World Wrestling Entertainment, Case Study Example

In the early days of professional wrestling, the industry was divided up in regions. Television broadcasts of events were also regional, usually airing on the closest UHF station in proximity to the event (if it was televised at all). Operating under the umbrella of the National Wrestling Alliance, each region had its own promoter or set of promoters, and they competed among each other for talent and audience attention. Over time, the promoters in the north east United States (New York, Philadelphia, Boston, and so on) amassed more power and influence than their brethren in smaller markets in the South and Midwest. With a larger fan base, and the larger revenue streams that came with that fan base, the New York-area promoters ere able to stage more lavish events and pay larger salaries than the smaller-market promoters. This made it difficult for the less-powerful promoters to book wrestlers with greater star power, as they simply could not afford to pay them what they made in larger markets (Cohen 2010).

In an effort to combat the effects of the larger-market promoters, several of the promoters in the smaller markets joined forces, and out-voted the promoters in the north east markets to elect Lou Thez as the next “champion.” Thez was unpopular in the New York market, and the smaller-market promoters hoped that an unpopular champion might turn off viewers in the north east, thereby upsetting the balance of power. Rather than allow the smaller markets to dictate the ascension of the next champion, the promoters in the north east split from the NWA and formed a new organization, the World Wide Wrestling Federation. Following that, they elected Bruno Sammartino as their next champion; over the next few years, he would share the limelight with several other wrestlers, such as Pedro Morales. Vince McMahon Sr., who along with Toots Mondt was one of the most powerful promoters in the WWWF, believed that wrestlers with string ethnic identities would appeal to the ethnically-diverse viewer base of the New York area, a belief that was borne out by the wrestlers’ –and the WWWF’s- burgeoning popularity (Cohen 2010).

The split from NWA proved wildly successful for the WWWF, and quite damaging for the remnants of the NWA (Shields, 2006). As fortunes in the smaller markets dwindled, events became increasingly amateurish and poorly attended; at the same time, events staged by the WWWF were growing ever larger, filling New York’s famed Madison Square Garden with legions of loyal fans (Cohen 2010).

Following the death of Toots Mondt in 1976, Vince McMahon Sr. renamed the organization the World Wrestling Federation. McMahon Sr, exerted total control over the industry and his employees. Wrestlers were prohibited from making appearances outside of WWF-sanctioned events or granting interviews; the primary motivation behind this media blackout was McMahon Sr.’s concerns about wrestlers being asked about the “legitimacy” of the sport (Cohen 2010). When wrestler Hulk Hogan defied McMahon’s edict and appeared with Sylvester Stallone in a sequel to Stallone’s Rocky, he was summarily fired from the WWF (Shields 2006).

In 1983, Vince McMahon Sr. sold the company to his son, Vince McMahon Jr. This was to prove portentous, as “Vince Jr.” would go on to turn the WWF from a strong, but still regional, organization into a national-scale company that would generate millions of dollars in profits in coming years. McMahon saw the potential in the new opportunities opening up in the cable television market, and moved swiftly to capitalize on them. He rehired Hulk Hogan (who had joined with the competition –the NWA- after his dismissal from the WWF) and began staging a series of cable and pay-per-view events. The first of his pay-per-view events, Wrestlemania, was hosted by well-known actor Mr. T, and was a smashing success. Soon his competitors were going under, and Vince Jr. was poised to control the entire market (Shields 2006).

Ted Turner, who owned a network of cable television stations across the country (some of which ran the remaining programming offered by the NWA), made an effort to battle McMahon’s monopoly by buying out the NWA and attempting to resuscitate it. Though Turner at first faced a daunting task, he was aided by the misfortunes of McMahon’s organization, which, in the 1990s, faced a steroid scandal that threatened to land McMahon in jail (Assael, Mooneyham 2002). The NWA –now renamed World Championship Wrestling- proved to be a scrappy, if sometimes poorly-managed competitor (Shields 2006).

In the mid 1990s, Turner handed the WCW reigns to former wrestler Eric Bishoff. Bishoff turned out to be a savvy businessman; he hired away several of WWF’s top wrestlers, such as Hulk Hogan,, and launched a series of programs that began drawing off huge portions of McMahon’s audience. Not one to avoid a fight, McMahon countered by reconfiguring his organization; he began to place more emphasis on “storylines” (that is, plotlines and backstories that fleshed out the “characters” of his wrestlers) with edgier, adult-oriented themes. As a “family” oriented network, Turner’s stations were under pressure not to mirror these slightly R-rated themes, which proved helpful for the WWF (Cohen 2010).

