The Hamilton Ave Journal 03.04.10: Volume 2 – Issue 127

Posted by JP Prag on 03.04.2010

Could Hulk Hogan and Eric Bischoff really walk away from TNA tomorrow? Does WWE care that their stock hit a 52 week high or that John Cena is outselling everyone else on the roster combined? 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 127

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 on media blitz

Being true to their word, TNA has been going full throttle on the marketing in preparation for iMPACT moving to Monday nights starting on March 8, 2010. Hulk Hogan, Eric Bischoff, Dixie Carter, and other TNA stars have been all over radio and television to promote the product and the show, but it has not ended there. From the TNA press release:

Starting Wednesday, TNA Wrestling takes over the Big Apple with huge billboards at Times Square, Penn Station and Madison Square Garden featuring Hulk Hogan promoting Monday's historic "iMPACT!" on SpikeTV!

Apparently, Viacom (parent company of Spike TV) owns these billboards and has used them in the past to promote UFC events and various network shows. Even from an internal transfer of funds, this is most likely costing Spike TV a fair chunk of change. But Spike TV and TNA remain committed to take TNA as big as they can and their major hurdle is awareness. If these billboards in one of the most populous places in the world will help, then that is what they intend to do.

Meanwhile, TNA is also trying to think of the future of the program. Eric Bischoff and Hulk Hogan visited Knokx Pro Wrestling School in Burbank California in an effort to evaluate potential new talent. At the same time, TNA has signed some type of talent exchange and evaluation program with Mach-1 Wrestling in Anaheim California. Says TNA Director of Talent Relations Terry Taylor:

"In the spirit of TNA's commitment to developing future superstars we look forward to offering M1W an expedited process through which they can submit potential talent for inclusion on our TNA roster. We look forward to working with M1W on locating and developing future talent for the TNA brand."

Though everyone seems to be looking out for TNA's future, one has to wonder about Eric Bischoff and Hulk Hogan, but not for the normal reasons. The duo through Bischoff-Hervey Productions is starting their own wrestling company and using the TNA studios to do so. From the casting call:

This Thursday evening, March 4th, Micro Championship Wrestling will invade Universal Studios Orlando for one unbelievable night of absolutely insane action. From the world's smallest wrestler, Demo, to the world's largest midget, Meatball, the baddest little men AND WOMEN on the planet will be in action.

Featuring a special appearance by TNA's Eric Bischoff.

Come on out and be part of the action as MCW tapes their first ever televised event!

While TNA wrestlers are often allowed to work independent events, those are always restricted to ones not on television. This is a rare time when a TNA contracted talent is allowed to not just appear on television for another program, but actually own a piece of it.

More than that, this project appears to be for TruTV and not Spike. Spike actually has their own midget wrestling program in development that is not related to TNA in any way. In other words, TNA talent are being allowed to work on a program for a rival network and a potential rival company. True, a midget wrestling federation is not a direct competitor of TNA, but it is in the same venue and targets a specific audience that is a part of TNA.

Eric Bischoff and Hulk Hogan must have they most loose contract in modern wrestling history. To have this type of leeway is unprecedented since WCW created the fixed contract and WWE was forced to fall in line to lock in talent. Hulk Hogan has always stated in interviews that he could walk away from TNA at any time if it wasn't working out, but now that appears more true than ever. If he can literally work on other projects while under TNA's roof, it would appear that the relationship between Hogan and TNA is even less locked in then imagined.


Newsbites

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

Following the official toxicology results in the death of the wrestler known as Umaga, the WWE has once again sent a letter out to all current and former talent offering them free rehab. The WWE has done this once before but looks to be expanding the program for the foreseeable future.

TNA had fixed their PPV situation in the UK. TNA President Dixie Carter made an announcement on Twitter that PPVs will air on a five day delay on Extreme Sports Channel. Additionally, TNA Xplosion will air Fridays on the same station while iMPACT remains on the Bravo family of stations.

WWE has started a partnership with Ticketmaster to have their own sub-area on their site and pass-through on WWE.com. Most major sporting and entertainment venues already have this, but it is another way the WWE is trying to ease the ticket sales process and move more seats.

