MMA Universe

Welcome to another edition of The pro wrestling post. This week we look at the changes going on with TNA and the WWE.

TNA going live – A lot of changes going on for TNA. First, news that it was moving up an hour starting May 31st, then the big King Mo signing and now TNA is going to be live throughout the summer.

Payout Take: Going live is supposed to promote the time change for TNA but it will be interesting if this will help or hurt the production value of the product. Despite RAW being live most of the time, I am not sure of its overall value in drawing ratings.

RAW going to 3 hours – Perhaps in an effort to trump TNA’s news of going live starting May 31st, the WWE announced that its anchor program, “Monday Night RAW,” is going to 3 hours starting with its 1,000 episode on July 23rd. The news was first reported via tweet through Jon Cena. Cena was rated the No. 1 most influential athlete on Twitter last month.

Payout Take: Good way of using social media to filter its news. I like how the WWE utilizes its social media so that the end user feels as though there is value for following the likes of John Cena. As far as going to 3 hours, I understand the RAW receives good ratings, but how much is too much for one night? WCW did this during the Monday Night Wars and at a certain point there’s too much filler during a three hour block.

Brooke Hogan signs with TNA and Ashley Flair signs with WWE – News came down that Brooke Hogan is following her dad’s footsteps by signing on with TNA. Although she will not be in the ring, she will be an executive with TNA and develop its female talent. Flair’s daughter has signed a developmental deal with the WWE where she will train as a wrestler according to Dave Metzler.

Payout Take: It sounds like Hogan will be in a Stephanie McMahon sort of role and will eventually become involved in some way with the story lines in front of the camera. On the other hand, Flair’s signing has many speculating that Ric Flair will return to the WWE. What these two signings show is that wrestling is the family business for so many wrestlers. Hogan’s signing will deliver more impact (no pun intended) to her organization sooner. Her aspirations to be a singer/actress have now translated into being a performer for TNA. For TNA, it’s another sign that it is making a major attempt to be competitive with the WWE.

Former Strikeforce Light Heavy Weight Champion Muhammed “King Mo” Lawal announced today that he has signed a first-of-its-kind deal to simultaneously compete for Spike TV properties Bellator Fighting Championship (MMA) & TNA (Professioinal Wrestling).

In an unprecedented move, one of the biggest names in mixed martial arts, “King Mo” Lawal, has signed a deal to compete in Spike TV’s two major sports properties, Bellator Fighting Championships and TNA’s IMPACT Wrestling. “King Mo” will join the stars of TNA this summer and resume his mixed martial arts career next year when Bellator Fighting Championships moves to Spike TV from its current television home, MTV2.  The deal was jointly announced today by Kevin Kay, President, Spike TV along with Bjorn Rebney, Chairman & CEO, Bellator Fighting Championships and Dixie Carter, President, TNA Entertainment.

“‘King Mo’ is an incredible athlete and a great addition to the Bellator family.  He immediately adds prominence and star-power to our light heavyweight division,” said Rebney.

“‘King Mo’ is the perfect athlete for this type of alliance.  He is the real deal in MMA, and his bold personality and world class wrestling accomplishments are unparalleled.  I’m confident he will have a major impact in both sports,” stated Carter.

Lawal (10-1-1) launched his mixed martial arts career in 2008, and after four straight wins, he faced off against his toughest challenge, renowned fighter Mark Kerr.  “King Mo” knocked out Kerr in the first round, and eight months later he defeated Gegard Mousasi in a Light Heavyweight world title fight.  Lawal also holds an impressive KO victory against multiple Brazilian jiu-jitsu world championship winner Roger Gracie in September 2011.

“This deal is a dream come true for me,” Lawal said. “Bjorn and Dixie have given me the opportunity to engage in my two great loves, mixed martial arts and professional wrestling, at the same time.  And, to have it all on Spike TV is really buttercream icing on a big ol’ cake – not that whipped cream stuff either!”

Lawal rose to grappling acclaim as a NCAA Division I All-American wrestler at Oklahoma State University in 2003 and a three-time U.S. National Champion (2005, 2006, and 2008) in the 84 kilogram division.  In 2007, as a member of the US National team, he brought home a gold medal at the Pan American Games and a silver medal at the World Cup.

A native of Murfreesboro, Tenn., Lawal lives in San Jose, Calif. and trains with the prominent American Kickboxing Academy.

�

Payout Perspective:

There aren’t too many options for MMA fighters nowadays since Zuffa purchased Strikeforce last year.  King Mo was one of those fighters that benefited from Strikeforce’s existence back when he was fighting for Sengoku in Japan and as a free agent, signed a flexible and favorable contract with the San Jose based promotion despite being courted by multiple promotions.

This time around, King Mo – who has had previous interest and has actually tried out for Professional Wrestling years ago – signs a simultaneous deal to compete for both Bellator and TNA.  This is Spike TV’s pocket Aces, giving professional fighters another option to make a living within MMA in the sports and entertainment industry.  Some who are purist MMA fans may cringe at the idea of MMA fighters also dabbling in Pro Wrestling, but this has been a constant in MMA for quite some time.  From Dan Severn, to many Japanese fighters, to Josh Barnett, Pro Wrestling and MMA have gone hand-in-hand for quite some time.  Plus, let’s not forget the UFC’s biggest PPV draw Brock Lesnar – who is now back with WWE – and Ken Shamrock who spiked up everyone’s interest in MMA when he signed with the UFC after competing in WWE.

