This is the biggest weekend of the year for WWE (NYSE:WWE) shareholders. Sports entertainment's most lavish event, Wrestlemania, will see the titans like John Cena and the Undertaker squaring off against their respective foes in matches that will instantaneously become legendary as soon as they begin. Oh, and did I mention that either Donald Trump or Vince McMahon might be bald after this weekend is over?
The scripted billionaire feud aside, WWE needs to really nail the pay-per-view buys this week, because Wrestlemania is a great opportunity to create momentum for the next year of premium events. Part of the excitement is due to the gathering of the company's three separate brands under one roof -- talent from RAW, SmackDown!, and ECW will compete in the various contests. Fans love it when the entire roster comes together to rumble.
And so does WWE, because it's good for business. The company issued a press release earlier in the month commenting on the value of combining brands. According to WWE, the multiple-brand pay-per-views performed better in terms of buy rates than the ones with only a single allegiance. So in order to keep fans enticed and buy rates up, every pay-per-view event starting the end of April will feature talent from at least two of the brands. This is a smart move, since limiting the talent that could be attached to a paid live event as opposed to gratis would obviously limit the upside potential. Plus, with the recent $5 price hike for pay-per-views, fans might perceive more bang for the buck with the added competitors.
Having separate brands on television makes sense; a higher quantity of stories can be presented, and relatively similar products are on the air three times a week instead of once. But having everything come together during the premium programs is proper synergy. WWE could benefit from a different blueprint right now, since buy rates aren't necessarily spectacular at the moment (based on the latest earnings report).
Wrestlemania 23 will knock the socks off fans in Detroit this weekend. With a new approach for all pay-per-view events, shareholders could be looking at a higher level of revenues from this section of the company. That's important, because WWE wants a large amount of its consumers to go beyond the free cable stuff and put real cash on the line for further product. This will drive other platforms, such as the company's subscription video-on-demand service, and its merchandise business. In fact, THQ (NASDAQ:THQI) and JAKKS Pacific (NASDAQ:JAKK) will be kicking off the festivities with a promotional tournament featuring their popular WWE video game. I don't know if Vince McMahon is going to come out looking like Britney Spears after Wrestlemania, but I have a feeling that his wrestling empire still has growth ahead of it.
That's right, you stock-investing jabroni, it's time for Foolmania!
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Fool contributor Steven Mallas owns none of the companies mentioned. As of this writing, he was ranked 10,677 out of 25,169 investors in the CAPS system. Don't know what CAPS is? Check it out. The Fool has a disclosure policy.
