The Hamilton Ave Journal 02.23.08: Volume 1 – Issue 22
Posted by JP Prag on 02.23.2008
WWE increased their dividend by 50%, wrestling and violent teen behavior could hurt SmackDown!, RAW jumps 17.6% in the ratings, and John Cena and ODB dominate the merchandise sales.
THE HAMILTON AVE JOURNAL
By JP Prag
Volume 1 – Issue 22
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: WWE Announced 50% Dividend Increase
Amid the results of strong earnings released last week, the WWE announced a 50% increase in Class A common stock dividends to $0.36 a share. Class B will remain at $0.24 a share for at least three years. The dividends are paid quarterly, therefore the next payment is scheduled for March 25, 2008. The increase is dependent upon a favorable tax ruling, so if the ruling is not made before that date the increase will not be seen until June.
Vince and Linda McMahon are the vast majority stock holders with nearly 47.5 million shares of Class A stock (67% of Shares outstanding) and 47.5 million shares of Class B stock. Including their super-voter rights where they receive 10 votes per 1 share, the McMahons control 95% of the voting power.
With the dividend increase, the McMahons can be expected to take in $28.5 million pre-tax (over $15.5 million post-tax), a nice bonus for a strong year.
Despite these payments, the WWE will still be sitting on a pile of cash of around $100 million, with an additional $130 million in short term investments. In other words, despite the large payouts, the WWE can not only afford them, but might as well do something with the money if they are not going to spend it.
Newsbites
Some items of note in the rest of the wrestling business world:
On February 15, 2008, investment analyst Jim Cramer, who is highly regarded in the world of Wall Street, recommended the WWE stock as a buy, specifically saying, "I was on the conference call, and I want to buy this one." Upon this Friday announcement, WWE stocked opened nearly $0.45 cents higher (3%). The stock has traded at or above $17 since then and has peaked at $17.43.
The lawsuit Corey Macklin launched against the WWE for racketeering when they pulled Jerry Lawler from his show in Memphis against Hulk Hogan is set to have a pre-discovery date of February 28, 2008. This will set up a future trial date and give the parties time to build evidence. Expect a trial date to be set several months into the future and for the WWE to file an extension as the time comes close. These law tactics are used often by the WWE and other organizations to wear down opponents and get them to drop cases or accept unfavorable non-binding (IE not admitting fault) settlements.
A study was released that by the Southern Medical Journal that showed teens who engaged in violent behavior, smoked, and engaged in unprotected sex were more likely to be watchers of professional wrestling than those who do not. In the press release by Reuters, it was noted that there is no conclusive evidence that watching wrestling leads to the behaviors and that is may just be people with those behaviors may just gravitate towards wrestling. No other comparisons of those people's tendency to watch cartoons, sports, MMA, or any other activities were released or apparently studied. Still, expect organizations like the PTC to gravitate towards these results and use them as evidence against networks airing wrestling.
The results of this study could not have come at a worse time for the WWE as they are shopping around for a new home for SmackDown!. Any negative press associated with wrestling will most likely drive down the asking price.
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 Thursday February 21, 2008, here are the current standings of our shows:
RAW
Close (This Week's Rating): 4.0
Open (Last Week's Rating): 3.4
Percentage Change: ▲ 17.6%
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): 2.8
Open (Last Week's Rating): 2.6
Percentage Change: ▲ 7.7%
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): 1.4
Open (Last Week's Rating): 1.4
Percentage Change: UNCH
52-Week High: 2.3
52-Week Low: 0.6
All Time High: 2.3
All Time Low: 0.6
TNA iMPACT**
Close (This Week's Rating): 1.1
Open (Last Week's Rating): 1.1
Percentage Change: ▼ 3.6%
52-Week High: 1.2
52-Week Low: 0.9
All Time High: 1.2
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
Analysis:
Of course, the big news this week is RAW's 17.6% jump in ratings and breaking the 4.0 ratings barrier for the first time since December 10, 2007 (which was the first time the barrier had been broken since June 18, 2007). The last time the ratings were above a 4.0 was a special 3-hour RAW presentation with weeks of hype, so a show immediately after a PPV with almost no hype must be seen as a positive, even if just a temporary one. Speculation is that the Floyd Mayweather involvement is responsible for the bump. If true, having him involved at WrestleMania will do just what the WWE wants: increase buys. On Monday, the WWE will hold a press conference in Los Angeles (12:00pm PST) where they will officially announce the match. Whatever the match may be and whatever the "quality" or "enjoyment quotient" after the fact, the WWE will have already done their job by increasing the overall buyrate for WrestleMania as well as garner free advertising through ESPN and the like.