In the open market, WWE stock hit a new 52 week high following their financial results. The stock hit $17.91 yesterday before closing the day down $0.07 at $17.68. The stock closed at $16.43 last Wednesday, so in just a week it has gained 7.6% and a peak of 9.0%.




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 March 3, 2010, here are the current standings of our shows:





RAW
Close (This Week's Rating): 3.7
Open (Last Week's Rating): 3.8
Percentage Change: ▼ 2.6%
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): 1.9
Percentage Change: N/A
52-Week High: 2.2
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.

TNA iMPACT**
Close (This Week's Rating): 1.1
Open (Last Week's Rating): 1.2
Percentage Change: ▼ 5.0%
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): 0.8
Open (Last Week's Rating): 0.9
Percentage Change: ▼ 7.8%
52-Week High: 1.1
52-Week Low: 0.7
All Time High: 1.1
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.

NXT
Close (This Week's Rating): 1.2
Open (Last Week's Rating): 1.4
Percentage Change: ▼ 11.4%
52-Week High: 1.4
52-Week Low: 1.2
All Time High: 1.4
All Time Low: 1.2


Analysis:

Not unexpectedly, NXT dropped after its initial week 11.4% to a 1.2. Still, this is about 20% higher than ECW was doing at the end, so thus far that is a success. Should the show continue to drop, though, SyFy will not be happy with the new arrangement.

Meanwhile, everyone else's ratings dropped this week as well officially ending all of the strong streaks. RAW is actually starting a new one have ratings higher than 3.6 for the two weeks in a row, which is the first time this has happened since August 2009. The four week rolling average for RAW right now is a 3.6. However, last year on this date the average was a 3.9. What will this mean for the WrestleMania buyrate? Well, we are quite a whiles away from learning the answer to that 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. John Cena Never Give Up T-Shirt ($25.00)
2. Randy Orton Lobotomy T-Shirt ($25.00)
3. Triple H Return to Fear T-Shirt ($28.00)
4. John Cena Never Give Up YOUTH T-Shirt ($22.00)
5. John Cena Never Give Up Sweatband Set ($12.00)
6. John Cena Never Give up YOUTH Basics T-Shirt ($9.99)
7. John Cena Never Give Up Baseball Cap ($20.00)
8. WrestleMania 26 Red T-Shirt ($25.00)
9. Bret Hart Emblem T-Shirt ($25.00)
10. John Cena Attitude Adjustment T-Shirt ($25, on sale $14.98)
11. D Generation X Worlds Biggest Member T-Shirt ($25.00)
12. Edge Throwback T-Shirt ($25.00)
13. LIMITED EDITION WWE St. Patricks Day T-Shirt ($9.99)
14. Shawn Michaels My Journey DVD ($34.95, on sale $21.99)
15. WWE Championship Spinner Toy Belt- Mattel ($14.99)
16. John Cena Never Give Up Pendant ($10.00)
17. Miz I'm Awesome T-Shirt ($25.00)
18. John Cena Illustrated YOUTH T-Shirt ($9.99)
19. Royal Rumble 2010 DVD ($24.95, on sale $15.50)
20. Royal Rumble 2010 DVD/T-Shirt Package ($21.99)

Have John Cena, will sell. Mr. Cena made up 40% of the list this week, including 60% of the Top Ten. Also making a return after quite a while away was Randy Orton, whose turn landed him in the number two spot. Edge, Bret Hart, and Triple H held on to their spots, but the Miz was still able to return to the list after a week away. And while John Morrison's DVD is no where to be seen after an impressive debut, the Royal Rumble took two spots giving high hopes for the selling ability of that event alone. Unlike the TNA list, in the WWE list it rare for an event to outsell a performer, so that shows just how strong of an item the Royal Rumble is for the WWE.


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

1. Hulk Hogan – Change T-shirt ($19.99)
2. Don's Insane Brown Bag Special ($20)
3 HOGAN JOINS TNA - Limited Edition Plaque and Card ($39.99)
4. "Hulkamania" T-shirt ($19.99)
5. Beer Money T-shirt ($19.99)
6. Emergence CD ($14.99, on sale $9.99)
7. Bound For Glory 2009 DVD ($19.99, on sale $17.99)
8. AJ Styles "Phenomenal Brand" T-shirt ($19.99)
9. Hard Justice 2009 DVD ($19.99, on sale $9.99)
10. Sting "Discharge" T-shirt ($19.99)

One more week until a potential delisting.




