The Hamilton Ave Journal 09.09.10: Volume 2 – Issue 154

THE HAMILTON AVE JOURNAL
By JP Prag

Volume 2 – Issue 154

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.

TOP STORY: More wrestling on TV near you

Are you looking for more wrestling on TV? Well, despite having so many hours available every week, the expansion continues around the world.

First up, TNA announced a new deal in France. After losing their existing deal after announcing a tour data there, TNA has finally inked a new deal that will have the show airing at Fridays at 8:00pm starting September 10, 2010 on MCS. So while the USA will not have an iMPACT tonight, France will be getting their first episode in months. From the press release:

“TNA iMPACT!” will air Fridays at 20:00 starting September 10, while TNA pay-per-view events will be available via MCS’s On-Demand service beginning with TNA’s biggest event of the year, “Bound For Glory 2010,” October 10.

“TNA iMPACT!” brings a two hour weekly dose of the very best in professional wrestling to MCS, featuring huge matches and high drama from some of the most famous names in professional wrestling such as pop culture icon Hulk Hogan, ‘The Nature Boy’ Ric Flair, ‘The Phenomenal’ AJ Styles, “The Charismatic Enigma” Jeff Hardy and Rob Van Dam.

MCS is the among the leading sports channels in France reaching over 8 million households through Cable, Satellite, ADSL and Mobile. MCS boasts several sports channels including: Ma Chaine Sport (its flagship channel), MCS Extrême, MCS Mobile, as well as various PPV and VOD services. Other content carried on Ma Chaine Sport includes Football, Boxing, Tennis ATP/WTA, Athletics and many more, for a total of more than 4000 hours per year of exclusive content.

Interestingly enough, there was another line in this press release that caught the Journal’s attention:

TNA Wrestling has gone from strength to strength since its founding in 2002 and now boasts broadcast deals in over 100 countries.

That number of 100 counties is above the 80 the Journal has been using for this year. Counting the countries listed on TNA’s website, there are 70 shown plus Al Jazeera. Al Jazeera would seem to account for another 20 countries across the Middle East and Northern Africa, so the last ten countries remain a mystery for now. Even still, this should reinforce the idea that TNA has reach around the globe more than any other wrestling company next to the WWE.

And while TNA is not airing this week they are taping three episodes, which will lead to a live show on October 7, 2010. This show is expected to be a one-time deal before Bound For Glory and will not be leading into weekly or bi-weekly live shows. Then again, TNA has been known to change their mind suddenly, so pay attention to the dates at Universal Studios after October 7.

TNA was not the only company to announce a deal in France as ROH has inked a deal as well. From their press release:

Ring of Honor, in conjunction with HDNet, Big Media, and Actionmedia are proud to announce a broadcasting agreement for “Ring of Honor Wrestling” to air weekly on MCM in France. MCM is the leading French channel on cable and satellite for music, manga/animee, and young adult programming. Programming is scheduled to begin in mid-September 2010.

This is a major coup for ROH as—much like TNA—repacking an existing product and sending it to another country is an extremely high margin venture that can only help. Also, it is interesting that HDNet was involved in the deal as normally the domestic partner has little to no say in international distribution. HDNet would appear to have a very different contract with ROH than Spike has TNA or NBC-Universal has with the WWE.

ROH has been dealing with some issues related to footage recently, though, as WFX out of Canada is claiming that ROH illegally used some of their footage to advertise a match. However, the video in question which used the footage was not created by ROH but instead by a fan who used footage to make his own promotion and uploaded to YouTube. Since it never aired on ROH programming and was not linked to by any ROH sponsored account, this appears to be a non-issue.

Back at home, another half-hour women’s wrestling show is set to debut on Philadelphia television. Highspots.com has put together “Dangerous Women of Wrestling” and secured a TV deal. From that press release:

This Saturday, September 11, 2010 (1:30 a.m. ET) The Dangerous Women of Wrestling Television Show UNDERGROUND makes it debut on WMCN DT 44 airing in Philadelphia, PA and all surrounding suburbs, South Jersey to the beaches, and Northern Delaware to Dover, DE. WMCN is carried in 2.6 million homes and is available on DirecTV, Dish Network, Verizon FiOS, Comcast Cable, and Digital TV. UNDERGROUND will air every Saturday at 1:30am on WMCN.

The Dangerous Women of Wrestling Underground is a weekly thirty-minute TV Show, presented by Highspots.com. DWOW present Women’s Wrestling like no other company in the history of professional wrestling –extreme, sexy, hardcore wrestling and total chaos at times

There is no world on how long the contract is for, but a 1:30am timeslot should limit the competition and expectations. Still, the show is already available in the UK and Canada on The Fight Network, so they seem to be following the Wrestlicious model of signing a number of small deals, string them together into something much larger, and go through a “season” of episodes with each new contract.

