The Hamilton Ave Journal 09.23.10: Volume 2 – Issue 156

THE HAMILTON AVE JOURNAL
By JP Prag

Volume 2 – Issue 156

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.

Newsbites

With few major stories breaking this week, hare are some items of note in the wrestling business world:

The WWE has been expanding some of their digital offerings in an effort to buck the trend of lower revenues in their multi-media division. Now, there is an iPhone version of WWE Magazine for $2.99 a month and episodes of SmackDown for $9.99 for the SD version and $14.99 for the HD version. Individual matches can also be purchased for $1.99 a piece.

Speaking of SmackDown, the show will officially be rebranded from “Friday Night SmackDown” back to “WWE SmackDown” starting with the show’s move to SyFy on October 1, 2010.

As expected, Vince and Linda McMahon have individually filed a motion to have the Martha Hart lawsuit brought against them dismissed. The Hart camp has until October 11, 2010 to respond.

ROH owner Cary Silkin recently talked with Alex Marvez of Scrippsnews about the condition of the business and dealing with so many performers coming and going. Among the topics that were discussed were the buyrates for ROH’s online PPVs. Mr. Silkin stated that Glory by Honor IX was their most successful offering, coming in at around 2,000 buys at $19.95 a piece. That would amount to just under $40,000 for the show. How much gofightlive.com takes off the top of that remains a question, but tradition PPV providers take 50%. One would imagine the deal would have to be better than that for ROH to make the transition.

Lucha Libre USA may have some hope left of a second season as MTV2 will be hosting a marathon of the show this Saturday September 25, 2010 at 6am, airing all of the Season 1 episodes.

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 22, 2010, here are the current standings of the shows:

Analysis:

RAW’s difficulties continued this week as the show’s ratings dropped again to a 2.8, the lowest rating in almost exactly two years when RAW scored a 2.6 on September 15, 2008. The show came into heavy competition from Monday Night Football, Dancing with the Stars, and the premier of a number of programs. Since December 31, 2001 this is only the 16th time that RAW has had a rating below a 3.0. Before that, RAW had not seen a sub-3 rating since December 15, 1997 when the show came in with a 2.7. So to say rating below a 3 are a rare occurrence for the WWE’s flagship show would be an understatement. Is this a trend the WWE will have to deal with in the coming weeks? And if so, what will they do about it?

SmackDown’s ratings have been unavailable for a while now due to delays in the syndication market. One can expect when they are on SyFy in a few weeks that ratings will become a bit more readily available. With a network and name move SmackDown may have some issues at the beginning, but their ratings will be interesting to watch to see if they can buck RAW’s tend.

Going against the WWE’s direction is TNA. After a week away, iMPACT came back with a 1.12 rating. The overrun of iMPACT into ReACTION helped boost that show’s rating as well. While these numbers are still a fraction (that fraction being 1/3) of RAW’s ratings, it is an upward trend for TNA following their return to Thursday.

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. Randy Orton Viper T-Shirt ($25.00)
2. Rey Mysterio DELUXE Youth Halloween Costume ($42.00)
3. John Cena Cenation T-Shirt ($25.00)
4. Randy Orton Lobotomy TOP ROPE T-Shirt ($45, on sale $37.95)
5. John Cena 2010 YOUTH Halloween Package ($36.99)
6. John Cena Cenation WWE Bandz ($5.00)
7. John Cena Cenation YOUTH T-Shirt ($22.00)
8. The Miz My Name Is T-Shirt ($25.00)
9. WWE Superstars Bandz (Triple H/Kofi Kingston/Sheamus) ($5.00)
10. D Generation X Army Strong T-Shirt ($25, on sale $22.95, on double sale $6.25)
11. John Cena Cenation Baseball Cap ($20.00)
12. Miz I’m Awesome T-Shirt ($25, on sale $19.95, on double sale $12.50)
13. John Cena Cenation Sweatband Set ($12.00)
14. Undertaker Deadman Forever Top Rope T-Shirt ($45, on sale $37.95, on double sale $22.50)
15. WWE Red/Blue Reusable Bag ($3.99)
16. Nexus Logo T-Shirt ($25, on sale $19.95)
17. John Cena Never Give Up T-Shirt ($25, on sale $19.95)
18. Rey Mysterio YOUTH Halloween Costume ($28.00)
19. Breaking The Code: Behind The Walls of Chris Jericho DVD Package ($25.99)
20. WWE Superstars Bandz (Undertaker/John Morrison/CM Punk) ($5.00)

While Matt Hardy may not enjoy the WWE youth movement, the sales chart certainly reflects that impact. Halloween costumes, youth t-shirts, and bandz, dominate the list, with names like John Cena, the Miz, Nexus, Undertaker, Randy Orton, and Rey Mysterio leading the way. Also breaking through for a rare appearance is Chris Jericho whose upcoming DVD set helped him come in at number nineteen.

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. Jeff Hardy “The Ring Is My Canvas” T-shirt ($19.99)
3. Mr. Anderson………People Are Fake T-Shirt ($19.99)
4. Jeff Hardy Enigma T-Shirt (Glow In The Dark) ($19.99)
5. TNA Knockouts Special ($29.99)
6. Jeff Jarrett Autographed Bound For Glory Poster ($19.99)
7. Kurt Angle “Warrior” T-shirt ($19.99)
8. Slammiversary – 2010 ($19.99, on sale $14.99)
9. RVD – Video Wall T-shirt ($19.99)
10. Mr. Anderson “Donkey” T-shirt ($19.99)

Well, it is the same list with just a few items switched around. Supposedly that is an update.

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:

What’s the UK mean to TNA?

I am a big fan of this column, but the whole “TNA’s TV contracts, rights fees overseas” defense has really drove me nuts the past few months.

As noted today, look what happened in the UK. New people-no network, bye bye TNA!

WWE has an exclusive deal with Sky, so TNA isn’t moving there. Somewhere else maybe? Perhaps, but as I have been saying for months-those TNA TV contracts are worth nothing.
– Vic

Oh, Vic, where to even begin?

It is very interesting that you say you ‘love’ this column, but also manage to completley fail to grasp the TNA TV deal point.

be it 100 or 120 countries right now, the US and UK are only 2. that leaves 98 – 118 other countries where TNA has sold their programming to.

TNA may have lost its current network in the UK, but its ratings would be enough of a draw for it to find a new home. To think otherwise is rather absurd.

look at how both Raw and Smackdown have switched networks successfully.
– Guest#9476

If you had actually read the article, you would have read that if they don’t pick up the show, they still have to pay them the remainder of the contract. And they will find a place to air because they do get good rating over there.
– just another hater

You just came here showing a lack of knowledge. So what if you are sick of the contracts argument? It doesn’t make it less true and you have never disproved it. Repetition doesn’t weaken the facts.

Even if the UK market is lost, it is only a fraction of TNA’s revenues. Do you have any information showing that this lose would kill TNA?

If what JJ said is true – that TNA has been paying back Panda – then TNA likely can survive without the UK market without major changes.

But they don’t have to, they just inked a new deal in France. France has both a larger population than England and a GDP per person that is about 25% higher than the UK. This likely means that the French deal was worth more. Even if, in the worst case scenario, it is a pure switch, TNA is most likely ahead of where they were when the year began.

The UK income was more than replaced. So what is your argument now, that revenue kills companies?

It is also a legal truth that without escape clauses, rights fees must be paid to TNA until the expiration of their contract. It doesn’t matter if it is Sky who bought out all of Bravo’s properties or if the holding company that owned Bravo is stuck with what Sky feels are undesirable contracts. Somebody owes.

This buyout does not preclude Impact! going elsewhere, however. I don’t know the UK market at all, but you have yet to name a single reason why Impact! cannot find a new home.

So far you have asserted you are right, but have yet to give a reason why. Easy to make bold statements, but bombast does not balance the sheets.
– Guest#2621

You just don’t get it do you, WWE doesn’t have an exclusive contract with Sky, Sky have an exclusive contract with WWE, BIG BIG difference.

At no point have Sky said they’re dropping Impact, just that they’re closing down Bravo.

TNA still has a broadcast contract that will merely migrate to either a Sky premium channel or Sky 1 (where Superstars can be found). TNA on a £10/month package beats WWE on a £45/month package. Vince would love Impact to go to SS2 or SS3 and see the potential audience shrink to see it die a death, while Jamie Murdoch is no fool and didn’t get where he is today without knowing what sells.
– V

To end this right here, nobody has actually confirmed that Sky has an exclusive contract with the WWE or vice versa. That was a speculative possibility as one of the issues and then Vic repeated it as if it were true. At no point has any information been brought forth that says Sky has an exclusive deal with the WWE. And in many markets, that is absolutely not the case as the WWE and TNA share a home network.

