Follow Mr. Tito on Twitter.com: @titowrestling
Bookmark Mr. Tito’s Column Archive to read the current and past columns.
The EXCELLENCE IN COLUMN WRITING has returned to LordsofPain.net, exclusive to that site since October 1998. This column is a follow-up to my LAST COLUMN from 5/10/2018 in which I was mocking the WWE for lower RAW viewership numbers following WWE Backlash and lower Merchandise/Attendance for the 1st Quarter 2018. My big thing is that the WWE just spent the last 4 years building up Roman Reigns at a cost for a reduced United States audience.
I need to start being specific on that, as WWE’s declines that I mostly speak about is regarding the United States audience. RAW did 6-8 million viewers during peak levels of 1999-2000 while Arenas up to 20,000 would sell out in minutes back then (lucky to get 10,000 for a TV show, much less for a houseshow). I can get more specific that since Roman’s push starting since early 2014, RAW’s viewership has lost over 1 million viewers per show (DVR numbers also decreased) and attendance has lost a few more thousands per show. Those numbers are extremely factual and cannot be denied.
But the follow-up question that I kept getting was this: What about the WWE Stock Price?
In case you don’t follow the Stock Market, the WWE Stock is currently priced at $43.51 at the close of 5/11/2018 and it once reached a peak of $43.67. In case you haven’t followed the WWE’s stock, those prices are the record highs since the stock began trading during 1999-2000. The price being that high cranks up the WWE’s market cap… If you do the math, the WWE from their 1st Quarter 2018 has 77,142,000 basic shares outstanding. Multiple that by $43.51 and you get almost $3.4 Billion. That is quite impressive which gives you an easy reason WHY the WWE went public. By offering a portion of ownership to the public, it gives the WWE an easy route to raise capital to invest in its company. As long as you keep your financials in order (Revenues – Expenses = POSITIVE Net Income), your stock will grow with the market.
However, what I wrote in my LAST COLUMN sounded contrary to what the WWE Stock is doing. In other words, Investors with much more money than me, by a margin, are placing more confidence in the WWE with their money than I am with a wrestling column. That’s a fair point but there’s MORE to owning a stock than just your opinion of a product. For example, I’m not a fan of Microsoft… I really don’t like Windows 10, their Smartphones and Tablets are total crap, and I believe they went the wrong direction with the X-Box One. HOWEVER, I cannot deny that this company has creative ways of making money and has a strong grip over the market with their Operating Systems. As strong as Apple has been, legitimate businesses are loaded with Microsoft operating systems, network software, 365, Office products, etc. I cannot deny those facts.
Just like I cannot deny that if I want to watch pro wrestling right now, my best choice is WWE. Sorry Ring of Honor, Impact, New Japan, Lucha Underground, and whatever else. WWE is better. Better yet, they are the most accessible product with their Cable/Satellite shows, placing partial shows on Hulu, placing clips on YouTube.com, and the amazing WWE Network for just $9.99 per month. Because NOBODY in the United States can challenge the WWE on its turf, they’ll remain a superpower in this country. Especially if no other wrestling promotion can catch the eye of major Cable/Satellite companies, nobody will ever compete with the WWE.
Let me dig deeper in to the WWE Stock… And because I’m speaking about a security that can be openly purchased in the market, I want to express that my thoughts and opinions here are for ENTERTAINMENT purposes only! Anyone daring to invest in the WWE stock or any stock/security does so at their own risk.
REASONS FOR WWE’s HIGHER STOCK PRICE
– ALL STOCKS ARE UP
On Friday, the Dow Jones Industrial Average closed at 24,831 and that is actually down from its highs earlier this year following the hype of the Tax Cuts at 26,616.71. If you compare that to the peak of stocks during October 2007 before recessionary hell all broke loose, just over 14,000. What is the reason for this growth? Aside from the economy rebounding since the 2007-2009 Recession, interest rates at the Federal Reserve have been SUPER LOW since 2008. Through mid-2007, the Federal Funds Rate that our central banking system offers to Banks to borrow money was at 5.25%. During late December 2008, the rate became 0 to 0.25% “target range” or as I call it, “next to nothing”. Through May 12th, that interest rate is at a range peaking at 1.75%. STILL SUPER LOW! In other words, Banks and individuals taking out loans to make stock investments are borrowing money at extremely low rates. Lower interest rates = higher borrowing demand to borrow money.
