TR's Thoughts #10

In this weekly column, I will comment on the past week's goings-on in WOW, and whatever else it occurs to me to discuss :-) I also hope that a big part of the column will be printing and responding to your e-mails. So please send them in (the address is thatthing35@yahoo.com)!

4/20/2001: A Few Million Here, A Few Million There...

A lot has happened since we last chatted here on the TR's Thoughts page. First off, I now have a column at TFHWrestling.com. Look for "Eat My Dust" by Tom Dean in the "columns" section. I will discuss WOW if I have an excuse to do so, but the column will mostly be about the WWF, at least for now. WOW fans will also definitely enjoy the rest of the site. They have interviewed Riot, Ice Cold, and Jade, and there is a lot of good writing there in general, so check it out.

Another recent news item, sadly, relates to Vince Russo, former WWF and WCW writer/booker and full-time egomaniac. Russo reported on his website that he has talked to David McLane about a job with WOW. I don't even want to think about this possibility, so I won't dwell on it. For those of you who are long-time "smarks", you probably know how Russo was one of the main culprits in bringing down WCW (a company which was a hell of a lot tougher to bring down than WOW). For those of you who don't know the story, it gets complex, so I won't get into revisiting that history unless this report becomes more than a rumor. Anyways, to say the least, I hope that Russo does not get the job. But it was nice to see that this news at least got WOW acknowledged by the mainstream wrestling world, and it's also good to see that McLane is making future plans. By the way, the always-clueless Russo seems totally unaware of just how precarious WOW's future is. In a recent chat, Russo downplayed the WOW thing (apparently he is concentrating more on doing non-wrestling related TV), so that relieved my fears somewhat.

News item #3, and the big one: WOW released their latest quarterly financial report this week. On the "glass is half full" side, it was not as damning as I feared it might be. On the "glass is half empty" side, it sure wasn't good. Let's break it down.

• WOW lost another $2.8 million dollars in the first quarter of 2001. Put that together with the $3 million lost in the fourth quarter of 2000, and that puts them almost $6 million in the hole. As the saying goes, "a few million here, a few million there, pretty soon you're talking real money." The well is running rapidly dry. The company still has no cash -- actually, they have $76,000 in cash, as opposed to $148,000 last quarter, but neither amount is significant when you're talking about multimillion dollar losses. If they lose money, they have to borrow to stay afloat.
• We saw last time we looked at the financials that WOW has kept itself going through loans from their "sugar daddy", the ever so aptly named Carter M. Fortune. At that time, WOW stated that they were looking to get an additional $3 million loan from Fortune. Apparently, Carter is getting a little tired of seeing his money disappear as fast as he hands it over. He "only" loaned another $1 million this quarter, rather than the $3 mil they wanted. WOW reports that they have spent that $1 million already, as well as the $500,000 he loaned them last quarter that they didn't get around to spending at that time.
• It boils down to the fact that WOW is going to have to start looking elsewhere for cash. And they are, as "the Company is engaging in discussions with several third parties to participate in an "accredited investor" only Regulation D offering under the Securities Act of 1933." Basically, an "accredited investor" is someone with a helluva lot of money: it could be a a venture capital firm, or just a millionaire in the Carter M. Fortune mold. It is worth noting that they said the same exact thing in the previous quarter's financial statement, so investors are obviously not lining up around the block to get in on WOW.
• In the Speaks for Itself Dept.: "The Company believes that if it is successful in obtaining the additional funding discussed above, it will be able to continue operations through August 31, 2001 without a significant modification of its business plan. If the Company is not successful in obtaining such additional funding, there is substantial doubt about the Company's ability to continue as a going concern." And, "Any decision to produce a second season of WOW-Women of Wrestling(R) will be contingent upon the Company obtaining additional financing."
• As we have heard from the wrestlers and from WOW ever since the "first season" ended, "The Company is actively pursuing the licensing of additional programming with a television company and/or a cable network affiliation." However, "There is no guarantee that WOW will be able to secure a licensing agreement that would provide adequate additional capital from operations to warrant the production of such a program. If WOW is unable to secure such an agreement within the next three to six months, WOW intends to alter further its current operating structure." So, put this together with the previous point, and we have a bit of a timetable. In the next four and a half months, give or take a few weeks, WOW has to both get someone besides Carter M. Fortune to invest a lot of money in them, and get a cable deal that makes it worthwhile financially to do a "second season". If one or both of those things fails to materialize, then the hoped-for September re-launch clearly will not happen, and it's very strongly implied that the company will fold.
• The Feb. 4 "WOW: Unleashed" pay-per-view event was as much of a flop as rumored. WOW reports pay-per-view revenues of $105,000. At $20 a pop, that would mean 5,250 buys. This is in line with past Internet reports of the buyrate that were denied by representatives of WOW.
• "Following the conclusion of its first season of production of WOW-Women of Wrestling, the Company terminated its agreements with its performers and terminated much of its production staff. As of the date of this report, the Company has five employees." I would of course assume that they will attempt to hire back most of the same wrestlers if they do a "second season". But no one is contractually obligated to anyone, at this point.
• "WOW does not intend to continue a distribution relationship with the distributor of the first season of WOW-Women of Wrestling(R) and is in negotiations to terminate the relationship." So MG/Perin, WOW's old syndicator, is out. We then learn that WOW "is assessing the syndication market for the 2001 launch of its second season, and is also actively working to distribute programming through a cable or network outlet." The wording of this statement strongly implies what we basically already knew: that the plan to stay on the air in syndication by convincing stations to broadcast the show for free has failed, and it's cable or bust at this point. Oh, by the way, WOW went off the air last week in Chicago, meaning it is no longer on in the nation's three biggest markets, as well as many smaller ones.
• WOW "is also exploring licensing certain assets of WOW, including intellectual property, to a third party in exchange for a royalty with certain minimum payment requirements." A very interesting statement that unfortunately is too vague for us to interpret in any meaningful way.
• "The Company also is reviewing the potential acquisition and/or operation of other businesses, which if consummated will be through a wholly-owned subsidiary or subsidiaries separate from WOW." Talk about vague... I have no clue what this might be implying.
• WOW "is also negotiating to reduce its office and warehouse space at The Great Western Forum." A logical move, although not as logical as moving out of the Forum altogether in my humble opinion.
• In the trivia department, there was still no mention of the "Spring Vengeance" pay-per-view event which was scheduled for Apr. 8 and obviously did not happen (except on this site in the fantasy section!!)