In other ratings news, TNA has a new 52-week low of 0.9, compared to 0.6 last week. The 0.6 was done on the week iMPACT went head-to-head with RAW. A year has passed since then, so it is difficult to say what would happen if SmackDown! ended up back on Thursday night against iMPACT. Last time TNA went head-to-head with any WWE programming was when they went up against ECW for an hour, which did not hurt ratings at all. On the other end, iMPACT has slipped below a solid 1.1 this week for the first time November 22, 2007 (Thanksgiving Day). The programming went up against Valentine's day, which could have hurt ratings slightly, just like it did on Thanksgiving. Most likely the ratings will recover this week.
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. John Cena 8-Bit T-Shirt
2. Stone Cold Steve Austin Legacy of Austin DVD/T-Shirt Package
3. Hardys Purple Logo Pendant
4. D Generation X Anytime Anywhere T-Shirt
5. Triple H The Conqueror T-Shirt
6. WWE Black Gift Bag
7. John Cena Beware of Dog Package
8. Randy Orton Oblivion T-Shirt
9. Triple H King of Kings: There is Only One DVD/Retro T-Shirt Package
10. John Cena 8-Bit Youth T-Shirt
Have new T-shirt, will travel. As will be noted in the Editorials, John Cena's one item on the list for the past few weeks has been a very old item that was maintaining high sales numbers. Sure enough, he introduced a new shirt on Monday and it became the #1 seller (for adults) and the #10 seller (for youths). Combined with a revamped "Beware of Dog" package to sell off combinations of old items for under $40, and Cena has quickly proven that he is the top seller. Triple H, Jeff Hardy, and Randy Orton still hold strong positions as well, so it is a rare time of having many different stars and types of wrestlers dominating the list.
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 on "featured products" and sorts by most popular. They came up in order as:
1. TNA Meltdown CD Vol. 2
2. James Storm "Sorry Bout Your Damn Luck" T-Shirt
3. 2008 Wall Calendar
4. Booker T T-shirt
5. Genesis 2007 DVD
6. TNA Playing Cards
7. TNA Gym Bag
8. TNA Turning Point 2007 DVD
9. ODB "Not Just Another Pretty Face" Men's T-shirt
10. MMG Skull Cap
Another week that had significant movement on TNA's list. Starting off with the usual, James Storm jumped yet another spot to the number two position with Booker T chasing close behind and jumping one spot to number 4. The Turning Point 2007 DVD entered the list as well, which is no surprise after showing up on the two-week delayed Top Ten Selling Sports DVDs. Also joining the list this week is ODB's premier t-shirt starting off at number 9, at least for the men's version. The women's version is number eleven on the list, so combined ODB has just become a near-top seller in the company. This is rare for any person (man or woman) in TNA, and especially for a woman in wrestling in general. This is most likely leading further credence to the idea of a Knockoff spinoff show. With ODB, the Motor City Machine Guns return to the top ten for the first time in nearly two months. Their dog tags also come in at number 13, so it will be interesting to see if sales can overcome rumored "attitude issues".
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
24 (Feb)
25
RAW Phoenix, AZ
TNA iMPACT Orlando, FL
26
SmackDown/ECW Tuscon, AZ
TNA iMPACT Orlando, FL
27
28
29
RAW Live Cape Girardeau, MO
1 (Mar)
RAW Live Louisville, KY
SmackDown!/ECW Live Fort Wayne, IN
2
RAW Live Danville, IL
SmackDown!/ECW Muncie, IN
3
RAW Indianapolis, IN
4
SmackDown!/ECW Cleveland, OH
5
6
7
8
RAW Live Madison, WI
SmackDown!/ECW Live Dubuque, IA
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, we have several items to highlight.
