The Hamilton Ave Journal 01.29.09: Volume 2 – Issue 71

THE HAMILTON AVE JOURNAL
By JP Prag

Volume 2 – Issue 71

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.

LEAD STORY: Too much wrestling?

In the past two months, both the WWE and TNA have announced new television shows. For the WWE it is the one-hour original content show “WWE SuperStars” that will air on WGN starting in April. With TNA, they have announced “TNA Epix” showing classic footage from TNA’s six year history and some never before seen matches. Although no American distribution deal has been announced for the program, TNA has already signed deals in several other countries that are expecting the program.

In the United States alone, there are programs for WWE RAW, ECW, and SmackDown, as well as TNA iMPACT, AAA, and CMLL. In certain parts of the country, there are also independent promotions that have television including OVW, UPW, FCW, NWA Wildside, and plenty of others. Outside of the United States, there is a similar level of availability of and diversity of products, and also rebroadcast of WWE and TNA programming.

Despite there being such a large quantity of wrestling content available, ratings have either sagged or been stagnant while diversification of revenue streams is the only thing truly growing the top and bottom line. Eric Bischoff explained in his book “Controversy Creates Cash” that he was against Turner Broadcasting when they wanted to add Thunder and the third hour of Nitro because he knew that it would eventually water down the market and make each show less compelling.

Today, the WWE is faced with a similar dilemma in that the USA network is constantly pushing for a third hour of RAW. Although the WWE has been successful thus far of bucking that request, they have willingly just added another hour a week to an already oversaturated market.

Yet that is not where they have chosen to stop. According to a WWE press release, the WWE is starting two new hour long shows on Eurosport which is distributed in 58 countries (excluding the UK). According to the release those shows are:

‘This Week in WWE’ is a weekly catch up show exclusively produced for Eurosport, featuring clips from WWE’s flagship programmes RAW®, SmackDown® and ECW®. Each Monday night at 21:00 CET, fans can catch up on WWE’s week of action, including the latest matches, rivalries and news on their favourite WWE Superstars and Divas.

Through this agreement, Eurosport also acquires exclusive European (excluding UK) programming rights to ‘WWE Vintage Collection’, which is dedicated to WWE legends from the 1970s, 80s, and 90s. Airing each Monday at 21:30 CET, Eurosport will be the only channel in continental Europe offering fans access to WWE’s greatest legends, including Stone Cold Steve Austin®, The Rock®, Hulk Hogan, and Bret ‘The Hitman’ Hart.

As noted above, most of Europe has many of the same options as the USA when it comes to wrestling (and also often has NWE or other local organizations), so the WWE is looking to over-saturate their fastest growing markets. Though these new programs will lead to short term gains due to programming fees, it seems quite possible that with too much “inventory” or wrestling that the demand cannot keep up and overall viewership will drop.

At the same time, the WWE is not the only organization introducing programming. In the United States, the NWA is beginning to launch their “NWA Showcase” show on the Colours Network on Dish TV. Distribution may be limited at this time, but there is always the possibility for more growth.

Meanwhile, ROH officially signed a deal HDNet. Although HDNet is not paying ROH any rights fees, the two have set up a profit sharing plan. In the meanwhile, ROH will be in charge of content while HDNet runs the production end. Nothing is confirmed as of yet for the logistics of the show (what night the show will air on; if it will be run is specials or episodic; etc…), but this adds yet another wrestling product to the mix.

Like the NWA show, the ROH should would have limited distribution but HDNet could expand in the ensuring years.

How much of the product can the market handle? Judging by ratings today, it would seem like there is too much already. Though WWE programming often ranks in the top of cable ratings, the advertising rates are much lower due to perception of the product. TNA has not done much to change that opinion and seems unlikely that upstarts in the NWA and ROH are going to be causing a paradigm shift among advertisers. ROH may cater to a niche market, but their very existence could actually make the wrestling product too available and drive ratings and potential buyers of other products down and away.

Wrestling has done well in a “less is more” environment, but now the companies are looking at a “more is more” approach. That approach may hurt the WWE, TNA, NWA, ROH, AAA (who is touring in America a bit now), CMLL, local organizations, and others in the long run as the product looses what it needs most: being special.

Newsbites

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

WWE CEO Linda McMahon was apparently caught in an apparent contradiction when a reporter from the Stamford Advocate pointed out that her major in college was French, not education (a certificate she gained later on in the state of North Carolina). Mrs. McMahon reported this information to the Governor of Connecticut who has nominated Mrs. McMahon for a position on the State Board of Education. Mrs. McMahon and the WWE would like to have the CEO on the board as part of their continued effort to rebrand the WWE as kid and family friendly.

