CALDWELL'S TAKE CORNER CUBE WEDNESDAY 5/14 - Future of WWE's international expansion requires more international talent May 14, 2008 - 12:10:17 PM

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By James Caldwell, Torch columnist

Updated daily from the corner cubicle, Torch columnist James Caldwell's weekday blog focuses on hot topic current events and other items of interest from around wrestling.

Updated Wednesday, May 14, 2008

While poring over WWE's latest financial numbers for a story in this week's Torch Newsletter, two things occurred to me. One - WWE has tremendous growth potential overseas. Two - WWE has a ton of cash on hand.

First conclusion is quite obvious. Three years ago, international business saved WWE's back sides when domestic business was down. Two years ago, international business really took off as WWE's product became a huge hit in Europe. One year ago, domestic business finally started to catch up to international growth with the Kids Movement driving toys, merchandise, and assorted apparel sales.

Now, WWE is looking to turn that international growth into a significant portion of quarterly revenue. They're going to sacrifice small market domestic house shows for more international dates. They're opening more distribution centers for delivering merchandise faster and more efficiently. International customers are starting to pay for the premium PPV product when they were getting it for free previously.

WWE's global expansion is slowly coming into form. It's not just a novel concept to boost the bottom line, but rather The Future of WWE's business. Domestic is still the company's bread and butter with Top Five cable ratings, two-thirds of PPV revenue coming from U.S. customers, and an average of 85 domestic live events per quarter.

But, considering how many untapped markets there are outside of the U.S., and considering how much free cash WWE has on hand, there are unlimited possibilities for expansion. WWE has barely set foot in China and India, which have billions of people to market the product to.

Let me bring up TNA for a second. TNA is still in a growth stage domestically, but eventually, they'll have an opportunity to have their own international expansion. I bring up TNA because there are endless corners of the globe that could be wrestling markets. TNA will have an opportunity to fill in the gaps where WWE chooses not to reach, or where WWE blazes the trail and TNA follows.

Back to WWE, where the buzz last year was about starting new promotions overseas. That idea has fizzled out, most likely because WWE realized their current talent pool of wrestlers, agents, and officials is too shallow to draw from.

A more plausible business plan is setting up training facilities in overseas markets to find a variety of talent. Major League Baseball ran with this idea a long time ago by helping set up baseball academies in Latin America, which have produced countless All-Star hitters and pitchers.

Great Khali has talked about a training facility in India during his vacation/trip. Certainly, part of that is Khali talking himself up to say the right things during his current status of India's favorite son, but if WWE wants to create a new pool of talent for Raw, Smackdown, and ECW, they might want to look beyond Florida.

I think of Yao Ming playing for the Houston Rockets. Millions of people back in China watch his regular season NBA games and follow his every move closely. And in Japan, millions of people follow the likes of Ichiro and Matsuzaka playing baseball in the U.S.

WWE incorporating more international stars on the main roster will create more interest in those home countries for the product - TV viewership leading to live event tickets sold leading to merchandise revenue. With Khali on TV, ratings in India have increased 10 percent over the last year. 15,000 people turned out for a Khali meet-and-greet this past weekend.

WWE's future internationally isn't just taking the product overseas, but also incorporating overseas talent on the main shows. With the right capital investments - putting all that free cash to work - WWE can set up shop in China, India, Europe, and Latin America to find, train, teach, and develop international stars that will drive the future of domestic and international business.

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Updated Tuesday, May 13, 2008

First off, I want to congratulate Jamie Penick on becoming the new managing editor of our sister site, MMATorch.com. Penick is my partner in crime every other week on the Raw audio post-game show, and he is already busy at work on the site. If you're an MMA fan, I hope you'll check out the revamped site in the weeks and months to come.

On to Raw. WWE wasn't about to hold back on this show. They weren't thinking about holding off the heavy hitters until after Judgment Day, as there was a clear sense of urgency to this show after last week's Raw continued the disappointing ratings slide.

Bringing back Jeff Hardy and John Cena, while keeping Triple H virtually non-existent until the final segment, will give WWE a very strong indication of Hardy and Cena's collective impact on the viewing audience.

