Wrestling heats up the sports licensing landscape

TitanSport's World Wrestling Federation (WWF) and Time Warner's World Championship Wrestling (WCW) do battle on more fronts than just canvas-covered rings. Right now, the two biggest wrestling organizations in North America are at war over ratings in the hotly contested Monday...
March 1, 1999

TitanSport’s World Wrestling Federation (WWF) and Time Warner’s World Championship Wrestling (WCW) do battle on more fronts than just canvas-covered rings. Right now, the two biggest wrestling organizations in North America are at war over ratings in the hotly contested Monday night TV arena, as well as in the licensed merchandise marketplace. Considering pro wrestling’s resurgence into the mainstream, and its incredible popularity, we aren’t likely to see a white flag any time soon from either side.

Actually the word ‘sport’ may be a little misleading. People in the wrestling business prefer the term ‘sports entertainment.’ ‘We’re both,’ says Mike Weber, head of WCW

marketing. ‘We are sports, we’re entertainment and these are athletes.’ And consequently, wrestling is well poised to translate its wide popularity from the TV to the cash register. Weber even believes that the genre is gaining momentum over sports. ‘People are losing interest in the NBA and NFL, what with all of these high-priced contracts and player strikes. Wrestling is a little more wholesome.’

However you want to classify this sports/

circus/soap opera hybrid, the Monday night cable TV rivalry between the WWF and WCW has become legendary, and the resulting seesaw viewership split has left both leagues as viable licensed merchandise choices. For the earlier part of the `90s, WWF’s Monday Night Raw on the USA Network was the lone wrestling show on Monday nights. Then on September 4, 1994, TNT declared war and debuted WCW’s Monday Nitro.

‘We decided to go on TNT in the same time [slot] as our competition, the WWF,’ says Weber. ‘Competition is good in that it makes both companies raise the bar in their programming.’

The Nielsen ratings for the first week of head-to-head combat was Nitro 2.5 to Raw’s 2.2. WCW continued to dominate the ratings by extending its program to three hours in length (8 p.m. to 11 p.m.) and buying up a large portion of key WWF wrestling alumni. Meanwhile, the federation nurtured new talent and

developed outlandish story lines and char-

acters. In spring 1998, the WWF reclaimed the top spot in the Monday night ratings, while WCW still stands strong.

Since the competition began, wrestling’s audience has grown to almost nine million on Mondays, collectively. According to Nielsen ratings, the WWF’s Raw is War and Warzone, which run back to back from 9 p.m. to 11 p.m. on USA, were the two most watched hours on cable television coming into the new year, and have remained so. More than 10 hours of weekly cable TV features two large men fighting it out for fans, the likes of `Stone Cold’ Steve Austin, Bill Goldberg and Mankind have become some of the most recognized faces in sports-and their fans are willing to demonstrate their loyalty in purchases. Combined, the organizations bring in roughly US$1 billion a year in total licensing revenue.

The likenesses of pro wrestling folk can be seen everywhere, from T-shirts to toys to credit cards. Both organizations have well over 100 licensees each. According to Weber, the WCW depends on their licensing revenue to bring in roughly US$500 million, putting licensing in the same league as television ad sales and pay-per-view revenue. Among the

hundreds of WCW products available are hot sauces by Choke Hold International,

collectible figurines by Creative Licensing, posters by Scorpio Poster Inc., toys by Toy Biz and lines of apparel too numerous to mention. Weber is most pleased with the popularity of WCW T-shirts.

‘In mass market in the U.S., the T-shirts are incredible,’ he says. ‘Kmart, Wal-Mart, Target, J.C. Penny-all of these mass

merchants are dedicating portions of their stores to wrestling T-shirts.’

At Toy Fair in New York, WCW unveiled a line of postage stamps featuring WCW wrestler likenesses, and had a wall-breaking ceremony in Las Vegas for the opening of the first Nitro Grill wrestling-themed restaurant. Weber says that it should be operational by April. The WWF has purchased the Debbie Reynolds Hotel, also in Las Vegas, although, at press time, plans for what will be done with it were unconfirmed.

In business for over 50 years, there have been thousands of WWF products. Head of licensing at TitanSport, Jim Bell says that the WWF’s current licensee number is 110, with licensing activities earning the property around US$500 million. According to Bell, there’s a tie for the best-selling category. ‘It’s between toys and apparel,’ he says. ‘They are head-to-head in total growth revenue, both in

retail and wholesale dollars.’

Much like the WCW, the WWF has dozens of apparel licensees, making everything from children’s clothing to skullcaps. WWF also has Planet Toys crafting pinball machines and pool accessories; Technicraft Industries

making cotton throw rugs; Unique Industries providing party favors; and JAKKS Pacific

supplying the toys.

JAKKS garnered so much revenue from the WWF account that the California-based toy-maker extended its agreement for 10 more years. According to Stephen Berman, president and co-founder of JAKKS, approximately 39% to 42% of the company’s US$80 million in earnings for 1998 is credited to WWF product.

‘The WWF, and the relationship we’ve had, has been a dream, ‘ says Berman. ‘Our WWF line is to us what G.I. Joe is to Hasbro.’ JAKKS debuted a line of sweating toy wrestlers at Toy Fair along with the next series of WWF action figures, in time for Wrestlemania XV. They have also joined with THQ to produce WWF software over the next decade.

At press time, the WWF had won the Monday night Nielsen ratings war for the previous week with a 5.5 to 5.0 final score. By the time this issue is published, things may have changed. But whoever is momentarily winning the war, the wrestling licensing biz is expected to be better than ever over the course of 1999.

‘I’m no expert,’ said Mike Weber, ‘but from what we’re hearing it’s us and Star Wars for 1999-[us meaning] the wrestling category. I can’t really discount the WWF as much as I try to.’

The war rages on.

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