TJR: Recap of WWE Executives on Bloomberg TV & Eleven Thoughts on WWE Business
By John Canton
Follow me on Twitter at @johnreport
This will be a two part piece. First, you'll get recap of the 30 minute WWE segment on the Bloomberg TV show Enterprise. Immediately following that you'll get eleven thoughts from me on some of the things that were discussed on the show. There were some things I strongly agreed with. There were other aspects that I disagreed with. I think it's interesting to look at WWE from a business perspective instead of the creative viewpoint that we the fans usually look at.
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On the Bloomberg TV show Enterprise at 9pmET on Wednesday June 29th they interviewed various WWE executives including Vince McMahon, Stephanie McMahon-Levesque & Paul Levesque (Triple H). The interviews were conducted by Melissa Long.
The first person she talked to was WWE Chairman Vince McMahon.
- McMahon stressed the importance of live events. He talked about the sights & sounds being mind-blowing if you've never been before. He says he always puts himself in the shoes of the consumer. When Melissa asked about direct competitors he said there are no direct competitors. He mentioned that Ted Turner and Time Warner couldn't compete with them even with all of their vast resources.
- Vince McMahon: "We don't consider ourselves a wrestling company. We're an entertainment company."
- Vince McMahon: "I like to say that WWE is America's greatest export."
- He said UFC isn't competition because they're sport and "we are entertainment."
- He talked about the TV network and how that's something they need to get into to give their fans what they want.
- He said they just completed their first successful reality show. They mentioned on the show that it was likely there would be a season two. No references to previous Tough Enough seasons.
- He said that like a good Broadway play or movie you want to be able to feel what you're watching. He says that's what you get from a WWE live event.
The next person interviewed was George Barrios, Chief Financial Officer (CFO).
- Mr. Barrios said TV is the epicenter of everything else. It's how they build superstars and gain fans.
- He claimed that within 12-18 months they can launch the TV Network and they believe that it can be a successful venture. He stressed that network launches take a while. He talked about how there's complexity with external stakeholders, but that they are getting there.
(Commercial)
They returned to the show talking to Vince McMahon.
- He said it's not really a family business. He said his daughter and son in law are climbing up, but if they're not good at contributing to the business you won't be there. There was no mention of Shane McMahon.
- When his daughter Stephanie was a junior in college he sat her down to ask what she wanted to do in her life. She told him she wanted to be in the business.
They talked to Stephanie McMahon, the Executive VP, Creative Development & Operations.
- The host walked with Stephanie McMahon in WWE offices. Stephanie put on the headpiece that her husband HHH wore at WrestleMania a few years ago and how it was called the Skull King. She talked about looking at expanding the Skull King character for Triple H potentially by selling it, going into comic books, video games, etc. She says it would cater to 8-16 year old males most likely. It's available at WWEShop.com here.
- Stephanie says that she works with talent and produces talent. She talked about John Cena, Kofi Kingston (then the US Champion) and Triple H as they showed photos of them in the hallways of WWE Headquarters.
The host spoke with Triple H (Paul Levesque) and his wife Stephanie together.
- Melissa asked Triple H of his role in WWE: "What are you?" "A little bit of everything," says HHH. He says he can be a superstar, a corporate executive (even though it's awkward for him to say that) or backstage helping create new talent. He can also be directing, producing, helping write. Stephanie helped him say all those things. He said that it's part of the business and company to be involved in a lot of different things.
- It was mentioned that since April he's been leading the talent development team. He said he looks for charisma & personality. He says the business is like a puzzle where you have to be a wrestler, performer, talker, ad-liber and then ha that charisma, larger than life character. He thinks charisma is that biggest x-factor. You can't always teach somebody that.
- Melissa talked about WWE's global appeal by specifically mentioning Sin Cara. Hunter says Sin Cara is an amazing talent. He wears a facemask with no eyes, but he can see through it. That's a secret, he says. It's part of talent development - the group he's heading up - to create stars globally.
Triple H: "In every corner of the world people know what we do."
(Commercial)
As they returned from break, they focused on Vince McMahon again.
