WWE News WWE News: Important L.A. Times article on WWE business - removing "wrestling," expansion plans, McMahon interview, TV Network update, is WWE looking to sell?
Apr 7, 2011 - 12:21:19 AM
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By James Caldwell, Torch assistant editor
The Los Angeles Times covered WWE's current business in a feature article following WrestleMania that includes quotes from WWE CEO Vince McMahon about the state of the company. The following are key highlights of the highly newsworthy article on the future of the company.
-- The Times article starts with an assessment of WWE dropping the name "World Wrestling Entertainment" and simply going by WWE, with emphasis on removing "wrestling" from the company's name. It's not surprising, as WWE has often talked in corporate settings about believing "wrestling" doesn't give them "credibility" as a media company.
Vince McMahon addressed the "name change" to the Times: "I think every brand has to re-create itself. I want everyone to look at us in a vastly different way than they have."
-- According to the Times, McMahon is looking to go on a "spending spree" acquiring companies that are involved in "production, live entertainment, and branding."
McMahon cited WWE having a clean balance sheet with "virtually no debt" to allow them to spend. Not mentioned in the Times article are concerns over WWE's dwindling cash on-hand due to poor business the past two years and dividends paid out ahead of growth.
"To me, it is anything that is out there," McMahon said about what WWE might look to acquire. "We can take on a ton of debt."
-- WWE is still targeting 2012 to launch its own WWE TV Network. The Times specifically mentioned Verizon as a media distributor WWE recently had discussions with.
On a related note, McMahon said WWE is looking to market its "expertise in producing live events" to draw additional revenue, which suggests WWE expanding its revenue sources.
"No one does television production better than we do, it's damn near the Olympics," McMahon said. "We know more about live event touring than anyone in the United States."
-- With all of the talk of expanding WWE's business reach, the Times went back to the basics of concerns with WWE's core pro wrestling product that's offered weekly on TV, monthly on PPV, and regularly on house shows.
"I think that the most important thing right now is the return of the health of the core business," said Jay Kaplan, portfolio manager for Royce & Associates, which holds 9 percent of WWE stock. "One of the market's big concerns is are they losing market share to real fighting (MMA)."
-- At the end of the article, the Times poses an interesting question of whether WWE is looking to grow its portfolio to potentially sell the company. McMahon shot down the notion.
"We're very independent-minded," he said. "I don't see that happening."
The Times noted McMahon is 65-years-old and said there "hasn't been a clear heir apparent since his wife, Linda, resigned."
The article does not reference the power couple of Stephanie McMahon & Triple H that are expected to be next in power whenever that would happen.
Caldwell's Analysis: There's a lot to digest in the Times article. On one hand, WWE does need to re-focus on its core competency of building a wrestling product that makes people want to spend money on it. WWE can take away "wrestling" as part of a re-branding effort to sell the company to the outside business world, but there's a still a ring, there's still a conflict, there's still good vs. evil storyline, there's still 13 PPVs per year, and there's still a quest for titles. WWE had to put together a very short-term build for this year's WrestleMania and now they're back to where they were pre-Rock/Taker/Hunter/Austin/HBK.
On the other hand, any good business has to find new ways to make money. WWE lending its expertise in production to other companies or even expanding to live music/theater touring to send a crew out on the road every weekend could be a way to expand the company's revenue reach.
It's unfathomable to picture anyone but a McMahon running WWE, but at some point with the current state of the product without the Nostalgia & Attitude Era acts propping up the product, there's certainly more than a whisper that fresh views internally in WWE would benefit the company. There are too many yes-men in WWE's inner circle placating McMahon.
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