The history has always been there and it has been a black eye to many that have wanted the sport to be legitimized by mainstream, but we are seeing something new here.  Something innovative, if you want to call it.  Spike TV is using both of their properties to not only cross-promote, but to embellish the partnership as an alliance and expand their audience. To not only grow Bellator and TNA as individual entities as a union, but to anchor the M18-34 flag on the Spike TV network. It’s innovative, it’s controversial, and its getting people’s attention. Its exactly what Spike TV want’s to do as it continues it’s preparations for the transfer of Bellator from MTV to Spike TV in 2013.

Jason Cruz:

This is a great move for all parties. Despite what MMA purists think about the move, TNA receives higher ratings (1.4 million viewer average) on Spike TV than TUF Live. This will help Lawal financially and as a brand. He’ll be unique and definitely receive some good storylines for the show. For TNA, it elevates its appeal as it tries to move on from the Hulk Hogans and Ric Flairs to a new generation of wrestlers. The pro wrestling company has been asked to retool its product by Spike TV and this is a step in that direction. It also helps that it is moving up in time slots on Thursday nights to avoid competition. As has been rumored, this could lead to Bellator moving to Thursday nights with TNA as a lead-in.

For Bellator, the addition of Lawal should bolster the brand when it makes its long awaited debut on Spike TV. The twittershpere is now speculating whether Rampage Jackson could jump to Bellator as well to create a Lawal-Rampage shootfight. It will be interesting to see whether we will see if Spike TV/Bellator/TNA adopts this strategy of signing fighters to do both (e.g. Josh Barnett).

On Thursday of last week, the WWE reported strong Q1 earnings despite a quarter which saw its stock plummet to an all-time low in April.  The earnings beat analysts expectations of the company.

A synopsis of the performance via the Chicago Tribune:

During a conference call with analysts, executives of WWE cited improved revenues from live events and lower losses from its movie business as key drivers for this quarter’s success The good news was due in part that losses from its much maligned film division were only $1 million as compared to $3.6 million a year ago. It is implementing a new direction which it hopes will stop the bleeding of money.

Overall, its operating income increased 21% to $16 million. Some other notable earnings call notes:

- It spent $2.1 million this quarter on its WWE Network which has yet to announce when it will premiere.  However, Vince McMahon indicated that the holdup is on the WWE’s side and an announcement is expected sometime within the next 3 months.  McMahon expects it to launch this year and maintained that the WWE Network will be run 100% by the WWE.

-  Its magazine publishing business was down 36% while its digital business was up 16% due in part to the content on its YouTube channel.  Perhaps a sign of the times with print losing out to digital options.

-  It noted its increase in social media and leveraging these opportunities.  Notably, it has 62 million Facebook fans and 5 million twitter followers.  In addition, its YouTube Channel is ramping up in viewership.

-  WWE announced that its made ad revenue off of its YouTube channel and that Google (YouTube’s parent company) is now paying the WWE a licensing fee for its content.

-  The WWE noted the success of its recent expansion into Russia and China.  Its first show in Russia drew rave reviews and could be the harbinger of a new area of growth.

-  Live event merchandise revenue increased 13% or $3.2 million due to its tour of Abu Dhabi and fan access events.  However, North America ticket revenue decreased by 3% although there were four fewer events during the quarter.

-  Internationally revenue was up due to the aforementioned Abu Dhabi tour yet was down in attendance due to tours in Central America.  WWE cites the economic climate of Central America as the reason for its decline.

-  The PPV business was flat as gains were essentially from PPV price points rather than from an increase in buys.  This is interesting considering Vince McMahon’s statement at its annual stockholder meeting in which he said WWE’s have maintained while UFC PPV’s have “dropped like a rock.”  The statement is more for impact at the stockholders meeting than it is the truth.

Payout Perspective:

A much brighter perspective in Q1 than last quarter.  While the WWE stock saw its worst day in April it has surged forward.  It appears that global expansion of the WWE product and its realignment message concerning its film division has painted a brighter picture for the year.  Notably, its YouTube channel success seems to be a highlight to monitor as it continues forward.  It will be interesting to see if its YouTube channel is a Plan B in case the WWE Network falls through due to lack of distribution.  Of course, the WWE has dedicated a significant amount of capital and operating expenditure toward the network so my guess is that the WWE Network will launch.

Welcome to another edition of the pro wrestling post.

Shawn Michaels deal with Eyeblack

Former WWE superstar Shawn Michaels has signed an endorsement deal with Eyeblack. The company produces under-eye eyeblack with phrases and logo.  Seattle Seahawks running back Marshawn Lynch is also sponsored by Eyeblack.

The deal according to the press release allows Eyeblack to produce and sell product with Michaels’ trademark catchphrases which include Showstopper, Mr. HOF and Mr. Hall of Fame.  It will also produce custom designs on camouflauge eyeblack for Michaels’ Outdoor Channel show, “MacMillan River Adventures.”

Payout Take:  A nice quid pro quo for Michaels.  A portion of the deal was for use of Michaels trademarked phrases.  It is a nice product placement for Michaels’ hunting show.  But, in general,  just what real purpose do the eyeblack strips have?  Couldn’t you wear sunglasses to keep the sun out of your eyes?

A sample of the Shawn Michaels EyeBlack collection

TNA moves up an hour earlier on Spike TV

TNA will move up an hour to 8pm ET (5pm PT) starting May 31st.  According to the press release, it’s “predicated on the fact that there are more available viewers in the 8:00-10:00pm timeslot with less sports competition in the 8pm hour.”

TNA is not doing too bad in the ratings right now.  This past week it averaged 1.4 million viewers with a 0.99 rating which was up from the previous week.  Bear in mind, the ratings are much better than either Bellator or TUF Live.

