In Defense Of… The Brand Extension
A version of this article originally appeared on 411mania.com and was updated for the book IN DEFENSE OF… EXONERATING PROFESSIONAL WRESTLING’S MOST HATED. Learn more at https://www.jpprag.com
Certain people, events, organizations, and storylines in wrestling history have gotten a bum rap. Some writers have presented overtly critical comments and outright lies as fact, and others have followed suit. Well no more! “In Defense of…” has one reason: to bring the truth to the wrestling fan!
Some dame walked into my office and said…
Three and half months ago regular 411mania reader Manu Bumb (who appears in many reader write-in sections all over the net) came to me with a very compelling story:
How about the Brand Extension? I hear people giving it crap all the time, but I still think [it’s] awesome, even if it hasn’t reached maturity yet. I think, 10 years down the road, with minimal interaction between the shows and minimal trading, the draft lottery will pay off… The brand extension was never meant to work overnight. They need to build superstars first, who will be the future of this business…
And there were quite a few good points before, the middle, and after those ellipses, but I think we will save them for the case!
Manu has a huge point; people have ripped on the Brand Extension since the beginning. It is the same thing I highlighted in The Elimination Chamber case. Before ever getting to see something, people have already judged its worth and decided whether or not they like it. From that point on, it does not matter what they see, they will let their initial prejudices blind them to all the good that is happening.
The Brand Extension is a long-term project meant to change the way the WWE does business. We are only a few years into it, but so much has happened. This case will explore the intentions of the Brand Extension, what it has accomplished, and where it is going. This will be an odd case because the evidence is not what has happened, but more about giving something the chance TO happen.
What is a brand?
When we talk about a brand, what do we really mean? In the normal business sense, a brand is an image, logo, or trademarked line that is immediately identifiable with a company or a product. For instance, when you see a swoosh you think Nike. Or when you see lightning bolts on a plastic bottle you think Gatorade. The most successful brands are the ones when you see it you know the product, the company, and the image it is supposed to represent.
A brand does not have to be limited to the visual sense. It could be oratory, also (“I’m loving it!” = McDonald’s). In another sense, it can also be a feeling. When someone says, “Let’s go to Burger King, Wendy’s, or McDonald’s” you have an immediate emotional reaction to each company’s name, and a preference that comes to mind. That is your brand loyalty. Brand loyalty is the emotional connection you feel to a company name or image, and it is how companies consider you a customer.
For years, the brand of the WWF was the WWF, and you had a reaction to it. Whether that was positive or negative depends on the person. As time went on, the WWF established other brands, such as WrestleMania and Summerslam. These events became so big they were established names unto themselves beyond the WWF and existed whether someone were aware of the WWF as a company or not. Later yet, the WWF turned from a touring performance company to a television entertainment company. With that came the advent of “RAW” and “SmackDown!”. During the late 1990’s, people often knew of the shows RAW and SmackDown! whether or not they necessarily knew much about the WWF. The two shows had become brands unto themselves. More on this in a minute.
The WWF went through a major change when it was forced to drop the F and add an E. The WWF brand had become synonymous with wrestling in general. When people talked about wrestling, they often qualified it with “WWF wrestling”. Or when someone mentioned a fight, they would say, “Like in the WWF?” You see, having a brand being recognized as the industry is not always a good thing, though.
Let’s say you are the Band-aid company. Band-aid is a brand that has become synonymous with adhesive strips. Now everyone else who sells adhesive strips is living off of the Band-aid name and gets free advertising whenever someone says Band-aid. The same goes for Q-tips (cotton swab), Kleenex (tissue), Xerox (carbon copy), Post-It Notes (sticky pads), Tupperware (reusable plastic container), Rollerblades (in-line skates), AstroTurf (artificial grass), Jell-O (gelatin desert), and Ramen (instant noodles); and even FedEx (shipping) and Google (internet search) are recently falling prey to losing brand recognition. Some would have you believe that when your brand is synonymous with the product or the industry, you are the ultimate success, but that could not be further from the truth. When your brand is used to describe an entire industry or product, then it is worthless and you gain nothing from it. If all chocolates were called Godivas, then would you go to the Godiva store and spend four times the normal cost for chocolate? If all soaps were called Dove bars, would you buy Dove or the generic store brand?
The choice is clear. Losing your brand means losing all of the power and value that goes along with it.
Even during WCW’s height, people still referred to this industry as WWF wrestling. Read the old interviews with Goldberg, Sting, or Hogan during WCW’s top days, and the uniformed would still call them WWF wrestlers. WWF had become wrestling in general and was worth a lot less at that time.
When the WWF purchased WCW, then it did not matter anymore. They had a near monopoly on the industry and therefore did not need to reinforce to people that there was a difference between wrestling in general and the WWF.
But that was not so in the days of the Monday Night Wars. Since WWF already meant wrestling, they needed to find a way to attract and keep an audience on their programming and not on WCW’s. Hence, a new focus came: RAW and SmackDown!.
The advertising for the late 1990’s focused on getting people to tune into RAW or SmackDown!, not into the WWF. The same was true in WCW, people were asked to tune into Nitro and Thunder, not WCW. It was “Tonight on RAW: Stone Cold confronts the Rock”. It was not “Tonight in the WWF: Stone Cold confronts the Rock”. There is a subtle difference, but it was how the WWF attracted an audience. They made sure that people, especially the casual fans, knew the difference between RAW and Nitro since they could not teach them the difference between the WWF and WCW. This worked as people knew Stone Cold and the Rock were on RAW while Goldberg and Sting were on Nitro. They may have called it all wrestling or WWF, but they knew the difference in the shows.
This, obviously, became crucial in the deciding factors of the Monday Night Wars. By making their drawing factors in line with a television name brand it allowed the WWF to gain and maintain the casual fan audience and media attention that eventually led to them winning the war.
After the war was won and the dust cleared, the WWF faced a new problem. They lost the F and gained an E, but the mass media and the casual audience did not know. To them, the WWF equated to wrestling, and that was all there was to it. Those people (and most wrestling enthusiast) did not recognize the WWE as a brand name that they equated with wrestling. Even the few articles that did appear about wrestling at this point or with former wrestling stars usually said “WWF” (even if that person was never in the WWF). What was the WWE to do?
