World Wrestling Entertainment (NYSE:WWE) wants to smack up Thursday night content asset SmackDown! via the addition of a new round of the contest series Tough Enough.
Beginning in October, Tough Enough will become a feature of the weekly series up until its climax in mid-December, when a single participant will score up to a million-dollar contract with the company. You can bet that WWE Superstar Al Snow, the guy whose character used to flaunt a mannequin head at his matches as a gimmick, will be appropriately rough on the contestants, thus ensuring an entertaining initiative.
I used to watch Tough Enough on Viacom's (NYSE:VIA) MTV and enjoyed it quite a bit. I appreciated the way WWE created a new franchise with which not only to drive revenues but also to gain coverage of the brand in a valuable youth-targeted cable channel (the company used to have another of its shows, Heat, on MTV as well).
Although it would have perhaps been preferable to keep the program on MTV, I think the decision to associate it with SmackDown! will go a long way toward creating excitement for that show and thus snare more eyeballs. More eyeballs mean pricier rates can be charged to advertisers by UPN, which will in turn give WWE's license fees a higher value (WWE altered its SmackDown! business model, opting to license the show for a fee instead of selling inventory itself, as noted in this release).
WWE's stock price is at relatively depressed levels, arguably because of disappointing results in certain company metrics such as attendance at live events and television ratings. Seth Jayson took a look at the company's recent earnings report, and he found a few interesting items. Costs were kept in line, a fact that tended to fuel the winning profits. He also noted that the company's home video and licensed-merchandise segments are doing well; I believe Tough Enough will add to the momentum in the former segment because following its TV airing, it naturally will be exploited in the DVD market. And one has to expect a video game based on the property at some point, so THQ (NASDAQ:THQI) might conceivably one day need to prove that it continues to be tough enough to publish some great software for the likes of Sony's (NYSE:SNE) PlayStation 2 and Microsoft's (NASDAQ:MSFT) Xbox (THQ, incidentally, needs to prove that it is tough enough to the investment community in general, let alone WWE).
For an excellent review of the WWE business dynamic, check out Inside the Cage With WWE, once again courtesy of Seth Jayson, a guy who is certainly no fool when it comes to dealings with Mr. McMahon and his world of the squared circle. And for more, click on:
Fool contributor Steven Mallas owns none of the companies mentioned but is ready to script some story lines for the WWE if Mr. McMahon and company need some help.