Payout Take:  Acknowledging the competition and moving it to a slot where it may get move viewers is a good move by TNA and Spike TV.  The move likely is gearing up for this fall when the NFL will have more games on Thursday nights throughout the fall.  It could also mean sliding in Bellator at 10pm in 2013 with TNA as a solid lead-in and moving it off of Friday nights.

WWE to live stream PPV show on Facebook and YouTube Channel

Without its network, the WWE is utilizing its other social media to promote this Sunday’s PPV which features Brock Lesnar.  Earlier this year, the WWE used its YouTube channel to promote Wrestlemania this past year and returns to it to feature a match.   Cageside Seats reports that the live pre-show will appear on its Facebook, WWE.com and YouTube channel.  The additional free match should draw viewers to one of the outlets and perhaps draw additional buys.

Payout Take:  The move helps market Lesnar’s return to WWE PPV and serves as a monitor as to how well visited its social media, especially its YouTube channel is visited.  The WWE has produced original content for the channel and it may be a default place for the WWE while it waits for its Network to hit.

Welcome to another edition of the pro wrestling post.

Shawn Michaels deal with Eyeblack

Former WWE superstar Shawn Michaels has signed an endorsement deal with Eyeblack. The company produces under-eye eyeblack with phrases and logo.  Seattle Seahawks running back Marshawn Lynch is also sponsored by Eyeblack.

The deal according to the press release allows Eyeblack to produce and sell product with Michaels’ trademark catchphrases which include Showstopper, Mr. HOF and Mr. Hall of Fame.  It will also produce custom designs on camouflauge eyeblack for Michaels’ Outdoor Channel show, “MacMillan River Adventures.”

Payout Take:  A nice quid pro quo for Michaels.  A portion of the deal was for use of Michaels trademarked phrases.  It is a nice product placement for Michaels’ hunting show.  But, in general,  just what real purpose do the eyeblack strips have?  Couldn’t you wear sunglasses to keep the sun out of your eyes?

A sample of the Shawn Michaels EyeBlack collection

TNA moves up an hour earlier on Spike TV

TNA will move up an hour to 8pm ET (5pm PT) starting May 31st.  According to the press release, it’s “predicated on the fact that there are more available viewers in the 8:00-10:00pm timeslot with less sports competition in the 8pm hour.”

TNA is not doing too bad in the ratings right now.  This past week it averaged 1.4 million viewers with a 0.99 rating which was up from the previous week.  Bear in mind, the ratings are much better than either Bellator or TUF Live.

Payout Take:  Acknowledging the competition and moving it to a slot where it may get move viewers is a good move by TNA and Spike TV.  The move likely is gearing up for this fall when the NFL will have more games on Thursday nights throughout the fall.  It could also mean sliding in Bellator at 10pm in 2013 with TNA as a solid lead-in and moving it off of Friday nights.

WWE to live stream PPV show on Facebook and YouTube Channel

Without its network, the WWE is utilizing its other social media to promote this Sunday’s PPV which features Brock Lesnar.  Earlier this year, the WWE used its YouTube channel to promote Wrestlemania this past year and returns to it to feature a match.   Cageside Seats reports that the live pre-show will appear on its Facebook, WWE.com and YouTube channel.  The additional free match should draw viewers to one of the outlets and perhaps draw additional buys.

Payout Take:  The move helps market Lesnar’s return to WWE PPV and serves as a monitor as to how well visited its social media, especially its YouTube channel is visited.  The WWE has produced original content for the channel and it may be a default place for the WWE while it waits for its Network to hit.

Before we all sit down to watch one of the biggest hyped UFC fights of 2012, MMA Payout gives you the weekly pro wrestling post.

WWE stock plummets to 52 week low Thursday

Despite breaking records with its PPV buys for Wrestlemania 28, the WWE’s stock hit a 52 week low on Thursday.  The depression in stock comes a couple weeks before it announces its first quarter results.  WWE reports first quarter results May 3rd.  The company is spending a lot of money right now as it attempts to build its WWE Network.

Payout Take:  The 52 week low may be attributed to the high aspirations for its PPV buys.  The WWE Network and its Film Division are the two culprits in the WWE empire that are losing money for the company.  While the WWE is addressing the issues with its film unit, it is the expenses for the WWE Network that may be a ray of hope for the company in the future.  Although it missed its original target date for its debut, if it can find distribution deals and a fan base and advertisers that will be willing to pay, the WWE may be onto something.  But, that’s a big “if”.

Lesnar allowed to wear his sponsors in the WWE

Despite jumping to the WWE, Brock Lesnar is keeping his sponsors.  According to Wrestling-Online.com, one of the clauses in his contract was that he could still wear his sponsors while in the WWE.  Currently, the WWE characters are sponsorless.  Jimmy Johns is one of the bigger sponsors Lesnar will be wearing to the ring.  I don’t believe the WWE has an official sandwich maker for the company so there were no conflicts.  It will be odd to see Lesnar in the ring wearing gear that he wore in the Octagon.

Payout Take:  Not only does Lesnar get a $5 million contract from the WWE, he will still be paid by his UFC sponsors for wearing the gear.  This is a bonus for his sponsors considering that he will be in front of a much bigger audience.

�

TNA to work with Bellator when it heads to SpikeTV

Despite renewing its contract with Spike TV, TNA wrestling is still retooling its product.  News has surfaced that TNA heads Dixie Carter and Eric Bischoff have met with Spike TV execs to discuss the direction of the product.  TNA has contacted Bellator about ways that each company can help one another once Bellator comes aboard to Spike in 2013.

Payout Take: This can benefit both companies…or, it could hurt each company.  While both cater to the network’s target demographics, involving Bellator in TNA angles may disturb the Bellator product and blur the lines of real and sports entertainment.  Spike execs, TNA and Bellator will have to be creative in collaborating on cross-promotion.