On paper, it reads like WWE put more effort into advancing TV storylines rather than trying to sell the Judgment Day PPV on Sunday. Quite the contrary, as the entire show seemed to create momentum going to Judgment Day with each storyline from top-to-bottom advancing to some degree. WWE kept its eye on the ball building to a crescendo in the final segment that sold two of the main matches on Sunday.

What seemed like a completely dead-in-the-water PPV prior to Raw instantly became a show worth a second look on Sunday evening for whether it's worth $40 and three hours. It helped that the crowd in Detroit was red-hot throughout this show. John Cena certainly did his job in the opening segment getting folks in the building fired up for two hours of Raw.

I hold to the theory that one of the keys to selling a PPV is the interest level of the live audience on the final show before the PPV. If the crowd seems lethargic or indifferent when WWE is trying to pitch their top storylines going into a PPV, then undecided home viewers are most likely going to balk at the idea of another $40 on a blah product. If the live audience is hot for everything, then undecided home viewers are going to lean a little more to ordering the PPV.

The momentum of an energetic John Cena return, a memorable Jeff Hardy return, a poignant sweet chin music from Michaels, the women's division advancing, Cade turning on Murdoch, a very hot main event between Orton and Cena, and two of the top PPV matches being sold at the end of the show created a strong sales pitch that wasn't there the previous two weeks.

WWE brought out the heavy hitters on Monday night, and in the process, they sold a PPV better than they had at any point the previous two weeks. WWE had an eye on delivering a better TV product, but they also gave themselves an opportunity to earn additional buys that weren't there prior to last night.

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Updated Monday, May 12, 2008

This time last month, we were talking about TNA having an opportunity to turn the corner after the Lockdown PPV when they presented the template of how to promote serious pro wrestling. In the weeks that followed, TNA returned to what they know - confusing gimmick matches, zany angles, and A.J. Styles as a goofball character.

That culminated at Sacrifice, which turned into one of those forgettable PPVs that wasn't particularly bad or insulting, but it wasn't good. It was what was expected, with TNA wanting to dip into the bag-of-tricks, while also trying to present a somewhat more serious product. They want to overbook because that's what they know.

As a result, Sacrifice delivered seven tag matches that were all very similar until the final match of the tournament, one giant structure monkey bars gimmick match featuring eight people, one battle royale/ladder match/head-shaving three-piece combo that featured ten people, and one three-way main event for the TNA Title with a de-pushed X Division wrestler replacing a former World champion. It added up to an overloaded show that was a blur by the end of the night.

TNA's TV ratings are reflecting a lukewarm response to a lukewarm product. The shows are fine; I'm not feeling stressed out after watching two hours of Impact. The current product mix just doesn't lend itself to a strong response one way or the other.

It starts at the top with Samoa Joe. During the pre-match introductions for the main event, the crowd response to Joe was indifference. Granted, it was the tenth match on a show that seemed to wear on the psyche with repetitive tag matches. There are only so many two-on-one beat downs and hot tags that fans can tolerate in one night. But, the response to Joe is indicative of fan response to the product right now.

It doesn't help that Joe has been presented on TV as overly-aggressive compared to calm and cool Kevin Nash. Joe yelling and screaming doesn't play well juxtaposed to the coolest man in the room. I'm tempted to call for a Joe heel turn, but that's falling into the same trap TNA falls into by writing a 10-chapter story that is missing chapters 2-9. That was the case with Awesome Kong's first match with the men, as there was no story behind the most-dominant heel on the roster mixing it up with the men.

It's obvious TNA doesn't want to give up its bag-of-tricks. The bag is like a security blanket that keeps the company aligned with the vision for let's-not-take-ourselves-too-seriously wrestling. When something unfamiliar, such as legit build-up to Joe vs. Angle at Lockdown creeps in, TNA knows exactly where they can turn for comfort.

Joe as a serious champion trying to have serious matches doesn't mix well with TNA's vision for attempted comedy and overbooking. It creates a strange mix that doesn't play well with audiences, as evidenced by the ratings trends the last four weeks.

I don't see this mix changing. TNA will continue to overbook and come up with more "concept matches". We know next month's PPV will feature yet another gimmick match with King of the Mountain. It's the reality of how TNA presents its product. Right now, it's not bad enough to be hair-pulling and worthy of tuning in for a trainwreck, but it's not good enough to be memorable and worth spending money on the product.

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