Capitalizing on the momentum, McMahon continued to make changes to his programming that would appeal to his audience demographics, such as bringing in female wrestlers with sex appeal, and creating “rock-star” type images for his male and female wrestlers alike (Sharnsie, Eisner 2007). Eventually the dominance of the WWF proved to be too much for the WCW to bear; Turner sold the company to McMahon in 2001. Though there have been other hiccups along the way, Vince’s WWF –now renamed WWE (for World Wrestling Entertainment) currently remains at the top of the wrestling heap (Cohen 2010).

While McMahon’s successes are undeniable, his organization has seen its share of difficulties posed by forces both from within and from outside the company. Many of the hurdles the company has faced had to do with McMahon himself. He’s not just a businessman, he’s also an entertainer and performer. He’s actively involved behind the scenes and in front of the camera. So much of the WWF’s success rides on him that even the slightest distraction can trigger enormous difficulties.

In the early 1990s, federal investigators began looking into allegations of steroid abuse within the WWF. Charges were levied against many involved, including McMahon himself as well s several of his top performers (like Hulk Hogan). McMahon and Hogan both issued rather tame admissions of having used steroids, but proclaimed that those days were in the past. Though the company recovered from the scandal, it was difficult for McMahon to focus his energies on the business and still deal with the investigation (Assael, Mooneyham 2002).

There were other distractions as well; one of the most notable was McMahon’s attempt to compete with the National Football League with his own XFL, a start-up football league that McMahon hoped would appeal both to sports fans and fans of the WWE. Despite pouring vast sums of money into the effort, it was ultimately a failure, as well as serving as yet another distraction from the business of operating the WWE (Cohen 2010).

While McMahon may be his own worst enemy from within the WWE, there’s no denying his successes in vanquishing opponents from outside the organization. Following in the tradition set by his late father, McMahon has employed a ruthless strategy of divide-and-conquer against any and all comers. One by one, competing organizations saw themselves dismantled, as McMahon lured away their biggest stars and counter-programmed them into oblivion (Cohen 2010). McMahon’s primary remaining competitor, Total Nonstop Action Wrestling (TNA), which grew from the remnants of the NWA, is the only organization that poses any serious challenge to McMahon’s empire. Though TNA is able to utilize many of the same strategies as WWF to gain an audience, they still don’t have the key ingredient: McMahon himself. Other factors notwithstanding, there’s no denying McMahon’s personal charisma and drive; as the most well-known promoter in the history of Professional Wrestling, he remains in a position to drive the industry, with everyone else playing catch-up (seekingalpha.com 2010).

Competition is good for any industry; it helps spur creativity and keeps a company on its toes. The existence of TNA can only serve to keep McMahon’s attention focused where it needs to be: on the WWE. The history of the WWE, from its roots as a small, regional operation to its current status as a nationally- (and internationally-) known entertainment juggernaut, is more than just the story of a business. It is a singularly unique story of people, of the people who have nurtured the growth of this mighty organization. Though there have been countless numbers of people involved along the way, the WWE is, in many ways, simply a family business. It is that sense of family, and the continuity it provides, that serves as the backbone of the organization. Consider the trials and tribulations McMahon has faced both personally and professionally over the years: criminal investigations, tawdry scandals, and massive business failures outside of the WWE may well have felled a lesser company, but McMahon understands the human side of wrestling. To a great extent, he is the WWE. He has involved his family in many events, and he has created storylines for the performers that often include elements of “real life,” thus blurring the distinction between the fictional and the factual. In this way, his events become more than just commodities (Sharnsie, Eisner 2007); as his viewers become loyal and emotionally-invested with not just the characters, but with McMahon and his family, he assures that they too feel like “part of the family.”

McMahon has always had the savvy to capitalize on technology to grow his audience. His early, fledgling efforts to mount pay-per-view events have blossomed into the financial core of his enterprise (Sharnsie, Eisner 2007). In 2009, his pay-per-view special (now at number twenty-six and counting) pulled in an estimated $21 million, his highest take to date, an accomplishment made all the more impressive considering that not only is the country still feeling the effects of the recession, but that the price-per-view was actually raised this year. And in a time of lagging economic indicators, WWE’s stock rose by several dollars recently, leveling out at over $17.00 per share (seekingalpha.com 2010).

