The Hamilton Ave News Journal 10.06.07
Posted by JP Prag on 10.06.2007
TNA makes plans for the post 2-Hour Era, WWE Films becomes entrenched and takes a new direction, two big stars cause trouble for their companies, and RAW and SmackDown! lose viewers while ECW and iMPACT gain.
THE HAMILTON AVE JOURNAL
By JP Prag
Volume 1 Issue 2
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.
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.
Lead Story: TNA begins 2-hour era, plans for next steps
Thursday October 4, 2007 marked the first day of the new age in TNA: The 2-Hour Era. iMPACT drew 1.1 rating, which is in line with recent month, with 1.5 million viewers. At the time of this article's deadline, hour-by-hour and quarterly breakdowns were not available. It will be interesting to view the ratings trend during the show. Did iMPACT simply maintain relatively the same number of viewers during the show? Did they start off strong and lose viewers as they went? Or did they start low and work their way up (like seen in RAW ratings). As soon as these details become available, you can expect the Journal to have a full scale analysis.
Meanwhile, TNA has made many plans for the future. In a conference call with TNA President Dixie Carter, Ms. Carter revealed that TNA has a four year contract with Spike, as well as additional specials and other "growing" deals. Obviously, this will keep TNA programming secure for at least the next four years, so it looks like TNA has enabled itself to make it to nine years. With a television contract securely in place, TNA can turn their focus to other matterslike profit.
(On a side note, the iMPACT replay will also be moving back from midnight on Saturday to 11pm, making it more visible to the audience without sacrificing the time.)
In the vein of profit, GameInformer magazine recently released screen shots of the new TNA video game. The release of this game could prove quite lucrative to TNA on many fronts. For one, plenty of people buy wrestling games that do not necessarily watch the product. Even if they do not bring these fans in (which is the ultimate hope as the video game spreads TNA's brand), they will still see the additional revenue from an untapped market.
Additionally, TNA is making plans to further establish their brand image with an expanded touring schedule. Pay-per-view events are being planned for Ohio, Virginia, Illinois, and Massachusetts, while additional house shows are being planned for Texas and New York City. Although this expanded schedule should help TNA get more name brand recognition, the profitability of these trips must be closely scrutinized. Additionally, there is a personnel issue as many performers chose TNA for the lighter road schedule. TNA will have to tread carefully before expanding the schedule too much or having events too far away. Rumbles of international tours to Israel, England, Australia, and the Orient have come up, and these could cause the most difficulties. If TNA keeps these tours limited and provides exceptional logistical support for their contracted wrestlers, than they may be able to mitigate the HR issues they will face.
Also on the horizon, Spike TV has said that it will have an HD simulcast starting in 2008, with TNA iMPACT one of the show expected to be a part of it. Unless Spike is providing the new equipment, this reporter cannot see TNA being quick to the switch. Still, this may have been part of the four-year deal, so TNA may not have much say in the matter. Spike has been a solid partner and has financially supported TNA in the past, and this may just be another instance of that.
The bottom line is, despite getting the two-hours, TNA is still moving ahead and has plenty of plans for the future. Their TV deal is secure and safe, so now the concentration can go into the product, presentation, and expansion.
WWE Films here to stay, changes direction
Over the past two years, the WWE launched a new division WWE Films in order to, according to company literature, capitalize on the intellectual property of the organization and give contracted wrestlers another outlet for work. To this date, the WWE has not actually collected any revenue associated with their released films due to agreements with studios and the general slow process of moving money from disparate organizations like regional movie theatre chains. That said, their first two release"The Marine" starring John Cena and "See No Evil" starring Glen "Kane" Jacobsboth performed above the expectations of the company and media trackers. That said, their latest foray into the silver screen ("The Condemned" starting retired grappler "Stone Cold" Steve Austin) was met with disappointing numbers, at least at first.
According to VideoBusiness.com, "The Condemned" was the number two selling DVD of the week in its premier, playing second fiddle only to "We Are Marshall". A total of 87,820 units were sold according to PWInsider, adding in an estimate $1.7-$1.8 million to the total film revenue thus far. Rentals continued strong as well, with the film finishing in forth place taking in another $3.6 million, bringing rental totals close to $7.8 million over the past few week. However weak "The Condemned" may have been at the box office, it has been completely the opposite in rentals and purchases.
Prior to the premier of "The Condemned" in theatres, WWE CEO Linda McMahon in an investor's conference call had already stated that the company would be moving away from theatrical releases and focus on promoting more direct-to-video features. As seen by the numbers above, that would be a prudent move. Although WWE films may have little large office box appeal, their films, like their wrestling product, have a niche market ready to buy.