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
7 (Mar) RAW Live (Boise, ID) SmackDown Live (Yakima, WA)	8 RAW (Portland, OR) TNA iMPACT (Orlando, FL)	9 SmackDown (Seattle, WA) TNA iMPACT (Orlando, FL)	10	11	12 RAW Live (Denver, CO) TNA Live (Erie, PA)	13 RAW Live (Fresno, CA) SmackDown Live (Stockton, CA) TNA Live (Pittsburgh, PA)
14 RAW Live (Bakersfield, CA) SmackDown Live (San Francisco, CA) TNA Live (Wheeling, WV)	15 RAW (San Diego, CA)	16 SmackDown / NXT (Los Angeles, CA)	17	18 TNA Live (Hattiesburg, MS)	19 RAW Live (El Paso, TX) TNA Live (Pensacola, FL) ROH Live (Dearborn, MI) JP's B-day (Everywhere)	20 RAW Live (Tucson, AZ) SmackDown Live (Visalia, CA) Mississauga, Ontario, Canada

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, our Hindu Friend (along with a few others), could use come clarification:

I hate the argument that "Well, WCW gave away big FREE TV matches..."

Yeah, they did, and out of 40 years, they were on top for 2 years; and now are out of business.

Strangely, it is the unnamed guests of the Journal that appear to be synthesizing information better, such as Guest#2818:

That argument wasn't used though. In fact, the difference in how TNA and WCW operates was. Understanding the difference is vital to understanding why giving away a big match doesn't really harm TNA the way it did WCW.

As for WCW, their business issues require an article of their own. Giving away free matches was the least of their problems.

Guest hit it right one the head. The whole point is that TNA and WCW have very different profit models, and that means you cannot compare them in all respects. Of course, talking about why WCW went out of business is always a sure way to bring in the commenters like Doktor Sick:

WCW went out of business because Time-Warner didn't want to be involved in wrestling anymore. If Time Warner wanted to keep WCW going it would have been back top in a year or two. That's the way it goes companies come and go.

TNA is coming up now and possible ROH could move in position to be third or some other company may get the right money and TV time and become big.

Whether WCW could have overtaken WWE at that point in history or not is neither here nor there and something we will never know. What we do know is your first point: If AOL-Time Warner wanted WCW to be around it would have. That is the only thing that killed WCW—losing their TV outlet. That, and backroom fire sale that involved people who were too close to key then WWF personnel. Intentionally Sexy continues to fill in this point:

WCW went out of business because of the AOL/Time Warner merger. They could have kept going because they were making enough money. It wasn't a single creative decision that led to the end of WCW, it was the stiffs at AOL/Time Warner that decided wrestling was beneath them.

As you can imagine, though, these type of arguments lead people down the path of the past always predicting the future, like Guest#5817:

Much like WCW, TNA would go out of business tomorrow if Spike TV got bought out, and the new company dropped the show.

First off, it would have to be Viacom that got bought out since Spike is a member of the Viacom family. That said, TNA could actually survive for quite a while without an American distribution. Again, this goes back to the point above about TNA's profit model being different then WCW's. WCW was heavily dependent on domestic product while TNA gets at least half of earnings from overseas. Given certain restructurings, they could survive.

On top that, you miss the vital point of the relationship of WCW with their network compared to TNA and theirs. WCW was owned by their network and even if they wanted to go to another station they could not because they were blocked by their own corporate policies. If Spike ceased to exist tomorrow, TNA could go looking for a new network and could probably find one. Their deal may not be as good as the one they had on Spike, but they would be able to manage.

Also, let's not forget how TNA makes money on their programs. TNA is not advertiser based; they are rights fees based. Spike pays TNA a certain amount of dollars for the program and then Spike sells the advertising time to make the costs. If Spike decided one day to yank TNA off the air, they would still have to pay TNA every cent of the contract between the two. So theoretically, TNA could survive with no domestic TV because they would still be making almost the same money.

