They say you can never go home again. But don't tell that to Vince McMahon and company.
According to a press release issued by World Wrestling Entertainment
As we all know, WWE is looking to enter a new growth cycle, something akin to the days when the McMahon/Austin feud fed the imagination of hardcore and casual fans alike. The move from one cable channel to another isn't necessarily going to cause a nascent upswing in appreciation (and monetization) of the product. Sure, the release talks about "cross-marketing opportunities" on various NBC Universal properties, but I think the real key to WWE's getting a near-term pop to its financials is a serendipitous stumble over a set of story ideas that will captivate its user base. (Longer term, I am very bullish on WWE's movie productions.)
Besides, I'm not wholly sanguine over the prospects of synergy these days. Some will argue that the USA Network brand is a better vehicle of distribution than Viacom's
The big thing to me about this move is the deal structure. USA Network will be responsible for making a profit over and above the license fees (and whatever marketing commitments, expenses, etc.) it pays to WWE for the right to broadcast RAW and other specials by selling the advertising inventory itself, as opposed to the sports entertainment concern fighting to place it. This will allow the company to allocate more concentration on the content. I am a huge fan of the licensing model; in this manner, WWE won't expose itself to the volatility that ad prices can see at any given time. This doesn't let the wrestlers off the hook, of course, since they still have to bring in the eyeballs to make future licensing arrangements increasingly valuable.
It will be interesting to gauge how this change ultimately affects WWE. Going from USA to Spike (originally called TNN) didn't necessarily send the company into the stratosphere, so we'll have to sit back and see what the ratings information tells us in the fall. The marketplace blessed the move on Monday, sending the stock to a closing price that was 2.7% higher than the previous session's final value (on pretty good volume, to boot). Let's hope all that accumulation was done at the hands of so-called "smart money."
Fore more on World Wrestling Entertainment:
What do you think about WWE's return to USA? Let us know by posting on the WWE discussion board.