WWE posts 3rd Quarter results, will hold event in Saudi Arabia

October 26, 2018

The WWE announced its third quarter results for the year on Thursday morning.  It also confirmed that it will go forward with an event in Saudi Arabia despite the murder of journalist Jamal Khashoggi.

The WWE addressed the controversial in today’s earnings release which called the killing “heinous” but stated that as with other US companies that are continuing operations in Sauid Arabia, the WWE decided to “uphold its contractual obligations to the General Sports Authority and stage the event.”

When asked by analysts today on the earnings call, Vince McMahon stated, “[i]t’s a very sensitive subject.  I think our statement says what we wanna say.”  In recent weeks, the WWE promoted the event without indicating that Crown Jewel on November 3rd would take place in Saudi Arabia.  The event will be the second in Saudi Arabia as the WWE held, “Greatest Royal Rumble” this past April.  The reason for the events in Saudi Arabia boil down to the massive amounts of revenue for the company.

The WWE earnings for the third quarter beat analyst expectations as Wall Street predicted Earnings Per Share of 21 cents.  The company announced an Earnings Per Share of 37 cents on revenue of $188.4 million.  Subscriptions to the WWE Network grew 9% to more than 1.66 million.  The media division increased 9% to $142.1 million due license fees and sales of ad and sponsorships.

Revenue at live events dropped this quarter by 15.5% to $26.7 million due to fewer events and an 8% decrease in North American attendance.  International events saw an even bigger decrease of 18% in average attendance.  In consumer products, revenue declined 18% to $19.6 million due to new revenue recognition standards and lower sales of merchandise online and at WWE venues.

WWE shares are at $75.68, down approximately 2.18% as of Thursday afternoon after hours trading.

Payout Perspective:

The Saudi Arabia event which will be held November 3rd likely will help with company’s revenue, but there will be a public relation hit based on the controversy surrounding the death of the Washington Post journalist.  The partnership with Saudi Arabia caused controversy as women couldn’t participate in the country.  But, the WWE has signed a 10-year agreement with Saudi Arabia and estimates $50 million of incremental revenue and more than $15 million in operating income to the company.  The infusion of cash will please shareholders.

 

The WWE has done well with its media division as shows like Total Divas and Miz & Mrs have increased license fees and sales of advertising and sponsorships.  Aside from its media division, the WWE has seen a decline in operating income in the other sectors of its business.  The decrease in attendance likely caused, in part, the lower revenue in the consumer products.

Cabana sues Punk over unpaid legal fees

August 9, 2018

Scott Colton (aka Colt Cabana) is suing C.M. Punk over unpaid legal fees the two shared as a result of a defamation lawsuit brought by a WWE physician.  Cabana and Punk prevailed in the lawsuit although the issue of the bill is in dispute.

The lawsuit was filed on Tuesday, August 7th in the Circuit Court of Cook County Illinois.  According to the lawsuit, CM Punk assured Cabana that he was “100% covered” in relation to a demand letter he received regarding the infamous podcast in which Punk and Cabana spoke about the latter’s time in WWE including the physician’s lack of care for Punk.  Punk and Cabana were sued on February 19, 2015.

A retention agreement by Punk and Cabana’s defense law firm during for the trial indicated that Punk would be responsible for paying the legal invoices.  But, Cabana claims that in April 2016, Punk emailed him stating he would no longer pay the legal bills stating that Cabana would be responsible for half.  But, in June 2016, an agreement was brokered between the law firm, Punk and Cabana through trial.

In March 2017, Punk allegedly requested that the law firm representing them withdraw from the case as to representing Cabana.  As a result, Cabana had to retain separate counsel.

In June 2018, a jury returned a verdict in favor of Punk and Cabana.  After the trial, Cabana’s lawyers demanded $200,000 in legal fees and net costs incurred by Cabana.  But, Punk refused to pay.

Cabana has brought a civil lawsuit for breach of contract and fraud.

Payout Perspective:

It looks like the former friends are friends no more considering this lawsuit.  There were potential conflicts between Cabana and Punk from the outset and to have both represented by the same counsel seemed dubious.  Based on Cabana’s side of the story, it appears that he took no action to remove the podcast when the initial demand letter was sent by the WWE doctor because he believed that Punk would “cover” him.  In this case, withdrawing as counsel two years into the lawsuit is more damaging than letting him find his own counsel from the beginning because it would seem that the new counsel would cost more considering it would have to get up to speed with the lawsuit and duplicate efforts.  One would think that a settlement would have happened instead of this lawsuit but it may be a case of bad blood between the two.

