Vince McMahon Speaks - Buying TNA?!, The Rock's Deal

WWE held their annual stockholder's meeting today in Stamford, CT. During the meeting, the floor was opened for questions from stockholders:

Vince McMahon was asked about WWE's relationship with the Rock, specifically whether the company's new deal with him was cost-effective, since they obviously were having to pay a high premium for someone of his current stature. McMahon responded that he and Rock are working on a handshake deal and that is "how they have operated for a long, long time." McMahon said it's all based on increased value. He said that if there is a higher percentage in terms of growth in terms of what they would "normally expect", Rock is "going to get a piece of that". McMahon said their net was going to be much higher and he and Rock were proud of that.

How the other WWE PPV events were doing compared to the past was brought up. McMahon said the PPV business is down but he's hoping that Wrestlemania's PPV numbers will be a kickoff for a new year in terms of numbers for the company's PPV events.

McMahon was asked whether Smackdown had retained its audience in the transition from MyNetworkTV to SyFy, McMahon said that the show has just about the same penetration now and they are very happy with SyFy, stating that they have "been the number one show on the network" since they've debuted there. He said if there's been any change in distribution, it's offset by the advantages of being under the NBC Universal family through promotion. McMahon noted that the syndicated network system, such as MyNetworkTV, is in trouble. Being on SyFy gives them longevity and provides them with non-preemptive status (i.e. they won't be bounced out their timeslot), which is "so important" to the company. He explained how they would often be bounced for sports programming on MyNetwork and the audience would be diluted when they were moved out of the slots.

Triple H's international development of talent was brought up, as was the idea of launching other groups in other countries with locally cultivated stars. McMahon said that there will be a more aggressive attempt to bring in international talents and grooming them, but they need to become stars here, because if they are, they will be stars elsewhere. McMahon said that with Miz, Alberto Del Rio and Sin Cara, you are seeing talents on the "fast track" to becoming the new "Rocks and John Cena of the day."

The company's intellectual property was brought up and McMahon was asked what the biggest problem in terms of protecting it is. McMahon said piracy and that they have a very aggressive group that handles that aspect. They noted piracy is incredibly difficult outside the U.S. as well as inside of the country. There's no silver bullet that can stop it. The hope is that as countries become more developed as markets, they will help crack down on it. McMahon noted that they just went on the air in Russia and Brazil "but we've been there a long time." He said the best way to fight piracy in other countries was to actually bring the content to the countries.

In regard to expanding and re-branding the company, McMahon was asked whether he had learned anything from past failures like the XFL and the WWE restaurant. McMahon said that when you think about it, none of those ventures have used the core competencies of the company as their current plans. He said that they have no interest in going back into football or opening a restaurant, noting that they "had to inherit that business right before we went public." He also noted there was no interest in returning to bodybuilding. He said they aren't looking to invest into anything like that but acquisitions that they can "fit what we do" and things "we can, in essence, flip the model on". McMahon explained that they can acquire the license of an property and then run it through the same system of distributions, context and partners that they put the WWE property through.

A stockholder referred to the current WWE product as "1970s/1980s comic book campy" and that some viewers feel that the "scripts are belittling the watcher." He mentioned the PG content of the show and asked if there were any plans to maintain PG but drive the show closer to what made the 1990s so enjoyable for adults. McMahon said, "It's important that you sometimes go backwards to go forwards." He said they were so far from PG that you had to go back. McMahon joked, "Where do you go after a chainsaw?" He said you have to go back to your roots to go forward. He said that they have no plans currently to ever go back to where they were in terms of an adult product but there are ways to advance the product. He said they listen to their audience and commented, "There's no doubt we could have a more aggressive and more sophisticated product that encompasses all of our ages as opposed to just strictly our PG audience. We are opening it up again, not to a great extent, but again one that is certainly not insulting to any facet of our audience. We are broadening a bit."