Well, because of the Monday Night Wars, they had developed RAW and SmackDown! into brands of their own, and they were the only brands (outside of the major PPVs) the company still owned that the casual audience would recognize.
When they decided to split the company into two traveling units, they decided that each company was going to go under the WWE (unrecognized brand) corporate umbrella. But they needed something the audience would recognize right away. They could not call one of them WWE and the other WCW or ECW or the Federation or any such thing (more on this later). They needed something the audience immediately recognized with the style of the WWE product, and those names were RAW and SmackDown!.
And as time has moved on, the WWE has discovered a new tidbit: 70% of the audience is Brand loyal. That means that only 30% of the audience watches both RAW and SmackDown! while the remainder only watch one or the other! Don’t believe it? Just take a look though the message board at all the people that are “protesting” watching SmackDown! or don’t get Spike TV (most people get USA, right?). The RAW and SmackDown! brands attracted and have retained different audiences based on their style, wrestlers, and availability.
So the WWE has been working for past year to create cross-over brand appeal to expand both audiences.
Now, a network rating point equals about 1,096,000 households and an episode of SmackDown! that took place a week before this was originally written did a 3.0 network rating. That means there are about 2.3 million people who are watching SmackDown who are not watching RAW. There is a potential audience to plow with a whole other product. The Brand Extension revealed that there is a WWE to be built with the existing audience, not just outside of it.
You might ask, though, why the WWE would go through the Brand Extension in the first place? After all, in 2002 they were the WWF, the InVasion was over, and there was a whole new world ahead.
But why oh why oh why would they ever do this?
Who better to ask than the WWE itself. In December 2003, the WWE posted this in their FAQ section of their website in response to the question “What was the reason for the brand extension?”:
The brand extension has enabled WWE to create two separate and distinct television shows that would provide the opportunity to develop and establish new WWE Superstars. The RAW and SmackDown! brands each have a touring company, thereby enabling us to increase the number of international live events yet lower the number of events at which each of our Superstars performs. Fewer events extend the careers of existing talent while provide more exposure to new talent. As well, there is the further opportunity to develop more pay-per-view events and distinctive consumer products. The company is considering increasing the number of pay-per-view events to 14 in fiscal 2005.
Quite a bit covered there, and we will explore the success of each, but let us just now focus on the intentions of the WWE:
(1) They wanted to establish new stars. Being the only game in town, they had most of main event talent already under contract and would likely gain the rest over time. They wanted to split those talents up to have others enter the mix.
(2) They wanted to have more live events to create more gate revenue and give more talent a chance to get practice and develop. On the same token, they did not want a single wrestler to appear at 5 shows a week and instead be at 3–4, thus keeping their bodies and minds in better shape. This would also lower the probability of injuries for these wrestlers.
(3) They wanted to add more PPVs. Having one company meant they could only have 12 PPVs overall. But only a year before the brand extension there were 12 WWF, 12 WCW, and 6 ECW PPVs a year. The WWF felt that there was an untapped market who purchased those PPVs who now had extra income that could be used on WWF PPV products instead.
Of course, there was the unstated reason here: the WWF/E wanted to create its own internal competition. They ruled the wrestling world and needed to find a way to innovate and re-attract the casual and WCW audience. So the brands were set up and given distinctive flavors. You may notice that the color red now equates to RAW and blue equates to SmackDown!, or that big guest stars show up on RAW while the future champions first appear on SmackDown!. The shows have been developing more branding over time, quite different from where they started.
The Beginnings of the Extension to Today
On March 18, 2002, WWF CEO Linda McMahon announced that since co-owners Vince McMahon and Ric Flair could not work together, they would be separated permanently.
Aside: Just to clear this up so this storyline so it makes sense, McMahon and Flair each owned 50% of the Class B super voting stock, while the rest of us out in the stock market owned a percentage of Class A regular stock. Every share of Class B stock was worth 10 times the voting power of Class A — that is, one stock of Class A would get me one vote at a stock holders meeting while one stock of Class B would get me ten. Since each owned shares that far outweighed the voting power of Class A stock, they could do whatever they wanted in the company… to an extent. You see, the Board of Directors had become the official overseers and decision makers of the company in the best interest of all shareholders. Although they are voted on by the amount of stock you have, they are only voted on once a year. So even if Flair and McMahon did not like their decisions, they still had to adhere to them until they could use their voting power to remove a board member a year later. So the board of directors through Linda McMahon decided to split the company in two and give each of the two Class B controlling stock holders control over one half of the company. Since their personal rivalry was hurting the company and thus the stockholders, the only fair solution was to get them away from each other since they could not get the controlling stock away from either.
The next week on RAW, each owner would get a chance to pick a superstar or tag team or stable (depending on the contracts of those teams) one at a time, alternating evenly. Each would have ten picks and then the rest would be randomly assigned. The Undisputed World Champion (Triple H) and Women’s World Champion (Jazz) were off limits since they would float between brands to defend their titles, as was Stone Cold due to a contract clause. McMahon got to pick first since he won a coin toss.
There were a number of interesting choices, but at the end of the day SmackDown! had the Tag Team, Hardcore, and Cruiserweight championships while RAW had European and Intercontinental. Well actually, Raven defeated Maven for the Hardcore title on the last mixed brand SmackDown!, so that belt went back to RAW.
Problems arose early as Ric Flair tried to make the Undertaker the #1 contender, but McMahon said he had first pick by virtue of the coin toss. So Hollywood Hulk Hogan became the #1 contender for Backlash, and RAW and SmackDown! would trade PPV main events each month. At this point, there was very little difference in the brands, and they shared everything except a couple of titles and TV time slots.
Another problem arose after Hogan defeated Triple H for the title. Triple H then became a SmackDown! wrestler but still kept showing up on RAW. There was no way to control him and no penalty to do so. The Undertaker then started showing up on SmackDown!. What were the owners to do? This could not go on.
And then the WWF became the WWE! Too many things were happening.
Jazz also then lost the Women’s Championship to Trish Stratus, thus making her part of the RAW roster as had happened to Triple H. Finally, all the superstars had a core brand (even Stone Cold had previously signed with RAW).
