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Interview:
Vince McMahon, Chairman, World Wrestling Entertainment
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9th March 2004, by
Chad Williams
Credit:
The Hollywood Reporter
It's
been a long, wild ride to WrestleMania XX. Since
the first edition of WWE's annual wrestling spectacular
in 1985, the company has exploded into a television
powerhouse, fought a life-and-death battle for
its very existence and even changed its name.
WWE chairman Vince McMahon recently sat down with
The Hollywood Reporter's Chad Williams to reflect
on the road his company has traveled these past
20 years and where it's heading.
The
Hollywood Reporter: Twenty years ago you rolled
the dice and risked your national expansion on
the first WrestleMania. Could you have imagined
back in March of 1985 that you'd still be here
trying to top yourself in 2004?
Vince
McMahon: Well, yes. It was a bit of a risk, there's
no question about that. We didn't have to make
money, that's for sure, but it all caught on,
it did extremely well, and the rest is history.
But after the first one, then there's no reason
why they wouldn't be successful on an annual basis.
The whole theory behind (WrestleMania) was no
different than the Super Bowl, or the Emmys, the
Oscars, whatever. We should have had our big annual
event. And that's what it still is.
THR:
The early days of WrestleMania saw WWE utilize
a lot of mainstream celebrities. Can we expect
anything along those lines this year?
McMahon:
This year we're not. Quite frankly, our guys have
become the celebrities. ... The original emphasis
of WrestleMania was all about "what is sports
entertainment." We were still defining it
for the masses then. They understand what sports
entertainment is now. We find that our audience
actually resents celebrities coming in unless
the celebrity is woven into the fabric of a story
line and really adopts what our audience adopts,
which is WWE.
THR:
About three years ago now, your last national
competitor (Time Warner-owned WCW) went out of
business. Do you miss the competition?
McMahon:
Hindsight being 20/20 ... I don't know that it
may have been just a matter of time before we
killed each other off. I don't know. Our understanding
of the business on a long-range basis really gave
us an advantage. We were overmatched in terms
of assets, but they were overmatched in terms
of work ethic and in terms of understanding how
to build a brand. And in the end, our formula
worked. Quite frankly, though, I was surprised
when (they) threw in the towel. I didn't think
that would ever happen.
THR:
You were wooed quite publicly when your contract
with USA Network expired in 2000. What convinced
you to make the move to Viacom?
McMahon:
We always enjoyed (our relationship with) USA.
Some of the people who are still there are still
our friends. But Viacom gave us more of an umbrella
type thing in terms of what they could do for
us. Obviously, this is before USA was acquired
by NBC. But when you look at Viacom in terms of
all they could do for us in terms of theme parks,
publishing, everything along those lines ... And
we were already on UPN, so it was just a matter
of time then before there would be synergy with
that and Spike TV, or TNN as it was called when
we first went over. It just gave us more opportunities
I guess.
THR:
About a year ago, WWE re-upped its "SmackDown!"
contract with UPN, and in doing so abandoned a
long-standing practice of purchasing airtime and
then selling the advertising yourselves. Why the
switch to a more traditional license-fee arrangement?
McMahon:
We made that decision because it was a better
deal for us from a downside standpoint. But beyond
that, we were hopeful that the "SmackDown!"
sales force combined with CBS' sales team would
bring more advertisers than we were able to attract
because they deal with a larger spectrum (of advertisers).
So the hope is that they will be able to attract
sponsors and advertisers that we otherwise, in
our small little world, cannot.
THR:
You came out on the losing end of a legal battle
in 2002 with the World Wildlife Fund over the
rights to the name WWF, a name your company had
been using for a number of years. Were you surprised
that you lost that case?
McMahon:
Very.
THR:
You had some sort of understanding in place with
the World Wildlife Fund prior to the lawsuit,
didn't you?
McMahon:
At one point they came over and strong-armed us
into signing something. There was absolutely no
confusion whatsoever in the marketplace between
the World Wildlife Fund and the World Wrestling
Federation. We were told by those people that
their chairman or someone got off a plane in Nairobi
and the people who were there to greet them were
disappointed because they thought that "the
wrestlers had arrived." To my knowledge,
if that's true -- and I doubt it very seriously
-- that is the first and only confusion of the
two brands. But nonetheless they said that this
was a big problem for them. We signed something
... (after) they threatened all kinds of litigation,
etc., which at the time would have buried us.
So we signed it under duress ... and basically
as time went on, it was like, "This is onerous,
this is absurd." And we continued to grow
exponentially ... far more than they did, and
we became a global brand. Quite frankly, I don't
know why they picked on us really ... because
we've done them no harm. So the only avenue that
was available to us -- other than living under
their thumb, which we didn't want to do -- was
to change the branding ... so we did. And quite
frankly, I'd like to think it's a textbook case
of how you change your branding.