– WWE PROFITABILITY
Look specifically at the WWE 1st Quarter 2018 Financials. Revenues are down, year-over-year, by just over $700,000. Operating Expenses, however, are down by OVER $11 million. Factoring in other expenses, adjustments, and taxes, the Net Income for the WWE was $14.8 million compared to a much slimmer margin of $888,000 during last year’s quarter. This, in my opinion, is where Vince McMahon truly shines as a CEO and where many wrestling fans bitter about his Creative decisions overlook. Vince has always been tight on his budget and is good with expense-reduction mode when needed. Do Stephanie, Shane, or Triple H have this kind of business smarts or discipline?
– WWE GOING INTERNATIONAL
The biggest story of out of the GREATEST ROYAL RUMBLE show is NOT the results of the event and not the controversy over certain wrestling genders not appearing… But how much Saudi Arabia reportedly paid the WWE to be there. I’m hearing things from a $75 million over 10 years deal to something outrageous as $25 million per year from that country for this big show deal. After all of the WWE’s attempts to strike it big internationally whether it is India (good TV deal there, to be honest), Mexico, Japan, or various places in Europe, they have broken through to becoming an international success. IN MY OPINION, the merging of the RAW/Smackdown branded Pay Per Views was to create more International Pay Per Views like the “Greatest Royal Rumble” in other countries who want a Pay Per View-like event that airs on the WWE Network. Because it can air on WWE Network, the show can act like a “tourist video” for fans outside of that country. That is HUGE and something that was not realized until now.
– CABLE/SATELLITE DEAL HYPE
Go back to 2014 when the WWE was negotiating to strike a new TV deal. Reports were suggesting that WWE was looking for a “NASCAR Deal” or hyping something that was “triple” their current deal. However, interest in acquiring the WWE then was low as only Comcast and AMC (who wanted to reportedly buy the WWE) showed interest. The McMahons weren’t ready to sell yet, and thus Comcast had full negotiating power. In the end, the WWE reportedly doubled their existing deal but Investors did not like it. The stock reached its record high before the deal was announced just north of $30 but then tanked after the deal was announced (under $20). Right now, FOX Sports is reportedly showing interest to possibly place RAW on the FOX Broadcast channel which doesn’t need a Cable/Satellite package to view. That is HUGE… That, and FOX is desperate to get Fox Sports 1 viewership upward with the major investments made for that channel (signing away many top ESPN talents). If WWE can create a bidding war between Comcast and FOX, a bigger 2019 deal can be struck. WWE has an advantage of Cable/Satellite channels desperate for highly rated content provided how much Netflix and Amazon Prime have eroded their syndicate audiences.
– CORPORATE TAX CUT
This one looks weird during the 1st Quarter 2018 numbers because the 2017 Net Income was so low to be subjected to taxation versus how high the 2018 numbers appear. But for 2017 overall, WWE paid upwards towards a 35% Corporate Tax Rate. Now, they pay 21%. This affects all Corporations at once and it is no surprise that all major Corporations are seeing their stocks surge. With a Lower Tax Rate, it is less of a reduction to Net Income that could be applied (thus other expenses don’t have to be drastically cut).
– WWE NETWORK IS SUCCESSFUL
WWE Network pulled in $46 million for the 1st Quarter 2018. If you assume that steady rate for the rest of 2018, you’re looking at just under $200 annually. Compare that to the WWE’s 10-K report for 2013, the final full year of Pay Per Views in place… Just under $83 million. Wow… Now you see why the WWE shifted to the streaming service, even if it took about 2 years to start breaking even financially.