Later yet, we learned that when SmackDown! superstar Chris Benoit showed up on RAW he was allowed to do so because he was injured and not on the active roster. So apparently, only being an active wrestler kept you on a brand.
Things were going too crazy and the Brand Extension needed a new direction. Vince decided to do that by defeating Ric Flair in winner-takes-all-ownership match on RAW on June 10, 2002. It would seem that the Brand Extension would be over, then. But wait! Remember in the aside that I explained that the board of directors can control the final say in the WWE, and can only be voted out once a year? Well, despite Vince having so much clout, the board of directors, from a storyline point of view, were happy with the Brand Extension and wanted more of it. Vince, then, had to placate them.
After a month of planning, the WWE came up with a new direction: General Managers. Each would be in control of their brand and report to Vince as the ultimate overseer. On July 15, 2002, Eric Bischoff became the GM of RAW, followed a few days later by Stephanie McMahon becoming the GM of SmackDown! Thus, the Brand Extension Version 2.0 was born!
Vince also announced that superstars were now allowed to negotiate with either brand’s GM to get the best deal they could. Immediately, an open back and forth trading war ensued. Not just people, though, but titles. The entire structure of the original draft was changing. Meanwhile, the European and Hardcore titles merged into the IC title, creating one major mid-card title.
Then the unthinkable happened. Brock Lesner, the Undisputed Champion, refused to appear on RAW or face any RAW challengers. The championship became in dispute. Refer to the earlier Elimination Chamber case to follow the storyline there.
At the same time, the women’s championship also became exclusive to RAW for the same reasons, though Stephanie did not choose to dispute it. Now, each brand had a top World Champion of its own, with a Women’s, Tag Team, and IC title on RAW and a Cruiserweight Title on SmackDown! On September 22, 2002, the open contract period came to an end, and each brand was forced to build from the inside. Version 2.5 had begun.
SmackDown! focused on wrestling and had two top athletes, Chris Benoit and Kurt Angle, win the newly created WWE Tag Team Championships. Over time, fighting between these two, Los Guerreros, Edge, and Rey Mysterio (affectionately dubbed the SmackDown! Six) would highlight SmackDown! for months to come. Meanwhile, RAW became more about storylines and flash, with things like Katie Vick, HLA, and returning stars like Scott Steiner and Kevin Nash. Also, the IC title merged into the World Heavyweight Championship, meaning each side now had an even (odd?) three titles.
WrestleMania approached and the Royal Rumble was given a new twist. Each brand would get 15 superstars, and the winner would get to face “the world champion” in the main event of WrestleMania. Brock Lesner won and went on to defeat Kurt Angle in the main event.
Things stayed quiet for a while with some minor trades and the return of the IC championship. That is until Version 3.0 of the Brand Extension began on June 15, 2005 with the first ever brand-only PPV (RAW), Bad Blood. In an interview, Jim Ross had this to say:
BS: Wrestlers have the incentive for Sunday at the ppv, obviously putting on the best show they can besides the financial reasons, but this will be the first brand-only, RAW-only ppv. What’s the mood around Connecticut? Are the WWE offices a little bit more tense than normal? Any sort of expectations or ramifications come out of this ppv?
JR: No, I think it’s business as normal. I think everybody’s looking forward to it. The guys have a — there’s a friendly, natural [rivalry] between the RAW and Smackdown rosters. We don’t have that ECW ‘Us Against the World’ mentality. Which I think is counterproductive, as far as, the RAW guys hating the Smackdown guys. Or Michael Cole and Tazz knocking JR and King and vice versa. I don’t think that, to me, is a positive. At least that’s my view, I could be wrong on that. I think there is a very friendly, competitive nature with the rosters.
You see that manifest itself when we have our co-jointly produced ppvs when all the guys are in the locker room at the same time. I think the guys on RAW are probably gonna be, will rise to the [occasion], because they know their peers are going to be watching. I think it’s a pretty healthy environment right now. Really, Brian, I think everybody is pumped up and it’s gameday. Sunday, you go out and you get it done. And I think that’s what we’re intending to do.
And life goes on. SmackDown! had its brand-only PPVs, the two shared major PPVs, King of the Ring went away, the United States Championship came back. Paul Heyman, Kurt Angle, and Theodore Long each became the GM of the SmackDown! while Mick Foley and Steve Austin both took temporary co-leadership roles on RAW. People came, and people went, trades happened, new people premiered, new gimmicks were formed. The mode changed, the day changed, there was a lot of change going on. New rules were formed (the winner of the Royal Rumble could pick their brand champion to face), new events were formed (draft lottery, RAW vs. SmackDown! color wars), and some wrestlers found they have never seen the other brand. This is Version 3.5 of the Brand Extension still going on at the time of this writing, but definitely not the end of it.
The point of all of that? The Brand Extension is a work in progress! The WWE has recognized that things need to change, and they are constantly trying to make it a better experience while also creating cross-brand appeal (have to attract the rest of that 70%). Is it perfect yet? No. Are they trying to get there? Yes!
And the WWE will not get there if all we say is “the Brand Extension sucks. It’s a failure and they should reunite the brands.” I’ll get to that last point later, but you should know by now that being critical without a recommendation yields nothing. The only thing that is going to make the Brand Extension better is to let the WWE know what we like about it and where we can see improvement. They are in it for the long haul, and we as the audience have the responsibility to give suggestions that improve the product, not just be counter to it.
But I’m afraid there is one suggestion that just will not fly.
Where’s my brand?
Over the life of the Brand Extension, one thing that keeps popping up to the surface is the names of the brands: RAW and SmackDown!. Many people have come on and asked why not name the brands WCW or ECW? Those are certainly recognized products that would draw well!
That may be so, but think about this. Let’s say that SmackDown! became WCW. That means RAW would become the WWE, right? There would have to be a counter to the resurgence of WCW. But that brings us back to the original problem we stated at the beginning: the WWE is not a recognized brand name. While the WWF is a recognized brand that is synonymous with wrestling, WWE has not created that connection in the vast majority of people’s heads. Meanwhile, RAW is an immediately identifiable brand that attracts an audience. So while WCW might help one program, the other program suffers from being just WWE.
