World Wrestling Entertainment announced that it is changing its name to WWE in a rebranding effort that includes a new business strategy. The purpose of the change is to “better reflect the company’s global entertainment offerings.”
Via WWE.com:
Two key components to WWE’s brand expansion will be the active pursuit to acquire entertainment content companies and the outsourcing of WWE’s core competencies – television and film production, live event production and licensing. As part of the new business model, the company will also focus on the development of new television products including scripted, non-scripted and animated programs, as well as the launch of a new WWE network in the next 12-18 months. The first new program of the brand expansion is Tough Enough®, WWE’s non-scripted program that debuted on the USA Network on Monday.
This new rebranding initiative will be highlighted through a national consumer and business-to-business advertising campaign entitled “Bigger. Badder. Better.™” The campaign kicked off at WrestleMania® XXVII on Sunday and will be featured on cable TV, print and online.
More from the LA Times:
The moves come as WWE looks to rebound from a tough end to 2010 that saw attendance at its events and pay-per-view revenue both drop 15% in the fourth quarter. The declines were blamed on the economy, although WWE probably didn’t help matters by raising prices at a time when its core audience was feeling the pinch.
There is some skepticism of the expansion outside the ring as well as concern that the WWE is losing some of its market share to MMA.
“I think that the most important thing right now is the return of the health of the core business,” said Jay Kaplan, portfolio manager for Royce & Associates, which holds about 9% of WWE stock. “One of the market’s big concerns is are they losing market share to real fighting,” Kaplan added, referring to mixed martial arts and ultimate fighting.
Payout Perspective:
The WWE new strategy is risky. But, it is familiar with taking risks lest we forget the XFL. How much of the refocusing has to do with the fact that MMA has taken some of its core audience? The timing of the move is curious considering the financials. There are some positive signs: Wrestlemania 27 was a success, the debut of Tough Enough received good ratings and the WWE will see a boost with The Rock back. Prior to the refocusing of its business strategy, there were plans of further international expansion. Als0, its film division has made stars out of some of its in ring talent (e.g., John Cena, The Big Show, Triple H).
Dropping “wrestling” from its name may benefit the company in working with mainstream companies. If it is to extend its brand and compete with the likes of AEG in live entertainment production, the name change could help.
Another intriguing aspect of this is the development of a WWE network. With a vast wrestling library at its disposal, it would not be far fetched to create a network. This could be the blueprint for the UFC to one day have its own network.
One final interesting bit from the LA Times piece is the question of whether the rebranding effort will attract a bigger company to purchase the WWE. Vince McMahon denied this is the reason for the new strategy. It would seem unlikely that this would be the case knowing how hard McMahon worked to build the WWE.
Lots of people talk about UFC having its own netowork. I think its a bad idea for the sport at this time. It simply isnt big enough. The UFC needs a network tv deal with one of the big 3 or 4 or ESPN. Having an MMA channel is not a good substitution for those. There isnt enough hardcore fans and there would be no way to reach the casual fan. Even on spike you get lead ins from other shows. Look at channels like Speed channel, Golf Channel, etc. Nascar events are still on major networks. Most events with Tiger Woods are on Major networks. These sports have major events on big networks to build the sport and get attention. It was later these 24 hour golf channels were create. If MMA create the channel before a major netork was done and established than it would saturate the market so the major networks wouldnt bother or ratings would not be enough to carry it.
It is different for wrestling because most of the big networks have already give it a try long ago and it didnt work and will never give it another chance. So WWE isnt really hurting future tv expansion like the UFC would. A UFC channel would have roughly 300K viewers most of the time IMO. On a known channel like spike with other genres to draw from they Only get a million or 1.5 million. Low level events and replays are not going to do that well to amke it worth throwing away the sports chance to go mainstream. There is a time and place for it but i dont think it is any time soon.
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