World Wrestling Entertainment
WWE currently has two branded wrestling rosters -- most of you are probably familiar with the Raw! and SmackDown! shows, programmed on Monday and Friday nights, respectively. The idea was to create two distinct grappling repertoires, each with its own storylines and fan bases. By doing this, each show would possess an identity and would not merely be a continuation of the previous program's plot, thus conferring an incentive to watch on both nights. The initiative was bolstered by the addition of a stable of wrestlers from the purchase of Time Warner's
But WCW isn't the only other wrestling library that Vince McMahon owns. He, like Bill Gates, is a benign monopolist at heart -- he also calls Extreme Championship Wrestling (ECW) an asset, having purchased it a few years ago. WWE intends to market ECW as yet another unique, integrated member of its burgeoning portfolio.
You can't argue with the strategy (although I'm not sure that programming ECW on the Sci-Fi Channel makes a lot of sense). WWE now has a diverse lineup of product that fans are sure to savor. It offers diversity, since each brand, while retaining the main engine of scripted contests, sports different attributes and degrees of edge.
The company can really get creative with this. The writers will obviously go into overdrive, seeking opportunities to pit the three brands against each other in all kinds of venues; the press release makes clear that no time will be wasted in terms of exploiting pay-per-view, touring, and merchandising possibilities for the ECW lineup (in fact, come Wednesday, the USA cable network will feature a special brawl between the rosters). Fans that get sick of watching one brand will hopefully stay in the WWE fold by taking up another; as for the superfan, this is simply a new product line to spend money on.
Don't misunderstand that last statement, though -- the ECW organization has been around for a while. It's just showing up refreshed and re-energized. The task should be relatively easy since the wrestling demographic is amply familiar with the promotion's legacy (as well as the mastermind behind ECW, the spastic Paul Heyman).
Question is, will this move signal saturation of squared-circle shenanigans? At some point, wrestling will cool down, but I don't think anyone should underestimate the potential of this company as a long-term investment, especially since it has consistently generated free cash flow over the past four years and pays a rocking dividend. And though this might be a bit premature, remember that WWE will be celebrating the 25th anniversary of Wrestlemania in a few years. Honestly, I think there's going to be a lot of excitement for the company between now and then (and plenty of disposable income allocated toward its various projects). Between the surge in popularity for wrestling, expanded product offerings, and the company's 5.4% annual dividend yield, this looks to be a long-term winner.
Grapple with these testosterone-tinged Takes:
- Is the WWE appropriate for your own mother?
- How did Kane do in his new WWE movie?
- Think WWE has awesome yields? Find some stellar dividend stocks of your own.
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