The WWE is reporting that the preliminary PPV buy rate for Wrestlemania 28 is 1.3 million buys worldwide.  It also is reporting that global gross sales exceeded $67 million including the live event.

If I am reading the WWE’s release correctly, the gross sales includes the live gate which was originally reported as $8.9 million. The buy rate broke the 2007 WM which was 1.25 million buys according to F4WOnline.  That Wrestlemania featured Donald Trump in a cameo role.

Broken down, the 1.3 million buys means about 700K domestic and 600K international.

Payout Perspective:

Is 1.3 million buys a disappointment?  While there was an ESPN reporter that tweeted that the buy rate was closer to 2 million buys, we now know that was more speculation than reporting.  The fact that the Rock was involved in the main event in his hometown and there was a year long run-up to this event makes 1.3 million somewhat of a disappointment.  We shall see what this means for the WWE’s stock for the rest of this year.  Last year, the company rode the financial wave of WM 27 so this could be a good sign for the company in its next earnings call.

Welcome to another edition of the pro wrestling post where he cover some business headlines from the world of pro wrestling.  

WWE and “Deadliest Catch” team up for show premiere

The Discovery Channel’s “The Deadliest Catch” and the WWE have teamed up where WWE stars are promoting the show’s premiere.  The debut promo occurred during the Wrestlemania PPV two weeks ago.

According to a Discovery Channel press release, “We could have just bought an ad, but to have an opportunity to bring these two brands together and really engage the fans with our content was really important to us,” said Discovery’s Chief Marketing Officer David Shackley.

Running through mid-April for the 100th episode of the popular Discovery show, WWE will post exclusive videos with WWE Superstars and Divas promoting Deadliest Catch, homepage takeovers, Facebook alerts from WWE talent and live events presence.

Payout Take: An interesting partner for the reality show although it’s likely that the demos crossover a bit.  

Tito Ortiz to the WWE?

Cageside Seats via an interview with MMA Heat’s Karyn Bryant states that the Huntington Beach Bad Boy may be thinking of a run in the WWE after his MMA finale with Forrest Griffin this summer.   As most know, Ortiz changed his nickname to “The People’s Champ.”  Not sure if paperwork was actually filed to do this although I’m sure he consulted with Sean Combs aka Puff Daddy aka Diddy (j/k).

Payout Take:  Ortiz actually participated as a ref with the TNA organization in 2005 so a run in pro wrestling is not out of the question.  He definitely would have the persona and attitude for sports entertainment.

WWE Raw ratings drop slightly despite Lesnar’s second appearance

PW Torch reports that the April 9th edition of Raw ratings dropped by 10 percent as it received a 3.1 rating down from the preceding week’s 3.4.  It averaged 4.29 million viewers for Lesnar’s second appearance back with the WWE as opposed to 5 million for the April 2nd edition of Raw.

Payout Take:  Television by Numbers reports that Raw was second to “Pawn Stars” for highest rated cable show for April 9th. The WWE announcers promoted (and Lesnar used in his promo) his UFC background.  He also delivered a real blow to John Cena which busted Cena’s face (not sure if it was scripted or not).  Wonder if the transition from real to fake may actually be hard to do?

Wrestlemania 28 buy rate

The Wrestling Observer reports that the initial buy rate for the WWE’s biggest show of the year scored 1.1 million buys which is off from the ambitious prediction of 1.9 million. Last year, WM 27 scored 1,059,000 buys with the Rock playing a minor role at the show.  

Payout Take: This could be seen as disappointing considering the year long build-up for The Rock vs. Cena matchup.  It will be interesting to see what the WWE does with the build-up for Lesnar in the main event in New Jersey next year.  Already, the WWE will have Lesnar in the arena more than The Rock which should help.  

Hall arrested again

For those that watched the E:60 piece on Scott Hall late last year, you would think that he was trying to turn around his life of addiction.  Looks like it has not.  Hall was arrested on suspicion of domestic violence.  TMZ reports that he had been “drinking for days.”

Payout Take:  No real take hear except the fact that it’s a sad look at the many issues with pro wrestlers.  Most of us grew up watching Razor Ramon and to see him deteriorate right before our eyes is depressing.

MMA Payout provides your Easter weekend with some pro wrestling business headlines including Lesnar’s contract, Spike TV reups with TNA and the US Marines call in a favor.

Lesnar’s impact and contract

Finally…Brock Lesnar has returned back to the WWE.  He made his appearance on Monday Night Raw the night after Wrestlemania.  Although a brief cameo at the end of the program (where he F5’d Jon Cena), the Wrestlemania bump and the Lesnar rumors had RAW draw a 2.0 rating (according to TV By Numbers) for the second hour of Raw which was up from the prior week among adults 18-49.  The programming ran up against CBS and the National Championship Title Game which is pretty good considering March Madness had been impacting MMA ratings.

As for Lesnar’s contract, it’s being reported that his 1 year deal is worth around 5 million dollars (via CageSide Seats).  The deal runs through next year’s Wrestlemania which will be held at Met Life Stadium in New Jersey which we may presume Lesnar will be in the main event.  Lesnar will not be on the road full time but will appear twice a month with more frequency running up to Wrestlemania.

Spike TV and TNA Wrestling agree to extension

TNA Wrestling has agreed to a multi-year extension with Spike TV.  TNA’s “Impact Wrestling” show on Thursday nights has been drawing an average of 1.7 million viewers in 2012.  Financial terms were not disclosed however there is speculation that TNA will be involved in additional projects with the network in addition to its weekly show.  I was surprised to know that TNA is drawing so well.  Its interesting compared to the TUF ratings from past seasons on the network.