– WOMEN’S WRESTLING – JUST GETTING STARTED
Getting hard to deny… Women superstars in the WWE are creating additional revenue streams and have salvaged the WWE’s midcard. Add in Ronda Rousey, who appears to be working out (I was worried there for a second) and now you have a place for all former MMA fighters, Volleyball, and Basketball players to join. On top of that, it gives the WWE legitimate diversity that can reach across more audiences. The amazing depth that the WWE roster has and NXT keeps pumping into the promotion cannot be denied.
– BUSINESS CONTINUITY PLANNING
Let’s be honest here… As the #2 guy and potentially the backstage successor to Vince McMahon, Triple H is doing a really good job as an Executive. How can you deny that? Look at the Women’s wrestling in the WWE. All Triple H’s planning from the NXT promotion and developmental system. His personnel signings are better than John Laurinaitis and he has added depth to WWE’s rosters to not only support the RAW/Smackdown split but to sustain NXT as a valuable brand. Could he do more in Creative for the WWE Main Roster? Of course, but Vince McMahon still has firm personal control over that. As a backstage boss, Vince is impossible to replace… But Triple H is that guy. The question is this: can HHH do math?
– BROCK LESNAR IS STILL THERE
As much as we rip Roman Reigns apart, the fact is that Roman was NOT crowned the WWE Universal Champion in the 2 attempts that he had to defeat Lesnar. Lesnar is still champ and will continue to headline WWE Network exclusive shows. THUS, it retains the VALUE of the WWE Network itself which, in my opinion, Brock Lesnar has established as an exclusive wrestler to its shows. He is still working with the company and kept strong… If ratings for RAW keep declining, Investors know that Brock will return to bring them back up.
– NO COMPETITION
Yes, there are other promotions out there… But nothing with the infrastructure to compete or challenge the WWE. Being on AXS, late night on Sinclair stations, or PopTV is nothing compared with being on USA Network. Not even close. Impact has debt issues to still resolve thanks to the Dixie Carter days and Sinclair is running Ring of Honor on a shoestring budget. New Japan celebrated adding 25,000 new streaming service members when Jericho vs. Omega happened at Wrestle Kingdom… But that only brought them to 100,000 members. WWE has over 1.5 million by comparison. Until something like Mark Cuban and Sinclair Corporation combine assets or make an offer to appear on a better Cable/Satellite system, nobody is challenging the WWE’s market share. Furthermore, as we’re talking about this Stock discussion, the “barriers to entry” are too intense to challenge the WWE. Think about what WWE had to do during 1999 to intensify their stance as the #1 promotion against the Time Warner Corporation funded WCW… Become a corporation, too. Sinclair is a wealthy corporation but their interests are focused on expanding their Broadcast TV footprint. WWE has been essentially unchallenged since 2001 when WCW died, insomuch that “WWE” has become the term for “pro wrestling”. Kind of like “Bandaid” is for elastic strips for cuts or Coke for colas.
AS BAD as watching 3 hours of RAW can be, as awful as Roman Reigns is as a Main Event babyface, and how bad Smackdown‘s creative has been since 2017… Where else are you going to go if you’re a wrestling fan? You’re only other choice is to STOP being a fan… But if you want to remain a fan yet not watch the current WWE shows, you can watch years of previous content on the WWE Network. Between watching RAW/Smackdown, NXT, or past shows on the WWE Network… The WWE Corporation has provided you with lots of choices to remain a paying WWE customer. Again, where else are you going to go? Yes, I keep harping on “losing 1 million RAW viewers”, but 3 million viewers is still high for any Cable/Satellite standards. Filling an arena of 5,000 people paying at least $40 each + merchandise ($35 per shirt, UGH) still makes for a successful night.
Could you imagine how much more money that WWE could make if their Creative Team did a GOOD job? Holy cow… Or if they could deliver their next John Cena draw or better yet, someone like Hulk/Austin/Rock? That stock price would explode!
HULK HOGAN – RETURNING TO WWE?!?
