WWE Forging Ahead with Cable Network Plan

WWE continues to grapple with the challenge of developing its own cable television network, and the Stamford-based company says it is making headway toward entering a contract with a distributor.

"There will be a WWE network in some shape or form. We are in late-stage negotiations with distributors," said Michelle Wilson, chief marketing officer at WWE. "Getting a distribution agreement for a cable network is not easy."

She said the situation is far better than the one presented by the New York Post, which reported earlier this month that the company is behind schedule in its plans to launch the network on April 1, timed to coincide with Wrestlemania XXVIII in Miami.

There never was a deadline, according to Wilson, who said the company is hiring staff to operate the network.

"We've filled 30 positions so far specifically for the network. They come with cable experience at ESPN, Viacom, Discovery and Warner Brothers TV," said Wilson, who anticipates that up to 120 new employees will eventually be hired for the new network.

They have been busy producing and preparing programming, Wilson said, declining to predict when the new network will air.



"They just got done shooting a reality show, `Legends House,' where eight of our Superstar legends live together in a house in Palm Springs, Calif.," she said. "Another reality show will feature our WWE Divas. We did a lot of research on what our fans want to see. We're developing new shows taking advantage of our amazing library."

The cable network also would show movies produced by WWE Studios, a WWE subsidiary, starring its Superstars like John Cena.

WWE's RAW programming is shown Monday nights on the USA Network, while its Smackdown programming runs on Friday nights on the SyFy Network. WWE primarily targets 18-to 34-year-olds with its programming.

"USA is the number one cable network in terms of viewership, and we are critical to USA," Wilson said, but having its own cable network would dramatically increase potential advertising. "The more places you are, the more your viewership rises."

Those programs will remain on their respective networks.

With a goal of reaching 50 million homes, she said the network will charge a subscription fee from each distributor. She would not comment on how much WWE is investing in the new network, which it is funding itself.

"This is an all-WWE initiative -- fully," she said. "It's going to be a game-changer."

Given the fact that WWE reported in February a net loss of $8.6 million or 12 cents per share in the fourth quarter, the company must make sure that the new network turns a profit as soon as possible, according to Michael Kupinski, an analyst with Noble Financial.

"It appears that the company will bear much of the cost. They have soft fundamentals, and the cable channel could lose money for a period of years," he said, adding that having a financial partner would help.

Kupinski had previously said developing the new cable network could cost $10 million to $15 million.

Developing enough entertaining shows outside the wrestling ring to fill 24 hours of daily programming will be a challenge, added Jill Rosengard Hill, senior vice president of Frank N. Magid Associates, a media and entertainment strategy firm.

"It's a highly niche audience," she said. "It could fly if they can develop entertaining concepts that are not matches. It could be lifestyle stories about the wrestlers."

Convincing cable networking distributors that the programming will draw an audience and advertisers will be the key to the success of the effort, she said.

source: stamfordadvocate.com