Wrestler Randy Orton pulled from WWE film

The WWE has pulled Randy Orton from a starring role in its film studios’ ongoing feature film Marine 3.  The “Marine” series put on by WWE Films is the longest running and most notable of its film franchises (which may explain why the WWE film division is in its current state).  Orton, a real US Marine in the 1990s was dishonorably discharged from the Corps after two AWOLs and a disobyeing a command from a superior officer (h/t Cage Side Seats via TMZ Sports).  The WWE indicated that it “demonstrated poor judgment” in casting Orton in the role even though it knew of his past.

One does not usually see the WWE concede fault but the fact is the WWE is a staunch supporter of the Armed Forces (as shown by its annual holiday shows in the Middle East) and the Marines rely on the support of the WWE as it can tap into the young male demo.  Here, it made sense for the WWE to pull Orton off of the film as it would have heaped a lot of bad press on the WWE further impacting the issues the film division has right now.

Dave Metzler is reporting that Brock Lesnar has signed a one year deal with the WWE.  The deal comes the night before Wrestlemania fueling speculation that the former UFC Heavyweight Champ may make an appearance in the WWE for Wrestlemania or the day after.

Previously, it was reported that since Lesnar announced his retirement with the UFC that he was free from any contractual obligation with the company.  Lesnar’s return to the WWE can only help the company that’s looking to make a big splash with its biggest event of the year.  Lesnar is in Miami, the site of Wrestlemania, and the rumors are flying about when/if Lesnar will make an appearance.

Payout Perspective:

Lesnar’s return to pro wrestling has been rumored since his run in with the Undertaker after losing his title to Cain Velasquez at UFC 121.  For the WWE, it’s a risk considering Lesnar’s health.  Even though the WWE is scripted, Lesnar still has to physically perform in the ring. But, Lesnar can be a big draw considering name recognition and his history of being a PPV draw.  This should appeal to the WWE as it can only help its PPV buys as well as provide some buzz for building its network.

Despite a delay in its plans to get a network off the ground, the WWE is still working on developing an over the air network. Originally, the WWE had planned the network to launch in conjunction with Wrestlemania this Sunday.

The WWE’s CMO, Michelle Wilson, indicated to the News Times (a local paper in Connecticut) that the WWE is in late stage negotiations with a distributor.  Its goal is to reach 50 million viewers with its network.  Wilson stated that the WWE would charge a subscription fee from each distributor.  Wilson’s comments addressed concerns in a New York Post article which identified the delay for the network noting the difficulties faced by the WWE.

The WWE recently posted a disappointing 4th Quarter with substantial losses from its film division – another WWE venture which has been the brunt of the financial freefall by the company.  It also spent $4 million on building the network in Q4.

But the fact remains that the network must turn a profit sooner than later.  Analyst Michael Kupinski emphasized the need for this to the News Times:

“It appears that the company will bear much of the cost. They have soft fundamentals, and the cable channel could lose money for a period of years,” he said, adding that having a financial partner would help. Kupinski had previously said developing the new cable network could cost $10 million to $15 million.

The network would need to convince distributors that it would attract viewers and advertisers for it to catch on. It may be hard to attract a financial partner with the current economic climate and the fact that the WWE, like the UFC, enjoys control over its product.

Payout Perspective:

Looking at the financial losses the WWE’s film division has had would give pause to distributors and investors about the potential success of the WWE network.  It appears that the launching of the network at Wrestlemania was ambitious at best.  Despite great ratings from its television shows, producing 24/7 content will need to attract more viewers than its core wrestling audience.  While the WWE owns a vast library (which would be great for nostalgic wrestling fans), original content and WWE films might not get the job done. The WWE is cultivating its content on its YouTube channel but we will see if this translate to over the air success. Time (and its balance sheet) will tell whether the network will get off the ground and when.

With Wrestlemania one week away, the WWE is pulling out all the stops in ensuring that the biggest event of its year gets the full promotional treatment. The WWE is airing a one hour “Once in a Lifetime – Rock vs. Cena” special utilizing NBC Universal’s television power.

The first ever WWE behind-the-scenes-style look at the two main eventers will also air on Syfy, Bravo, E!, Oxygen, G4, Style, NBC Sports Network, mun2, CLOO and Universal HD.

Via WWE press release:

This lifestyle special is a candid and compelling look at two of the biggest icons in sports entertainment history as they prepare for their Once in a Lifetime main event match. From touring and training on the road to Hollywood movie sets to the 54th Annual Daytona 500, this in-depth look with exclusive footage gives viewers unprecedented access and a glimpse into the personal lives of these men.

The special will premiere on the USA Network one hour before Raw this Monday night.

Payout Perspective:

Putting aside your personal thoughts about pro wrestling, this is an interesting look at how the WWE has been influenced by the UFC. The WWE has had behind-the-scenes looks at wrestlers. Most of these happen when they are doing charity work or are visiting the US Troops in the Middle East. It will be interesting to see how the WWE will produce this special as it’s being billed as a “countdown” style look at Rock and Cena. The television special also shows the advantage of the WWE’s partnership with the NBC Network as it can play its special over multiple network partners. Sound familiar? The UFC has taken advantage of the network synergy in promoting its events. Of course, having the Rock as one of its key characters in the special will help with ratings.  Is this a new level of promotion for the WWE or is the WWE concerned with how the PPV will do next week?

The WWE announced its Q4 2011 results on Thursday and the earnings were described as disappointing. WWE earnings were lower for the fifth straight quarter.

The main culprit for the poor performance of the company was its film division and television licensing decisions according to Vince McMahon. In addition, costs from starting the WWE Network were cited as reasons for the softening of its earnings.

With respect to its film division, McMahon indicated that the company would utilize different strategies to try to bolster the division’s profitability but if that did not work, the WWE would be out of the film business. The WWE lost $12.2 million in the Q4 alone due to film impairment charges.

The television licensing decisions were based on the WWE’s decision not to distribute two of its properties, WWE Superstars and NXT, which have been showing online.

Via WWE press release:

Revenues totaled $112.9 million as compared to $122.5 million in the prior year quarter. Operating loss was ($13.1) million as compared to Operating income of $14.4 million in the prior year quarter. Net loss was ($8.6) million, or ($0.12) per share, as compared to Net income of $8.1 million, or $0.11 per share, in the prior year quarter. Excluding the impact of film impairments and network related expenses in the current year quarter, Adjusted Operating income was $3.1 million as compared to $14.4 million in the prior year quarter. Adjusted Net income was $1.8 million, or $0.02 per share, as compared to $8.1 million, or $0.11 per share, in the prior year quarter.

The WWE spent $4 million in Q4 on the creation of the WWE Network. However, the position on rolling out the new network was uncertain.

On the positive side, McMahon said during the earnings call that live attendance was up 7% for the quarter. Yet, this may be due to the fact that there were 11 fewer events in the quarter.

The PPV revenues were up 2% from 2010’s Q4 and up 6% over 2011. However, this can be seen as the result of a strong Wrestlemania PPV which is likely due in part to the return of Dwayne “The Rock” Johnson.

(H/t: Seeking Alpha)

Payout Perspective:

While overall revenues were up from 2010, it was mainly due to the success of Wrestlemania 27. It also looks like the WWE may need to see a significant turnaround if it wants to remain in the movie business otherwise it may continue to see huge losses. The gloomy numbers may mean some downsizing of the WWE talent roster which traditionally comes after Wrestlemania.

The other notable news coming out of the earnings call was McMahon’s description of the WWE Network as “potential creation” of the network. This is interesting considering the prior hype for the network which included commercials for it on Raw and the initial belief that it would roll out by Wrestlemania this year. It looks like the WWE wants to make sure it gets it right before unveiling it. However, its sunk $4.0 million alone this quarter into the creation of the network and has committed staff and other startups to this venture in prior quarters.

It will be interesting to see how the WWE will try to turn things around. Based on the great  performance and impact last year’s Wrestlemania had on the WWE earnings, it will hope that this year’s Wrestlemania on April 1 will produce more of the same.

The WWE announced its Q4 2011 results on Thursday and the earnings were described as disappointing. WWE earnings were lower for the fifth straight quarter.

The main culprit for the poor performance of the company was its film division and television licensing decisions according to Vince McMahon. In addition, costs from starting the WWE Network were cited as reasons for the softening of its earnings.

With respect to its film division, McMahon indicated that the company would utilize different strategies to try to bolster the division’s profitability but if that did not work, the WWE would be out of the film business. The WWE lost $12.2 million in the Q4 alone due to film impairment charges.

The television licensing decisions were based on the WWE’s decision not to distribute two of its properties, WWE Superstars and NXT, which have been showing online.

Via WWE press release:

Revenues totaled $112.9 million as compared to $122.5 million in the prior year quarter. Operating loss was ($13.1) million as compared to Operating income of $14.4 million in the prior year quarter. Net loss was ($8.6) million, or ($0.12) per share, as compared to Net income of $8.1 million, or $0.11 per share, in the prior year quarter. Excluding the impact of film impairments and network related expenses in the current year quarter, Adjusted Operating income was $3.1 million as compared to $14.4 million in the prior year quarter. Adjusted Net income was $1.8 million, or $0.02 per share, as compared to $8.1 million, or $0.11 per share, in the prior year quarter.

The WWE spent $4 million in Q4 on the creation of the WWE Network. However, the position on rolling out the new network was uncertain.

On the positive side, McMahon said during the earnings call that live attendance was up 7% for the quarter. Yet, this may be due to the fact that there were 11 fewer events in the quarter.

The PPV revenues were up 2% from 2010’s Q4 and up 6% over 2011. However, this can be seen as the result of a strong Wrestlemania PPV which is likely due in part to the return of Dwayne “The Rock” Johnson.

(H/t: Seeking Alpha)

Payout Perspective:

While overall revenues were up from 2010, it was mainly due to the success of Wrestlemania 27. It also looks like the WWE may need to see a significant turnaround if it wants to remain in the movie business otherwise it may continue to see huge losses. The gloomy numbers may mean some downsizing of the WWE talent roster which traditionally comes after Wrestlemania.

The other notable news coming out of the earnings call was McMahon’s description of the WWE Network as “potential creation” of the network. This is interesting considering the prior hype for the network which included commercials for it on Raw and the initial belief that it would roll out by Wrestlemania this year. It looks like the WWE wants to make sure it gets it right before unveiling it. However, its sunk $4.0 million alone this quarter into the creation of the network and has committed staff and other startups to this venture in prior quarters.

It will be interesting to see how the WWE will try to turn things around. Based on the great  performance and impact last year’s Wrestlemania had on the WWE earnings, it will hope that this year’s Wrestlemania on April 1 will produce more of the same.

The WWE Network is set to launch on April 1st of next year. The Sports Business Journal reports that its in talks with In Demand and other cable operators to carry the network.

The WWE expects to reach 40 million homes with its network which would have the same reach as Fuel TV and the Fox Soccer Channel. However, it must reach carriage agreements with satellite and cable operators including Cox, Comcast and Time Warner.

Its expected that the WWE will follow the same model as other sports networks by having live events on its network. Notably, some of the WWE’s current PPVs will move over to the network.