- Back from break they mentioned the Chris Benoit double murder suicide. What lessons have been learned? Vince says you're going to have individuals that are outside the norm and you have no idea they're outside the norm. He says it can happen with any company in any business. There's behavior that's outside of your control.
Vince McMahon: "We control their characters; we don't control their individual life."
- What type of a leader are you? Are you easy to work with? He said "you don't work for me, you work with me." He puts smiles on people's faces all over the world and that starts with people that work with him. Everybody works hard, but you hear laughter and it's an environment that people enjoy working in. He says that because he's so driven, some people may take things the wrong way.
- He says that WWE is successful worldwide because it's pop culture.
- Back to HHH & Stephanie, Hunter says it's a simple story because it's good versus evil in a ring. It's not necessarily cultural because everybody understands what they do and they love it. Stephanie says it's like gladiators fighting in the Roman times. Stephanie mentions that Abe Lincoln was a professional wrestler and not many people knew that. "Actually Vince wrestled him one time," says Triple H with a laugh.
- The host mentioned Vince's answer about it being easy to work with him. Hunter jokes that you could probably see steam coming from his head as he said that, intimating that it's not always true. Hunter pointed out that he beat Vince up many times and that "it's on DVD if you want to watch it."
- Hunter said when he first got there he always felt that that the company was working for the talent.
(Commercial)
Back from break they mentioned that WWE has a half billion dollar revenue.
- Barrios mentioned that the real driver of the business model is the various aspects that they use to generate money (live shows, DVDs, books, etc.). "It's like a mini Disney."
- He says that 2010 was the most profitable year in the history of the company.
- A stock expert said the upside is that their money from television and films is going to rise. He said the TV Network is a smart move because they'll get subscribers and networks backing them due to fans subscribing to their channel.
To close out the show they talked to Vince one more time.
- When the host asked if he would like to retire on a beach somewhere in Belize, Vince said he doesn't see himself ever retiring. He said that hopefully there will be people one day to tell him to step aside, but that he doesn't know when that would be. "Maybe they'll discover that I am senile." He laughed. The show ended with Vince saying he'll likely "die in the chair, as they say."
The 30 minute show ended there.
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Eleven Thoughts on the Bloomberg TV Enterprise feature about WWE
I have some extended thoughts on all of this. It interests me as a Business Administration graduate. The financial aspects of the business have always been something that intrigues me.
- The McMahon statement that live events drive the business is absolutely true. I like that. It's the foundation of WWE. Before TV, PPV and everything else it was the live events that made the company a success. They have blossomed from there, but the basis of the business is that they are a traveling road show that performs for fans around the world. To admit that and be proud of that is a great thing to hear.
- The "no direct competition" line probably raises a few eyebrows. TNA Impact Wrestling is on Spike TV every Thursday night, but obviously Vince doesn't feel threatened by them. I see Vince's point of view because they aren't the threat that WCW was. They don't have the money or the resources that Turner had. They aren't a threat to sign away talent with big money contracts the way WCW did (Hogan, Nash, Hall, Savage, etc.) in the late 1990s. In that sense he's right. They are competing in the sense that it's a wrestling show, but as we saw when TNA went on Monday nights they are not close to WWE's level right now and it's unlikely that they will ever be. That doesn't mean that TNA is a failure. They have had moderate success as the number two promotion in America for nine years now. The chances of them ever surpassing WWE is a bit of a reach at this point, though.
- I seriously question the claim that 2010 was the most profitable year in the history of WWE. I doubt it topped the very successful 1998-2001 years especially that made Vince McMahon a ridiculous amount of money and let the company to become publicly traded. I know that they run more live events now due to the two rosters, but I don't believe that statement to be true.
(Thursday morning edit: After looking into it more the statement is definitely true. Due to the amount of live events, sales from the website, DVD units shipped - which wasn't that prevalent in 2001 for example - licensing fees and other reasons the claim is accurate. Also the amount of live events in 2010 was over 350 while in 2001 it was just over 200. I apologize for questioning it. It's worth noting that in the 2000-01 fiscal year the wrestling profit was $84,981,000 but WWE’s share of the 50% of the XFL losses were $68,994,000. Total XFL losses for the league, which lasted one season, were $137,988 000, half of which was covered by NBC. From the wrestling side of the company that was the most successful year, so my claim is true in that sense. The XFL losses, however, do count and obviously can't be ignored.)
