wrestling / Columns

The Hamilton Ave Journal 08.05.10: Volume 2 – Issue 149

August 5, 2010 | Posted by JP Prag

THE HAMILTON AVE JOURNAL
By JP Prag

Volume 2 – Issue 149

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 Hamilton Ave Journal

WHAT'S NEWS

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.

TOP STORY: New and Old Programming

After months of false starts, TNA ReACTION has once again announced a start date. According to the press release, the show will begin on August 12, 2010 at 11:00pm immediately following iMPACT. Continues the press release:

“TNA ReACTION” will immediately follow TNA’s flagship program “TNA iMPACT!,” which airs from 9-11PM (ET/PT) every Thursday to create a three-hour bloc, “TNA Thursdays,” on Spike TV.

“TNA ReACTION” is a one hour docu-style series that will bring the characters, story, and drama of TNA Wrestling’s long running action format “iMPACT!” to life in an entirely new and unique way.

It does seem odd that a magazine style show about iMPACT will air immediately after iMPACT. But Spike and TNA have many times shown no qualms with moving programming around.

Of course, TNA ReACTION has been announced twice before, so it remains to be seen if this will really happen. However, as of yesterday it was on the SpikeTV schedule.

Meanwhile, SyFy has already started to advertise the arrival of SmackDown on their website. Says that release:

This fall, the super heroes of wrestling have a new home. Friday Night SmackDown will premiere on its new home October 1st at 8:00 PM ET. The program, which debuted more than 10 years ago, is one of the longest-running weekly episodic shows on television.

While SyFy has been preparing for the arrival of the program, SmackDown is dealing with delays in several markets due to baseball games. For instance, the show will be delayed until 11pm this Friday in New York. Overall, the preemptions have not affected SmackDown’s ratings as they have been consistently in the 1.7 to 1.9 range for months.

At this time, there is still no word on the future of NXT. This is not just a question of SyFy as the WWE has sold ECW/NXT in most other countries around the world and make millions of dollars from the distribution. In the past, WWE CEO and Chairman of the Board Vince McMahon has stated that he’d want to keep the show or something like it going, and given the millions of dollars on the line one can see why.

Even if SyFy were not to renew NXT and the WWE could not find a home, they will still need to create programming for other markets that have ordered it for the long term. The WWE already does create specialty programming in markets like Canada, so it would not be beyond reason for them to find something else to fill the void. Still, if they can make more programming in the United States the company will do so simply because of additional boost of revenue and profit.

While TNA and the WWE are focusing on more television, Wrestlicious is looking for more alternative methods of distributing their shows. From the press release:

Elan Entertainment Group acquires the rights to the television series Wrestlicious TakeDown. […] Wrestlicious TakeDown has been the highest rated series on MAVTV in the U.S. and is the third most watched professional wrestling entertainment program on television. The deal grants Elan Entertainment worldwide mobile and Latin American distribution rights to the entire first season of the show.

Elan Entertainment intends to use their iPad & iPhone distribution deal with Mobile Muviez to launch Wrestlicious TakeDown on the mobile devices this fall. Elan Entertainment’s existing relationship with Smiling People Films in Panama will spearhead its Latin American efforts with the show.

To sum that up, Elan Entertainment has paid for the rights to take Wrestlicious TakeDown and sell the show on Apple devices around the world, as well as distribute any other possible way in Latin America. So Wrestlicious continues to inexplicably expand and gain new markets around the world.

Then again, the question should be what is Elan Entertainment’s qualifications for this type of venture. In the past year, the company has been redefining itself as “a full service production company and literary, movie, television, and multi media content provider.” In September 2009, the description of the company was as follows:

Elan Entertainment Group is a full service production company. We provide movie and television packaging, production and crew, and post production and marketing services.
However, our current focus is fund raising for our slated movies, television series’, and literary content.

In many ways this makes them similar to Bischoff-Hervey Entertainment.