That is why it should be no surprise that Joel Simon was replaced as President of WWE Films. Mr. Simon's role was to get WWE Films off the ground, get production and operations in place, and make initial studio connections. He has done that role well, but now the company is moving in a new direction. They needed someone who had the ability to produce direct-to-video hits, knew how to work in a small budget, had connections to studios and distributors, and was familiar with the WWE.
That is why they turned to the Executive Producer of "The Condemned" Michael Lake and named him the new President of WWE Films. According to the WWE's own press release:
Michael Lake has been producing films and television shows for 20 years. Throughout his career, Lake has overseen production for such hits as The Matrix Trilogy, Miss Congeniality, Ocean's Eleven and Ocean's Twelve. Lake currently sits on the Advisory Board of the Association of Film Commissioners International.
Even though the film did not fair well in the large market, the WWE has shifted direction and wants someone they can trust with their overall plays of being a direct-to-video producer.
What does this mean overall? The WWE stands behind their latest venture outside of wrestling and will continue to promote and push it. They still believe that WWE Films will be a way to gain additional revenue and exposure, as well as give their contracted wrestlers another outlet to work in without looking outside the company. This appointment also solidifies their focus in the direct-to-video market, and we should see more features from them in the next few years. Also, the direct-to-video market will allow for faster collection of receipts, thus making the cash flow cycle more in line with the WWE's other products. All-and-all, it appears as if this division is fairing much better than other ventures like the World Bodybuilding Federation, XFL, and the World. Expect more from WWE films in the years to come.
Two big stars face trouble
Both the WWE and TNA faced difficulties this week with their roster, though for different reasons.
First, WWE saw the return of many suspended superstars at the end of their 30-day Wellness-related suspensions. One of those stars, Mr. Kennedy, had a match with WWE Champion John Cena on RAW and injured the champion with an errant hip toss. At first, the muscle tear was not expected to be too bad and that Cena would be able to compete at the No Mercy PPV event. When Mr. Cena went to see Dr. James Andrews it was revealed to be much worse. From WWE.com:
WWE Champion John Cena has suffered a complete tear of his right pectoral tendon and is heading into surgery, according to noted orthopedic surgeon Dr. James Andrews. Because of the seriousness of the injury, WWE officials will not allow Cena to compete this Sunday at No Mercy, and he will have no choice but to surrender the title.
Dr. Andrews said Cena could miss between six and eight months of action,
Obviously this is a blow to the WWE's fall and winter storylines, as well as the general direction of RAW, but may have a larger trickle down affect. As noted in the MONEY AND INVESTING section, John Cena is one of the top sellers of WWE merchandise, and a top draw to live events. Without him, the WWE could see a substantial decrease in sales of t-shirts and related paraphernalia, as well as a slight attendance decrease. Superstars absent from the roster sell less merchandise by a simple equation of visibility. Though the FY07 Q4 numbers may remain relatively stable, the FY08 Q1 numbers should be the most telling. That quarter is also the beginning of WrestleMania season (which this year falls into Q1, not Q2 like years past), so it will be interesting to see how the sales fan out over the next six months.
On the other end of the spectrum, Kurt Angle was arrested for allegedly driving under the influence of alcohol and allegedly almost hitting a woman. Although Kurt Angle's lawyer is maintaining Angle's innocence and improper conduct by police because Angle is a celebrity, the Associated Press has already picked up on the story with notes to the contrary:
Angle was charged Friday after a motorist called police in Moon Township about 2 p.m. to report a Cadillac Escalade was driving erratically, according to a police news release.
Police used the license number to determine the vehicle belonged to Angle and went to his home, where police said the wrestler acknowledged driving home from a bar.
Angle appeared to be intoxicated and failed a field sobriety test before refusing a blood test, police said.
Police also claim that Angle had pills in his mouth when he answered the door (which later analysis revealed to be anti-inflammatory drugs. If he has a prescription for these drugs remains to be seen.).
This, of course, could not have come at a worse time for the company. Congress is beginning its investigations into drugs and steroids in wresting, and this incident has just made TNA a target. Whether the allegations prove true or not is irrelevant as the damage has been done in the press and in the eyes of the US Congress. This is especially true because just a day before, TNA President Dixie Carter hosted a conference call where she was questioned on drug abuse in TNA. According to 411mania, Ms. Carter responded:
TNA has an active drug policy prohibiting steroids and other illegal drugs. We want a drug free environment that they feel that they need to do. We offer rehab and education, and plan to evolve the policy accordingly as they learn more.
Kurt Angle has been very vocal about how he "had" a drug and alcohol problem in the past, and that TNA has been supporting him and has had doctors monitoring his progress. Congress will be very interested to test the effectiveness of TNA's supposed drug and education policy. TNA does not have the resources (money, people, and time) that the WWE does, so the investigation taking a spotlight on them could be a detrimental step in the company's continued effort towards consistent profitability.