Then there is the other end. The WWF/E defeated and absorbed WCW and ECW. As much as we may not like it, that is the be all and end all of the Monday Night Wars and the wrestling revolution of the 1990’s. You have to realize that Vince and many people in the WWE cannot and will not ever accept the resurgence of a brand that could overtake the WWE. Can you imagine if WCW SmackDown! got better ratings than WWE RAW? All those people who spent so many years working in the WWF while WCW demolished them would suddenly find themselves second banana to the brand they tried to destroy.
Yes, in reality it would not matter since WWE corporate would be reaping the profits. But there is psychological toll that is taken. Look at what happened at AOL Time-Warner. The Times and Warner people wanted nothing to do with the AOL people, and stopped all the synergies of the merger from forming. This, with the downturn in AOL subscribers, led to the company just becoming Time Warner again. Even though AOL was victorious in acquiring Time Warner, they lost internally and became what they had bought. Because of that, many AOL people left. Even though they were still in charge and were still making money, they could not deal with the psychological impact of working for a brand that had been under them.
Many of those people loyal to Vince and the WWE would not be able to handle it if the “enemy” brand became predominant. To them, it would be as if Vince had turned his back on his own creation just for the sake of money. It would be like if McDonald’s bought Wendy’s and then renamed all of its restaurants Wendy’s. Where is the victory for all those who worked to make that acquisition possible?
Thus the Brand Extension in its current form becomes the compromise. Nobody in the WWE office will care whether RAW or SmackDown! is on top. Both of those exist UNDER the WWE umbrella, not beside it. It is completely psychological, but makes a big difference in the office and backstage employees who put everything on the line to bring the WWF to its superior heights of the late 1990’s. Although it may seem neurotic to an outsider, it makes sense in the heads of those who have been there. And those are the people Vince needs to support to keep his empire going.
The Big Guns
When the Brand Extension began, Triple H had just won the Undisputed World Heavyweight, and was not happy with the brands being split up. This was especially true after he lost the title to Hulk Hogan a month later and was relegated to SmackDown!. Hulk Hogan would in turn lose the title a month later to the Undertaker who would lose it two months later to the Rock. That was July 21, 2002.
Then, on August 25, 2002, a mere five months after the beginning of the Brand Extension, Brock Lesner defeated the Rock to become the first new champion of the Brand Extension era.
And what did the WWE say was one of their goals from earlier?
“…to develop and establish new WWE Superstars…”
Well, that’s one way to go about it. Brock Lesner also ushered in Phase 2.5 of the Brand Extension by only being on one brand, leading to the re-birth of the World Heavyweight Championship and his title becoming known simply at the WWE Championship. And since that time, the WWE Championship has been held by other first-time champions Eddie Guerrero, John Bradshaw Layfield, and John Cena. Meanwhile, the World Heavyweight Championship also met new holders in Chris Benoit, Randy Orton, and Dave Batista.
Of the ten World Heavyweight Champion reigns since the Brand Extension, 30% were held by new players, 10% were by young former champions in their first run in the WWE (Bill Goldberg), 10% by former stars coming back (Shawn Michaels), and 50% by Triple H. Ouch, that’s a lot of Triple H. That would make you think that he totally dominated the title and that nobody was given a chance. Well, of the 1,107 days since the resurgence of the World Heavyweight Championship, 55% of the time it has been in Triple H’s hands, 4% of the time vacant, 10% in older stars hands, and 31% in new stars hands. And every day that goes by, Triple H and the older stars numbers go down while the new stars’ numbers rise.
Don’t forget: at the beginning of the Brand Extension, the World Heavyweight Title needed some legitimacy. Although Eric Bischoff had genuine reasons to award Triple H the World Heavyweight Championship, he needed to win over the fans to the legitimacy and legacy of the belt. Having a credible champion like Triple H defending it against the best, and having big main even matches like the Elimination Chamber made the title seem incredibly important, despite the hurdle it had to get over in its path to re-existence.
Meanwhile, the WWE Championship had no such hurdles and could continue on unabated. Of the nine WWE Championship reigns, only 33 1/3% were by old stars and 66 2/3% were with new stars. Delving deeper, in the 1,115 days since Brock Lesner won the championship, 83% of the time the title was in new stars hands! That means old stars only touched the WWE Championship 17% of the time! How is that for developing new talent?
Combining the brands and the number of days of championship reigns, the titles have been vacant 2% of the time, in old stars hands 41% of the time, and in new stars hands 58% of the time. And like I said before, every day that goes by the old stars’ percentage goes down while the new stars percentage goes up.
At the time of this writing, it has only been three years since the Brand Extension split the titles, and only three and half since the Brand Extension began. Yet still, the WWE has succeeded in their goal of creating new champions. As time goes on, only more new champions can rise to the top with the occasional run by an old champion to keep the scene fresh and bring legitimacy to the young contenders.
Of course, with so many young, new superstars, there’s plenty we have not seen from them.
The Dream Match. Or is that the Dream eHarmony?
Who are the SmackDown! superstars at the time of this writing who have never been on RAW (TV)? Well, there’s Doug Basham, Joey Mercury, Juventud, Ken Kennedy, Melina, Orlando Jordan, Paul London, Psicosis, Rey Mysterio, Sharmell, Steve Romero (I know, I’m sorry), Super Crazy, and Vito.
And what about RAW? What RAW guys have never seen SmackDown!? Looking down, there’s Antonio, Ashley, Chris Masters, Gene Snitsky, Lance Cade, Maria, Rob Conway, Romeo, Trevor Murdoch, and Tyson Tomko.
What am I getting at? Well, most of these guys may not be huge now, but any one of them could be a future top tier champion. Stone Cold did not find his niche in the WWE right away, the Rock spent years developing, Triple H was not even Triple H for a long time. Stars take time to develop, and any one of these guys could be huge in the future.
One that is right near the top is Rey Mysterio. Sure, Rey-Rey has been beating up former WWE Champion Eddie Guerrero plenty, and holds wins over other former champions the Big Show, Kurt Angle, and Kevin Nash, but there are plenty of people he has not fought. What about Triple H? What about John Cena? What about Batista? What about older champions Stone Cold, the Rock, Mick Foley, or Hulk Hogan? There’s just so many different opportunities for him out there.
But it is not just Rey Mysterio. What about the battle of the champions with John Cena and Batista? What about the Kurt Angle/Batista match? Where’s John Cena/Triple H? John Cena/Shawn Michaels? Shawn Michaels/Batista? Hulk Hogan/John Cena? Ric Flair/John Cena? Chris Masters/Tyson Tomko?
OK, so maybe only I want to see that last match, but you never know! Maybe that will be the main event of WrestleMania 27? It’s too early to tell!
The point is, the WWE is trying to recreate the idea of the dream match. By having PPVs on a bi-monthly basis for each brand and extending feuds, they are keeping guys further apart, extending title reigns, and making dream matches more possible. Let me put it to you this way: if cake is available for free all the time, then it loses its specialness. You get sick of eating cake and start craving some nice carrot sticks. The longer you can go without cake, the better it actually tastes.
Plus, just look at the Dream Matches the WWE has created with the Brand Extension. At WrestleMania XX we got the huge inter-promotional match between Goldberg and Brock Lesner, a match the fans had been chanting for since Brock started running rough shot over everyone (and well before Goldberg was in the WWE). At WrestleMania 21, we got two huge matches in Randy Orton vs. the Undertaker and Kurt Angle vs. Shawn Michaels. Both sets were forced to stay apart from each other for months leading up to the big main event.
Even recently at SummerSlam we got Hulk Hogan vs. Shawn Michaels, and we are likely to get a couple more Hogan, Michaels, Flair, Foley, and Rock matches.
Let us not forget that a few superstars are still out there, including Sting, Kevin Nash, Scott Hall, and Bret Hart. Though those men are not likely to appear in a WWE ring again (or ever, in the case of Sting, or wrestling for the rest), the possibility exists. They say “Never say never” in this business, and so that possibility exists. And because the possibility exists, the WWE through the Brand Extension has brought back the dream.
New Rules, New Games
But the Brand Extension is not just about the dream of the future; it’s what it is adding to the here and now. What has the Brand Extension been up to? Well, let’s look at all the new situations and events we have now because of its existence:
In what has become an anticipated event, the draft lottery shakes up the definitions of RAW and SmackDown! every year. And the draft lottery has not remained in one stagnant form, either. Oh no no no no no no! What started out first as an “Owner picks” moved the next year into a “Random Pick” where everyone was on the line. Fan interest was so high that the WWE opted to extend the event the following year into a month-long affair. Is this the final version of the draft lottery? Most likely not, but it remains an exciting and compelling bit of TV that we would not have without the Brand Extension.
Royal Rumble Stipulation
With the Brand Extension came some wishy-washy areas from the old WWE that did not fit in anymore. One of those was the fact that the winner of the Royal Rumble received a shot at the “Champion in the Main Event of WrestleMania”. That little bit of ambiguity led to Chris Benoit being able to jump from SmackDown! to RAW in 2004, and was the crux of the storyline with Batista in 2005. The Royal Rumble stipulation is now an effective storyline piece that helps keep the pace from the Rumble until WrestleMania and provides just a little bit more of drama and intrigue for the interim.
In order to establish the brands (mostly RAW) and the rebirth of the World Heavyweight Championship, a monumental match needed to be created to capture the audience’s attention. That match was the Elimination Chamber. And as we covered in the Elimination Chamber case, that match drew the big buy rates to prove it was worth the dollars and the interest it generated.
Since the brands have been separated for a while now, fans have come to expect just seeing RAW of SmackDown! superstars at the house shows and television tapings around the country. Now, the WWE has started to schedule super shows that contain RAW and SmackDown! matches on the card, or do back-to-back television tapings. This is reminiscent of the days when the NWA and the AWA used to put on shows together, or WCW and New Japan putting on international supercards. The WWE has used the brand extension to create a supercard with just the talent they have in house, without the mess of having to split the profits of the show and other paper work mess that would go along with working with another organization. And there is no worry of the two sides not getting along in the future and never working together again and disappointing the fans; they belong to the same company.
Whether imaginary or real, the wrestlers’ contracts come up during the year. In the old days, that meant that they might jump from the WWF to WCW of vice versa (and a few to ECW and from ECW, too). Nowadays, there is very little of this. TNA cannot afford the large guaranteed contracts, and the WWE has most of the talent locked up. But what the WWE can do is create the illusion of contracts being up. Last year, Matt Hardy switched from SmackDown! to RAW by saying his contact was up and he signed with over to the other side. This plot device can now be used for other wrestlers, especially those being harassed by their general managers.
Of course, the talent is not in complete control. The GMs can send their talent away in monumental trades. At any time (apparently) several talent can be traded for others in a chance to see talent move off cycle. At the same time, talent can be raised by what they are traded for. When the Big Show was traded from RAW to SmackDown!, five wrestlers came in his place. That just made the Big Show look like a huge value coming in to SmackDown!, and he used that momentum to propel his rebirth over there.
For a while, Vince McMahon could threaten to fire anyone once he controlled the wrestling world. No one was safe, and it made it clear that he was in control and no one else. It was rather disheartening. With the GMs in control of each brand, firing someone can be a mistake. If they fire a wrestler (in a storyline), that wrestler can show up on the other show fresh as a daisy. To stop that, a GM can instead suspend a wrestler. This allows for slowing down a storyline, keeping characters fresh, and avoid the messy complication of “re-hires” at a later date. Besides, if someone were really fired, WWE.com would be sure to let us know. New honesty from WWE corporate: yet another repercussion of the Brand Extension.
But with all of these new inventions, some still criticized one brand or the other. As it is, I cannot go a week without reading that one brand is about to die.
The Death of So-and-So
At the beginning of the brand extension, RAW was considered the “weaker” brand because it had less credible champions and challengers. After the draft lottery, RAW became the powerhouse while SmackDown! became the “second banana”. As time has gone on, there have been scares that either show was about to be cancelled, and the rabble was more than willing to go along with the idea. But why?
Are those shows unprofitable? No, and as you will see later, quite the opposite. Are the ratings terrible? No, in comparison to the past they are not that high, but RAW is consistently rated in the top 5 shows on cable and SmackDown! is UPN’s top-rated show. Are advertisers canceling left and right? Absolutely not; if anything the WWE has a large plethora of very supportive advertisers who know the market they cater to.
