Wrestling has choke-hold on cable fans

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Wrestling, cable TV's programming behemoth, has gotten so hot it's spilling into other sports.

Seventeen years after the World Wrestling Federation debuted on USA Network, wrestling is bigger than ever, and now the WWF is transplanting its pop-culture spectacular to football with plans to revolutionize that sport.

The self-contained soap-opera universe of wrestling, incorporating real-world events into storylines so convoluted that the boundaries between reality and wrestling are often blurred, continues to prove unbeatable in cable TV's ratings race.

"There's more to it than getting two people in Spandex in a ring to beat the hell out of each other," says Merrill Lynch analyst Seth Weber.

The combatants are: WWF, which runs on USA Network and broadcast network UPN; Time Warner-owned World Championship Wrestling, which runs on TBS and TNT; and Extreme Championship Wrestling, which debuted on The Nashville Network last August.

XFL KICKS OFF

In February, WWF Chairman Vince McMahon announced plans for the XFL, a new "extreme" football league. After talking to such cable nets as USA, Mr. McMahon last month linked with NBC Sports. The XFL deal, involving NBC's purchase of $30 million in shares of a new class of WWF Entertainment stock, gives NBC prime-time football on Saturday nights from February to April. The first XFL championship game will air on NBC on April 21, 2001.

The ultimate outcome of XFL, could reveal Mr. McMahon to be sports entertainment's premiere champ -- or chump. The XFL will control all of its ad inventory and have its own sales force.

"Young males. And young males. And young males," says John Lazarus, director of national broadcast operations for TN Media, listing the reasons for advertisers to buy WWF product.

Observers who doubt how wrestling turbocharges ratings should consider how WWF's "Smackdown!" revived a moribund UPN, or what the ECW's brief tenure is doing for TNN.

"We have increased young males, in some cases 200% from what the period was previously," says Brian Hughes, TNN's VP-programming. And what was there previously was testosterone-heavy roller derby update, "Roller Jam."

"Week in, week out," Mr. Hughes adds, "we are No. 1 or No. 2 in impressions [for] 12-to-34-year-old males."

Bear in mind the ECW claims no stars matching Marketing Evaluations' Q ratings of the WCW's Hulk Hogan or the WWF's Stone Cold Steve Austin.

GENDER BRIDGE

Surprisingly, wrestling's cable audiences are closer to gender parity than one might think. Ray Giacopelli, VP-research for USA Networks, says WWF broadcasts skew 70/30 male-female, and Jim Rothschild, WWF's senior VP-sales, says females are the WWF's fastest-growing audience segment.

"You can hardly buy a more efficient vehicle for teens than wrestling," says Karen Van Prooyen, a media buyer with Starcom USA, Chicago, which buys ads for Nintendo of America and H.J. Heinz Co., among others. "I buy it for all teens, not just male teens."

It's not just TV, either. The self-contained world of pro wrestling promotions encompass in-house magazines, Internet properties and on-site promotions at live wrestling events; the organizations are keenly aware of the marketing possibilities.

REVENUES UP

WCW revenues from ad sales reportedly reached $75 million last year, up 44% from 1998. The WWF, which went public in November, reported fourth-quarter 1999 revenues from TV ad sales of $33 million, up from $10 million in the same period in 1998.

In 1999, fans spent about $81.5 million on WWF branded merchandise and an additional $400 million on licensed products; comparable figures for the WCW are $40 million and $220 million, respectively. A WWF-themed restaurant opened in New York last year, and the stakes keep rising.

"My pitch is that when somebody buys advertising, one of the most important things to look for is an environment where the consumer is totally involved in the environment and story," says Brad Siegel, WCW president. "I have those environments."

Half of WCW's Internet-related advertisers, according to the organization, also advertise on WCW TV programs. In addition, the league inked a deal with Coca-Cola Co. for its Surge brand, the (appropriately) highly caffeinated soft drink, encompassing field promotions and WCW characters appearing on Surge cans.

The WWF is also employing its 7-foot-2-inch, 500-pound wrestler, The Big Show, for an upcoming promotional deal with International Home Foods for an oversized Chef Boyardee product.

"What's cool about it is Chef Boyardee not only uses WWF Creative," says Mr. Rothschild, "but WWF Internet, live events, pay per view and publishing to communicate the brand message."