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 52 weeks we should be able to see patterns, trends, and anomalies. Please note that gaps in the chart below are due to data not being released/available.
For the week ending Friday October 5, 2007, here are the current standings of our shows:
RAW
Close (This Week's Rating): 3.2
Open (Last Week's Rating): 3.4
Percentage Change: ▼ 5.9%
52-Week High: 4.3
52-Week Low: 2.5
All Time High: 8.1
All Time Low: 1.8
SmackDown!*
Close (This Week's Rating): 2.5
Open (Last Week's Rating): 2.7
Percentage Change: ▼ 7.4%
52-Week High: 3.3
52-Week Low: 2.2
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): 1.2
Open (Last Week's Rating): 1.1
Percentage Change: ▲ 9.1%
52-Week High: 2.3
52-Week Low: 0.9
All Time High**: 2.3
All Time Low**: 0.6
** ECW's All Time figures include ECW on TNN
TNA iMPACT
Close (This Week's Rating): 1.1
Open (Last Week's Rating): 0.9
Percentage Change: ▲ 22.2%
52-Week High: 1.2
52-Week Low: 0.6
All Time High: 1.2
All Time Low: 0.6
Analysis:
The big watch this week was on how TNA iMPACT would do with two hours, and the results were in line with recent months. As noted above, the interesting factor will be to find out if TNA maintained the same number of viewers during the show, added viewers, or lost viewers. Meanwhile, WWE continues to struggle with both RAW and SmackDown! losing viewers (to new shows and baseball, presumably) and ECW struggling to maintain any distance over iMPACT. Can iMPACT overcome ECW in the weeks and months to come? That would be a strong bet, but on what grounds? Can iMPACT actually gain new viewers, or is ECW going to continue to shed its audience?
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 ten selling items for the WWE? From WWEShopZone.com:
1. Triple H Grey Skulls T-shirt
2. John Cena Youth Halloween 2007
3. John Cena Beware of Dog T-shirt
4. John Cena Camo Military Style Cap
5. Rey Mysterio Role Play Series #2
6. WWE Action Trading Cards
7. Randy Orton Skull T-shirt
8. WWE Black Gift Bag
9. Unforgiven 07 DVD T-shirt package
10. John Cena Bulldog Dog Tags
Once again, John Cena completely dominates the list with four items this week. Like noted above, his lack of visibility in the months ahead should make for a change to this list, as well as an overall drop of sales. Also of interest is that two items both prominently display skulls, making one wonder if the wrestlers is selling or the skulls.
TNA requires a little bit more research. Their website does not release Top Ten lists, so the Journal does a general search for a space and sorted by most popular. They came up in order as:
1. The Original 3 (DVD 3 Pack)
2. Against All Odds 2007 DVD
3. Bound for Glory Fan Interaction Ticket
4. Sacrifice 2007 DVD
5. Christian Cage "Instant Classic" T-shirt
6. The Best of the Bloodiest Brawls 2003
7. Against All Odds 2006 DVD
8. Sting "Craw" T-shirt
9. No Surrender 2006 DVD
10. TNA Anthology The Epic (DVD 3 Pack)
Very little change to TNA's list, with the exception of the Bound for Glory Fan Interaction Ticket moving up a notch. The overall story remains the same: TNA is focused on events, although a current one is moving on the charts for a change. One wonders if there was any bump in sales due to the 1500 tickets Adam "Pacman" Jones bought and gave away to inner city youth?
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 next 2 weeks? The Personal Journal answers that question.
Sunday
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
7 (Oct)
RAW/SmackDown/ECW No Mercy Chicago, IL
8
RAW Grand Rapids, MI
9
SmackDown/ECW Grand Rapids, MI
10
11
TNA Birmingham, AL
RAW Live Erfurt, Germany
12
RAW Live Braunschweig, Germany
SmackDown! Live Luxemburg
13
TNA InterAction Atlanta, GA
SmackDown! Live Brussels, Belgium
RAW Live Köln, Germany
14
TNA Bound for Glory Atlanta, GA
RAW Live Glasgow, U.K
SmackDown! Live Butlins, Minehead, U.K.
15
TNA iMPACT Orlando, FL
SmackDown! Live Newcastle, U.K.
RAW Birmingham, U.K.
16
TNA iMPACT Orlando, FL
RAW Live London, U.K.
SmackDown/ECW Birmingham, U.K.
17
RAW Live Cardiff, U.K.
SmackDown! Live Manchester, U.K.
18
RAW Live Sheffield, U.K.
SmackDown! Live Nottingham, U.K.
19
RAW Live Belfast, Ireland
SmackDown! Live Glasgow, Scotland
ROH Las Vegas, NV
20
RAW Live Belfast, Ireland
SmackDown! Live Aberdeen, U.K.
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.
No critical pieces were written this issue, so instead worth your read this week is:
