The Hamilton Ave Journal 10.04.08: Volume 1 – Issue 54

As with stocks, here in the Journal we track the progress of television ratings. If ratings are the barometer by which we judge the product, then over the course of 52 weeks we should be able to see patterns, trends, and anomalies. Please note that gaps in the chart below are due to data not being released/available.

For the week ending Thursday October 2, 2008, here are the current standings of our shows:

RAW
Close (This Week’s Rating): 3.1
Open (Last Week’s Rating): 3.1
Percentage Change: UNCH
52-Week High: 4.1
52-Week Low: 2.5
All Time High: 8.1
All Time Low: 1.8

SmackDown*
Close (This Week’s Rating): 2.4
Open (Last Week’s Rating): 2.3
Percentage Change: ▲ 4.3%
52-Week High: 2.9
52-Week Low: 1.6
All Time High: 5.8
All Time Low: 1.0

What are the top ten selling items for the WWE? From WWEShopZone.com:

1. Hardys Purple Logo Pendant ($10)
2. D Generation X Anytime Anywhere Sweatshirt ($40, on sale $12.98)
3. Jeff Hardy 2008 YOUTH Halloween Package ($84.49, on sale $43.99)
4. Shawn Michaels Creation Sweatshirt ($40, on sale $12.98)
5. Stone Cold Steve Austin Destroyed That Sweatshirt ($40, on sale $12.98)
6. Jeff Hardy 2008 Halloween Package ($87.49, on sale $46.99)
7. John Cena Beware of Dog Sweatshirt ($40, on sale $12.98)
8. WWE Black Gift Bag ($3)
9. Undertaker Smoke Sweatshirt ($40, on sale $12.98)
10. Triple H Grey Skull Sweatshirt ($40, on sale $12.98)

And the clearance sale continues! 80% of the Top Ten consisted of items that were discounted, thus hurting bottom line margins. Additionally, 80% of the items were under $13, making this one of the lowest per item average of any Top Ten list. Overall, the WWE is making sales and clearing out old inventory, but the old inventory is dominating sales. For one week this would not be that large of an issue, but this has been going on for a month. And what are the new items that the WWE is releasing to counter this and start new sales? Diva cell phone socks, of course.

This past week, TNA has upgraded their shop site to a new format. Although sharper and easier to navigate, the new site lost the ability to search for the Top Ten sellers. There is a list of Top Six best sellers, but this is an all-time list and not a weekly update. The Journal will be speaking with the ShopTNA.com team to see if a new list can be produced and apologizes for the lack update this week.

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.

From the commentary section last week, Guest#6413 wanted to talk about how at risk the wWE was in 1997:

It’s just a little hard to believe they’d risk going out of business on something that could have failed or only been somewhat successful.

April 1997 – March 1998
Earnings: $126,231,000
Profit of $8,466,000

The WWE was, no doubt, beginning to improve business before the involvement of Tyson. Though these numbers are suspect (the WWE was a private company and released those numbers as part of their prospectus in 1999 for going public) they represent what was most likely going on. The loss turned into profit in 1996 was mostly through cost cutting (layoffs, closing of facilities, smaller tours, lower contracts, etc…), but in 1996/1997 business was genuinely improving. That said, the Tyson deal not only cost millions of dollars that the WWE did not have on hand and had to use their line of credit to pay, but could have backfired. Although the WWE ended profitable for the year, if Tyson’s involvement did not bring in new viewers and instead drove away viewers and buyrates, the story would be completely different.

Another no-name feedback person in Guest#2969 also wanted to chime in on the subject:

Vince claimed he couldn’t pay Bret Hart (who hated the direction of the product and was vocal about it) around $1,000,000 a year even though business was better than it was when that figure was agreed upon by WWE and Bret. Then a month after Bret leaves, WWE offers Tyson around $5,000,000 for a few appearances.

The financial situation wasn’t great like it would become but the company almost going out of business seems like a stretch after WWE had survived years much worse than 1997 was.

The company was still on precarious ground. You cannot look at one year and say that is the be-all-end-all. In order to survive the prior few years and pay Tyson, the WWE took on a large amount of debt. Although the official reason for the public offering in 1999 was to raise capital to expand WWF.com and upgrade the production facilities on Hamilton Ave in Stamford, CT, that hardly totals $172.5 million. The WWE was still carrying a large amount of expensive debt and needed to get a lot of it off the books. The carrying costs of debt are much more expensive then equity, and the WWE successfully converted those issues and has not looked back since.

On another subject related to the WWE was the low attendance for their recent PPV. King chimes in with:

I am extremely disappointed in this Quicken Loans Argument. You are very good with research and I am shocked that you have not pointed out the MAIN reason why that arena was so empty and why they sold out a TV taping there months ago.

The Cleveland Browns were heavily hyped going into their home opener on the very same day…. against Dallas!!

Except for the fact that the Journal did cover that point several weeks prior, which is why it was not covered again last week. Instead, the Journal just wrote in last week’s issue “perhaps there were too many things going on that day already” to cover that point. Although that may not be as specific as you would care for, but this story is now a month old and there is no need to rehash every exacting detail that is already documented.

As for your question on why the WWE would schedule against such an important football game, it has to do with scheduling. The WWE booked the venue and the arena before the NFL finished their schedule for the year. The WWE was basically stuck with the arena and decided to take their chances rather than move the venue.

Off this subject and on to merchandise, Brett wants to know:

I was hoping you could shed some light on something for me. WWE has a brand of shirts called “top rope” luxury apparel, and they are more expensive. What’s the deal?

The WWE is attempting to diversify their products and come in with some higher margin items. These two-sided t-shirts cost about $45 each and are in the “Ed Hardy” vein of designer t-shirts. The WWE tries to market to many different segments and one of the growth areas right now is designer t-shirts. Although more goes into creating these shirts (pre-washing, better material, additional printing), they are still essentially t-shirts with much higher margins.

Moving from merchandise to ratings, yet another no-named Guest#7872 says:

To think TNA is going from their current 1.0’s to pushing 1.2, an obvious near 20% increase, by December, is very obviously merely wishful thinking.

They’ve been very stagnant at that 1.0 figure for just about the whole time they’ve been on Spike now and nothing they’ve done to get new viewers has worked. Why would they get new viewers now?

random responded with this point:

Well they have got a 1.2 several times at one point a few weeks in a row so a 1.2 average is possible.

Yes, we are not talking about getting a 1.2 every week, but for a while they were close to that average. In January 2008 TNA averaged a 1.17, so the projection for December 2008 is a 1.18. That is not much of a growth but pretty much in line with where they were at the beginning of the year. TNA also averaged near a 1.1 until mid-April when ratings dipped. Despite the dip in ratings, they have recovered greatly during a traditional down time for TNA, making it seem like they are actually in a growth time. Reaching just shy of a 1.2 average before the end of the year is not only plausible, but actually a point that TNA was at just a 9 months ago.

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!!