World Wrestling Entertainment (NYSE:WWE) wants to become a movie star, but so far, the results have been as grim and painful as a tombstone pile driver delivered by the undertaker. See No Evil and The Condemned, which were distributed by Lions Gate Entertainment (NYSE:LGF), and The Marine, released by News Corp.'s (NYSE:NWS) Fox, weren't able to bring in the big bucks at the box office despite including star wrestlers like Stone Cold Steve Austin and John Cena.

Just as any struggling star might do, the WWE has replaced Joel Simon, the former president of its film division, with Michael Lake. Lake has more than three decades of experience in the motion picture industry, and he was the executive producer of The Condemned.

In addition to the announcement, this stuck out in the press release: "[Michael Lake] will be tasked with developing theatrical and direct-to-video opportunities for WWE Films that provide unmatched on-screen action as vehicles for WWE Superstars." Furthermore, investors were reminded that WWE Films exists to "explore options in filmed entertainment in order to promote its Superstars."

The theory of using movies as vehicles for wrestlers hasn't worked so far, with the exception of The Rock. (He is featured in Disney's (NYSE:DIS) The Game Plan.) But should WWE stop making films? It's a legitimate question. If a business is not getting a return on its capital, then it normally might indicate that an exit strategy is in order. However, I don't think the company should stop. WWE's mandate is clear -- to grow, it must become a bigger media concern, and it must diversify into appropriate businesses beyond wrestling. Movies make sense. 

My solution would be to forget about producing "vehicles for WWE Superstars." Instead, find great scripts that have commercial stories within them. Look for edgy, youth-targeted plots and promote the heck out of them during its shows.

Because the company hasn't booked revenue yet from its projects (the distributor's costs haven't been recouped), the WWE is looking at direct-to-video projects as a way of releasing movies more economically.

WWE shouldn't be discouraged. Its strength lies in its programming platforms, which in my opinion offer great exposure for movies. A change in leadership is a sound move, but WWE needs to update its thinking when it comes to the films it makes.

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