In any case, it is another step forward for a company that has just ten episodes in the can.

Newsbites

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

  • The WWE has declared the normal quarterly dividend of $0.36 per share for Class A stock and $0.24 per share of Class B stock (IE, the stock owned by the McMahon family). The payment will be made on September 27, 2010.
  • Former WWE Executive Vice President of Global Media Shane McMahon has finally got a new job. Mr. McMahon has been appointed CEO of China Broadband, Inc., a cable/broadband provider in the Shandong Province of China. President of China Broadband Marc Urbach had this to say:

    “Mr. McMahon has been appointed Chief Executive Officer and we are honored to have one of the most seasoned veterans of PPV and premium sports entertainment in the world join the China Broadband team. His highly skilled background in marketing and promotion will be instrumental in moving us forward.”

    Of course, the deal can also help the WWE with another provider in China, as well as a person doing business in the country with close ties in the family. In many ways, Shane McMahon’s leaving the WWE may end up helping the WWE more in the long run, especially with their growth in the most populated country in the world.

  • Lucha Libre USA is also seeing barely any movement in ratings. The show once again scored a 0.08 rating for its first viewing.

    MARKETPLACE

    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 time we should be able to see patterns, trends, and anomalies.

    For the week ending Wednesday August 4, 2010, here are the current standings of the shows:

    Analysis:

    Where RAW dropped from their recent 3.50 high to a 3.28 (losing most of their gains), iMPACT saw a big leap up of 14% to a 1.22. This is the highest rating iMPACT has received since February 18, 2010 when the show scored a 1.20 rating. To find a higher rating, one has to go back a couple of more weeks to January 28, 2010 when the show scored a 1.40 rating.

    This is also iMPACT’s fourth week in a row with a 1.0+ rating. The last streak of 1.0+ ratings began in January and lasted nine weeks until the move to Mondays. The repairs from that move are still going on, but obviously this is a good sign for the company. The question now remains if the upward momentum is only temporary or if TNA can maintain the audience and then grow from there.

    MONEY AND INVESTING

    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, on sale $19.95)
    2. John Cena Never Give Up T-Shirt Package ($37.99)
    3. Nexus Logo T-Shirt ($25, on sale $19.95)
    4. Randy Orton Lobotomy T-Shirt ($25, on sale $19.95)
    5. WWE Red/Blue Reusable Bag ($2.99)
    6. John Cena Never Give Up Lunch Cooler ($12.00)
    7. Randy Orton Lobotomy Basics YOUTH T-Shirt ($9.99, $8.95)
    8. John Cena Never Give Up Sweatband Set ($12.00)
    9. Triple H Return to Fear T-Shirt ($25, on sale $19.95)
    10. Miz I’m Awesome T-Shirt ($25, on sale $19.95)
    11. Randy Orton Lobotomy TOP ROPE T-Shirt ($45, on sale $37.95)
    12. WWE Superstars 2010 Notebook ($5.99)
    13. John Cena Never Give up Notebook ($5.99)
    14. John Cena Illustrated YOUTH T-Shirt ($9.99, on sale $8.95)
    15. The Miz I’m Awesome Blue T-Shirt ($25, on sale $19.95)
    16. Nexus Armband ($8.00)
    17. John Cena Never Give Up Backpack ($39.95)
    18. Randy Orton Lobotomy Basics T-Shirt ($14.99, on sale $12.95)
    19. John Morrison Sunglasses ($12.00)
    20. John Cena Never Give up YOUTH Basics T-Shirt ($9.99, on sale $8.95)

    The t-shirt sale continues in full force moving the vast majority of merchandise in the WWE’s top selling list. But also coming in were a number of back to school items including backpacks, notebooks, and lunch coolers (mostly of the John Cena variety). And while this week also dropped a number of people like CM Punk, the Big Show, and Sheamus, the Miz held on strong with John Cena and Randy Orton. Beyond that, the Nexus also added a second item to the list with their armband coming in at number sixteen. The Nexus angle has done well for sales here in the short term and should be interesting to see if it can maintain for a while yet.