- No mention of Shane McMahon. Are you surprised? I'm not. He has moved on. WWE has moved on without him. I would love to hear what Vince would say if somebody asked him his true feelings about his son not working for him anymore. Is he upset about it? Is he okay with it? I have no idea. I'd love to know that answer.
- I think Triple H will be very good at his job as a talent evaluator. That's just a hunch on my part. He's one of the smartest wrestlers in the history of the business. His ability to step aside even though he could still be out there in the ring shows his willingness to try to develop others for the long term future of the company. While he did have his critics on his way up the roster in WWE, I think that comes with being a competitive guy.
- When Triple H said that everybody in the world knows what they do he's right. The language doesn't necessarily matter. It translates worldwide and that's a key to WWE's success. The growth of the company, especially in the two most populated countries in the world (China and India), over the last few years has been enormous. They travel all over the world. Both rosters are going on tours to South Africa, Australia and New Zealand over the next two weeks as proof of that. A ten year old kid in India might be confused by an NFL game because he doesn't know the rules. If he watches wrestling, though, he can root for the good guy to beat the bad guy just like the ten year old in America. That's where the business thrives. No translation needed. The action does the talking.
- The idea that UFC isn't competition is an opinion that I disagree with. They are competition in the PPV market just like boxing is. It's an area of WWE's business that has been in decline in recent years although the WrestleMania 27 numbers were great. UFC is a legitimate sport like Vince says, but it's a form of entertainment too. Each company is charging around $50 once a month (at least) for the consumer's dollar. I understand Vince's point of view. However, his point is a minor technicality in the grand scheme of things.
- I thought McMahon handled the Benoit question perfectly. There's no other way to say it. From WWE's perspective the best thing to say is that it was one man acting out in a way that nobody expected.
- I feel like the optimism surrounding the WWE TV Network is absolutely warranted. Since they said that it would be 12 to 18 months before it launches that would mean either late 2012 or early 2013. I think it's important to take their time because the initial launch will be an attention grabber for sure. It will be a channel that television distributors all around the world will want to make available to their customers because WWE is a successful brand.
- The part about Vince dying in the chair? It was a bit of a joke I think, but there's some truth to it too. He's not the retiring type. He'll turn 66 in August. My guess is that by the time he's 75 he'll step down as CEO because by that point stockholders will question a man of that age that has been running the same company for so many years. Then again it's Vince McMahon. Do you think anybody will tell him to step aside? I'm not sure about that.
- I'm sure this quote will create a lot of discussion: "We don't consider ourselves a wrestling company. We're an entertainment company." I realize that this will piss people off. I don't blame Vince for saying it. They are successful at what they do. To want to expand is something that has driven Vince for 30 years. Some experiments fail (WBF, XFL, etc.), but in terms of growth WWE has done very well. It's better to want to grow than to rest on your laurels. If people are upset by the quote my advice is to relax. The ring is still there. Feuds are settled there. They always will be. At least I hope so.
In Closing…
From a creative standpoint I wish WWE would improve. I write about it every week. I will continue to do that. It's like a favorite sports team that I want to see improve the product on the field. I think the product is stale due to the lack of new stars, especially on the babyface side, being created. There are other things of course, but I think that's one of the bigger things.
From a business standpoint, WWE is an unquestionable success and has been for over 30 years. To deny that would be foolish. Yes, we wish the booking of the shows were better, but in the grand scheme of things the company is doing very well. Like they say proudly they are pop culture known the world over. The formula for success is there. There's no need for drastic measures. Sometimes that's a bad thing, but can you blame them when what they do clearly works?
It was a good show produced by Bloomberg TV because the WWE executives provided insight into their company that the viewer isn't usually privy to.
It's worth checking out in case you missed it. Go to bloomberg.com for more info.
John Canton - john@thejohnreport.net
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