SPIKE DECLINES IMPACT; WWE NETWORK SUBS, BIG WWE CANADA NEWS

[Rhawk]

I just signed up an ccount here, so correctly me if I'm wrong, but why is a TNA discussion thread posted in a ROH Discusion sub-forum? Maybe it should be moved to the correct sub-forum to avoid confusion perhaps?

Besides that, all I need to say on this matter is... Vince Russo. That is all.

[The Dragon Saga]

Because while the thread is directly discussing a TNA conflict, TNA's issue here directly effects ROH's standing in the American wrestling business. If TNA dies, ROH becomes the #2 wrestling promotion. In-fact one could argue with its better attendance levels this year and higher momentum and consistency, that ROH would be #2 if TNA were to solely lose their TV show because it's the one of two things, along with more international exposure, TNA has over ROH. Without Spike TV's contract it's highly unlikely any network will pay the estimated $100,000 Spike pay TNA an hour, which has earned TNA over the past three years millions of dollars, which they have squandered with ease.

It also could directly effect ROH's talent pool, as TNA losing their TV deal could mean releases of guys known for their ROH work such as Samoa Joe and Eddie Edwards. It's not so much a TNA thread as it is a wrestling thread as a whole, and ROH being a wrestling company comes into the line of those who will feel the aftermath of this no matter how it goes.

[WHG]

The difference here that complicates it, though, is that if ROH didn't exist Sinclair would need to fill the void with some kind of syndicated programming that they would need to pay for. In companies where one division is providing a service to another there is typically an allocation or pass-through transfer cost to accurately reflect that. In this case, the stations getting free programming would make their numbers look better, while ROH's would suffer because they were producing TV that wasn't generating any rights fees. I suspect they have some way to account for that internally.

Don't underestimate the impact of replacing those fees. In some markets, SBG runs ROH for 4 hours per week (2 stations and 2 showings per week. In addition, I've pointed out in threads that SBG highlights ROH as it's top rated content outside of local news in investor presentations.

My guess is ROH as a break-even profit center outside of TV would be a huge win for SBG, and they're likely close or even slightly profitable given the conservative cost management.

[Robareid]

It's a complicated situation, and it won't just be a simple number to say whether or not ROH is "profitable" or not.

We don't have access to the number, but actually it is pretty simple and it's the way large corporations evaluate their divisions all the time - does this division generate enough revenue to justify its existence? You look at how much the division costs vs how much it generates. Companies make those evaluations every day. For instance, Miramax films is a division of Disney. Every quarter, Disney looks at Miramax and sees how it's doing. Based on profitability, they could decide to pump more money into MIramax, or try to sell it off, or fold it. Sinclair will evaluate Ring of Honor in the same way.

But it'll depend on how much they value the TV to decide how much it generates. Because they're owned by the company it does TV for, I very much doubt there's a contract situation like TNA with Spike, and as a result no negotiations.

But anyway, as you said, we have no figures, so its all just speculation.

[Bluto]

Looks like the six sided ring is for sale already lol

http://orlando.craigslist.org/spo/4591854820.html

LOL that's so fake...

[Burnside]

I'm strictly talking from a product standpoint. ROH has been awesome in 2014, in my opinion. Definitely the best year, product wise, since Sinclair bought the company (I think that's obvious).

Okay, but since it is a business, Sinclair will be evaluating ROH based on how much financial sense it makes, not on how "awesome" it is.

[Burnside]

The difference here that complicates it, though, is that if ROH didn't exist Sinclair would need to fill the void with some kind of syndicated programming that they would need to pay for. In companies where one division is providing a service to another there is typically an allocation or pass-through transfer cost to accurately reflect that. In this case, the stations getting free programming would make their numbers look better, while ROH's would suffer because they were producing TV that wasn't generating any rights fees. I suspect they have some way to account for that internally.

