The Hamilton Ave Journal 09.20.08: Volume 1 – Issue 52

Posted by JP Prag on 09.20.2008

The WWE makes another move in Mexico and expands further into India, FCW opens their front door, RAW hits an 11-year ratings low, CM Punk climbs to the pinnacle of the Top Ten, and the debate continues on the employee status of wrestlers.

THE HAMILTON AVE JOURNAL
By JP Prag

Volume 1 – Issue 52

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 keeps moving around the world

After announcing a new TV deal for RAW with Televia owned Channel Galavision Mexico, WWE Vice President of Global Media Shane McMahon signed a new deal for SmackDown in Mexico as well. SmackDown will now air on TV Azteca 7 on Friday nights at 10pm. Previously, SmackDown has aired on 52MX Sundays at 11:30am, so at least SmackDown will not be on the same day as RAW and will not in direct competition with them. That said, it now looks like 52MX will have no WWE programming as this has been described as an "exclusive distribution" deal.

Says Rodrigo Fernández Capdevielle, Programming General Manager for TV Azteca:

"We at TV Azteca are really excited to be the first to bring the successful global spectacle that is WWE SmackDown to Mexican open TV beginning October 3 at 10:00 pm on Azteca 7. "Offering this type of programming allows us to fulfill our commitment to provide the best on worldwide television to our Azteca 7 audience. We are convinced that the amazing product that WWE brings to the table each week on its program will hook Mexican fans and turn them into huge followers of SmackDown. Azteca Deportes announcers and wresting experts Carlos Aguilar, Francisco González and Rafael Ayala, will add their own distinctive style, as they do with great success for several other sporting events."

Mexico was not the only country that Mr. McMahon was able to make a coup in. Over in India this week, the WWE inked a deal with Kids Media India (KMI) to be the exclusive "licensee of WWE products in India".

KMI has been looking to move from cartoon licenses to live character ones, so this is an important move in their transition. According to a KMI press release:

The partnership expects to propel annual revenues generated from WWE-licensed consumer goods in India, from one million to 10 million dollars within the next three years.

International growth continues to be the fastest and most important part of the WWE business, especially as domestic business continues to weaken. That will be covered much more in depth in the Marketplace section below.


Newsbites

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

Looking to expand their roster, WWE Development territory FCW will be opening its doors for a tryout from October 16 to 21, 2008. The cost was $1000 to enroll, where enrollment ended on September 15, 2008. When FCW first launched, the WWE said it wanted about 75 wrestlers on the roster to be in training at any given time.



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 September 18, 2008, here are the current standings of our shows:





RAW
Close (This Week's Rating): 2.6
Open (Last Week's Rating): 3.0
Percentage Change: ▼ 13.3%
52-Week High: 4.1
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): 2.4
Percentage Change: ▲ 4.2%
52-Week High: 2.9
52-Week Low: 1.6
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): 1.3
Percentage Change: ▼ 7.7%
52-Week High: 1.6
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): 1.0
Percentage Change: ▲ 10.0%
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:

With TNA hanging out in it the higher end of its usual territory after some three-year lows and SmackDown actually hitting a rating level not seen since April 11, 2008, it would seem to be a decent time in the ratings world of wrestling. But then the figure turns to RAW which hit a near 52-week low of a 2.6 and a definite low when dealing with a "normal" night (not on a different night, not an extra hour, not time shifted, not against a holiday). Some have been saying that this rating can be expected as Monday Night Football scored its highest ESPN rating ever with a 13.3. This issue with that is that when Monday Night Football was on ABC, it routinely scored high ratings and Monday Night Football on ESPN for the last two years scored high ratings as well. As a matter of fact, on September 18, 2006 (the comparable day), Monday Night Football scored a 10.6 ratings compared to RAW's 3.7. And that was actually up from the prior week's 3.6. Even last year RAW scored a 3.3, though that was down from the prior week's 3.9.

The bottom line is: RAW is down from the numbers they were seeing last year and especially the year before. Although Monday Night Football is a contributing factor, it does not account for RAW averaging a 2.8 in the last 4 weeks. The last time a four-week span of RAW averaged below a 3.0 was the four-week timeframe ending November 17, 1997. That means RAW's ratings have regressed to the level when WCW was on the verge of putting the out of business.