The SBJ article notes that the WWE is considering programming beyond wrestling and there’s a possibility it would include some team sports.

In addition to the WWE Network on satellite and cable, it will also have a channel on YouTube.

Payout Perspective:

As the WWE network takes shape, it will be interesting to see how many PPVs will migrate to the network. As Cageside Seats suggests, the converted PPVs could be a value add to attract viewers to the network. By subtracting PPVs and leaving only its big draw PPVs (i.e., Wrestlemania, Survivor Series, Summerslam and Royal Rumble) it could help bolster PPV buys.

Its interesting to note that the UFC’s model differs from the WWE as the UFC relies on its PPVs whereas it appears that the WWE will focus on building its network through moving its PPVs to the WWE network. This is a good idea considering the content of some of the WWE PPVs were not PPV quality. As such, it has been reflective in its PPV buys.

As the WWE Network is taking shape, the biggest hurdle seems to be striking a deal with the satellite and cable operators to come to a deal that will land it on a tier that would be attractive to the casual viewer. Comcast has taken the lead in negotiating a deal on behalf of the WWE. This is likely due to the popular WWE Raw being on the USA Network, a Comcast property.

The WWE announced its 3rd quarter earnings this past Thursday in a conference call hosted by WWE Chairman Vince McMahon and other WWE executives. Despite beating analysts expectations for Q3 earnings, net income for WWE fell to $10.6 million vs. $14.3 million in 2010.

The WWE announced that revenues totaled $108.5 million as opposed to $109.6 in 2010. A decline of 1%. Analysts expected adjusted net income of $0.15 per share. WWE announced its adjusted net income as $0.19 per share.

One of the bigger questions on the earnings call was the WWE Network announced to debut in 2012. Notably, there was no talk about the recent announcement that there would be a WWE channel on YouTube. So, it appears that the WWE will go forward with an over the air network in addition to its YouTube channel.

McMahon and other WWE executives were quite vague regarding the plans for the WWE Network. But here are some tidbits.

Via Seeking Alpha:

(McMahon) Capital expenditure is about $10 million to $15 million mostly in equipment and construction for our network. And we believe that, obviously we have finally turned the corner on where we are with our network, and we’ll soon be making a very big announcement as it relates to that.

So that we are generally speaking of where we are with the quarter this year. And notwithstanding that, again, we are taking advantage as we always do with all of our strategic opportunities as well as I’ve said before, including launch of the WWE Network, so with that we can achieve meaningful growth as far as that in other aspects of our company is concerned.

We expect our fourth quarter 2011 results will reflect $46 million in startup operating expense and $10 million to $15 million in capital expenditures for equipment and construction. This investment will provide space for additional staff and production equipment and allows for a redesign of enhanced interactive website to support a full range of network programs.

- McMahon indicated that the network would not partner with distributors. The network will be wholly owned by the WWE.
- WWE entered into a revolving credit agreement of $200 million based on favorable conditions in capital markets. Although the WWE indicated no plans to borrow at the time, it could utilize the agreement for the WWE network.

Other information:

- Q3 saw an impairment charge of $5.1 million coming from its film division
- PPV buys increased domestically by 3%, TV ratings were flat compared to Q2 and live attendance saw a 6% decline.
- Excluding the impact of the film impairments in the current quarter, Adjusted Operating income was $21.0 million as compared to $20.3 million in the prior year quarter. Adjusted Net income was $14.1 million, or $0.19 per share, as compared to $14.3 million, or $0.19 per share. (via WWE press release)
- Although the WWE announced a shift in its business strategy earlier this year. there are no threats of a takeover.
- Analysts actually take issue with the WWE’s creative team as it cites the lack of taking advantage of wrestler C.M. Punk’s anti-hero storyline. However, the return of The Rock to the WWE this quarter, it should help with ratings. McMahon addressed the fact that the WWE could address these “creative challenges”

WWE stock price was up to $10.70 but closed down slightly for the week at $10.58.

Cageside Seats reports that the WWE Network is coming to cable systems in 2012. A teaser played on this week’s episode of Monday Night Raw on USA and a story followed on WWE.com.

Via WWE.com

It’s the WWE Network. And, as the world learned this week, it’s on its way in 2012. All we know is that it’ll be a brand new day for watching the greatest matches, moments and Superstars in sports-entertainment history.

The MMA tie-in here is that it is being reported by the Wrestling Observer that the WWE pushed plans for the announcement of the network as it was feared that the UFC would jump the WWE’s plan and announce its own network. Concerned that it would be perceived as a copycat, the WWE made the announcement this week.

�

Payout Perspective:

There are three things that don’t mesh with the theory that the WWE rushed the announcement of its network. First, the UFC announced its partnership with Fox on August 18th. Secondly, Vince McMahon noted that a WWE Network was coming in an early August company earnings call. While he did not state that it was coming 2012, he did state that the network was imminent. McMahon indicated that prior to the UFC-Fox deal. Finally, Dana White and Vince McMahon met this summer as White paid a visit to McMahon at WWE headquarters. While both blew off the media for the reason for the visit, its now obvious that a portion of their get together was to discuss the future of their respective businesses.

Notwithstanding the theory, the Wall Street Journal story about the UFC seeking to purchase the G4 network, the near-deal with NBC Sports and the Fox deal all point to the possibility that the UFC could have its own network. Seeing the possibility, the WWE felt compelled to make the announcement. Its interesting considering the fact that both White and McMahon have made it clear that the respective organizations are not competitors. UFC is sports, WWE is entertainment according to both heads. Yet, the WWE cannot help but be concerned about the UFC coming to Fox. The Ultimate Fighter series will air the same night as WWE’s Smackdown. As a result, Smackdown aired live last Tuesday with the prospect of moving from Friday to Tuesday presumably to avoid competing. Although both parties claim not to be competitors, both seek the same male demographic audience.

