The 2009 WWE Annual Shareholders Meeting was held Friday morning. That may sound like the most boring three hours of incomprehensible statistics and prolonged discussions about bake sale funds imaginable, but it's actually reliably full of news right from the horse's mouth. And by the horse I mean Vince McMahon.
Among the highlights, the McMahon family gave up their big bonuses and returned the money to the shareholders. The WWE is looking to create a show on Wednesdays so they're airing five nights a week. Playboy approached the WWE this year about another crossover and Vince said no - the WWE feels it's better business to go in a PG direction moving forward. The WWE plans to hold a big party leading into SummerSlam this year. Vince will open a WWE Hall of Fame in the future and he's discussed locations, but he has no immediate plans because it wouldn't be a huge profit stream. Vince wouldn't appear in a WWE movie because he wouldn't have the patience to deal with the constant retakes, and he wouldn't personally be the one to screw The Undertaker out of his Wrestlemania winning streak because he thinks a great number of fans would be very displeased with that outcome. Vince is happy with the creative direction of ECW, though not the ratings success. He uses it as an entry point for new talent, a chance to assess what does and doesn't work. He's not inclined to hold Wrestlemania overseas because making it live for North American audiences would present scheduling issues and when they tried holding SummerSlam in London once before it was not a buyrate success.
Now for the more in depth take.
Given the economic crisis this has been a scary year for just about every corporation economically, the WWE included. With companies ranging from Ford and Chrysler to Borders and Old Navy, which had all seemed sturdy as a rock just recently, all folding or at a very real risk of folding within the next year, the WWE has held really strong by comparison. And when I say comparison I mean the WWE has only had to cut mercilessly from their payroll. They're not in danger of closing. How would Vince - a master businessman - field the questions from people who have a significant amount of their family's income wrapped up in the company's success?
"Seems like every year I start this meeting out the very same way in that I'm never satisfied with our performance, although I think we've done reasonably well under the set of circumstances. We had record revenues. We've had some great management changes. And we've secured any number of - what's extremely important - our television networks to ensure our exposure so that we can benefit from all of the other ancillary aspects of what we do, whether it's licensing, merchandizing, pay-per-view and on and on." Vince conceded that the company had struggled in so far as every business around the world has struggled, but stressed that the company has been able to hold live event ticket sales steady "reasonably well" and that that's the foundation of the company's success. If live event sales are strong then the company is fundamentally on solid footing.
I think it would be fair to say that historically live event ticket sales were always the bedrock of the company's success. Throughout the 1960s and 70s Vince's father ran the company successfully without pay-per-views, movies and video games, and throughout the 80s the WWF was primarily syndicated on Saturday mornings. The ratings weren't expected to carry the financial weight. Pay-per-views only came once every three or four months. The goal was always to drive live event ticket sales.
Obviously with the expansion of the WWF into World Wrestling Entertainment the burden was no longer squarely on the shoulders of arena shows. Everything from DVD collections to WWE.com ad revenue could be counted on to make some money. Even if one of those projects bombed the others should still be doing good business and the WWE itself should keep moving forward like a horror movie monster who's been shot. The point is that Vince's claim isn't a bold faced lie at all but focusing on their historic model for success - pre-21st century - is sleight-of-hand.
As the questions began Vince seemed to be chomping at the bit for the chance to answer, repeatedly opening and closing his mouth to speak as shareholders dragged on with their questions. He looks like a kid who always raises his hand in school whether he knows the answer or not because he's so confident he can make something up that sounds great and he's dying to show off.
The first questioner asked about the box office failure of John Cena's 12 Rounds, and whether the company planned to rethink their approach to the movie business because of the routinely disappointing performances of WWE films. Vince said that despite falling short of expectations their movies hadn't lost money. They'd collectively made six million dollars (after cost) and they'd learned a lot. He said shareholders don't invest in the WWE because it's in the movie business. The movies are just another revenue stream.
That's great in theory except for one problem. The profitability of movies is heavily influenced by how many screens they show on, and movie theater chains have to choose what films to attribute their resources to based on their projections for how the movie will do per screen relative to other movies they could be showing. In other words they may not widely distribute the WWE's next movie if Beverly Hills Chihuahua 2 is coming out the same week and they think it could make seven million dollars instead of six.
Another investor asked where the WWE Hall of Fame was located. Vince explained it was in a little compartment in his head, and interestingly said that the WWE would one day open an actual exhibit hall, and that they've held discussions about where it should be located; but he conceded it didn't stand to make enough money for the company to prioritize it at this point.
Another investor asked whether the WWE would attempt to go into the MMA business to counter UFC. McMahon said he had no more interest in building an MMA league than the New York Yankees. That's not what they do. They're not a sports business. (I'll just leave my two paragraphs on Vince's professional football league and his competitive bodybuilding federation on the cutting room floor, just like those projects ended up.) Obviously he's learned.
When asked about the unavailability of WWE Superstars and WWE 24/7 to Time Warner cable subscribers, Vince responded that his goal was to put a show on Wednesday nights. With WWE RAW
on Mondays, ECW on Sci-Fi
on Tuesdays, WWE Superstars on WGN
on Thursdays and Friday Night Smackdown
, of course, on Fridays, a Wednesday show would complete the week. Do you already feel like you're bombarded with far, far more WWE content than you can keep up with, no matter how rabid of a fan you may be? Vince has the answer.
"In the past, back when there were a few channels, there was something thought of as over exposure, and that's not the case when you have a plethora of channels." While he's right that more media noise means you need to speak up louder in order to be heard. But it doesn't speak to the question of fan burnout and of any individual show becoming totally disposable. At one point fans waited all week for RAW and couldn't miss it because then they'd have to wait a whole other week. Is it just me or was that anticipation sort of fun, and that payoff on Monday nights really exciting?
Vince makes the interesting point that if a viewer is really committed to a different show on a Monday night, having shows on other nights gives them another window to fall in love with the WWE. That may be true for a percentage of the audience but almost the same thing could be accomplished by having one or two weekly shows and making them available for download in their entirety online. It seems hard to argue that's not the right move creatively but obviously they're a business and you can't fault them for that. Presumably their numbers show they can still run in the black for airing more and more WWE content even if the numbers aren't that special.
The press conference was an interesting look inside the business, as it is every year.The WWE is putting on a brave face during the bad economy but they also know they're not in an mortal danger and that the wrestling economy always rebounds. They've survived much worse. While I don't agree with Vince's takes on every issue you can't fault his continued success in business, or the never ending supply of great ideas he has. It should be an interesting year ahead.
-Henry Jenkins, BuddyTV Staff Writer
(Image copyright of World Wrestling Entertainment 2009. All rights reserved.)