When Spike TV thought the WWE’s asking price was too high and subsequently cancelled RAW at the end of the contract, everyone said RAW’s days were over. Yet, just a few days later they were able to finalize their deal with USA. Do you think SmackDown! will not find a future home?
Just because SmackDown! is moving to Fridays, it does not mean the show is dead. First off, UPN’s contract with the WWE runs until the end of 2006, so the WWE has quite a while to set up a new deal. At that, you have to realize why UPN is acting this way with the WWE. UPN is owned by Viacom, which also owns Spike (along with a lot of other networks). So you can imagine that the sister networks are working together against the WWE. UPN still wants to make money off of their contract, but not at the expense of the overall corporate parent.
SmackDown! is not going anywhere, and neither is RAW. Each is still a healthy brand with lots of life left separately and occasionally crossed together.
Still, there are those that say if competition arose the Brand Extension would have to come to an end…
Beware the looming shark
If you have watched Spike TV over the past few weeks, you have probably noticed something: commercials for TNA. That’s right; TNA is coming to Slammin’ Saturday Night and a late-night Monday replay. That being said, TNA is not competition yet. And even if they were getting a 4.0 rating every week, it would still not be full competition. That is for the following reasons:
#1: PROFIT — TNA is not profitable yet and requires the backing of Panda Energy in order to go about their daily operations. There is nothing wrong with that, and it makes perfect sense to do in the short term to grow at a rate faster than they would be capable of organically. That being said, both RAW and SmackDown! are profitable (see below) and are at a level that even in the best conditions TNA would take three to five years to get to. I hope TNA gets there, but they are not there yet.
#2: RATINGS — I said above IF they were getting a 4.0 every week. That is not going to happen, and when TNA premiers they will probably get about a 1.2. They might get higher in the first week and then drop immediately after that. It will take a good long time, but TNA can get there. RAW regularly gets a 3.8 cable rating and used to regularly get 5.0’s. Even getting to RAW’s current level, nonetheless their peak, is still a long way off. [Editor’s Note: TNA iMPACT premiered to a 0.8 rating in October 2005 and stayed in that range for quite a while. They did finally get that first 1.2 rating in May 2006]
#3: TIMESLOT — As happy as I am that TNA has two cable timeslots now, they are not going head-to-head with the WWE. They are not there at primetime Monday’s or Friday’s, and they are only on for an hour a week. They can be as entertaining as they want (and I hope they will be), but that does not mean they are seen as much. Which leads to…
#4: BRAND RECOGNITION — As I covered previously, people equate wrestling with the WWE (well, WWF, but same difference). The other week while watching RAW, my co-worker (who hasn’t watched the WWE since it was WWF and featured the 1–2–3 Kid) was over and the TNA commercial came on. I had to explain to her what the heck it was, and why I was looking forward to it. Do you know what she asked? “Why the heck would they call it TNA? That’s a stupid name.” You see, TNA has an uphill battle with the casual and fair-weather fans. Non-wrestling fans only think of the WWE/F, and there is nothing in their frame of reference to place TNA. TNA can become a recognized brand, but with a slow, thoughtful approach. And all those people who think they are going to die tomorrow because your mail man does not know what TNA is are wrong also. TNA is going through a long-term plan of their own and are aware of their battle, a battle they can win one day. I just need you to be aware of it as seen by the WWE, that they cannot win by tomorrow.
That being said, TNA could become true competition. Let us say that TNA lives up to all of their potential and they get as big as WCW in 1997. What should the WWE do then? Is the Brand Extension ruined?
Absolutely not! From 1996 to 2001, three major organizations were running full touring companies with weekly shows and PPVs. They were the WWF, WCW, and ECW. And during that time, the WWF was helping to fund ECW. So instead of helping to fund a different company, why can’t the WWE run two companies and TNA be the other? Bobby Hennan once said that he thought there was room on Monday night TV for a hundred wrestling shows. While this may be an exaggeration of possibility, the point is there. The economy has already proven they can support three different organizations at the same time. So why could those organizations not be RAW, SmackDown!, and TNA? Wait, why am I using such a recent example?
Back in the 70’s and 80’s, three organizations in the WWWF/WWF, the NWA, and AWA were all running at the same time. Even further back the 30’s the NB/WA, AWA, and NWA all were running (and a great number more, but those were the big players). The point is, three separate organizations can run at the same time.
Others will still say that the WWE would be a stronger force in that situation if they recombined. I will cover this point below. Just now, begin to think of all that will be lost should the brands recombine and the dream matches that will be lost.
The other thing to keep in mind is how the WWF survived their lean days in the mid-1990’s. Remember at that point in time, RAW is WAR and WarZone were considered two different shows, even though they were part of the same two hour block. That is because they wanted to have two top rated shows on cable as opposed to WCW’s one (well, two with WCW Saturday Night). That, and they could charge advertisers more for WarZone since it got higher ratings. Separation can actually lead to more money, and it’s about time we proved how…
The numbers that don’t agree
When the Brand Extension began, many people said it was a mistake because with fewer stars on each card ratings, buyrates, and attendance (and thus revenue and profit) would go down. Well guess what?
They were right.
Well, that was a fun case. Guess I lost. Time to go home.
Wait, what’s that?
Oh yes, I have the counter-evidence! Silly me!
First of all, the drop in ratings and attendance at the beginning of the Brand Extension (and later PPV buys during the PPV split) was by design. On September 27, 2002, Vince McMahon went before the crowd at a stockholders meeting and began to address the issues of business being down. I turn to attendant Chris Perry:
McMahon said part of the decline in attendance and television ratings was by design. In order to position WWE well for the future, the company has high hopes the “brand extension” of the separate Raw and Smackdown rosters. In implementing this “brand extension,” WWE knew they would [lose] fans as the transition took place.
The ultimate game plan is to build two distinct groups that can operate under the WWE banner.
As discussed here before, separate storylines, TV shows, tour dates and Pay-Per-Views are the goals. All have been accomplished with additional PPVs scheduled for 2003.
McMahon believes as future stars are cultivated and creative storylines improve, so [too] will the product improve.
So the WWE knew overall numbers were going to drop. Of course, you are supposed to ask if they knew the numbers were going to drop, why would they do it at all?