That said, RAW and the WWE are nowhere near that danger zone. Although costs continue to rise, margins are shrinking, and the dividend payout exceeds earnings, the WWE is a much more financially stable than they were a decade ago. They are not a multi-national corporation with large licensing fees from almost every country on Earth and revenue streams in many different areas outside of television production and live events. RAW also has a contract with USA through 2010, so there are no worries about RAW being cancelled. That said, ratings are an indicator of many other trends in the organization and this will only hinder WWE's other negotiations.

For instance, why did RAW in Mexico end up on Galavision with AAA and CMLL? Why not on one of Televisa's more prominent stations? Perhaps that is because representatives saw RAW's rating trend in America and thought that it might translate to Mexican audiences. Although the press release describes RAW as a historical ratings winner, that would not the case in recent months.


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. CM Punk Fists T-Shirt ($25)
2. Stone Cold Steve Austin Raise Hell T-shirt ($20, on sale $9.98)
3. Hardys Purple Logo Pendant ($10)
4. WWE Ultimate Rivals Trading Cards ($2)
5. Jeff Hardy 2008 YOUTH Halloween Package ($84.49, on sale $43.99)
6. Triple H Hammer T-Shirt ($25)
7. Shawn Michaels Creation Sweatshirt ($40, on sale $12.98)
8. WWE Black Gift Bag ($3)
9. D Generation X Anytime Anywhere Sweatshirt ($40, on sale $12.98)
10. Undertaker Smoke Sweatshirt ($40, on sale $12.98)

The sale continues at WWE as the winter shirts from last season got a major cut and were bought out at a bargain price. On top of that, Jeff Hardy also sold a large Halloween package that includes his new T-shirt (which was also on the list earlier in the week, seeing a sales bump from him finally wearing it on SmackDown). But topping the heap for the first time at number one is the former World Heavyweight Champion CM Punk. It is a shame Mr. Punk could not put on this type of number during his reign, but hopefully this will lead to him continuing a prominent role in the organization.

TNA releases a list of Top Ten selling items, but the list has not been updated to current products in quite some time. Until TNA updates the list, the Journal will be take the list of featured products and sorting by most popular. When done so, the list comes up as:

1. TNA Global iMPACT DVD ($19.99 – OUT OF STOCK)
2. Bound for Glory 2008 FanFest Tickets ($40)
3. AJ Styles "Unim Phenomenous" T-Shirt ($19.99)
4. Post Yard Sale T-shirt Special ($39.99)
5. Complete 100 Card Set ($24.99)
6. Nash "Big Sexy Tour" T-shirt ($19.99)
7. Sting "Logo" T-Shirt ($19.99) ($19.99)
8. Samoa Joe "Drastic Times, Drastic Measures" T-Shirt
9. Post Yard Sale DVD Special ($29.99)
10. Blaster Pack ($24.99)

The sales also moved to TNA as the two-week old "Post Yard Sale" items jumped from the bottom of the list all the way to the top. TNA does a good job of repacking inventory and moving it out (thus reducing carrying fees) and this is just another example. Although TNA sells far less volume than the WWE, they have proven themselves effective at doing more with old merchandise other than straight discounting.


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
21 (Sep) SmackDown / ECW Live (Columbus, OH)	22 RAW (Cincinnati, OH) SmackDown / ECW Live (Bowling Green, OH)	23	24 RAW Live (Bilbao, Spain) SmackDown / ECW Live (Lisbon, Portugal)	25 RAW Live (Madrid, Spain) SmackDown / ECW Live (Barcelona, Spain)	26 RAW Live (Barcelona, Spain) SmackDown / ECW Live (Innsbruck, Austria)	27 RAW Live (Paris, France) SmackDown / ECW Live (Munich, Germany) TNA Live (Miami, FL)
28 TNA Live (Lakeland, FL)	29 RAW (Minneapolis, MN) SmackDown / ECW Live (Stevens Points, WI) TNA iMPACT (Orlando, FL)	30 SmackDown / ECW (Green Bay, WI) TNA iMPACT (Orlando, FL)	1 (Oct)	2	3 TNA Live (Lowell, MA)	4 TNA Live (Glenn Falls, NY)

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, Guest#9615 questioned some numbers:

"That, along with Unforgiven only selling 6,000 tickets"

Wasn't that figure taken a week before the show, not after the show and therefore not counting people who bought tickets the day of the show?

