The Hamilton Ave Journal 02.12.09: Volume 2 – Issue 73

Posted by JP Prag on 02.12.2009

TNA hires and fires employees, SmackDown survives the implosion of MyNetworkTV, ROH gets set for television, Linda McMahon continues her bid for education, ratings drop across the board, PPV buyrates remain the main topic of discussion in the Editorials, and Christian Cage tops off TNA’s top selling items.

THE HAMILTON AVE JOURNAL
By JP Prag

Volume 2 – Issue 73

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: TNA crossed their own lines

This past week, word spread that TNA had let go Lance Rock/Hoyt, Jimmy Rave, and Petey Williams. The original thought was TNA was looking to cut costs, but that is most likely not what is happening here. Most people in TNA do not have downside guarantees and instead only have pay per appearance deals, especially people in the undercard who have never worked for WWE or WCW. All of those let go had that deal, so there is no cost savings to be had.

Instead, TNA is looking to "shake up the undercard" by moving people who have been with the company for a long time out and bring in some fresh faces. This process has already started in not only people like Brutus Magnus, but also a few recent hires. Rob Terry (originally from Wales) was signed to a two-year deal after graduating from Team 3D's Training Academy. At the same time, TNA also added a performer to the Knockouts roster in Ashley Lane (who previously appeared in TNA as Madison Rayne).

Meanwhile, rumors began spreading that TNA might be bringing on former WWE, WCW, and ECW talent Stevie Richards. It is unknown if Mr. Richards is expected to be a performer or a backstage agent, but TNA did recently let go of two agents so the latter seems less likely.

At the same time, TNA has been expanding their touring schedule (see more below in the newsbites) and changing how their roster works inside and outside TNA. Generally things have been moving ahead positively, but a February 22, 2009 house show in Jacksonville, FL was cancelled for no reason given.

TNA is again changing who and what they are. What the ultimate plan is remains a secret, but many are quite skeptical of what they may be. Former WCW President Eric Bischoff recently sat down with the Sun UK to discuss Hulk Hogan's Championship Wrestling which is just debuting there. Inevitably, the question of going to TNA came up. Says Mr. Bischoff:

Neither one of us [Hulk Hogan or I] were interested in TNA. It's a small organisation that doesn't have very much vision. The best way to describe it is like WWE-lite. There was nothing exciting there for Hulk or myself.

Although Dixie Carter is a nice woman, and I'm sure very intelligent, the rest of the people in senior management there are not the sort of people we would like to work with.

Mr. Bischoff was later asked if TNA approached him to do some work for them. His response was equally tepid:

Sure they have.

But look, the people that are involved in the creative process and vision for TNA are people that couldn't get a job in WWE or shouldn't have had a job in WCW.

There's no vision for that company.

They are people who have never been to the dance. They've never been a part, really, of any of the decision-making processes that led to the success of the industry.

Some of them happen to have been working there while other people did it, but have never really done it for themselves. They just don't have the feel for it.

So that's the reason we wouldn't want to be there.

For me to sit down and say "listen guys, this is what you have to do to be successful" would be like telling a three-year-old how to fly an aeroplane. You can try all you want, they're never going to get it.

Whatever Mr. Bischoff's personal opinions of the people who work there are, there is one point that remains clear: TNA lacks vision. They have yet to describe a unique value proposition for the product and truly define it different from all else that is available. When listening to Ms. Carter, she often gives conflicting messages of what TNA does and who it markets to. This lack of understanding has led to confusion and audience degradation and re-creation in the past.

Now, the story appears to be the same again. TNA has decided the best way to change their organization is to let go of talent and hire new ones. Is this truly the solution, or just an idea thrown against a wall to see if it will stick?


SmackDown only saving grace of MyNetworkTV

Despite being the only network to have a ratings growth last year, MyNetworkTV's parent company NewsCorp (owner of Fox, among many others) has decide to remove "network" status from MyNetworkTV and stop all original programming save one: WWE SmackDown. NewsCorp is citing the current economic conditions as the reason why they have decided to suspend new programming. Despite showing reruns of other shows during the week, the local affiliates will be in charge of weekend programming.