WCW, on the other hand, was advertiser based. Without a show, they had no revenue, and thus lost most of their value overnight.

When talking about the differences between how WWE, WCW, and TNA make/made money, the potential of TNA without PPV of any kind came up. Jimbo Jones states:

I never really thought of a PPV-less Wrestling Promotion. Is anyone else somewhat excited by the prospect?

Think about it. If TNA doesn't count on their PPVs (and they fix much of their booking, of course), they could literally run through overlapping programs ON AIR over time, working the way that ROH used to work in their pre-PPV days (any given week could highlight a big match in a single feud).

No need to schedule every feud for a PPV. Just a couple of big-money matches a week while they continue other feuds.

Then, every 3-6 months, they could have a Clash of the Champions-like event on a different night (say a Sunday).

Just because WWE and WCW did the PPV thing doesn't mean TNA needs to. We've just gotten so used to it that we instantly think "PPV = Big Fed". But why?

TNA started things differently, with weekly PPVs. Why not continue differently? This could be the niche they need to fill.

The worst thing an entrepreneur can do is thing that he has to do something a specific way. You are correct in that the audience is conditioned to believe PPV means a big promotion, but someone who is thinking, to use the cliché, outside of the box will see that PPV is not the way to go for a newer company. If profit is the name of the game, then doing things that makes sense for the organization are much better than doing the expected.

Also, your idea of a free event on a Sunday gives TNA a chance to give the WWE a taste of their own medicine. For those who know their history or read Mathew Sforcina's Ask 411 Wrestling, the WWE purposely programmed free events on TV against NWA/WCW PPVs to hurt their buyrates. They also threatened cable companies by saying they would pull WrestleMania if the companies chose to air events like Starrcade over Survivor Series, but that is a whole different story. Some NWA/WCW Clash of the Champions were also programmed against WWE PPVs, so it worked both ways. But if TNA did not have any PPVs to fear repercussions, they could certainly program all their free events against major WWE PPVs.

Of course, when you want something for one organization, you may want it for all as Andrew Barbarash does:

TNA need to get rid of PPV as quick as they can, the market is over saturated with PPV from WWE, UFC and boxing.. lord knows people can't afford to buy all of them.

I think by running a big show monthly they will make more money from advertising streams than they ever did via PPV.

TNA is getting like 7-10,000 buys.... think how many people would watch if it was free (I'm guessing around 2.5 million based on current ratings) and think how much advertisers would pay during a major shows timeslot.

I truly believe the WWE (outside WM) and TNA long-term don't need PPV.

We need to stop quote Jeff Small PPVs numbers in the Journal. TNA averages between 25,000 and 55,000 buys per show domestically. That said, even with those numbers TNA would be better with another show that gives then rights fees. There are also a lot of extra costs associated with putting on a PPV, not the least of which is paying the PPV companies, satellite uplink, live streaming, and carrying costs.

For the WWE right now, though, that is not the case. The Journal has covered in depth several times that the WWE could not garner the same amount of money by dropping PPVs, at least not yet. For at least the next several years, WWE has a high dependency to keep PPV alive. Guest#7335 sums up this thought and finishes us off for the week:

WWE gets about 20-25% of its profits from PPVs, if I remember previous Hamilton Avenue Journals correctly. So not having PPVs would hurt, but this wouldn't happen immediately.

But PPVs mean less as WWE (regular shows) is sold to more foreign markets. That is almost free money, since the expensive part of the product is already paid for to feed the US market. Translators may be needed, but that need not be WWE money.

WWE is also aggressive in searching for more revenue streams. The more revenue streams you have, the less any one of them matter. Diversification is important for this reason.

If TNA were offering comparable money, then there is one aspect of a PPV-less world does hurt. Performers on PPVs get a bonus, something TNA doesn't seem to be able to meet.

WWE won't get rid of all PPV's though. Wrestlemania seems to be going strong. Summerslam is positioned as the other big show.

And if the PPV numbers from last week are any indication, the theme shows with generic names are actually helping.


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

Till then!