Don't underestimate the impact of replacing those fees. In some markets, SBG runs ROH for 4 hours per week (2 stations and 2 showings per week. In addition, I've pointed out in threads that SBG highlights ROH as it's top rated content outside of local news in investor presentations.

My guess is ROH as a break-even profit center outside of TV would be a huge win for SBG, and they're likely close or even slightly profitable given the conservative cost management.

I totally understand that, but my point is that if you have access to the financials it's not impossible to put a dollar amount on the value of ROH as in-house content has to Sinclair. And Sinclair certainly has the ability to make that kind of calculation.

I agree that if I had to guess I'd say ROH is probably close to profitability (although with a gun to my head I would lean towards guessing that the division is not quite breaking even).

My second point is that how "enjoyable" or "cool" hardcore fans think ROH is right now has no real business relevance compared to the financial status of the company. So saying, "Why would Sinclair sell ROH now? It's so awesome!" is a pretty naive thing to say. Sinclair doesn't care how "awesome" ROH is, they care about how financially valuable/viable it is.

[The Dragon Saga]

I would say ROH may have been profitable last year. Last year seemed much more conservative when it came to spending. Who was the biggest name brought in last year? Paul London? This year you have AJ Styles, who was the face of the #2 promotion in America for years, who the majority of wrestling fans have either seen or at least heard of. Then you add in things like the NJPW shows, which while appealing to a niche audience managed to create a lot of buzz because it was different. Stuff like that would make ROH more profitable in-turn, however it probably came at some sort of cost (I personally couldn't see NJPW halfing the cost of those shows with ROH. If they had the production would have surely been better.) I wouldn't be surprised with all the goings on this year in ROH, whether it be the returns, the signings, the buildings their running, PPV, iPPV, shows like MCU Park and the rising cost of the Hammerstein that they are making a loss, but maybe Sinclair finally realizes that the only way you'll make money from it in the long haul is by taking a small hit so you can enlarge your fanbase, because this year ROH has seemed like a much more experimental and trying to please the fan kind of company then since 2011, when it seemed very corporate.

[Robareid]

A hot product will generally lead to more buys though, while a worse one will lead to less.

[Burnside]

A hot product will generally lead to more buys though, while a worse one will lead to less.

It's better to have a product loved by diehard fans than it is to have one reviled by diehard fans, but how much difference it really makes on the balance sheets is another matter entirely. By your definition, the glory days of Sapolsky ROH were "hot"; they also lost money. The meaning of "hot" is very ambiguous and "hot" does not necessarily mean "sustainable business."

I was an ECW fan in the late 90s until it died. That company was white hot - "hotter" than ROH has ever been. Even at the end, they were selling out the Hammerstein every month, the crowds were rabid, the TV ratings were good (similar to what Impact gets now), the PPVs were doing 70k-90k buys (much better than TNA has ever done, miles better than ROH did last month). While all this "hotness" was going on, the company was going bankrupt.

[The Dragon Saga]

Plus wrestling was in a different time period. Wrestling in-general was hot at that time. Independents were running big arenas, if WWE released someone and you put them on your card, as shit as they may have been you still could have drawn 4,000 or so into an arena. Once ECW folded and WWE bought out WCW, wrestling became as some put it, scorched earth. Nobody wanted to touch it. That's what happens when you kill off the competition. By the time ROH and even TNA started one year later the business had changed drastically. The fact ROH and TNA have lived as long as they have is a testament to both, more-so ROH and that's not being bias, but because they didn't have the millions TNA had being invested in it but arguably ROH has had a bigger impact on the wrestling business as a whole than TNA has.

[Burnside]

Once ECW folded and WWE bought out WCW, wrestling became as some put it, scorched earth. Nobody wanted to touch it. That's what happens when you kill off the competition.

And this is exactly why TNA folding should not be read as good news by ROH fans or any wrestling fans. Because the lesson the entertainment industry will take from it is the same one they took from WCW and ECW folding (and Wrestling Society X and Lucha Libre USA and all the rest): "Non-WWE wrestling isn't viable and shouldn't be invested in."