And 3MW chimed in with:

Hmm, what might be wrong with having this sentence in your otherwise fine text?

Is it that hearsay has become fact? Or is it that Dave Meltzer wrote this section of the Journal? Or is it simply that it illustrates how IWC dynamics can cover a lack of research and proper information.

Anyone who actually watched Unforgiven should have witnessed that the arena was filled with far more than 6,000 people. Oh yes, I see. Meltzer said radio stations were giving away tickets. That must be the explanation, mustn't it?

Actually, quite the opposite. The WWE are masters of making an arena look more full than it is. From this news item:

Most of the upper deck was blocked off for the WWE Unforgiven PPV, due to low-ticket sales.

So yes, the 6,000 number was a pre-event sales figure, but it most likely would not jump by thousands on the day of the show. As mentioned in the Journal before the event, the Quickens Loan Arena can be set up for 15,000 to 18,000 for wrestling. Even saying it was 15,000, with the upper deck taped off that bring it closer to 9,000. Even if the WWE managed to sell 2,000 tickets between the date the first number was given and the show itself, that would still be far below the building capacity and what the WWE has sold there in the past. Even as a rough estimate, that is an incredibly low sales number for the WWE at any arena, nonetheless one that sold out a regular television taping not long ago.

3MW also had another critique:

In this sense, "According to Mexican readers of 411mania.com, Galavision in Mexico is the equivalent of MyNetwork TV" does not exactly match the definition of quality journalism...

How else is the Journal supposed to get this information? Travel to Mexico and poll people on how a network quality is viewed? In this case, the Journal was trusting sources who live in Mexico to describe a network in the most subjective way possible. This was not a statement saying that the programming was bad or management was incompetent, but trying to relate its place on the dial to non-Mexican readers. As a matter of fact, Megadeth provided some additional food for thought:

To be honest I'm not too sure how much a chance the E has in Mexico with that timeslot. Personally I love it ‘cause I can FINALLY get to see the E, after 2 years, BUT…

Sunday is soccer day in Mexico. Nothing beats soccer in ratings, especially since at 4 America (Mexico's biggest team) usually plays. Couple that with the fact that at 2, CMLL airs, so I'm not too sure how that will work.

That's quite interesting about soccer (futbol). RAW going up against soccer in Mexico is like how it goes up against Monday Night Football in the United States. Perhaps they will fall to the same ratings issues mentioned above?

Of course, the big debate continues to be around Raven's lawsuit against the WWE to become an employee and how unions might play up to wrestling in the future. First up was Carnivore, who will also provide his own counter arguments to the counters below.

When you decide to become a personal contractor in any facet of life you take on a huge responsibility. You are responsible to yourself. You have to plan for the worst. So a guy like Kofi Kingston needs to be taking a large portion of what he makes and using it wisely. The point here is the American public as a whole has this idea that they shouldn't have to take responsibility for themselves. WWE pays their people well, in Jericho's book he talks about how well he was paid. Granted that was during a boom period but I can't imagine it has changed all that much.

Wrestling for the WWE is a big deal and the guys that are in there now have the opportunity to make more money than anywhere else they could ply their trade. These guys are certainly making tons more money than your average personal contractor, for example, my brother has a license to run electricity commercially. He works for himself with a small crew. He is what is considered a sub-contractor. He makes enough money to pay his bills and put back a large chunk for his future. Jericho made more on his downside guarantee than my brother brings home ever. Jericho also mentioned he never made less than double the downside. So I know that these guys are simply being irresponsible, then passing the blame, and that's ridiculous!

This seemed to be an argument about against a wrestling union, but Brett saw it differently:

So because someone is looking to be compensated in the appropriate manner makes them irresponsible? If you're being treated as an employee and not receiving the benefits, you have every right to try and gain the benefits that are due to you. If these men were being treated as simply independent contractors, then by all means, they should not receive additional benefits, but they are treated as employees, and therefore should be treated as such. The WWE is being irresponsible to not label their employees properly.

