Buisness Question - it deals with wrestling

johnnycash

Since AOL and many other companies dont have as many message boards as teh WWE has.. I wanted people to have a conversation strictly based on buisness..And money..And stocks..And the things that the WWE is really all about..I mean the main goal is to make money..

I really just want everyone to think as a mark for a reason..Cuz the way I see it..HHH is the biggest Heel EVER..I mean everyone hates him..Without any real first hand knowledge.. entertainment has folled us before..Hell, ask your Mom if she thought Rock Hudson was gay..

What i really want to know is what is WWE doing wrong in terms of the regualer people..Hell Hogan still gets huge pops..Yet he is "slow..old etc"

BTW..I dont think the WWE is doing a great job..I just wanna start a buisness or "non smark" conversation..

Give me what you think the WWE is doing wrong as a company..Not a wrestling buisness..(which means no I want raven crap..cuz he sold nothing)

.....dont let this be a wrestling conversation..I dont care about characters..And Vinbce is a character for what u guys know..Say why the WWE is failing..

Papa Shango

If you want to encapsulate everything wrong with the company.. look at RAW this past week. Hurricane's music hit then he got attacked on the ramp to make way for a long HHH/Flair/Michaels promo. Now when you got the young stars being fodder for people who should have retired years ago (Except HHH) then there is a serious problem.

Another thing wrong with the company is over-saturation. there is too much too often. we get numerous shows a week and a monthly PPVs which all revolve around the same people anyway.

f*ck the old guys now, im sick of seeing them. Mr America started off as quite funny but now it dominates a large amount of air time, we get two consecutive bad matches of Nash and HHH (Although I blame Nash for the bad matches more than HHH), we get nonsense like Necrophilia and Al Wilson.. I could be here all day listing them.

Basically Vince is just totally out of touch. the wrong people are getting too much air time.. and younger stars are fodder for those people.

That wasnt a very 'Markish' point of view, but I know marks who are sick of the same people week in week out, they are sick of having their intelligence insulted with crap storylines and they are sick of the inconsitencies with giving younger people a push. Why is Benoit out of the Main Event yet slugs like Big Show get Main Event matches? Why did Vince do his utmost to bury WCW and make them look like a sub par product, yet he wonders when former WCW stars dont get over as much as he would like?

meh

Drunksader

If you want to analyze the company as a whole, you have to break down its revenue streams first, then analyze expenses.

Revenue:

WWE makes money through its television contract with UPN and TNN. This is static income that comes in through the life of the contract. The main goal for WWE here is to post exceptional ratings and bring in advertising revenue for the host networks, providing the company with increased leverage to demand a higher price for its programming once the contract is up. Look at WWE's squabble with the USA Network a few years ago when ratings were high - the company wanted a fat contract that TNN finally agreed to. When ratings are down (such as now), there's less money to be made in tv deals, since WWE isn't bringing home the bacon.

Poor television ratings are usually solid portents of PPV buyrates - if people aren't tuning in for the free programming, chances are they aren't going to shell out $40 a month to watch a pay-per-view.

Hence, two major sources of income for WWE are generated directly through its television product, which is directly affected (or at least measured) by ratings. When ratings are down, the company isn't going to be able to deliver on its quarterly earnings, unless ...

another major source of revenue, merchandising, can pave the road. While merchandise isn't directly linked to ratings (people may dole out cash for a cool t-shirt or something retro for reasons other than the current product), it is certainly indirectly affected by the success of the televised programming, since the programming provides the characters and the angles that generate catchphrases or character heat that get people to buy the products.

finally, you have live attendance gates. These can generate a solid amount of income, but only if people show up - when WWE was in its heyday in the late 90s, it saw a large amount of income from House Shows as well as televised events. Obviously, the house show attendance has been collapsing lately, so that revenue stream is suffering.

Additionally, and perhaps the focus of my post, WWE has sought to branch out as a company in various ventures to raise additional revenue, such as WWE NY and, of course, the XFL. Both caused to company to hemorrage cash.

So there you have the revenue - television contracts, PPV buyrates, merchandise, live attendance gates, and extraneous financial ventures. It doesn't take a genius to figure out that since the quality of the programming has been terrible, all of these figures are going to be on the downside. Furthermore, thanks to Vince's idiotic schemes to make WWE into a media conglomerate (the extra shows, the XFL, etc.), WWE has been blowing cash on "calculated risks" that have turned investors off to its long-term potential.

Now, as far as expenses go, WWE has to deal with a considerable amount of overhead when you consider the costs of maintaining and producing the televised shows - you need a huge support staff on hand to run the cameras, pyro, lights, costumes - not to mention the other behind the scenes employees necessary to put on a good show. Tack this on to wrestler salaries, which have been skyrocketing as WWE has tried to pull in older stars to boost ratings, and you can start to see a pattern forming here.

So, Johnny, to answer your question - WWE's stock is a miserable buy at the moment simply b/c the company isn't making much money. Ratings are down, salaries are up (since older "former draws" now have leverage in contract negotiations (read: Goldberg)). The company has made some stupid ventures to try and expand into media as a whole, and has paid dearly for it. As RAW and Smackdown have stopped selling out, there is a harsh reality approaching the company which is going to force continued downsizing of staff members (of course, the creative team will remain intact ... can't get rid of those amazing writers.)

In the end, WWE is entertainment. It has to put butts in the seats by putting out programming that people want to watch -once that core product has been established, the ancillary revenue streams from merchandise and whatnot will come. So if you want to blame someone for the WWE's failure, you can honestly blame the creative PROCESS. This process includes the writers, the wrestlers who influence them, and the management that cuts the checks for all involved (and tinkers w/the product as well). Wrestling makes money first and foremost through compelling characters w/interesting angles buttressed by quality matwork. Until that formula can be perfected (perhaps elevating some new talent that the current fanbase has yet to be fully exposed to), the company is going to continue to watch its expenses accumulate while income deteriorates.

Sorry about the length, btw - there's a lot to be said here, however, and I've only scratched the surface. A real nuts and bolts discussion would require me poring over WWE's annual report, which I do not have the time to do at the moment