It was all about merchandise in commentaries last week, starting off with Ric:
I thought Jay Lethal merchandise is selling like crazy - hence his big win at AAO and upcoming push. Yet, he doesn't crack your top 10 in TNA merchandise sales.
Unfortunately, the method used by the Journal to derive the Top Ten items for TNA only used the "Featured Products" and, for whatever reason, TNA is not spotlighting any Jay Lethal items. From all accounts, Jay Lethal is one of the top sellers at live events, which is a fraction of TNA's merchandise business. Since TNA does not do much touring, unlike the WWE the majority of their sales actually come from the online store and retail outlets. The Journal would like a more accurate Top Ten released by TNA, but that is not to be just yet. Even the WWE's Top Ten list is suspect because it most reflects ShopZone sales and not the addition of live sales.
On the subject of WWE sales, Davy is a bit sarcastic about John Cena's location in the Top Ten last week:
Uh oh. There goes me and all my fellow Chain Gang members argument that Cena must be mega popular because he sells massive amounts of merchandise.
To which an unknown guest responded:
That Cena shirt is the oldest thing on that list and is still on the top ten selling shirts. Plus his DVD sales smashed the sales of Shawn Michaels and Rey Mysterio's.
Absolutely a valid point as an item that was almost a year old was back in the Top Ten just be the mere presence of John Cena. As seen this week, he introduced one new item and discounted another and dominated the Top Ten with 3 spots.
There was plenty more written, so be sure to check out the rest of that section. Also worth your read this week is:
Posted By: Matt (Guest) on February 23, 2008 at 08:30 AM
I always noticed that people say WWE is smart for leaving Cena face because his detractors still want to see him lose and his fans don't want him to be a bad guy(duh!).
Obviously his Merch does sell well, but I was thinking. John Cena is not liked by his detractors in the same way people hated the patriots. Have you seen the 18-1 T-shirts? Well, they should try something similar with Cena, a "Cena Sucks" T-Shirt or something like that would sell pretty well I think. I think some people's hate for Cena is larger than their love of other superstars, which is why I think the shirt would work for him.
Posted By: Brett (Guest) on February 24, 2008 at 02:37 AM
hogan can beat john cena. cena sux monkey balls.
Posted By: Guest#0903 (Guest) on February 24, 2008 at 03:14 AM
Hogan couldn't beat off, he's so old and worthless.
Posted By: David (Guest) on February 24, 2008 at 01:30 PM
Of course violent kids are more likely to watch wrestling, angry violent people are more likely to watch more angry violent programning. Cause and Effect, wrestling can only make violent kids worse, but I don't think it turns peaceful rational kids violent. people watch stuff they agree with, not the other way around. Bill O'Rielly doesn't make people conservative!
Also I think Cena vs Hogan would be a weird match, all the normal fans would go nuts and the Smarks would slit their wrists on the spot. But I presonally think that It would be an interesting shoot fight (meaning nobody made up an outcome and the tougher man won) Hogan's slower and has bad joints, but has a major reach advantage and more muscle mass (Hogan is a big SOB) as well as his old-school training that includes a lot of ways to legitly hurt people in case they disagreed with the booking (that happened a lot more during the time Hogan's teacher was active and many wrestlers of the Hulkster's generation have those skills. called Hooking. Ric Flairs Figure 4 can in fact break shinbones). Cena on the other hand is a Genetic Freak (Steiner without 'Roids) and is a lot faster than Hogan, with a willingness to go off the top rope for legdrops, and seeing that Cena does have amazing strength and a lot more stamina and flexiblity than Hogan, if he can avoid old school Hooks Hogan might resort to, Cena might be able to take him down.
Posted By: Davy (Guest) on February 24, 2008 at 07:10 PM