The WWE—to their credit—are taking this in stride. They sent out a press release to make everything sound fine from there end:

In light of today's announcement by MyNetworkTV, World Wrestling Entertainment® officials are certain that SmackDown has a bright future.

WWE SmackDown, airing on Friday nights at 8:00/7:00 PM Central on MyNetworkTV, is the number one program on Friday nights on all broadcast television for males under the age of 50, including the key advertiser demos, M12-17 and M18-34.

WWE SmackDown will enter its 10th consecutive year this Fall, attesting to the popularity and longevity of the brand.

The WWE has a multi-year contract with MyNetworkTV and NewsCorp is not lacking in cash, so there is no immediate worry for the station. Also, the WWE is not dependent on lead-in programming and had little connection to other programs on the station, so overall this will most likely not affect their ratings.

The question remains whether the local affiliates will want to drop MyNetworkTV in favor of their own programming. If this were to happen, then SmackDown would be faced with much more serious problems. But since that would mean more cost for local stations, SmackDown is most likely safe in that regard as well.


ROH prepares for TV

ROH has made major strides for their new show on HDNet. HDNet camera crews were on hand this past weekend to do some test tapings and create video packages. This will be an important test as the first set of tapings will be on Saturday February 28, 2009 in Philadelphia, PA.

The shows taped by HDNet will apparently be exclusively controlled by station for a certain amount of time, perhaps as long as a year. ROH usually sells off tapings of their shows on DVD as a major revenue stream, so the television deal must be at least coming close to substituting for that revenue amount.

But as happened with ECW, ROH now faces issues with music rights. At shows, the wrestlers came out to regular music because their were no rights fees associated with them. On television it is a different story as ROH would have to pay fees to play the music, something they do not have money for. Instead of trying to create their own music and take on that cost, ROH has sent out a call for original music from fans. Says their announcement:

Are you a musician? Have any interest in National exposure? If so, we can help each other!

ROH is in need of original music for the upcoming HDNet television program, and if you've got original music that you think would fit ROH or one of its stars, we want to talk to you! We'd love nothing more than to be able to give National exposure to up-and-coming musicians in exchange for your talents!

If interested, please email [e-mail] and let us know where we can hear you do your thing!

Here it looks like an independent organization is trying to use independent musicians to bolster their own ranks. Whether this can be considered a symbiotic relationship or a parasitic one, ROH is already showing that they need to change for television.


Newsbites

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

In the continual growth in the non-domestic markets, the WWE has signed a deal with +5Live in Israel to air unedited versions of their PPVs live for the next 14 shows. Israel has been a particularly strong market for the WWE and TNA, though TNA cancelled planned house shows there last year before they began more regular touring.

TNA is also growing abroad and is planning a second set of shows through Europe this year. With stops in Germany, Austria, and Switzerland, TNA is hoping to continue the momentum from their recent UK tour. According to the press release, the planned dates are:

- 25 September Nuremberg, Germany
- 26 September Chemnitz, Germany
- 27 September Linz, Austria
- 29 September Dortmund, Germany
- 30 September Hannover, Germany
- 2 October Winterthur (Zurich), Switzerland

WWE CEO Linda McMahon continued her campaign to join the Connecticut State Board of Education this week. After what was described as a tough question and answer period, the House panel voted 11-to-2 in favor of the nomination. Mrs. McMahon will now go before the state Senate for final confirmation.

Despite laying off 10% of their workforce, the WWE has once again decided to add to the top of the chain by adding Michelle Wilson as Executive Vice President of Marketing. Prior to joining the WWE, Ms. Wilson was the Chief Marketing Officer of the United States Tennis Association and is considered a major factor in the mainstream acceptance of tennis events today. Before joining the USTA, though, Ms. Wilson was a part of the XFL launch in a marketing role, so she is no stranger to the players at the WWE.

According to a press release, the WWE latest CD "debuted at number one on SoundScan's Soundtrack Chart surpassing the soundtracks for Slumdog Millionaire, Notorious, Twilight, Mama Mia and High School Musical 3, among others." Of course, most of those have been out for a quite a while longer (especially High School Musical 3 and Mama Mia), but the WWE continues to try to push any accomplishment.