Let’s talk about the Hulkster… Reportedly, there is some interest by the WWE to bring back Hulk Hogan in some capacity. For the “Greatest Royal Rumble” show, there was some inquiries made by the host country to have Hogan appear on the show. As seen by Undertaker, Triple H, and John Cena appearing on that show, star power was probably requested by that country.
What happened to Hulk Hogan to cause him to be terminated by the WWE Corporation and scrubbed from most of their record books during 2015?
If you go back to the mid 2000s, the pressures of fame, trying to push their kids into different avenues, and possibly a wrestling career winding down caused Hulk Hogan and Linda Hogan‘s marriage to fall apart. Now, whether or not things were going South during 2006 is another matter as Linda filed for divorce during 2007. During 2006, Hulk Hogan took an offer from his radio buddy, Bubba the Love Sponge, to bang his wife (they reportedly had an “open marriage”). Little did Hogan know is that Bubba was filming the entire affair both before and after the sexual act to collect 30 minutes of tape. Bubba reportedly placed it on a DVD and that video somehow made its way to Gawker. The Lawsuit that Hogan eventually won against Gawker was because that website posted a segment of the sexual acts without Hogan’s consent and the taping was illegal.
Later, however, more parts of that 30 minute Bubba taping appeared and it was the verbal discussion that Hogan had with Bubba’s wife after the sexual act. The discussion was very specific about his daughter, Brooke Hogan. I’m NOT going to post the specific things that Hogan said, as you can check out the transcript here, but he used the N-word repeatedly and also added colorful metaphors in front of those N-words (F’N N-words).
That leaked audio came out during 2015 from something he thought that he said in private during 2006. Can wrestling fans forgive him during 2018?
Moreso, can black wrestling fans forgive?
For the record, I’m not defending Hulk Hogan said whatsoever. I hate that N-word and I think it’s cowardly for anyone to use to put down another race. Blacks were enslaved through the 1860s and endured Jim Crow horsecrap rules through the 1960s and that word was used is in a clear derogatory fashion to put down what individuals thought was a “lesser race”. Even though Civil Rights was passed through 1964-1965, there are still individuals who lived during a time when Jim Crow laws were still in place and didn’t forget. Many have refused to let go and they’ve even passed on their racism to their offspring.
Hulk Hogan was born in 1953, 11-12 years before Civil Rights was passed. Hogan was also born in Georgia… Now, I’m not here to bash an entire state. Been to Georgia a handful of times, it’s nice… But the fact is that from 1956 through 2001, they had a Confederate Flag built into their state flag. So the by time that the Hulkster was 3 years old, the stars and bars were everywhere in his state. Don’t forget that Martin Luther King, Jr. was born in Georgia and was emboldened from the segregation that he saw to become a leader in the Civil Rights movement. For Hogan, most of his childhood saw segregation in place and in action. Furthermore, he saw the resistence by whites to pushes for equal rights as a child as well. That is 11-12 years of his life that he could have witnessed a culture that degraded blacks and that’s a part of time when you learn absorb the most in your life.
Question for Hulk Hogan is this: was this an isolated incident or does he have other signs of racism?
And I cannot answer that… I haven’t it seen it, but Hulk Hogan is good at playing characters. What you see on television could be something entirely different behind closed doors. Just look at that sex tape… He’s cheating on his wife and using racial slurs. That’s not the “Say Your Prayers, Take Your Vitamins” superhero pro wrestler that most remember. During the Gawker trial, he actually explained the difference between the real person and the Hulk Hogan character as part of his defense. As far as I can see in Pro Wrestling, Hulk Hogan put over the Rock cleanly and had zero problems doing that for Wrestlemania 18. Conversely, Hogan actually had problems losing to a white guy named “Stone Cold” Steve Austin. And by the way, the Rock defended Hulk Hogan though suggesting what he said was “disappointed” in what was said. However, Rock said that he knew Hogan for years and that he “didn’t know (Hogan) to be a racist”.