Early PPV buy numbers have come in for the last set of PPVs in 2008. They are:

* No Mercy – 250,000 buys (down from last year)
* Cyber Sunday – 160,000 buys (down from last year)
* Survivor Series – 325,000 buys (down from last year)

The drop in Survivor Series is particularly of note and will be an interesting line item when the WWE releases 2008 Q4 results. Cyber Sunday may see some additional revenue from the text voting, but the WWE may choose to not reveal that particular line item.

TNA iMPACT is not the only wrestling video game having sales difficulty as SmackDown vs. RAW 2009 is reportedly selling 22% below last year’s model. Considering the video game industry is one of the only growth markets in the world right now, a franchise like this not doing well is truly a reflection on wrestling and the glut of availability of the prior product.

Although TNA often has problems with distribution (see the Editorials section below), the WWE’s DVD partner Genius Products is also in a financial quagmire. Couple that with a lawsuit against Genius Products claiming that they are not paying their bills, the WWE may be looking for a new partner soon.

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.

For the week ending Wednesday January 28, 2008, here are the current standings of our shows:

RAW
Close (This Week’s Rating): 3.6
Open (Last Week’s Rating): 3.9
Percentage Change: ▼ 7.7%
52-Week High: 4.0
52-Week Low: 2.6
All Time High: 8.1
All Time Low: 1.8

SmackDown*
Close (This Week’s Rating): 2.2
Open (Last Week’s Rating): 2.1
Percentage Change: ▲ 4.8%
52-Week High: 2.8
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): 1.4
Open (Last Week’s Rating): 1.3
Percentage Change: ▲ 7.7%
52-Week High: 1.5
52-Week Low: 1.0
All Time High: 2.3
All Time Low: 0.6

TNA iMPACT**
Close (This Week’s Rating): 1.1
Open (Last Week’s Rating): 1.2
Percentage Change: ▼ 8.3%
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:

After a large jump last week, RAW has come back down to earth dropping 7.7% to a 3.9. Many people are saying that it was Vince McMahon’s appearance that drove the rating, and that certainly has some merit. The important part, though, was that the WWE advertised and promoted the show for week beforehand, thus creating an event. Yet despite this, the WWE was not able to hold on to much of the gain, so there is no long term growth. The WWE has proven that on occasion they can pop a rating but have not proven recently they can consistently grow it.

Still, the WWE has actually been on an upswing with RAW for the past 20 weeks, so perhaps they have a chance to get back to that level on a regular basis again.

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 HLR Academy T-Shirt ($25)
2. Jeff Hardy Armband Package ($80, on sale $29.99)
3. WWE: The Music Vol 9 CD ($13.47, on sale $9.99)
4. Hardys Green Pendant ($10)
5. Randy Orton Age of Orton T-Shirt ($25)
6. Santino Flex T-Shirt ($25)
7. WWE Black Gift Bag ($3)
8. Hardys Purple Logo Pendant ($10)
9. Jeff Hardy Armbands ($20, on sale $10)
10. WWE 2009 Day Dream Calendar (SOLD OUT)

If there were ever a week full of surprises, this list would stand out. First up, WWE: The Music Vol. 9 scored the number 3 spot, an amazing accomplishment for a CD in this day and age. Then appearing for the second time in the past month was Randy Orton at number 5. Mr. Orton has proved that heels can sell, and his additional exposure is apparently paying off with dividends. The biggest surprise of all, though, was what came in just after Randy Orton: Santino Marella! Mr. Marella is a comedy act who almost never wins on TV and does not seem to have any type of push behind him. Despite that, he has been able to overcome everything that has been given him and not only turn it into entertainment, but sales! For at least this week, Santino Marella is a better seller than the Undertaker, Triple H, Big Show, Edge, and many others. Can Santino hold on to this spot for long, or is this just a one week aberration? Well, even Armando Estrada appeared in the Top Ten once, so anything is possible.

TNA sometimes releases a list of top selling items on ShopTNA.com. According to the site the top selling items were:

1. Main Event Mafia – Black T-shirt ($19.99)
2. Autographed Sting Baseball Bat ($149)
3. Main Event Mafia – Grey T-shirt ($19.99)
4. Frontline T-Shirt ($19.99)
5. Cross The Line Triple Pack ($24.99)
6. TNA Ultimate Matches ($19.99)
7. Mick Foley – Bang Bang T-Shirt ($19.99)

FINALLY, after over two months TNA has updated their list of top selling items. This list shows us the changing landscape of TNA as the Main Even Mafia dominate the list with 3 out of 7 items. The Frontline has one themselves, but Mick Foley also takes up another spot. When you look at it that way, the “older generation” of stars is taking over the vast majority of spots and outselling the new stars. This would seem to indicate that despite complaints over TNA bringing in too many established talents, they are doing their job by making it up in sales that the homegrown talent is not.