I don’t understand the situation with TNA’s TV contract in the UK. In Australia both TNA and WWE are shown on the same channel – Fox8, which is always advertising itself as the undisputed home of WWE. They have no conflict so why should Sky sports?
– Ronnie Barker

WWE Merchandise

Cena and his merch sales-I’d send that one little part to every IWC Cena hater out there. Maybe then they will get it…
– Xena

The sad part is, for the most part, they DO know. They just like hating on John Cena. I actually saw someone post the question “who in the hell would want a John Cena shirt”? I directed them to this very news report, as he has been dominating the list for ages.

You just have to overlook the trolls. Most of them just hate on John Cena because they have no real argument against his success.
– Truth Hurts

Usually you will then get the trite “success does not equal quality” argument, but readers of the Journal know that this is about making money, not about making the best art. If the two can coincide, all the better, but that does not happen often.

Why isn’t there more Randy Orton merch? The guy is #2 in sales, but that’s it. Maybe if other wrestlers had 50 pieces of merchandise like Cena, he wouldn’t be all over the chart.
– Scotty Flamingo

There isn’t more Orton merchandise because he was a heel until recently and heels, by nature, don’t move as much stuff.

As for the rest, very doubtful. Cena doesn’t have a lot of sales because he has a lot of items, rather he has a lot of items because he sells a lot of stuff. So they create more until they figure out the saturation point. Cena has four of the top five INDIVIDUAL selling items.

If a wrestler isn’t that popular, having ten items with his name on it isn’t going to help move any of them. So you test it out with a top selling category. What sells best in general? I’m guessing t-shirts or other apparel. So you stick a picture, logo, or catchphrase on it and see if it moves. If it does better than average, you try other stuff that seems reasonable. A Cena indoor electric grill seems unlikely to work, for instance. But if everything else with his name on it has sold and it is the only thing left, why not?
– Guest#9928

Just for the record, John Cena has 58 items available and Randy Orton has 36. The Nexus, which has also spent a great deal of time in the top selling list, has 6. Similarly, the Miz has 16.

TNA’s Merchandise

What the hell is Don’s Insane Brown Bag Special? Is it a mystery bag of a DVD, poster and shirt or something? It just seems odd that TNA’s hottest seller is a sale item and not regular merchandise.
– Pants

According to Don West (not edited in any way):

THE SPECIAL BROWN BAG WILL CONTAIN 4 DIFFERENT RANDOM DVD’S VALUED AT $80.00. IT CAN BE ANY OF THE DVD’S CURRENT OR PAST IN OUR INVENTORY. PLUS WE WILL THROW IN A RANDOM T-SHIRT VALUED AT $20.00. IT CAN BE ANY OF OUR PAST OR CURRENT T-SHIRTS, JUST GIVE US THE SIZE YOU NEED.

$100.00 WORTH OF VALUE FOR ONLY $20.00!!!!!!!!

ORDER UP TO THREE AND EACH DVD AND SHIRT WILL BE DIFFERENT.

AS AN ADDED BONUS AND SURELY NOT WORTH ANYTHING EXTRA, I WILL PERSONALLY AUTOGRAPH EACH OF THE BROWN BAGS.

THESE ARE VERY LIMITED AND WILL SELL FAST SO ORDER TODAY!!!!

Independent Contractors

I remember when Raven and others sued over the independent contractor status WWE’s lead attorney pointed out that they A) coincide with all independent contractor laws and B) that all provisions are in the contracts and “no one is forcing them to sign the contract”. I always thought that was weird because it implied that what is in the contracts doesn’t strictly assert an independent contractor relationship, as if they were saying “We follow the laws… but we push the lines on what an independent contractor really is”. My question is, what would the basic ramifications of a reform to WWE’s contracts be?

Not looking for a sweeping answer, just that do you think WWE would then go for: a true independent contractor contract or a true employee contract. Could they afford an employee contract with all those benefits they would inevitably entail and other expense like unemployment payments and FICA? Could WWE actually save money or break even on the change? Again, not looking for definitive answers as the variables are too numerous to name, just an idea.
– Pants

Actually, being an employee does not mean the company has to guarantee any benefits, except in the few states like Massachusetts that require companies to provide health insurance to workers. Instead, it is a matter of taxes as the WWE would have to pay the matching FICA, FUTA, and SUTA taxes. Also, they would have to do regular withholdings and report monthly, unlike the current talent who have to withhold their own taxes and pay quarterly estimates. Could the WWE afford it? Given their profit margin, most definitely. Would it cost them millions of dollars a year? Absolutely.

The greater concern for the WWE is if they are found to have been non-compliant the IRS can actually go back ten years for penalties. With that, the WWE would owe tens of millions of dollars instantaneously, not something the company would want to do. There is the possibility that the IRS would not put the retro-charge on them, but that would be something they would have to negotiate with court auditors.

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

Till then!