From my analysis of the tape, I think Hogan’s issue is regarding WHO was trying to date his daughter, Brooke Hogan, during that time. Again, this goes back to when Hogan grew up… He grew up with Jim Crow laws and even through the 1980s, mixed couples were “taboo”. Things have obviously changed since then as it became more common when celebrities began dating on a mixed level. Now, it’s quite common and not a big deal to most. My guess is that Hogan had frustrations with the money invested into Brooke’s music career and may have felt that she was being taken advantage of. If you’ll recall, her music began to take on a more hip hop feel to it as you can see with her moderate hit “About Us”. Combine failures of his daughter to catch on with the music scene, millions spent, and Hogan growing up during the latter days of the Jim Crow Era… You can easily see where that tirade came from.
The question you need to ask is this… Is Hogan just pissed at his daughter for dating other races or could he get worse as a racist? Would Hogan put on white sheets to dance around burning crosses? Would he attend a white supremacist rally in Charlottesville, VA?
To me, I see mostly ignorance on Hogan’s part for who is possibly dating his daughter… We haven’t seen any other racial issues with Hogan other that that leaked Bubba “the Love Sponge” video. But then again, I’m as white as a sheet of paper… If black wrestling fans have an extreme problem with WWE bringing Hogan back, I completely understand. Hell, I’d encourage them to protest. For me, I don’t like what Hogan said but I sort of understand the context (his daughter dating black men) and how he grew up in a society with government sponsored racial divide. My actual issue would be having a washed-up Hulk Hogan back on WWE television, possibly as an authority figure. Reportedly, WWE considered having him as the General Manager of Smackdown to replace Daniel Bryan. That would have been awful as we’ve seen the “authority figure” character before in TNA. No thanks…
Sticking to just doing WWE Network specials might be best for Hogan, should he return to the WWE… I could see his appearances in front of live WWE crowds in the United States going bad. That said, he could make appearances at International stops… Maybe make him a foreign General Manager, as other countries could enjoy Hogan if they choose.
What Hulk Hogan said was clearly wrong and disgusting… Everyone says that the Gawker lawsuit money has washed over his pain regarding that controversy but I bet Hogan would return all of that money for the shame he has endured. He can’t find work because of what happened and there’s no denying his wrestling legacy. He is on the first 9 Wrestlemania shows and was a huge part of the Monday Night Wars. His early 2000s comeback to the WWE was special, too.
And of course, what drives the WWE is money… If they believe that rehiring Hulk Hogan can grant them financial gains without much loss, they WWE will sign him. But will the public forgive Hogan and give him another chance?
Maybe you have to consider the case of Pete Rose in baseball. He gambled on his team when Rose was a manager and Major League Baseball has banned him for life from ever returning to a MLB job. The Baseball Hall of Fame have also denied Rose entry. Because the punishment was so severe, there isn’t a gambling problem in MLB. If the WWE brings back Hulk Hogan in just 3 years, what kind of message does that send? But if Hogan was banned for life, wrestlers could really watch out for what they say anywhere. That and Hogan’s starpower doesn’t protect him from creating awful PR situations. Lesson learned by the entire WWE locker room.
I don’t know… But it wouldn’t be the first time that the WWE “looked the other way” in order to make a buck. It’s all about the fan response to their actions.
Whatcha gonna do, brother?
SO JUST CHILL… ‘TIL THE NEXT EPISODE!
Comments and feedback are welcome. Follow and Tweet me @titowrestling or login in below to post comments.
Bookmark Mr. Tito’s Column Archive to read the current and past columns.
© Mr. Tito and LordsofPain.net – 1998-2018
THE BEST OF MR. TITO
- Update on Rey Mysterio Returning to WWE, Interesting Tweet from Chris Jericho
- Randy Orton Reportedly Mocks Allegations Before Dark Main Event at WWE Tapings
- WWE Reportedly Planning Horsewomen vs. Horsewomen for Survivor Series
- Peyton Royce Responds to Comments from Dave Meltzer, AJ Styles SummerSlam Diary, WWE Stock
- Hulk Hogan’s Reaction to Wrestlers Not Accepting His Apology