Similarly, the WWE sent out a press release that stated due to the declining price of their stock, their dividend yield has now increased to nearly 16%. The WWE used this opportunity to taught the bargain the stock is and that they will continue to have the ability to support the dividend for the foreseeable future. No guidance was given on how they play to support the dividend since cash from operations in the last three quarters has not been enough to cover it, which means they are paying it out form cash reserves.




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 February 11, 2009, here are the current standings of our shows:





RAW
Close (This Week's Rating): 3.4
Open (Last Week's Rating): 3.6
Percentage Change: ▼ 5.6%
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): UNAV
Open (Last Week's Rating): UNAV
Percentage Change: N/A
52-Week High: 2.7
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): 1.3
Open (Last Week's Rating): 1.4
Percentage Change: ▼ 3.7%
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): 1.0
Open (Last Week's Rating): 1.2
Percentage Change: ▼ 16.7%
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:

This week was not the most fantastic in ratings with all known shows dropping from the prior weeks. There had been such positive momentum in the past few weeks that this one can only be seen as a disappointment across the board.

Also, SmackDown ratings remain unavailable for undisclosed reasons, but this may be to the recent changes going on at MyNetworkTV, as covered above.




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. Jeff Hardy 3 Armband Package ($60, on sale $20)
2. Randy Orton Gas Mask T-Shirt ($25)
3. WWE: The Music Vol 9 CD ($13.47, on sale $9.99)
4. WWE Black Gift Bag ($3)
5. Hardys Green Pendant ($10)
6. John Cena HLR Academy T-Shirt ($25)
7. Randy Orton Age of Orton T-Shirt ($25)
8. Hardys Purple Logo Pendant ($10)
9. Starrcade: The Essential Collection DVD ($34.95, on sale $23.67)
10. WWE Heritage IV Trading Cards ($2)

Despite the worries from the Journal, Randy Orton managed to hold on to two spots in the Top Ten with two very high margin items. The list has rarely been broken up from the John Cena and Jeff Hardy contingent, especially for multiple weeks. It looks like Randy Orton is truly doing his part to help bolster the WWE's top and bottom line.

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

1. Christian Cage: The Instant Classic DVD ($19.99, on sale $10)
2. TNA Logo T-Shirt Special ($24.99)
3. Main Event Mafia – Black T-Shirt ($16.99)
4. Autographed Sting Baseball Bat ($149, on sale $126.65)
5. Frontline T-Shirt ($19.99)
6. Cross The Line Triple Pack DVD Set ($24.99)

TNA did actually update their list this week, but obviously did not pay much attention to what was at the top of their list. Christian Cage's DVD being discounted and taking the top spot is not one of TNA's most positive signs, especially considering the Triple Pack DVD is sold with Christian's picture on the front. Meanwhile, the Main Event Mafia looks to have overtaken the Frontline once again, but their shirts were mispriced. TNA has not picked up on this fact yet so anyone not getting the shirts for the list price of $16.99 should let TNA know they are expecting that price now.




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
15 (Feb)WWE No Way Out (Seattle, WA)	16 RAW / ECW (Spokane, WA)	17 SmackDown (Portland, OR)	18	19 SmackDown Live (Leon, Mexico)	20 RAW / ECW Live (Huntington, WV) SmackDown Live (Guadalajara, Mexico) TNA Live (Macon, GA)	21 RAW / ECW Live (Bristol, TN)
22 RAW / ECW Live (Asheville, NC)	23 RAW / ECW (Nashville, TN) TNA iMPACT (Orlando, FL)	24 TNA iMPACT (Orlando, FL)	25	26	27 RAW / ECW Live (Long Island, NY) SmackDown Live (Cornwall, Ontario, Canada) ROH Live (Danbury, CT)	28 ROH TV (Philadelphia, PA) RAW / ECW Live (Wilkes-Barre, PA) SmackDown Live (Burlington, VA)

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, the Journal discussed why the WWE has so many PPVs a year. Guest#7909 follows up with this point:

The simple math is fine as far as revenue is concerned but it would need to result in significantly higher revenue to offset the additional expenses.