WWE announces SmackDown Live deal with Fox Sports

June 26, 2018

The WWE announced its upcoming rights deal with Fox Sports with SmackDown Live starting on FOX Friday night October 4, 2019 according to a company press release.  The deal with Fox Sports more than triples the fees it was receiving in its prior deal with NBC Universal.

The show, which currently airs on the USA Network, will remain a 2-hour show airing year-round.

“WWE and FOX are a perfect match,” said Vince McMahon, WWE Chairman & CEO. “Moving SmackDown Live to broadcast TV and having the ability to leverage FOX’s extensive portfolio of world-class sporting events will expand the reach of our flagship programming.”

The announcement is part of a new 5-year deal with Fox Sports.  In addition, it signed a deal with Comcast Corp.’s USA Network for Raw to remain on the Network.

Payout Perspective:

The announcement confirms that Smackdown Live will be on network television in 2019.  The news of the deal with Fox Sports last month boosted WWE stock.  Smackdown Live on network television is an even bigger coup for the company as its business continues to ascend.  The clamor for live content has made this round of rights fees for the WWE a bounty of riches as it adjusted its annual average rights fees from $468 million as compared to the $130 million in its previous deal for its two key programs.

Ronda Rousey signs with WWE

January 28, 2018

Ronda Rousey has signed with WWE as she made a surprise appearance at the Royal Rumble Sunday night.  ESPN revealed the news after Rousey came down the ramp wearing a jacket given to her by Rowdy Roddy Piper’s son at the end of the show.

There was much speculation about Rousey’s appearance tonight as she was scheduled to be out of the country to film a moving.  It was an obvious swerve.  Maybe there was some foreshadowing as Rousey’s photographer was in Philadelphia according to a tweet he put out (looking for weed).

Rousey indicates in the Ramona Shelburne story that she will be in WWE full-time despite there are other options for her career-wise.

She has not shut the door on an MMA return as Brock Lesnar has returned from WWE to head back into the Octagon.

Rousey’s last fight was at UFC 207 where she was stopped by Amanda Nunes in the first round.  The PPV drew 1 million PPV buys.

Payout Perspective:

Rousey is a life-long pro wrestling fan and it’s clear that living out her dream of being a wrestler is something that she would like to do.  She made a memorable cameo with the Rock at Wrestlemania a couple years ago.  Her friend Shayna Baszler is on the NXT roster and this past summer there was the hint of a possible feud between Rousey’s Four Horsewomen and the NXT Four Horsewomen of Sasha Banks, Becky Lynch, Charlotte and Bailey.  All indications point to her wrestling debut this spring at Wrestlemania.

McMahon revives XFL

January 25, 2018

The XFL reboot is going to happen.  Vince McMahon is scheduled to make the announcement on Thursday.

Speculation about bringing back the XFL surfaced last month when SEC filings from the WWE indicated that McMahon sold 3.34 million shares of the company to fund a separate entity, Alpha Entertainment, LLC.  The company was established “to explore investment opportunityes across the sports and entertainment landscapes, including professional football.”  In addition, USPTO applications for XFL and Alpha Entertainment provided further clues that the football league was coming back.

Payout Perspective:

Dependent on how this is set up, a spring football league would not be a crazy idea at this point.  Notably, Tom Brady’s agent, Don Yee, was looking into establishing a league for those players that could not or did not go to college.  It would be similar to a developmental league like the NBA.  If it is structured like this, and not as a direct competitor to the NFL, there could be a viable market.  We shall see.

Rousey to test WWE waters?

December 6, 2017

According to MMA Junkie, it appears that Ronda Rousey’s next appearance will be in the WWE as the former UFC star is taking her talents to the pro wrestling ring.

Rousey has made an appearance at a Wrestlemania and admits to being a big wrestling fan.  Her friend, Shayna Baszler, is already a pro wrestler and recently signed with the company.  Rousey made an appearance at an NXT event earlier this year.  It is reported that she has been training at the WWE Performance Center in Florida.

Her longtime friend, Gene LeBell said that she may make occasional wrestling appearances as opposed to being on the full-time roster.  When Brock Lesnar returned to the WWE from his first stint with the UFC, he was on a part-time schedule which the company seems to accommodate for bigger stars.  Although Rousey is not a pro wrestling star, she certainly would be the type of personality that would command big money and star accommodations.