As for the network, the teaser on WWE.com shows the extent to which the WWE could use for programming. The WWE has much more of a library to carry a network as opposed to the UFC. Basically owning the wrestling universe: WWE, WCW, ECW, AWA, et al. there is ample content for a network. Thinking about the network, one could only imagine watching Hulk Hogan’s Rock n Wrestling on Saturday mornings once again.  But, from a business standpoint, there are still many logistics that need to be answered regarding distribution.  One need only look to today’s headline of the Tennis Channel-Cablevision/Verizon dispute over carriage fees and tier placement to see the obstacles ahead for a WWE Network.  We will see how soon, or how late in 2012 the network comes to fruition.

WWE announced its 2nd quarter earnings on Thursday as it beat analyst expectations. In its earnings call, Vince McMahon dismissed any partnership with the UFC for a television network.The question came as a result of Dana White’s recent visit to WWE headquarters. White was vague about the reason for his visit while McMahon indicated that the UFC head’s visit was purely social.

The second quarter ended June 30th and included this year’s Wrestlemania, which contributed to the financial success for the company this quarter. Among the other findings:

Wrestlemania was big for the WWE this year as it offset some of its losses (mostly in its home video sales unit). Its likely that the return of the Rock was the single factor behind that. The WWE All-Stars video game was another key positive for the WWE revenue as sales of the game have been strong. July’s WWE PPV “Money in the Bank” was 20% above its initial projections. The CM Punk factor probably contributed to the numbers. McMahon indicated that overall PPV revenue for the WWE is on the upswing. RAW TV ratings are up 3% from 2010. The WWE will begin a one hour WWE program prior to RAW which McMahon believes will contribute to revenue. Although live event attendance is down for 2011, there are positive signs of fans coming back.

McMahon spoke about the WWE Network (via Seeking Alpha):

From a content strategy, finally we’re rolling out the WWE Network after all these many years. In terms of putting it all together, we have I think the most compelling startup network in the history, which is saying a great deal, because I understand what other networks have started out as, we have an extraordinary leverage with all the content distributors.

And again, we’re finally rolling that out. And with meetings coming up actually this week and next, so we’re very proud of that. And we think again that’s going to be a significant bottomline number to us going forward.

McMahon was asked about whether he cared about the potential of the UFC having its own television network (via Seeking Alpha):

No, frankly I think they fell on their butt recently, trying to do network with NBCU Comcast. I don’t know if it makes any sense for them. I can’t speak to that, but it makes a great deal of sense for us. Again, they’re totally different than we are. We are in the entertainment business, which gives us formal leverage as far as networks are concerned.

He also dismissed any partnership with the UFC as he distinguished the UFC as sports and the WWE as entertainment. This mantra was stated both times when questioned about the UFC and it was said during the WWE’s feature on Bloomberg TV.

Most analysts list the WWE stock as most list it as a hold.

For those interested, the transcript of the earnings call is here.

Payout Perspective:

The WWE’s earnings announcement came on the worst financial day since 2008. Its easy to see that the addition of The Rock at Wrestlemania and its new WWE All-Star game, which features new and old WWE wrestlers, were big reasons for its earnings success this quarter.  Also, RAW ratings continue to impress. It was interesting to note that while McMahon may respect the UFC, there is no way that it partners with the UFC on a network.

McMahon made some interesting comments about the UFC as he  questioned whether a network would be the right direction for its business. He noted the UFC “falling on its butt” with “trying to do network with NBCU Comcast.” An interesting take and we will see what will happen with the UFC’s next television deal. With the news of the UFC-Fox Latin America television distribution agreement, there is speculation that Fox may be the new leader for the UFC television deal. Stay tuned.

The season finale of WWE’s Tough Enough scored 2.86 million viewers according to Television By Numbers. It received a 1.0 rating for Adults 18-49.

In the end, TE contestant Andy ousted the more polished Luke to win the TE contract. The ending was drawn out way too much as it segued into WWE’s Raw.

Episode 1 – 3.33 million viewers
Episode 2 – 2.785
Episode 3 – 2.196
Episode 4 – 2.452
Episode 5 – 2.438
Episode 6 – 2.471
Episode 7 – 2.112
Episode 8 – 2.562
Episode 9 – 2.437
Episode 10 – 2.860

Payout Perspective:

Solid ratings for the rebirth of the reality series. The last episode was the second highest of the season although it went up against the Stanley Cup Final. Of course, the Stanley Cup was shown on Versus and not on NBC. Still, very good ratings.

Television By Numbers reports that the penultimate episode of WWE’s Tough Enough received 2.437 million viewers for and a 1.0 rating in the A18-49 demographic. This is a slight decrease from last week’s 2.5 million.

The contestants were finally widdled down to two with the ex-MMA fighter and TUF contestant Jeremiah Riggs being the last one to be eliminated. Riggs lost an elimination bout during the Rampage-Griffin season.

Payout Perspective:

Episode 1 – 3.33 million viewers
Episode 2 – 2.785
Episode 3 – 2.196
Episode 4 – 2.452
Episode 5 – 2.438
Episode 6 – 2.471
Episode 7 – 2.112
Episode 8 – 2.562

Episode 9 – 2.437

Interesting to see the downturn in Monday’s ratings. Of course, it was Memorial Day so many viewers may have been returning from a long holiday weekend and missed this episode. The last episode will run opposite the Stanley Cup Final Monday so we may not get a strong finish to a solid season.