Meanwhile, it is not all new deals as Jerry Lawler’s Memphis Wrestling appears to be shutting down after a 12-week run on a local station. The project was run by Jerry Lawler and Joe Cooper, the man who wanted to start a wrestling-themed deli with Jerry Lawler. When that deal fell through, Mr. Cooper and Mr. Lawler apparently split ways. Since Mr. Cooper was responsible for selling the advertisement for the 12-week run of Memphis Wrestling and Mr. Lawler cannot commit to doing that, the run looks to be coming to finality.

Despite the loss of one show, there are still a large number of hours of programming to be seen each and every week. The question is, is there too much to watch and can some time be saved while trying to watch them all? Tune in this Monday to a special by JP Prag entitled “Pro-Wrestling Pilot: Fast Forward” to find out the answer to this question!

Newsbites

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

Early buyrates for WWE Money in the Bank have the show coming in at 189,000 buys, up 6% from the 178,000 seen by The Bash in the prior year. This reverses the trend seen since (and including) WrestleMania of year-over-year buyrate decreases after seeing a successfully two quarters of buyrate growth with the themed PPVs.

Former WWE CEO Linda McMahon’s campaign for US Senate looks like it could lead to opening up an old case followed very closely by the Journal. Yale Law Professor and presenter at the Connecticut Democratic Party conference Robert Solomon gave his analysis in the New Haven Register:

Solomon claimed wrestlers should be able to sue in case of WWE’s negligence because they are employees, according to state law. He compared them to pro football players, who are considered employees, as opposed to pro golfers.

“They decide where they go, they sign up with the PGA. … They keep their own winnings based on performance,” he said of golfers.

“As an employee, they’re obligated. The contract, as I understand it, has a right of exclusivity” so wrestlers can perform only for the WWE.

Of course, WWE Spokesman Robert Zimmerman brought up the fact that the WWE successfully fought this charge in 2008 when the case was brought against them by Scott Levy (Raven), Christopher Klucsarits (Kanyon), and Michael Sanders (“Above Average”). These charges, though, were dismissed without prejudice—which means they can be brought up again—and were mostly dismissed due to incorrect legal filing, timing, and jurisprudence.

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 September 8, 2010, here are the current standings of the shows:

Analysis:

With the Labor Day holiday this week in America, ratings across the board have been delayed. As such, a complete analysis would be inaccurate at this time.

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 Cenation T-Shirt ($25.00)
2. Randy Orton Lobotomy TOP ROPE T-Shirt ($45, on sale $37.95)
3. John Cena Cenation YOUTH T-Shirt ($22.00)
4. John Cena Cenation Baseball Cap ($20.00)
5. John Cena Cenation Sweatband Set ($12.00)
6. WWE Superstars Bandz (Randy Orton/Rey Mysterio/Edge) ($5.00)
7. John Cena Cenation WWE Bandz ($5.00)
8. WWE Red/Blue Reusable Bag ($2.99)
9. The Miz My Name Is T-Shirt ($25.00)
10. John Cena 2010 YOUTH Halloween Package ($36.99)
11. Nexus Logo T-Shirt ($25, on sale $19.95)
12. John Cena Never Give Up T-Shirt ($25, on sale $19.95)
13. Miz I’m Awesome T-Shirt ($25, on sale $19.95)
14. Randy Orton Lobotomy T-Shirt ($25, on sale $19.95)
15. The Miz I’m Awesome Blue T-Shirt ($25, on sale $19.95)
16. SmackDown Superstar Ring-Mattel ($15.99)
17. Rey Mysterio Blue/Silver Plastic Mask ($8.00)
18. Bret Hart Best Since 1984 T-Shirt ($25, on sale $9.98)
19. John Cena Never Give up Notebook ($5.99, on sale $3.59)
20. Nexus Armband ($8.00)

John Cena has once again controlled the top selling list with a healthy dose of the Miz, Randy Orton, and the Nexus. But what is interesting is that the items are already moving away from back to school and are now turning towards Halloween. And who is leading the pack in Halloween packages? Why none other than John Cena, of course. What is amazing is how long the plethora of Cena items have been dominating the top of the list with almost no movement. The WWE has certainly locked into a pattern and understands when the Cena products reach a saturation point how to introduce a new style.

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)

See the Editorials below. Yes, that is what was written here last week, as well.

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.

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. Now, let’s break down the topics from last week’s commentary section:

TNA going under

Let’s kick off this week with a ridiculous topic that has been done to death (no pun intended) but always is enjoyable.

What will you say when TNA finally folds? Ignoring all the warning signs makes you look foolish.
– Vic

Which warning signs?