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
1 (Feb) RAW / ECW Live (Cape Girardeau, MO) SmackDown Live (Huntsville, AL)	2 RAW / ECW (St. Louis, MO) SmackDown Live (Tupelo, MS)	3	4	5 TNA Live (Norfolk, VA)	6 RAW / ECW Live (Vancouver, BC, Canada) SmackDown Live (Kennewick, WA) TNA Live (Charlottesville, VA) ROH Live (Coral Springs, FL)	7 RAW / ECW Live (Victoria, BC, Canada) SmackDown Live (Yakima, WA) ROH Live (Orlando, FL)
8 TNA Against All Odds (Orlando, FL) RAW Live (Sacramento, CA) SmackDown Live (Bakersfield, CA)	9 RAW (Oakland, CA) iMPACT (Orlando, FL)	10 SmackDown / ECW (Fresno, CA) iMPACT (Orlando, FL)	11	12	13 RAW Live (Los Angeles, CA)	14

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.

From the commentary section last week, TNA’s merchandise department continues to be a point of consternation, especially with Kyle:

TNA needs to get their shop in order. One day I went to order something and my account was deleted apparently. I have ordered things from TNA before (Sting DVD, Christopher Daniels DVD, Kurt Angle shirt, Samoa Joe DVD, Best of the Bloodiest Brawls), yet they couldn’t find my account it makes them look really second rate. My account on WWE is still up and running.

You are not the first person who has written to the Journal with similar issues. It seems to be a fairly common issue, among the many others in that department. Of course, one of TNA’s larger issues has been distribution to stores and it looks like they may have more problems. From Donners:

You might be interested to know that Red Ant, the company which distributes TNA DVDs in Australia, is in receivership – which is effectively on the verge of bankruptcy.

They distribute plenty of things, mostly PC games for Bethesda, Midway, Capcom and Konami, and only started TNA DVDs late last year.

Their distribution has been very poor, and despite stores advertising that TNA DVDs would be on shelf, they have rarely made it. Even orders through those stores are rarely met (I’ve been waiting over a month for the Angle DVD).

Now stores don’t advertise the TNA DVDs at all, and it doesn’t look like local distribution is happening any more.

It’s a very bad end to what looked like a fantastic move.

What a major blow to TNA! Australia is a huge market for them and to have stores start to shun them because of a failing distributor is going to hurt them quite a bit. They need to send someone over there to help straighten things out with the stores and get a new distributor before things fall apart even more. Knowing TNA, though, they will most likely let this one slip through the cracks as well.

Of course, merchandise at home and abroad is not their only issues. Ratings became a key point in the UK though TNA President Dixie Carter’s own words and the responses of fans in the UK like Dennitt 316:

Comparing ratings the way Dixie Carter has done is slightly misleading, as Raw is only available on a Premium subscription channel, while TNA is shown on Bravo. Bravo is essentially a ‘free’ channel on a cable or satellite service. If TNA is only slightly ahead or ‘on par’ with WWE ratings on this basis, it’s hardly a success story.

Well, we can give them a little credit. Still, despite the similar ratings they have not been able to draw the same crowds. TNA may have had some of the biggest crowds in the company’s history the past couple of week in the UK, but that does not compare to the events the WWE holds there twice a year. Luke also followed up on Dennitt 316’s thoughts:

UK TV ratings are on the web somewhere, but last time I checked, Smackdown was scoring about double Impact. However, something to note: Impact airs once a week (although it is repeated on Bravo +1). Raw airs live and is repeated a few days later, whilst ECW and Smackdown are shown several times in primetime. So, it’s hard to directly compare the ratings. It’s plausible that Impact gets higher ratings than Raw in the UK, but has far fewer viewers.

That said, the TNA house show at Wembley Arena tonight was nearly full (at least 8,000) and TNA were hyping it as their biggest crowd ever. And, as Dixie said, Styles got a huge reaction – although not as good as 3D, Foley, Angle or Jarrett.

True, it is a much more difficult comparison. Either way, the UK is an incredibly strategic market for TNA and they would do well to continue to develop and grow there.

Speaking of other countries, Shawn Struck would like to see AAA on their tour of the US:

Why, oh WHY are there no Texas dates? Texas is right over the border! One of the local Spanish language channels, GALA, shows the full 2 hour TV program and it’s become my addiction. I would blow up a bus full of nuns using another bus full of nuns to see AAA in Texas.

Well, California and Texas are separated by 1,500 miles, so it’s not an easy jump. AAA also had a successful tour of California last year, so they are looking to build upon where they have already been. But if this one does well, they may well consider a Texas tour in the near future.

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!!

This concludes Issue #71 (Volume 2) of THE HAMILTON AVE JOURNAL. Join us next week as we get ready to ring the bell again.

Till then!