THR:
Following the collapse of WCW, you essentially
went about creating your own competition by creating
separate rosters for UPN's "SmackDown!"
and Spike TV's "RAW." Are you committed
to this strategy in the long term?
McMahon:
I am committed to it very long term and ... it
has worked out extremely well for us. We actually
have a tour going on in Japan as we speak and
one back over here. When we were going head-to-head
with Turner, it was one big soap opera played
out on Monday and Thursday, and it was just a
matter of time before we burned out those stars
or those story lines creatively. We just did a
survey in which Nielsen told us that 70% of both
"RAW" and "SmackDown!" viewers
do not watch the other brand. Which means that
we have a pretty large audience out there when
you combine the two. Whereas before it was the
opposite -- 70% of our audience watched both because
it was the same story line. Now (that we've established)
the brand separation ... we're gonna go the opposite
direction and start promoting one to the other.
THR:
You recently had a bit of a contractual showdown
with DirecTV during which four of your pay-per-views
were not aired. Are you satisfied with the deal
you ended up with and is the WWE getting the slice
of the PPV revenue pie it deserves?
McMahon:
Well, I haven't tried to change our deal. I don't
know that (our current) 50/50 deal really is fair
because there's nothing that's organic about a
WWE pay-per-view. We create the interest, we create
the characters. We're (both) the creators and
the presenters as opposed to other PPVs from the
sports world that happen organically -- ours is
completely created and done by us. ... We're not
the only thing in pay-per-view, but from a live-event
standpoint, we're obviously the biggest contributor
on an annual basis and have been for some time.
We've also elected to produce two additional PPVs
that will come out this year. At one point there
were 24 PPVs -- we had 12 and Turner had 12. Since
then, it's been down to just 12, and there's room
now since we have the separate brands ("RAW"
and "SmackDown!") and each brand has
had their own successful PPVs. By (adding PPVs),
I'm not asking DirecTV or anyone else for more
money -- even though we're creating two events
that they otherwise didn't even know they had
on the books. So I do think that we're entitled
to our 50%, and I won't take any less. It's unfair
to a producer who creates all of this to not give
that company a 50/50 (split). If you accept less
than that, it's just a matter of time before the
pipeline squeezes you out.
THR:
Your deal with InDemand is up for renewal soon.
Can we expect any similar drama?
McMahon:
We've drawn the line in the sand with InDemand.
We have a 50/50 deal with the cable systems, and
InDemand being the distributor garners some points
from us as well as they do from everybody else
that uses them. But again, this year is where
we drew the line in the sand and said, "Look,
if you take more than you have in the past ...
why are you taking more? Just because you're greedy?
Give me a reason why you want more money. Give
me any valid reason whatsoever." I don't
mind paying people more for something if we're
getting more. But just to change a deal because
you're greedy and you want more? No. I'm not gonna
go along with that. But we have agreed in principal
-- it's not in writing yet -- to stay the course
with InDemand.
THR:
Attendance at house shows (nontelevised events)
has been a source of concern for the company recently.
With so much emphasis on building to the PPVs
and putting on exciting free television, is it
tough to convince the fans that nontelevised events
still matter?
McMahon:
I think it's a difficult balance. It always has
been, even with the various tiers that we service
on television. You want to be able to give away
enough to maintain interest, but at the same time,
if you give away too much, then it's going to
hurt your PPV or DVD or whatever the next tier
is. Likewise in terms of our live events: It's
difficult but it can be done. You don't want to
play a market too frequently. I think Madison
Square Garden is the building we play most frequently,
which is only six times a year. Of those six times
a year, there should be three "SmackDowns!"
and three "RAWs." So let's say you're
a "RAW" devotee, in order to see the
stars live you only have three opportunities a
year to do that, and that's in a major market.
So I think that as time goes on it's a question
of supply and demand. And we're building up the
demand to see our new, younger stars in action.
I also think that our live events have to more
closely mirror our pay-per-views and we're gearing
that up too. The downside is, some might say,
"Well, geez, you guys are only doing 40%
capacity or something like that now." True,
that is a downside. But the upside is -- what's
gonna happen when we catch on fire?
THR:
Speaking of catching fire, it's sort of become
the common wisdom that wrestling is a cyclical
business. During the red-hot periods of the mid-'80s
and late-'90s, WWE brought an entirely new audience
to the product. Is there a level of faddishness
that those types of periods will always depend
on, or can those boom periods produce a long-term
fan base?
McMahon:
Well, I don't subscribe to (wrestling) being cyclical.
And they've always said that about our business.
I think that we're no different from a Hollywood
studio ... and our batting average is much higher
than any studio. By and large, regardless of how
well a studio is run, it's only as good as the
product it produces. And we're the same way. The
difference, though, is that even at a time like
this when we're not, quote, "on fire,"
we're still making money. A Hollywood studio (will)
lose millions of dollars until they hit. Through
the years when you chart our progress ... there's
been a constant (upward) grade, so that every
plateau we reach is higher than the last, which
means that we (ultimately) have a larger base
of fans.