Their primary income is guaranteed for years. There is no sign in any drop.

Regardless of what Eric Bischoff says, ratings are not money. Not directly anyways. Even so, iMPACT’s ratings are generally above a 1 now, safely above Spike’s prime time average. TNA is now being paid for more shows, which provides more revenue while costing little to produce.

And on top of it all, the Journal has never claimed TNA would be around forever. In fact he and several commentators have pointed out the need for real improvement in many areas.
– Guest#7232

What more is there to say? TNA has a lot of issues that could make it a more successful business. Read that as more successful. At the end of the day, TNA has steady revenue streams and television contracts for at least the next two and half years. The only thing that can kill it is excessive overspending, which they are capable of doing. However, there have been a number of notable cost cutting measures recently between the taping schedule, letting talent go, and other initiatives. Is it enough? Not by the Journal’s estimations, but it is a start.

The only foreseeable way for TNA not to last past 2011 would be for Spike to cancel iMPACT and no other station to pick it up. For that to happen the bottom would have to drop out of the ratings and there is no indication that is happening or is going to happen. Remember WCW would have been around much longer if television hadn’t been cancelled.
– gpjunk

Spike and TNA are locked into a contract. Spike could not just cancel iMPACT, but they could move it to some timeslot that no one would notice the show at.

That said, Spike would still have to pay TNA what they pay now, even if Spike removed all TNA from their schedule.

Once that contract runs out, that is anyone’s guess, but since iMPACT is doing almost 2x’s the Spike network average in ratings, it would take a catastrophe for Spike and TNA to part ways.

But then again, that is what kills me. Everyone assumes that ratings are the most important thing in terms of the WWE and TNA competition. They aren’t. TNA doesn’t need to beat the WWE’s ratings even once, they just need to beat the ratings of the other shows on Spike.

As long as TNA can do that, they have a network to showcase their programming.
– Darth Mortis

Great point! To take it to another level: TNA does not have to “beat” the WWE in any measure, whether it is ratings, buyrates, attendance, revenue, profit, or anything else. For TNA to be successful revenues minus costs must be a positive number. That’s it! So long as that is happening, TNA is doing fine. There is some question if that is still the case, but as covered above the addition of television deals only helps them as they cost TNA almost nothing and represent large pools of revenue.

There is one other thing that could kill TNA. If expenses balloon (or have ballooned) to the point where they can’t be covered by the revenue from Spike TV and international TV, causing Panda Energy to see no hope of future profits and pull the plug. (Assuming that PPV and house shows are costing TNA small amounts rather than contributing to profits. Infrastructure costs of merchandising compared with how much TNA sells may mean that merchandise is costing more than it produces.)
– John Bragg

Actually, TNA President Dixie Carter and Jeff Jarrett have said they have almost completely paid back the initial investment (re: Debt Investment) that Panda Energy made, so that is only going to help them be in a better profit position. And to clear up your point on merchandise, the cost to produce the merchandise is low compared to what they sell it for, but they have high “carrying costs”—the costs of keeping large of merchandise on hand and in the warehouse because they produce too much of it. Merchandise could still be profitable, but they need better operations control to lower inventory levels and that will lead to higher profitability.

TNA’s merchandise

Not to beat a dead horse, but my boss used to always tell me, “If you can’t do the smallest jobs right, you’ll never be able to do the big jobs right either.”

Thus, if a small merchandise listing on their website has not been touched in months (just like their roster page still has released wrestlers listed), then it is no wonder why some of their ‘big moves’ often lack direction and/or logic.
– Max

TNA’s lack of business and marketing discipline will ultimately cause a downfall for them sooner or later, I believe. If TNA wants to have aspirations to compete with McMahon, then they need to learn business discipline from McMahon’s model.
– Doc

Not only that, but a business can handle about three or four major changes a year, tops. TNA has been doing three or four major changes a month and it is taking a toll in their focus. To paraphrase the Balanced Scorecard Collaborative, it is better to implement a plain strategy well than a well defined strategy poorly. TNA may have a large idea for their strategy, but they are implementing major changes to it every month resulting in a poor execution. They are still doing well enough that issues can go unnoticed, but they could be doing better. Small things make a big difference.

