally different department. Home Video is its own division in the WWE and does quite well on its own. They have their own production studio (on Hamilton Ave in Stamford, CT) that is completely separate from the work WWE Studios does and their own set of employees. One is not taking resources or DVD creations away from the other. Only the WWE brass decided what the release order is for DVDs and may delay one project being released in favor of another.


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

Till then!