Payout Perspective:

Although nothing is confirmed, this move seems likely and the most sensible for Rousey if she still wanted to be involved in “combat sports.”  While she has tried out acting, she could utilize her MMA/Judo and entertainment background in pro wrestling while making good (and likely better) money.

Young Bucks receive cease and desist over hand gesture

October 4, 2017

Pro wrestling tag team, the Young Bucks (real life brothers Matt and Nick Jackson) are big stars on the independent wrestling scene.  Recently, World Wrestling Entertainment sent the team a cease and desist letter for using hand gestures and phrases made popular by WWE characters during their performances.

The “Kliq” hand gesture was used in the mid-1999 by WWE performers Shawn Michaels, Kevin Nash, Scott Hall, Sean Waltman and Triple H.  It was later used in the 2000s by wrestling group the New World Order in World Championship Wrestling.

Too Sweet

Hook’em Horns

The Young Bucks have used the hand gesture on the independent scene and in Japan along with their stable of wrestlers.

The WWE sent a cease and desist letter to the wrestlers requesting that they stop using the hand gesture in addition to another gesture as well as catchphrases or else be sued by the company.

Notably, the WWE attempted to trademark the “Kliq” hand gesture with the United States Patent and Trademark Office in March 2015.  However, it received an Office Action that the hand gesture was likely to be confused with a trademark owned by The Board of Regents of the University of Texas System.  That trademark, registered in May 2014, is described as “the representation of a human hand with the index and small fingers extended upward and the thumb closed over the middle and ring fingers.”  It is commonly referred to as the “Hook’em Horns” symbol.  Gene Simmons of famed rock band Kiss attempted to trademark a similar hand gesture earlier this year as it is commonly known as a “rock on” symbol.  But, he later abandoned the application likely due to the fact that it would not survive a challenge from the University of Texas.

Instead of challenging the WWE, the Young Bucks decided to let the hand gesture go.  Instead, their new merchandise is based on the cease and desist.

IP protection of hand gestures in pro wrestling is not new.  Former pro-wrestler Diamond Dallas Page sued rapper Jay-Z over a copyrighted hand gesture which symbolized a diamond.  Jay-Z used the hand gesture to signify his record label.  Page noted he had copyrighted the symbol in 1995.  In fact, a records search reveals that he did.

Trademarks and copyrights differ as we previously discussed in this post.

In essence, the reason for the WWE’s cease and desist relates to the commercial use of the mark.  Protection of one’s intellectual property is important despite many who believe that the move was done to harass the Young Bucks.  Certainly, harassment is an incidental benefit for the WWE, and the Young Bucks, as well as some wrestlers associated with them recently mocked the company prior to a live show last week.  The old saying about messing with the bull and getting the horns finally came around to the bucks as the WWE flexed its legal muscle.

Not only did the WWE come down on the “Too Sweet” hand gesture but it also is preventing them from the “Suck It” callout and gesture as well.

For those wondering, its hard to argue the issue of “Fair Use” as the Bucks could claim parody.  For those that follow this, the 2 Live Crew case which used the Roy Orbison song, “Oh, Pretty Woman,” was retooled by the Miami-based rap group.  The U.S. Supreme Court deemed that the song was a commercial parody of the Orbison song and considered Fair Use.  We talk about “Fair Use” here.

But, the monetization of their use of the phrases and gestures would prove to be a hard factor to overcome.  Moreover, one of the factors, effect upon a work’s value, would be impacted.  The market is affected as the use of the material by the Bucks could be construed as a substitute for the original Kliq which may negatively impact the commercial use of the original Kliq.

 

 

The Ratings Buffet for the week ending June 30th

June 30, 2017

Welcome to another week of The Ratings Buffet.  We have been a little late with posting this week.  Note the TUF Episode rating is down from last week but up from TUF 24’s Episode 11.

Saturday

Bellator 180 on Spike TV 8:00-10:00pm ET:  758,000 viewers

Bellator 180 on CMT:  143,000 viewers

HBO Boxing Replay Ward/Kovalev2 at 10:00pm ET 752,000 viewers/316 viewers in the A18-49 demo

Sunday

UFC Fight Night 112 Prelims on FS2 at7:00pm ET: 319,000 viewers/157,000 in the A18-49 demo

UFC Fight Night Main Card on FS1 at 9:00pm ET:  819,000 viewers/427,000 in the A18-49 demo

Monday

WWE Monday Night Raw on USA

8:00pmET 2.887 million viewers

9:00pm ET 3.092 million viewers

10:00pm ET 2.951 million viewers

Tuesday

WWE Smackdown on USA at 8:00-10:00pm ET 2.603 million viewers #1 in cable for Tuesday night.