    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. Mr. Anderson… People Are Fake T-Shirt ($19.99)
    3. Jeff Hardy Enigma T-Shirt (Glow In The Dark) ($19.99)
    4. The Best Of America’s Most Wanted DVD ($24.99, on sale $15.99)
    5. RVD – Video Wall T-shirt ($19.99)
    6. Hogan H Squared Limited Edition T-shirt ($29.99)
    7. Destination X 2010 DVD ($19.99, on sale $15.99)
    8. Unbreakable 2005 DVD ($9.99)
    9. “Hulkamania” T-shirt ($19.99)
    10. Beer Money / MMG “FANDIMONIUM” DVD ($19.99, on sale $14.99)

    Forget Mr. Anderson’s shirt; this list is starting to look fake.

    PERSONAL JOURNAL

    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 upcoming weeks? The Personal Journal answers that question.

    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.

    EDITORIALS

    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, Indianguy wants to understand the economics of TNA some more:

    What impact (no pun intended) has the Hogan-Bischoff regime had on TNA revenues and ratings? Again they are not publicly traded I know but you could have guestimates right?

    If you would ask me under Jarrett they were not that badly placed. They had similar ratings and more importantly would have relatively lesser fixed costs (from your discussion above) compared to getting someone like Hogan and the influx he caused in. I would rather be small and be highly profitable then be a huge revenue churner with slight margins.

    Again I am guestimating here about their Gross Margins. The only good thing could be they got added in several countries due to having Hogan on board and thus pushing up the Gross Margin, but only you can verify that.

    First thing we have to realize is that ratings do not equal revenues. TNA sells iMPACT, Xplosion, ReACTION, and whatever other oddly capitalized program they can to stations for a set fee over a contracted number of years. So during that cycle, TNA’s revenues from a television perspective (which are the vast majority of their revenues) remain the same until contracts come up again.

    At the beginning of the Hogan-Bischoff Era, TNA did quite well in rating and was averaging 5-10% better than just before. However, the move to Monday’s destroyed all of that and TNA is far below last year’s average at this time. For the first seven months of 2009, the average rating was a 1.21 compared to an average rating of a 1.02 this year. If contracts had to be renegotiated now, TNA might lose out on some revenue. However, they have another two and half years before they have to worry about that with Spike, so this situation should be resolved by then.

    Overseas, TNA’s ratings have been on more of a rise, especially in places like the UK, Australia, and India. And yes, they have signed some international distribution deals that added more to coffers, but that has more to do with TNA’s international sales team than anything else. The name “Hulk Hogan” probably does help in those sales, along with the ad rates that the television companies charge to make back the cost of getting TNA programming.

    Jeff Jarrett has been reporting the house show attendance is up, but that may or may not be directly related to Hogan. What is more closely aligned is merchandise, which has spiked up significantly on Hulk Hogan and Jeff Hardy. If Mr. Hogan can be considered responsible for bringing Jeff Hardy in the company, than that may be attributed to him as well.

    As far as margins, that is another story entirely. As you noted, the fixed costs of TNA have gone up considerably in the past year. Because of that, their margins may not be the best. That said, having the top margins is not Dixie Carter’s goal right now. While you and Journal see more value in being a stable company with smaller revenues and large margins, Ms. Carter has made it a goal to grow the company in terms of revenue, viewers, distribution, reach, and a number of other areas, placing margins second. As she said, they are going for broke and they are either going to explode in popularity or implode under the weight of so many lofty decisions. Either way, Ms. Carter has made it blatantly clear that this is the direction she wants to take the company with margins being secondary.

    Sticking in the TNA’s court, Rich (highly edited down to key points) goes back to the potential issues with EV2.0:

    I am not sure that is really enough for WWE to take them to court.