Another stockholder followed up on the conversation, noting that some of the matches held in the past were passionate, bringing up Austin vs. McMahon and HHH vs, Undertaker as examples. He commented that matches like "Michael Cole vs. Jim Ross" lacks that passion and drive that "wrestling fans come to love and enjoy." McMahon said that it's important to reach, from a demographic point, everyone like a menu at a diner. He said HHH vs. Taker was very passionate and serious but they had Cole to provide something else. He said that they are in the entertainment business and there's always going to be a balance. McMahon said he would personally prefer more from the serious side but WWE's E is for entertainment and there always has to be that balance.

Another stockholder brought up the "lack of build-up to PPVs" as a problem the company has. McMahon said that they try to do things long term in terms of building an attraction. He said that they attempt to have a longer range approach to story arcs but with as many PPVs as they produce, sometimes there are difficulties doing that.

A stockholder brought up running Extreme Rules the same weekend as UFC, noting that in the past, such events being held the same weekend has been detrimental to WWE's PPV buyrates. He asked whether there were future plans to avoid running the same weekend. McMahon said that there were plans to do so and they have been successful in recent months to avoid running head to head. He said that it wouldn't matter if it was UFC, boxing or another major event, because the events all eat up the promotional time that is given to them by cable companies. He said that they share all of that and that's what becomes difficult. He said that they can't control that they have gotten better at it.

Demographics were brought up, noting that more women were watching the product last year, something that the company touted last year in their stockholder's meeting. They were asked if the rebranding would change that. McMahon said that he hoped that Tough Enough and other new programming preceding Raw would bring in new demographics. He noted that TE has shown to have more females watching than men. He said that women have tremendous influenced in what is bought, so its important to have the right image, but not at the expense of the male demographic. Vince said that they want to grow all of their demographics.

Sponsorships were brought up. A stockholder asked why energy drinks and Budweiser aren't spending money with the WWE product. He also asked about the K-Mart sponsorship. Michelle Wilson, the company's Chief Marketing Officer, discussed the partnership and how K-Mart's awareness on their website and live events will benefit their retail outlets. She said it was a unique deal in that it was done jointly with the USA Network. She said that they, as a property, are one stop shopping, unlike sports products, since they can get talent appearances, TV awareness and live event awareness in one place. She said they have signed a similar deal with Mars and they are making progress in educating potential partners of what they have to bring to the table. She announced they have come to an agreement with Miller to do a summer promotion with the Keystone Light brand and they are looking to use some talents as part of that agreement.

McMahon said that PG doesn't have to mean kids, it just means PG. He said that if you are TV-MA, certain sponsors aren't going to touch you. He said that WWE can be aggressive but also fun. He said that it's important that the company doesn't do something outlandish that can put a blemish on their sponsors and partners. He said that they are attracting more sponsors because of their dedication to putting on a PG product for everyone.

McMahon was asked about PPVs like Extreme Rules without blood. McMahon said that you don't need blood to have shows of that nature. He said Extreme Rules is extreme on your body and joked that he can attest for that. McMahon said that people don't buy PPVs to watch others bleed but to be entertained. The PPV will be a different way to enjoy WWE.

A stockholder asked about how the loss of WGN affected the company and why it came suddenly. McMahon said that it wasn't sudden. He said that Tribune is "challenged" in terms of what it can acquire in terms of programming. McMahon said that they do have a place for WWE Superstars and for new programming that they develop and "it's not going anywhere."

Vince was asked when he was going to "buy that company based in Nashville, TN because they have the wrong people running it. Please save the business from Dixie Carter." McMahon laughed. The stockholder said, "Stephanie has more brains than Dixie Carter has." They showed Triple H and Stephanie laughing at this development. The stockholder said that if WWE bought TNA now, there "was a shot at fixing that company." Vince said, "I don't know they are for sale." The stockholder said, "It's a 50/50 shot, they know you are loaded with money." McMahon said, "Maybe."

A stockholder asked why they are using this smaller space as opposed to the old facility in the production studio, where they used to meet. McMahon said that space was being used and if they wanted to go to a bigger space, they could but Vince liked it dirty and cozy.