Sounds like it's time to sign a petition or something. If you do want to give some money to WOW, they did re-open the Shopzone... it's got the same merchandise, but the site looks snazzier. Don't blame me if it takes you two months to get your shirt, though. And WOW stock is of course still cheap... it hit an all-time low of 25 cents a share the day after this financial report came out.

Mailbag:

This great letter comes to us from Jack Stark, regarding last week's column.

"I think you left out a lot of the problems that WCW had. I mean, this is an organization that was handing out multi-million dollar guaranteed contracts to people like Kevin Nash (as well as giving him creative control). WCW seemed to be trying to fail, coming up with worthless gimmicks, stupid storylines and characters that made you want to yawn - or switch over to see what the WWF was doing."

That is all totally true. However, in that article, I was concentrating on WOW's chances to stay on TV. The quality of the show is actually not directly relevant to that. The only questions a TV station will ask about the show are: 1) What kind of ratings will it get? 2) What kind of sponsors will it get? Those questions will determine whether the station makes money off the show or not. If the show sucks and the TV station can make money off it, the station is thrilled; if the show is great and the station is losing money on it, they'll cancel it.

"Read Mick Foley's book or some of the comments former WCW wrestlers have made about working for WCW and I think you'll see that excuses like,"We couldn't get enough good ads for the show" is a bunch of total BS. WWF has absolutley no problem getting people to sponsor their shows. Why? Because the WWF gets ratings - the WCW didnt. It's as simple as that. It has nothing to do with wrestling being low brow or high brow or anything else."

I don't think I agree with that. WCW, at least at the end, was not doing comparable ratings to WWF... but it was still doing quite well for cable. It's not like AOL/Time Warner had some fantastic show to replace it with... they replaced it with movies, that have been doing a worse rating than WCW did. So I think the quality of the sponsors was in fact a factor, and that is something that will hurt WOW. WOW has a good argument that they can put up ratings, but they don't have much of an argument that they can get "good" sponsors. That's what makes it tough to predict how this all will turn out.

"As for the comments by the CEO of USA, i didn't read them, but i bet he wasn't saying anything when the WWF was getting a 7 plus rating on Monday nights and was (still is I believe) the highest rated program on cable."

Totally true. It is hypocritical, but it's also their current stated position, and it might be tough for them to go back on it.

"As for WOW, its been fighting an uphill battle ever since it started. Most people just don't like women's wrestling. Even wrestling fans. That's changing a little bit thanks to Lita and Chyna, but generally women's wrestling is not that poplular, period. It's too bad, because i think that WOW is on it's way to being a great program if it made a few changes. I wish WOW could get a cable deal because i think the onlyh way that any show survives is by being on the same time on the same channel every week. It allows people to discover the show and rely on it to be on at same time. Right now, as u know, WOW is usually on during the wee hours of the morning on independent channels in only parts of the country. I don't care how good the show is, or how many free shows they give away, it's never going to succeed with the kind of exposure it has now."

Can't argue with any of that.

"Personally, I think that most of the execs who work for these cable networks are morons. Yes, I admit that women's wrestling isn't that popular right now, but it does have a core audience and considering how low the ratings are for some of these networks I don't think it would hurt to put on a cheap program with lots of beautiful women who are good athletes and try hard to put on an entertaining show. The problem here is that most execs don't think like I do and only put on wrestling, especially women's wrestling, if they're forced to. Just ask the folks at the NWA when they tried to start a women's program a couple of years ago."

Definitely, if McLane can convince someone of WOW's potential, it vastly increases their chances to get on the air. Can we expect that to happen, though? "Potential" can be a hard sell. Normally, businesspeople want to see results. I guess we'll find out.

"Here's my plan: I win the lottery, retire, buy WOW, and keep it going until it catches on. Got any luck numbers?"

867-5309 :-)

Please e-mail me with your thoughts about anything WOW-related!
(e-mail: thatthing35@yahoo.com)

TR's Thoughts Archive

Back to main page