Think about it as a stock split. Let’s say you are a public company with one million shares outstanding (able to be traded) on the New York Stock Exchange (NYSE). On June 30, 2002, your stock was selling for $100 per share, and therefore your company was “worth” $100 million. On July 1, 2002 you did a “stock split” where every single share of stock became two. So now you have two million shares outstanding. Each share is not worth $100 a piece; each is now worth $50, and essentially nothing has changed. The company is still worth $100 million. Why would you do it then? The company seems to have less value per share now that it is split.
Let’s jump ahead to June 30, 2003. You still have two million shares of stock outstanding. But now they are worth $70 a piece, thus making your company worth $140 million dollars. If the company had not split, would the stock price have reached $140 a share to match that? Most likely not, there are few on the market that can afford that. But a much broader base of people can afford $70 a share, and now your company looks more attractive. It is owned by more stockholders, and may reach that $100 mark again to do another split!
Now think about this in terms of the WWE. When RAW and SmackDown! split, it was known that each was going to be “worth” less separately than if they had stayed together. $100 seems bigger than $50. But, as time moves on, each develops its own value and rises in price. Let’s say the WWE completely spun off RAW and SmackDown as separate companies. At the day of this writing, WWE is trading at $13.18 a share. For simplicity sake we will jump back in time when it was trading to about $12 a share.
OK, let’s pretend nothing else exists in the WWE (no WWE films, books, music, etc…) and it is just RAW and SmackDown! They split off tomorrow and each one is worth $6 a share. Because each is getting less revenue and profit separately, RAW drops to $5 and SmackDown! to $3.50. Now the company is worth even less than when this started!
That is where the WWE was in 2002/2003. The split lowered the overall value of the company. Jump ahead a few years. Now, RAW is trading at $9.00 and SmackDown! at $7.50. So the total WWE is worth $16.50, higher than when it started! Would the combined WWE reach that level? It possible, though not probable.
You are saying, ‘sure, that sounds good in an imaginary situation, but that’s not what is happening’. Oh contraire! That is exactly what is happening. How do I know? I read through five years of quarterly and annual reports and I ran the numbers!
First off, let me warn you that the WWE’s fiscal year is very peculiar and does not being and end on normal months. They try to end their year the month after WrestleMania, which gives an odd pattern to follow. That’s why sometimes a quarter will have an additional or one-less PPV. I did my best to normalize the WWE’s numbers into “regular” years, but I will be the first to admit it may be off by about 5%-8%. Know that going in, I don’t hide it.
In 2001, the WWE had revenues of about $431 million dollars and net profits of $8 million (net profits were so low due to the XFL). In 2002, with the beginning of the Brand Extension, that revenue number dropped to $411 million and net profits were at $26 million. Then in 2003, with the Brand Extension in full force, revenue dropped to $367 million while there was a net loss of $0.5 million (there was a correction on the balance sheet and some payments of discontinued operations. Profits from operations remained in the 15–20% of revenue range). This was not looking good, as many have said.
But something has begun to happen. In 2004, revenues popped just a little bit to $371 million with profits of $40 million. And with the additional quarter results release last week, the WWE is already up 3% to the previous year in revenue (and 9% on profit, though that is due to much cost cutting). By my calculations, the WWE does about 23% of their business in the next quarter, which means they are on track to make about $383 million in revenue for the year with $51 million in profit.
Do you see that? The Brand Extension is beginning to climb back up! All the loss that was expected at the beginning is giving way to the EVENTUAL growth. Given another few years, the WWE separated could be making much more than the WWE combined ever did from 1999–2001.
Looking for a few more signs? From Ashish and the newswire:
WWE Summerslam drew roughly 530,000 buys this year, making it the most bought Summerslam PPV in years.
And it also crashed our server! But it’s not the only PPV that has gone up:
Progress is starting to be made!
Is the WWE at the top of its financial game? No. Did they lose a lot of money in the short term that they could have had if they had not gone through the Brand Extension? You bet. Is that all changing? It looks like it! Is each brand beginning to grow at a faster rate separately than if the WWE were a combined company? The numbers don’t lie. Can each brand be a success and take the WWE overall to new heights?
Only if we are patient to let the Brand Extension reach maturity and not pull the trigger at the inopportune moment.
Reunion says what?
Let’s say, though, the WWE listens to the complainers and the brands recombine after the next PPV. These same complainers will say ratings will go up, PPV buyrates will go up, and attendance will go up!
And you know what? They are right again!
This does not bode well.
Sure, having all of your main event talent — your draws — all over your program will get people to watch both shows… for a while. This is just like the same type of crash booking that many complained about under Vince Russo. Just do something quickly and get the big pop! But then what happens?
Well, you’ll have the Big Show, Edge, John Cena, Kane, Kurt Angle, Ric Flair, Shawn Michaels, Triple H, Batista, Booker T, Chris Benoit, Eddie Guerrero, JBL, Randy Orton, and the Undertaker as your main event talent all fighting for one title. What the heck can you do with the other 13 main eventers while two are fighting each other? Plus Hulk Hogan, Mick Foley, and Steve Austin can show up at any time. And there are still others out there like Chris Jericho, Sting, Nash, Hall, and Goldberg. How long until you are back to the original problem of feuds getting played out and talent getting burnt out and fans getting bored out with seeing the same people twice a week. Everything gets hyper accelerated again, but the WWE will not let these guys go.
Yes, there will be a big pop like at this year’s Vengeance when RAW had both the WWE and World Champions in matches. What then? Then every problem still exists.
Does the WWE want to have two touring units? How can you tell the fans that only half of the main eventers can be there? People know who is on RAW and who is on SmackDown!, but if they are combined they will expect both and feel ripped off otherwise. Well, there went the second touring group. How many matches can you fit on a PPV? Somewhere in the neighborhood of eight seems probable. Are those main eventers going to give up those PPV spots to Carlito? Just look at all the stars that were not at a combined Summerslam, and all the titles that were not on the line. There just simply is not enough room.
And speaking of room, SmackDown! has 40 people listed on the roster and 47 over on RAW. Is there room in a combined WWE for 87 people? Most likely not, which means cutting at least 25% of the lower and mid-card. Where is the future of the WWE then? How can they develop new talent when they have to fire most of them and there are so many main eventers that there is no room to grow?
