captaincharisma
***** PLATINUM *****
good article about vince and his response:
WWE Boss Loses Fight for TV Fees - NASDAQ.com
WWE Boss Loses Fight for TV Fees - NASDAQ.com
WWE Boss Loses Fight for TV Fees
Holed up backstage during the taping of a recent match, World Wrestling Entertainment Inc. Chairman and CEO Vince McMahon barked instructions into a headset about camera angles before leaping out of his chair to give a pep talk to a heavily-bearded wrestler preparing to do damage in the ring.
The Chairman, as he is known in wrestling circles, can be found most weeks with his sleeves rolled up, orchestrating WWE matches from the so-called gorilla room where wrestlers prep before going on stage. Charged with running the public company he founded, Mr. McMahon is still intimately involved in the product itself, flying to weekly matches in the red-and-black-branded WWE jet and helping craft story lines and characters.
But as he approaches his 69th birthday, questions are emerging about what the future holds for WWE. Its stock plummeted 44% on Friday after Mr. McMahon failed in a high-stakes effort to wring a huge increase in television fees it receives from Comcast Corp.'s NBCUniversal--part of an effort to boost the company's stagnant revenues and declining profits.
The episode highlighted a shortcoming in Mr. McMahon's leadership style: While an unbeatable promoter and a creative genius, Mr. McMahon has at times struggled to master corporate negotiations and dealings with Wall Street.
In recent years, he has bolstered his executive ranks and groomed his son-in-law Paul Levesque--better known to fans as "Triple H"--and his daughter Stephanie McMahon to take bigger roles. But Mr. McMahon, a self-confessed workaholic and the company's controlling shareholder, still makes all the key decisions--both at the corporate level and at events.
At a recent taping, Mr. Levesque, 44, and Ms. McMahon, 37, flanked Mr. McMahon in the gorilla room, studiously observing him in action. After a series of improvised body slams ran long, Mr. Levesque was dispatched with his walkie talkie to reorder the scenes. Mr. McMahon sat jiggling his leg as he sipped an energy drink and directed a sequence involving Fandango, a flamboyant ballroom dancing-themed wrestler he dreamed up after watching "Dancing with the Stars."
The television recordings--"Raw" on USA Network and "Smackdown" on Syfy--are the bread and butter of the business, accounting for around 30% of revenue. The shows' ratings have held steady, and they remain among the most-watched weekly cable-TV programs. The events themselves bring in another 20% of revenue.
Mr. McMahon has spent much of this year renegotiating the television contracts. Determined to get a better deal for wrestling in light of the inflation in sports and event programming, he played hardball in discussions with NBCUniversal, demanding to more than double the value of their previous deal of just shy of $100 million. He looked around for possible alternative TV partners, unsuccessfully, ending up renewing the NBCU deal with an increase that analysts estimate at around 50%--still generous but well short of what Wall Street had come to expect.
The company has also struggled to manage expectations for the launch of an online subscription video service showing WWE programming which Mr. McMahon calls "one of the most important things I've ever done."
Since its launch earlier this year, the WWE Network has drawn more than 660,000 U.S. subscribers and it is on track to reach a goal of one million by year-end, says finance chief George Barrios--one of a band of executives hired to bring more corporate expertise to the Stamford, Conn., company. Long-term, the company expects to draw two million to three million subscribers--a range described as "very conservative" by the effusive chairman. But the company's latest profit guidance implies the network's fixed costs will be much higher than expected, says Daniel Moore, managing director at CJS Securities.
"This management has a history of over-promising and underperforming" adds Bradley Safalow, chief executive of PAA Research, who describes the new online network as a "black hole."
In an emailed statement on Friday, Mr. McMahon defended the company's record: "There should be no confusion on Wall Street as it is extraordinary to have reached more than 660,000 WWE Network subscribers only 42 days after launch, putting us on track to reach 1 million subscribers by the end of the year." He added: "We feel good about nearly doubling the value of our four largest TV deals around the world."
Mr. McMahon has made a career of taking big and risky bets. When he bought his ailing father's wrestling business in 1982, he says he was winging it financially. He took what was a fiercely territorial business and went national.
Today, WWE spans live events ("the heart and soul"); television shows (reaching 13 million U.S. viewers); movies; action figures (John Cena is the top seller); videogames; apparel; and paraphernalia from championship belts to Rey Mysterio's mask. But the competition has become fierce, whether it be videogames or mixed martial arts luring younger viewers.
"Vince's philosophy has always been to stay ahead of the curve," Ms. McMahon said of her father in an interview before this week's events. "One of the secrets to our success is that we listen to our audience and we can do that because we have 320 live events a year."
A key to securing the future of the WWE is characters, says Mr. McMahon. With that in mind, Mr. Levesque, who spent 20 years in the ring and still sometimes appears as Triple H, was put in charge of talent. Last summer, he launched a performance center in Orlando, Florida, where WWE wannabes are put through their paces to see if they have what it takes.
"We were doing nothing to create the future talent," says Mr. Levesque, who says he learned 90% of what he knows from his father-in-law.
Mr. Levesque has made a hard push into recruitment, building relationships with sports leagues including the NFL, NBA and the Olympics. "If you're a hammer thrower and you have a huge personality, what's next when you're done?" he explains. "There aren't a lot of professional hammer throwers."
At the opposite end of the floor of WWE's nondescript headquarters, Ms. McMahon is leading the charge as the chief brand officer. It is a role she took on a few months ago after heading up creative writing and digital media.
Ms. McMahon was at the center of WWE's shift in recent years to a more family-friendly brand, free of curse words and risqué programming like bra-and-panties matches--an effort to broaden its appeal and draw a wider swath of television partners and advertisers, who historically shied from wrestling. The WWE's biggest star, John Cena, morphed from a rapper known for a signature move called the "FU," to a Hulk Hogan-like superhero idolized by young boys--a move he equates to "an R-rated comedian shifting to a Bill Cosby routine."
The question is whether Mr. Levesque and Ms. McMahon--whose in-ring characters these days portray a pair of judgmental co-owners of the WWE--will be able to one day fill Mr. McMahon's shoes. Mr. McMahon, who describes himself as a thickheaded Irish man, says he can't be succeeded by just one person.
"It started out as a one-man band but if this is really going to take off and be everything I think it should be, it can't be one man's vision, " Mr. McMahon said in his distinctively gravelly voice in a recent interview. "If I get hit by a bus, there will be a couple of hiccups along the way but my position would be split into different directions. We have a lot of creative people and a lot of executives of a high caliber."
he never 'had' a billion dollars