Absolutely, that is an excellent point. Since we do know that an episode of SmackDown costs approximately $650,000, a PPV could cost about $1 million to produce and market. At the same time, the PPV companies immediately take 50% of the revenue. The simple math equation did not allow for that, but if those factors were included it still would have resulted in a higher bottom line. Still, all of those factors would have to be worked through, among others including per appearance fees, venue fees, and more. On the other hand, you also have to add back in more merchandise sales and a cut of the concession sales, so there is work to be done on the other end.

Still, the topic of PPVs was a hot one, starting with Donners:

I'm curious. I often take part in discussions about PPVs, and frequently am among the minority to have actually paid for it. Are there any estimates on levels of piracy in wrestling? Is anything being done to combat it?

Estimates are not something you could easily find, but it is a small minority. The dollars are enough to make a slight difference, but no where near the hundreds of thousands of buys that are missing. On the other hand, there appears to have been a bit of a crackdown as Guest#3183 points out:

I think piracy is a big concern. After all, its one thing to watch a TV show like Heroes live via stream or something like that (which I do, as I live in the UK and so don't want to have to wait a week or two to watch it), but its another matter when you're streaming expensive PPVs. I'll come clean, I've watched pretty much every WWE PPV over the last year, and the only one I paid for Wrestlemania. Why? I don't consider them to be worth the money usually, and streams are available quite easily if you know where to look.

However, in the last 2 to 3 months I've noticed it's become much harder to find a stream that isn't completely shit quality, which would imply there has been some cracking down on it by the WWE legal department. Of course, this then leads to the question that someone in the WWE must be being paid to combat this piracy, so its additional costs.

Also consider that many cable internet providers have been limiting bandwidth when they see spikes, so that could also be shutting down a number of feeds. Michael L also brings another theory to the table:

I think another factor in the declining PPV buyrates is the DVD market. While there is still something special about watching a show live blind, it usually isn't $45 special. I dont know about anyone else, but I'd rather wait to see what the reviews are for the show, and if favorable, I only have to wait 4-6 weeks and pick up the DVD for less than half the original price.

TAT has his own thoughts about this:

I have a feeling that would be relevant for the WWEs domestic market and not their international one.

Here in Australia, for instance, our top cable company (Foxtel) runs the PPVs live on Main Event, but DVDs are much harder to find and can take several months to appear: of the four stores I have seen WWE DVDs in, only one has dedicated shelf space for them (JB HiFi).

And international buyrates in individual countries have been dropping as well. The WWE has negated this by adding PPV to a number of countries that used to get it for free, but that temporary stopgap is not going to last for too long.

Outside of PPVs, the other number dropping was the video games sales. Trashy follows up with an interesting possibility on this one:

One other point not mentioned in the game discussion and lower than expected sales of SvsR is that there might be a lot of people who had previous editions who decided to put off upgrading that game in favor of the upcoming "Legends of Wrestlemania" game. That game was announced well before the new SvsR game was due on shelves.

That would make sense. The WWE may have cannibalized their own market by having two games come out in such a short succession. TNA iMPACT being available could have taken a small amount of dollars, but may have also confused consumers not familiar with the product that a wrestling game had already come out.

Sticking on the other end of merchandise Punt wants to know:

Remind how did Orton almost punt Jeff Hardy out of the top 10, when Jeff Hardy still has 3 items in the top ten, one of which was at number 2.

The key word in the statement was "almost". The Journal would like to invite you to two writing devices: the teaser title and the pun. First off, that line was in the teaser to entice people to see what it was all about. The pun comes from the word "punt" because Randy Orton's character punts people in the head. We at the Journal are sorry you did not understand the subtext.

And finally, the hard hitting question of the week comes from Ant-LOX:

With the WWE going PG, do you think they will still put a Diva on a Playboy cover this year?

If someone were to be in Playboy this year, the photos would have been taken in early January and we would already know about it. In a recent interview, Kelly Kelly said that there would be no more bra and panties matches because of the TV-PG, so one has to imagine that Playboy would be out as well. If you pay attention to the commentary, you will have noticed that none of the girls are referred to as "former Playboy cover-girls" anymore and most of them have lost the Playboy Bunny symbol from their costumes and entrance videos.

The Playboy issues have been lucrative for Playboy and the WWE in the past, but Playboy has fallen on hard times and the WWE wants to change their image. So yes, the Playboy issues is now another casualty of TV-PG.


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

Till then!