Besides, a recombined brand does not solve the WWE’s deeper problems. Does a combined WWE have a more creative department? No, it will still be the same people writing the shows. Does it make WWE legal more forgiving of alleged trademark infringements? No, the legal department still will not allow Justin Credible and Billy Kidman to walk around with those names. Will cruiserweights be allowed to fly off the top rope? No, Paul London will still get that whiner gimmick. Will wrestlers be able to work to their top ability? No, Doug Basham and Rob Conway will still be told to kick and punch and not show what they can do.
The WWE has other problems that are not so quickly solved with a recombined organization. Nor are those problems any easier to solve with a combined roster. If anything, recombining now will create more problems that will take years to resolve, all the while causing several more years of loss after the initial pop.
Why go back now when the upside is just starting to become visible?
Where the future lies
The WWE is going through some major changes at the time of this writing. SmackDown! has just moved to Friday’s (for now) and RAW is returning to USA. But what about the Brand Extension? What other changes are in store for each show?
Will RAW and SmackDown! get more PPVs? Will they only share two or even one a year? Will each brand introduce another title for lower-mid carders? Will RAW become more show and SmackDown! more athleticism? Will they reverse? Will bookers be given more control and Vince McMahon take a much more limited role? Will trades be allowed throughout the year? Will the draft lottery not cover champions? Will there be a RAW vs. SmackDown! tournament a la King of the Ring?
The answer is: I don’t know.
The Brand Extension is a work in progress, forever changing. The WWE is not satisfied with where it is now and is changing it for the better. And that is the point, isn’t it? We need to give it a chance to get there, wherever “there” may be.
Time to Split
The Brand Extension has not been given a fair shake since the beginning. People have complained on everything from the brand names to the champions. Yet the Brand Extension has given so much, including 58% new champions, annual events, new storylines and plot twists, and new situations that can keep the WWE interesting for years.
There is a fear of competition, but the wrestling world has proven it can handle having three promotions running at once. Besides, recombining the brands only provides a momentary pop and does not solve the WWE’s larger issues. Still, the numbers are beginning to turn around now, despite the initial drop that was expected and planned for. There is potential for growth.
And that is the point of this case. The Brand Extension needs to be given a chance to breath and mature. Calling it a failure and ending it does not prove anything, not when things are going just as the WWE said they would. The Brand Extension is plan in progress, and the WWE — and we the wrestling fans — deserve the chance to see where it can lead.
The defense rests.
After the Trial
IN THE CASE OF THE IWC VERSUS THE BRAND EXTENSION, THE BRAND EXTENSION HAS BEEN ACCUSED OF BEING AN ABYSMAL FAILURE THAT IS ONLY HURTING THE WWE, WRESTLING, WRESTLERS, AND THE FANS SINCE ITS INCEPTION.
With 90.5% of the vote, the Brand Extension was found:
As you can imagine, with a score like that there was not a lot of controversy. Instead, people brought up more pertinent examples from their own experiences, such as this one:
I wanted to add something to your thoughts about more house shows on a regular basis. Back in 2000, there was a House show in Fresno, CA. Here is our card for the night:
October 8, 2000 — WWF — Fresno, California:
K.Krush defeated Joey Abs…
Edge, Christian, and Jacquline defeated The Hardy Boyz and Lita…
Crash defeated Just Joe…
Light-Heavyweight Champion, Dean Malenko, defeated Essa Rios…
Hardcore Champion, Steve Blackman defeated Sho Funaki…
Chris Jericho defeated X-Pac
… Chris Jericho vs X-Pac for a Main Event????? Yeah I was pissed off too, I mean we got to see 3 Champions (Blackman, Hardy Boyz, and Malenko) but they weren’t the top guys. While San Jose got the big boys
October 8, 2000 — WWF — San Diego, California:
The Goodfather and Bull Buchanan defeated Too Cool…
Mideon defeated Brooklyn Brawler…
Jerry Lawler defeated Raven…
European Champion, Al Snow, defeated Saturn…
Rikishi Phatu and Triple H defeated Kurt Angle and Kane…
The Dupps defeated Rodney and Pete Gas…
Chris Benoit defeated Billy Gunn…
The Dudley Boyz defeated T&A in tables match
There was also an [appearance] by Stone Cold Steve Austin too, this night in San Jose.
With the brand [extension] most people who pay 40–50 bucks for house show tickets don’t feel like they got ripped off, I know [I] sure did with a main event that [I] had just seen 2 days before as the opening match on Smackdown.
A different Eric (Erik?) thought more about what would have happened to the up-and-coming wrestlers if there were less spots available for them:
It’s obvious it’s not guilty, just look at the current two top stars, John Cena and Batista. If the roster split never happened, they would still be mid-carders, most likely still under the Prototype and Leviathan gimmicks. Without the roster split, Orton and Batista would never have joined HHH and Flair to form Evolution. Without the split Cena would never had been given the time to find his voice and polish his gimmick to the point that now he’s the 2nd coming [of] Rock and Austin rolled into one. With one World Title, there is no chance that you would have seen Benoit or Guererro hold the belts, or see guys like Edge or Matt Hardy in TV Main Events. One Tag Team title would have stolen our chances of seeing MNM, The World’s Greatest Tag Team, or La Resistance blossom like they did. Would Carlito, Eugene, Paul London, Ken Kennedy….. Kennedy, Shelton Benjamin, Chris Masters, or Randy Orton have debuted without the roster split? Maybe a few, but they wouldn’t be becoming anything worthwhile. I have to say the Brand Extension did far more good to the WWE than bad.
To this I responded:
All I can think about is that Cena and Orton used to be “Team Vanilla New Kids With No Name”. I think you are being generous with them being mid-carders, because I’m not sure they would have got on TV. I think we would have seen them make it to Heat and then subsequently get cut when they did not immediately win over the crowd. It took both nearly two years to find their voices and gimmicks, and that does not include the years spent training in OVW. Just remember all of the guys who were in OVW and HWA when the WWF bought WCW, and how many did not make it to the main roster for years or at all because of the sudden influx of talent. Most of that talent is still around, yet spots had to open up for them somehow!