Also, how they treat their money has no bearing on whether or not they are independent contractors. It does not matter the reason that Raven, Kanyon, etc. is bringing this to court, all that matters is whether or not they were treated as employees. And if they were treated as employees, which I believe they were, they should compensated in the appropriate manner.

Carnivore's response:

Brett; I'm not saying they are irresponsible because they are "trying to be compensated in the appropriate manner", I'm saying they were compensated copiously. In fact they were most likely paid more than enough for what they did for the company. I believe, and I could be wrong, that this lawsuit is being brought against the WWE because these guys were irresponsible and now want due compensation for it. They made multiple bonuses and large downside guarantees that could have easily been placed into things like insurance, retirement funds, and the other such benefits. I can't expect most of you to understand this as you may not have even had to create a budget for yourself yet, but there is a high level of responsibility involved in all of our lives and planning for the future. I don't think these guys did that and instead of looking at themselves and saying, "hey I made a mistake I should have saved more," they attack a company that paid them handsomely for their work and place the blame on them.

To make Brett's point: just because they were paid well does not mean that they can still be treated as independent contractors. As stated in the Journal in the past, just because you are an employee does not mean a company has to pay benefits like retirement, medical insurance, 401K, or anything else. What they do have to do as a company is take on a higher tax burden and contribute to worker disability and unemployment. These are the basic rights Scott Levy, et al are fighting for. Even if the courts dismiss that the WWE owes them any money, the can still find the WWE at fault for not contributing to these three area and that the prosecution actually paid too much in personal taxes. Tapp makes this point as well:

Why does everybody keep thinking that this case is purely about monetary gain. I'm not gonna sit here and pretend to know whether Raven needs money or not. Maybe he does, but even if he does he has gone as far back as when he was holding the NWA World Title and main eventing TNA pay per views as saying wrestling needs a union. This is clearly something he was thinking about before he was in any supposed dire straits which, he might not even be in.

Absolutely true, although Chris Kanyon has come on Howard Stern several times and talked about his financial straight and Raven has said that he lost most of the money he ever made. That said, this lawsuit might not have money as the main motivating factor for the reasons you mentioned. That said, what does it matter if they want some compensation or not? This is a question about whether wrestlers in the WWE and TNA will be treated as employees in the future and gain all the protections there within. That is the only thing that matters in this case, not what the personal monetary situations of any of the accusers are.

Carnivore himself states:

Tapp; you absolutely could be 100% right, maybe it's not about the money, but I can't help but believe it is. If it's not and these guys have a legitimate grievance and they were truly wronged then I hope they get what they were looking for.

Like just said, even if it is about money for them, all that matters is what this means for every other wrestler now and in the future.

Iron Knee also chimed in with another argument:

So there's no need for OSHA or minimum wage laws then? Furthermore, according to your line of reasoning, we ought to shutter the USDA and FDA because people should be responsible for researching the quality of products that they purchase.

And Carnivore's response:

Iron Knee; Let's not take what I am saying out of context, OSHA and minimum wage laws are there to protect the employee from negligent employers. In this case WWE is not being negligent. They paid these guys very well for the work they did! You took my argument and twisted into a realm it was never intended for. However I'll walk down the road you paved for a second, you absolutely do have a responsibility to research the quality of the things you purchase, it would be asinine to purchase a drug, or a food product without looking into what information the USDA and FDA have gathered on said items. All four of the things you mentioned keep companies from treating consumers or employees in a negligent manner, which I do not believe is the case with how WWE treated it's employees, specifically Kanyon and Raven.

There is the key word, though: "employees". They have treated them as employees but not supplied everything an employee gets. You have many fine points in that these people are being compensated fairly, but that does not give the WWE the right to skirt the laws and cut these people from their contracts and for them to have nothing to fall back on.

Before we leave this section, the Journal would also like to apologize for a typo last week involving Japanese wrestling fans. For the record, they tend to "clap" for impressive moves.


Plenty more was written, so be sure to take a look. And of course, a week would not be complete without a good dose of JP Prag's own HIDDEN HIGHLIGHTS!!


CLOSING BELL

This concludes Issue #52 (Volume 1) of THE HAMILTON AVE JOURNAL. Join us next week as we get ready to ring the bell again.

Till then!