Look at WWE’s shopping website there are rotating ads for different wrestlers and different items to buy. Also I can see the top rated,top sellers, and new releases. You go to WWE’s site and there is a list of wrestlers and items you can buy of that wrestler. TNA’s site looks a little bush league compared to the WWE. TNA’s site seems a little disorganized. If I want to find a shirt i either have to type it in or go searching through every shirt to find the right one.
– Kyle

The idea that the top sales list is TNA running wild is just nonsense. TNA puts a lot of work into the site. Don West has new videos up every week, which is way more than WWE does. They hype the shop and run specials during their daily internet shows. If anything, they’ve just lost interest in the top sellers list. That doesn’t mean anything because there’s still a ton of stuff directing you to hot items, including Don West yelling.
– Guest#9913

Sales videos are nice, but are your average shoppers stopping to watch the whole thing or even a significant portion of it? If the answer is “no”, then it is not an effective sales tool.
I can appreciate that work went into that, but hard work that misses the mark isn’t the most useful thing in the world.

Losing interest in the best seller list isn’t a healthy thing. Even one of the more successful websites – Amazon – will tell you best sellers in a category. Emulating success might be a strategy to follow. Just a hunch.

Work can get boring. Losing interest in something that is a basic sales tool is a sign of poor management. It is the wisdom of crowd sourcing. The items in the top sales list are on top because your audience wants to buy them. They are the items you have the easiest time selling to the next person who comes across your sale site.

Hard work is great. Hard work is also over-rated. Work needs to be directed to yield the best results. Everything you say is just a sign that TNA needs people who have knowledge and can apply it to give their workers proper direction.

You came to defend TNA’s sales practices, but you have really just shown that they really need more leadership and management that is prepared to do their jobs right.
– Guest#2435

The adage would be “Work smarter, not harder”. Putting in excessive hours that yield little results are not worth it. Doing a small thing like rotating the items that are featured immediately when you log into a website can help boost sales of different items. How much work could possibly go in to collecting which items sold the most in a week and put it into a list? An hour or two, perhaps? How much time goes into making a 2 minute video? That could take ten hours between the scripting, writing, filming, editing, graphics, uploading, and updating the website. Given that, which is yielding more reward?

Online shows and PPVs

is there a future in Internet only PPVs, similar to the model ROH is pushing? Would NXT perhaps get a greater following as an online only show?
– Pen

Given the current adaptation to watching shows over the internet, large PPVs cannot be run as profitably through streaming. ROH is run on a model assuming a low volume of buys. WWE is planning on hundreds of thousands.

Hulu is a place where WWE has a presence and can learn from. Between Hulu and recording mediums, people are no longer limited to watching shows when they are aired. They have the convenience of watching when they want to or can, while skipping or attenuating commercials. Yet the majority of people, even those with reliable broadband, don’t watch a show through streaming.

NXT is a good test bed for expanding internet viewership, however. If you cannot convince the die-hard core to change, then there is no hope of getting the casual fan to watch over the internet. Making RAW internet only, for instance, could lead to conclusions that the other shows would not support.
– Guest#8983

Television is not dead yet and the vast majority of people still watch programs when they originally air. There is a “water cooler” mentality to talk about a show immediately after it airs so there is only 10-15% that time shifts shows through various means (DVR, on-demand, streaming, etc…).

The WWE has tried internet shows in the past, but they were often ahead of their time compared to today’s technology. That said, a smaller promotion like ROH can benefit from non-traditional models. TNA may as well given their buyrates (note the Journal does not use the 7,000 buy numbers like many of the rags to, but goes with the last known 25,000 buy average with a range of 18,000 to 50,000) because there is a lot of overhead associated with working with PPV companies.

For the WWE, internet streaming is not at a place to replace $80 million in revenue. ROH, though, was replacing something losing money with something that breaks even at 2,000 buys. TNA will need something a bit higher because their cost are so much more (let’s say 5,000 buys), but it could work out for them.

Basically, the WWE is locked into some of their models because they make too much money. TNA is only locked into television and merchandise where everything else could go down another path or make a new stream. ROH is not married to anything and can do whatever they want that may lead to profit.

The future of NXT

“Do not believe that the WWE will just drop NXT or a fourth show in general because there is simply millions of dollars on the line for them.”

I’ve been wondering about this myself. It seems like a waste for WWE to not try to get a third major show on TV somewhere. Especially considering that they can film it on the same night they film Smackdown.

This is based on nothing but my imagination, but I’ve kind of been thinking that NXT would eventually evolve into some sort of “Nexus-run” type of show. I wonder if perhaps, they didn’t expect SyFy to drop NXT. Hard to believe they’d introduce 16 new wrestlers (plus what 5 divas) if they weren’t planning something bigger.
– Korsen

The Nexus itself may have come about as a shift in direction anyway compared to what NXT was supposed to be. The WWE has shown themselves to be rather… experimental… with the format of the show and how it comes about. That said, the WWE also has international obligations to produce a show of some kind, so they will still be filming something before SmackDown in the interim.

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.

This concludes Issue #154 (Volume 2) of THE HAMILTON AVE JOURNAL. Join us next week as we get ready to ring the bell again.

Till then!