UFC Fight Flashback on FS1 at 8:00-8:30pm ET: 130,000 viewers

Wednesday

TUF 25 Episode 11 at 10:00pm ET 369,000 viewers

TUF Talk on FS1 at 11:00pm ET 121,000 viewers

Lucha Underground on ElRey 8:00pm ET 112,000 and immediate replay at 9:00pm ET drew 77,000 viewers

Thursday

Impact Wresting on Pop at 8:00pm: 268,000 viewers

The Ratings Buffet for the week ending June 23rd

June 23, 2017

Welcome to another week of The Ratings Buffet.

Saturday

Golden Boy Boxing on ESPN2 11:00pm-1:00am ET: 232,000 viewers

Monday

Raw on USA

WWE Raw 9:00pm ET: 3.201 million viewers; 1.09 rating A18-49

WWE Raw 10:00pm ET: 3.029 million viewers; 1.07 rating A18-49

WWE Raw 8:00pm ET: 3.075 million viewers; 1.05 rating A18-49

Bellator: Fedor Returns on Spike TV 11:00pm 11:30pm ET: 226,000 viewers; 0.07 rating A18-49

Tuesday

USA: WWE Smackdown 8:00pm-10pm ET: 2.597 million viewers; 0.85 rating A18-49

Wednesday

FS1:  TUF 25 10:00pm-11:00pm ET: 456,000 viewers; 0.20 rating A18-49

FS1:  TUF Talk 11:00pm-11:30pm ET: 134,000 viewers; 0.06 rating A18-49

El Rey: Lucha Underground:  111,000 viewers; 0.02 rating A18-49/52,000; 0.02 rating

Thursday

Impact Wresting on Pop TV: 8:00pm-10:pm ET: 342,000 viewers; 0.10 rating A18-49

USPTO refuses registration of Broken Matt Hardy TM application

May 29, 2017

Matt Hardy was handed a potential setback from trademarking “Broken Matt Hardy.”  The USPTO issued an Office Action which is denying the process for the “Broken Matt Hardy” trademark application.  The good news is that Hardy has a chance to respond to the initial decision.

Hardy applied to register his “Broken Matt Hardy” gimmick with the United States Patent and Trademark Office on March 1, 2017.  Last week, the USPTO issued a response initially denying the Trademark.

Hardy identified the first use of the trademark from April 20, 2016.  With existing use of an applicant’s trademark, you must provide what’s called a “specimen.”  This is to show the use of the trademark in commerce and your prior use (of the trademark before applying with the USPTO).  But the digital images include two YouTube video images showing  the use of Broken Matt Hardy in two promotions, and the third is an “EventBrite” screenshots for tickets to a talk featuring “Broken Matt Hardy.”  While all of these show the use of the name, these do not give rise to a trademark.

The Office Action notes:

Personal names (actual names and pseudonyms) of individuals or groups function as marks only if they identify and distinguish the services recited and not merely the individual or group. In re Mancino, 219 USPQ 1047 (TTAB 1983) (holding that BOOM BOOM would be viewed by the public solely as applicant’s professional boxing nickname and not as an identifier of the service of conducting professional boxing exhibitions); In re Lee Trevino Enters., 182 USPQ 253 (TTAB 1974) (LEE TREVINO used merely to identify a famous professional golfer rather than as a mark to identify and distinguish any services rendered by him); In re Generation Gap Prods., Inc., 170 USPQ 423 (TTAB 1971)(GORDON ROSE used only to identify a particular individual and not as a service mark to identify the services of a singing group).

Matt Hardy USPTO Office Action by JASONCRUZ206 on Scribd


As an example of a successful trademark of a wrestler’s name, the WWE applied for the trademark of “Daniel Bryan.”  The WWE registered the character name as a “Service Mark” and a Trademark.

The specimen for the Bryan service mark is one from the talent roster on NXT.

The trademark specimen for Bryan included an image of the character toy action figure.

Payout Perspective:

The Broken Matt Hardy trademark application can still be successful if Hardy’s representatives amend the application to include a specimen showing a service mark using Broken Matt Hardy.  Of course, if that has not happened yet, they could always convert the application to an “Intent to Use” application which means they plan to use the trademark at some point in the future.  Notably, the Daniel Bryan Service Mark is a web site screen shot of his NXT bio whereas you can argue it is similar to what Hardy submitted.  Hardy should have six months from the date of the issuance of the Office Action to respond or the application will not go forward.

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