The WWF now controls an estimated 85% of the ad inventory on its USA shows.

On the air and on the street, a rivalry between the WCW and WWF sizzles. First, there's a long-running ratings war on Monday nights, where WCW's "Monday Night Nitro" goes up against the WWF's "Raw Is War."

WCW RATINGS SLIDE

Though the WCW had an 83-week ratings winning streak until the summer of '98, the organization is now getting soundly beaten. Among 12-to-24-year-old males, WWF's "Raw" outdrew ABC-TV's "Monday Night Football" by 47% last year.

"Our competition on Monday night is `Monday Night Football,' " says Mr. Rothschild, letting an implication hang heavy in the air.

"We are in a soft period," admits Mr. Siegel but says there has been "almost no attrition" of advertisers.

McDonald's Corp. came on as a WCW advertiser in mid-March, and the league picked up business from Coca-Cola when the soft-drink giant split from the WWF over content issues.

Fan-site chatter and newsletters on the Web say WCW's product has markedly declined. Observers say WCW's ratings slide is due to relying too heavily on 50ish stars such as Hulk Hogan and Ric Flair and not developing flashy new stars such as WWF's The Rock. Last month, The Rock hosted "Saturday Night Live," generating "SNL's" strongest male demographics in several years.

"The WCW self-destructed," says Dave Meltzer, editor of Wrestling Observer. WCW "put on boring television." This happened, he says, as the WWF hit a renaissance by pumping up its storylines to delirious degrees, particularly one in which non-wrestler Mr. McMahon got into a feud -- and then the ring -- with the massive Steve Austin.

WWF BACK FROM THE DEAD

Still, Mr. Meltzer also points out that "from '92 to '95, the WWF was deader than the WCW is today."

Mr. Siegel concedes his rivals "have some terrific characters," but that they succeeded "through a controversial type of programming, a lot of very sexually explicit material."

Even given Mr. McMahon's acumen in assembling and selling the pop-culture party mix that defines today's WWF, his task is tough with the XFL. The XFL plans a 10-game spring schedule.

Start-up costs, Mr. McMahon says, will be just shy of $100 million and the game won't be scripted or choreographed.

"What we definitely will do is create changes which will accentuate the speed of play," says Basil DeVito Jr., XFL president. He promises a powerful level of access to the game: Players and coaches will be wired for sound, and cameras will be placed in locker rooms and player helmets. "Make no bones about it, we will absolutely explode the way football is presented on TV."

XFL SEEN AS VIABLE

In the early 1990s, the WWF attempted a body-building league, which failed miserably. Still, some sports sources say the XFL is not as far-fetched as it seems.

"If you look at the research," says Mike Trager, president of TV for SFX Sports Group, and who worked on the 1980s U.S. Football League, "it's viable providing you can maintain a cap on salaries.."

"The Arena Football League already does what [Mr.] McMahon might do, a higher-intensity, faster game that people can afford to go to," says Gary Hoenig, executive editor of ESPN the Magazine.

Media buyers sound lukewarm. "Do I see this becoming a major part of any particular client's strategy?" says Dean Luplow, a media buyer with Starcom. "Probably not at this point. It remains to be seen what we're talking about in terms of football."

FINAL FRONTIER

Now that the XFL has gained NBC as a partner, is broadcast the final frontier for wrestling? UPN's success with wrestling has drawn interest from other broadcast operations in the last year. USA Networks currently retains the rights to match competing offers for the WWF, but it's uncertain if the network will hold onto WWF, say observers.

Mr. Siegel questions the impact of the WWF claiming a greater network presence. "The reality is, USA or TNT are pretty good distribution nets," he says, in reaching almost 80% of all households. "What's an extra 20% going to do?"

USA has gone as far as preparing upfront-buying presentations without WWF footage, while pointing out to reporters that it would still be the ratings leader among its cable peers without WWF programming.

USA's Chief Financial Officer Tim Peterman contends the ad inventory deal that the WWF enjoys means that losing the WWF would have "zero" impact in 2000 and an "insignificant" one going forward.

Of course, the value of an association with the WWF -- with its comic dramas, its vein-popping spectacle and the grip it has on its audience -- may go beyond ratings at a time when competition's fierce for prime placement on cable systems.

"That's why people are listening" to Mr. McMahon's plans for football, says Mr. Peterman. "He does create these events."

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