As he did with cable television, McMahon has harnessed the internet as well. The WWE’s official website features programming information for the television shows, biographies of the various performers, “news” related to the character’s storylines, tickets and information regarding upcoming live events, and an online store where fans can purchase all manner of WWE memorabilia. And to flesh out the WWE universe even more fully, there are “webisodes” and other online-only programming features that help to drive customers to the site and to create an ever-more-immersive experience. Despite the fact that the results of wrestling matches are predetermined, these online marketing efforts help to broaden the appeal of the WWE, making it, in a sense, more “real” (wwe.com).

With the introduction of female wrestlers, and a growing reliance on soap-opera-esque storylines and mythic-superhero type characters, McMahon has seen his audience demographics change in recent years, as more women and children join the ranks of the typical young-male viewers of the past (Sharnsie, Eisner 2007). Recognizing this change in his audience, McMahon has responded accordingly. While understanding that his more “adult” themes spurred the growth of the WWE in the 1990s and early 2000s, he has reconfigured some of his weekly programming to reflect a more PG-rated stance (seekingalpha.com 2010); at the same time, he’s taken to pushing the envelope a bit further with some of his stand-alone and pay-per-view specials, thus serving as wide a segment of his potential viewership as possible (Cohen 2010).

He has also expanded the company’s product offerings beyond the typical t-shirt line, to include such items as action figure toys that appeal to children. As any good businessman knows, it’s always best to capture customers as early as possible, setting the stage for a lifetime of loyalty (seekingalpha.com 2010). And in a recent –and brilliant- move, McMahon is harnessing the interactive nature of the internet to allow a previously unheard-of level of audience involvement: through online voting, fans of the WWE are actually able to determine who will participate in the television show’s main event each night (Gaffney 2007).

Of course, with every online vote, or view of a webpage, McMahon and the WWE capture more than just the attention of their fans: they capture information. They learn which wrestlers are loved, and which ones are hated. And more than that, they learn who loves them, and who hates them. This allows the WWE to shape their product both on a small scale (for example: sending customized emails or text messages from a wrestler to the fan who just voted for him) and on a large scale (shaping the course of specific events, or determining the outcome of a longer-term story arc (Gaffney 2007).

McMahon’s genius has been in creating and maintaining a family, a group of performers with backstories and interpersonal dramas that draw fans in and get them emotionally invested in the company (Sharnsie, Eisner 2007). There is no company more suited, perhaps, to use the internet as a marketing tool than the WWE (Sharnsie, Eisner 2007). In almost any other business, no matter what the level of interactivity, it is ultimately a “static” experience, in the sense that the end product, as delivered, is the same for every customer. As a form of entertainment, professional wrestling is uniquely suited to exploit the interactivity in new ways. By allowing the fans to actively engage in the process of shaping the nature and outcome of events and storylines, the WWE is, for all intents and purposes, offering brand-new type of entertainment. It’s akin to watching a movie (well, maybe a soap opera) and allowing viewers to dictate the plot.

It is precisely this new level of a creative partnership between company and consumer that will continue to drive the success of the WWE well into the future. McMahon is not just shaping the future of his own company, but paving the way for myriad other forms of entertainment. The more involved the fans and the WWE become, the stronger his company gets. It will be fascinating to see what he comes up with next.

References

Shields, Brian. (2006). Main event: wwe in the raging 80s . New York, NY: Pocket Books.

Gaffney, John. (2007, May 03). wwe wrestles with customer feedback marketing. Retrieved from <http://searchcrm.techtarget.com/news/1253720/WWE-wrestles-with-customer-feedback-marketing>

Wwe drop-kicks the competition. (2010, March 29). Retrieved from <http://seekingalpha.com/article/196011-wwe-drop-kicks-the-competition>

Assael, Shaun, & Mooneyham, Mike. (2002). Sex, lies, and headlocks: the real story of vince mcmahon and world wrestling entertainment. New York, NY: Three Rivers Publishing.

Cohen, Eric. (n.d.). History of wwe (world wrestling entertainment). Retrieved from <http://prowrestling.about.com/od/thepromotions/a/historywwe_3.htm>(n.d.). Retrieved from <http://www.wwe.com/>

Sharnsie, Jamal , & Eisner, Alan B. (2007). World wnestling entertainment.