[DXvsNWO1994]

I'm strictly talking from a product standpoint. ROH has been awesome in 2014, in my opinion. Definitely the best year, product wise, since Sinclair bought the company (I think that's obvious).

Okay, but since it is a business, Sinclair will be evaluating ROH based on how much financial sense it makes, not on how "awesome" it is.

Right. I'm not disputing the fact that how good the product is and the actual business side of things are different.

And this is exactly why TNA folding should not be read as good news by ROH fans or any wrestling fans. Because the lesson the entertainment industry will take from it is the same one they took from WCW and ECW folding (and Wrestling Society X and Lucha Libre USA and all the rest): "Non-WWE wrestling isn't viable and shouldn't be invested in."

But then why would have Sinclair made the choice three years ago to invest in ROH?

As fas as ROH's position goes, I personally don't see them going anywhere at the moment. ROH provides original programming for all of Sinclair's stations and, at least from everything I've seen & heard reported, they're doing well for themselves (correct me if I'm wrong).

[The Dragon Saga]

Once ECW folded and WWE bought out WCW, wrestling became as some put it, scorched earth. Nobody wanted to touch it. That's what happens when you kill off the competition.

And this is exactly why TNA folding should not be read as good news by ROH fans or any wrestling fans. Because the lesson the entertainment industry will take from it is the same one they took from WCW and ECW folding (and Wrestling Society X and Lucha Libre USA and all the rest): "Non-WWE wrestling isn't viable and shouldn't be invested in."

Anyone who thinks TNA folding is good for the business is an idiot.

I am however not of that thought, I'm more-so excited as an ROH fan at the prospects this could bring such as the return of Samoa Joe and the default number two promotion in America.

[Burnside]

As fas as ROH's position goes, I personally don't see them going anywhere at the moment. ROH provides original programming for all of Sinclair's stations and, at least from everything I've seen & heard reported, they're doing well for themselves (correct me if I'm wrong).

Unfortunately there is little info available on where ROH stands as a division of SBG. I'm not a wrestling journalist or a financial reporter, but it seems to me that we should know a bit more than we do because Sinclair, like WWE, is a publicly traded company. Maybe somebody brighter than me could dig through their investor reports and find something:

http://www.sbgi.net/investors/reports_f ... orts.shtml

Here is their first quarter 2014 earnings report:

http://www.sbgi.net/investors/webcasts.shtml

As far as what we do know, on the plus side we have ROH being mentioned in a positive light by Sinclair as an example of a part of their business they seem to consider successful. We also have what certainly appears to be a budget increase over 2012 and 2013 (mostly reflected in some production improvements, hiring Court Bauer, and the foray into PPV). On the other side, we have Jim Ross saying he heard ROH may be for sale. Complicating matters is the fact that none of these pieces of news are necessarily mutually exclusive: Sinclair may in fact be building up the ROH brand a bit specifically because they want it to be more attractive to a potential buyer.

[DXvsNWO1994]

Didn't someone post a thread about SBG reports mentioning ROH a few weeks ago?

[The Dragon Saga]

There was a thread, I believe WHG started it, where it said in Sinclair's investor reports that in 2013 ROH was drawing an average of 300,000 viewers a week across all channels and was even out drawing many local news broadcasts on a weekly basis. It was actually some pretty impressive and surprising stuff.

[y2jbrock]

Looks like the six sided ring is for sale already lol

http://orlando.craigslist.org/spo/4591854820.html

LOL that's so fake...

Obviously LOL

[y2jbrock]

[The Dragon Saga]

...I... I don't get it. I mean I get the comparison, but I don't get what it's referring to. Like, NXT taking all of TNA's talent or something? Cause I doubt they'd be interested in many. Maybe like, IDK, five.