    Like I said last week, TNA might be some rinky dink just above independent status wrestling promotion, the guy that is backing them has more than enough money, and surely a staff of attorneys that he may or may not have consulted on this. Or probably has since. So I am sure they know how close to the line to get.

    Either way, I highly doubt WWE sues TNA for that line, or anything they have done so far.

    People want to blast Owen Hart’s widow for what she is doing, but WWE has broken more issues in that instance that TNA has thus far in regards to ECW.

    Rich, it is hard to take you serious when the first thing you do is go out of your way to insult TNA’s operations instead of coming at them with a critical eye. Let’s get one thing straight: TNA is not some “rinky dink promotion barely above the level of an independent”. TNA is the second largest wrestling company in the world (re: WORLD) in almost every category imaginable. Whether we want to talk about reach, distribution to foreign markets, sales of merchandise, total revenues, or television ratings; TNA is second only to the WWE. Some local promotions like AAA and NJPW can do better attendance in their home countries, but they are only available in a couple of markets outside their home. TNA is in over 80 countries, which is more than many hit television shows from America.

    Next, TNA is whole company by itself. Panda Energy is an investor, not an operating owner. There is a key difference from a legal perspective. If TNA Entertainment were a wholly owned subsidiary, then they could share resources like legal. But TNA Entertainment is a completely separate company with its own operations of which Panada Energy is the key investor and gets the largest cut of the payback, should a payback ever come.

    Last, it doesn’t matter who has done more or less alleged illegal activities. All that matters is who thinks they own what and how it should be used and if they decide they want to do something about it. And if you read closely last week, the discussion went more to the WWE just sending a cease and desist order like they do most other companies and contractors that try to use their trademarks. Just ask Team 3D what happened before they went to TNA and tried to use the “Dudley” name. If the WWE owns it, they have the right to try to enforce it.

    For all we know, WWE already sent that letter and TNA complied. You even heard Tommy Dreamer on iMPACT say “for legal reasons” they could not use those letters, so there you have it. Either TNA was being proactive, or they had already received a letter telling them to get their act in line. Just because it was not made public does not mean it has not happened.

    Guest#7879 wraps up the rest of this for you:

    What Bob Carter has is largely irrelevant, since it is Dixie Carter and company making operating decisions.

    When you think about it though, it is doubtful that Panda Energy has a lot of entertainment lawyers on hand. Getting that sort of thing is TNA’s responsibility.

    Going to daddy for BASIC business advice is a good way to make sure there isn’t more money coming.

    Well yes, McMahon doesn’t play nice. Neither does Microsoft. This is not to justify what was done. Legally speaking, it is irrelevant how Vince and WWE has done business. All they need is enough of a case to go to trial to harass TNA.

    Those legal costs add up fast and I don’t think TNA has enough profits to cover a lot of lawyer time.

    That was one of the main points. It was not whether the WWE was right or not of if they would win a case. Just the cost of going through the case would be devastating for TNA. TNA wants to avoid going to court not because they don’t think they can win, but because they don’t want to go through the hassle and–more importantly–the expense.

    Leaving behind all this TNA talk, JACKANAPES wants to know:

    Why is there no Nexus Merchandise on Euroshop yet? It seems like the Euroshop site is rarely updated in comparison WWE Shop. What’s the deal?

    For one thing, the WWE is still replacing their international departments after Shane McMahon left the company. Another is that the merchandise needs to be shipped over and stored and these products are only a few weeks old. There is a logistics barrier when it comes to the WWE getting their things overseas. If you think a few extra weeks for merchandise is trouble in the UK, talk to Australian readers about their delays.

    Plenty more was written, so be sure to take a look. And if you enjoy the Journal, why not bookmark 411wrestling.com and make it your home page? You can do that by clicking here.

    CLOSING BELL

    This concludes Issue #149 (Volume 2) of THE HAMILTON AVE JOURNAL. Join us next week as we get ready to ring the bell again.

    Till then!

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