THR:
In the last couple of years, you've bought up
a lot of wrestling footage from defunct companies
like ECW and the old American Wrestling Assn.
Combined with the library that came with the purchase
of WCW and WWE's own archives, you're now in possession
of thousands and thousands of hours of footage.
How do you plan to exploit that library?
McMahon:
It could take any number of forms, and we're exploring
that now. It could be a channel in and of itself
in terms of a digital channel. It could be an
analog channel, although they're very expensive.
It could be an SVOD (subscription video-on-demand)
type situation, which we think is a viable alternative,
too. So we're looking into all of that, and we
know that with all of the libraries and everything
that it is a tremendously valuable asset. You
can even exploit it on a tiered basis -- where
if you start it out as SVOD you can eventually
then move it onto a basic cable channel, etc.
The other aspect of this is that it's really global
in nature. When you think about our brand and
the inroads we've made in so many different countries,
that channel is viable in almost any language
or any country because it's readily understood.
I think we're poised for a lot of growth in the
very near future on a global basis.
THR:
At a press conference a couple of years ago, your
wife, (WWE CEO) Linda (McMahon), said that you
hoped to eventually have 25% of your total revenue
coming from international operations. Is that
something that you see on track?
McMahon:
I think we'll eventually get there. From an international
standpoint, I don't think we've done a very good
job, quite frankly, of exploiting the international
market like we really should. We're on television
in many many markets and do extremely well television
ratings-wise, but that's only one aspect of what
we do. We do licensing, we do merchandising, and
live events, and publications, and DVDs and everything
else imaginable. And we haven't integrated all
of that in our international platforms, and (doing
that) is one of our goals.
THR:
Speaking of the international arena, you recently
took your crew to Baghdad to tape a special "SmackDown!"
in front of U.S. troops there. What was the genesis
of that trip?
McMahon:
This company is truly an American success story.
It's Chevrolet, apple pie and WWE. Some people
tend to forget the roots that we have in the fabric
of Americana. So I'm very pro-American, and whether
you agree with whether we should be in a war or
not, I think that it's important for everyone
-- unlike Vietnam -- to support our troops. Wherever
our troops are, they're away from home, they're
making a sacrifice, and they are defending the
freedoms that we enjoy back over here, even though
they're on foreign soil. So to us it was a privilege
to go over there.
THR:
The Rock has been the first WWE star to make the
transition to major film star. How do you weigh
the loss of a charismatic performer -- at least
on a day-to-day basis -- against the benefit you
get from having a mainstream star identified with
your company?
McMahon:
First and foremost, when you create stars, I think
you want to hold onto them to a certain extent.
At the same time, you want them to be able to
go fly, and that's what we did with Rock. The
Rock loves this business and will always be a
part of it, but only on a sparing basis. He's
graduated so quickly into successful film work,
but he'll always want to come back. And as such
that spot needs to be filled with someone else
that's gonna come along and capture everyone else's
interest and imagination ... and then at the same
time probably do a little Hollywood work on the
side and gradually get into that. So it's important
to have a new young stable of stars, always ready,
always pushing the envelope, so that you can capitalize
on them. If you stop building stars, which we
never do, you wouldn't be in business.
THR:
You've had a couple of dust-ups with reporters
in the past year or two, including rather memorable
encounters with Bob Costas and HBO's Armen Keteyian.
Is that the real Vince McMahon we're seeing, or
is there a degree to which you're slipping into
the onscreen persona you've crafted for WWE fans
over the years?
McMahon:
I'm extremely passionate about our product. And
when I think that the product is being treated
unfairly, it upsets me. I guess maybe you can
easily read me sometimes when I'm upset. But the
character I play on television, in our environment,
that's a performance. When I'm doing the Costas
show or any other show, generally it's me. It
depends on where they lead me. A lot of times
they're looking for me to be the bad guy. And
if they give me reason to be, sometimes I don't
disappoint them.
THR:
There are few companies -- public or private --
that are more closely identified with one person.
Do you see WWE continuing to thrive when you're
no longer at the helm?
McMahon:
Absolutely I do. This is a young man's business.
Now that doesn't mean at 58 I can't contribute,
because I think young -- I think mentally maybe
I've just reached puberty. You need to surround
yourself with quality human beings that are intelligent
and have a vision, and we're doing that. I'm setting
it up now, even though I have no compunction to
check out at all. I think my idea of retirement
might be to one day work a 40-hour week. At the
same time, I don't want to be an impediment to
progress. Some people when they get up there in
age tend to be a little too conservative, not
want to take as many chances. And I know people
around me, not just my family, will let me know
if I don't know it myself, and hopefully I will.
But (the company) is to an extent heavily identified
with me, I guess, because I've been a public figure
for all these many years. I've been on television
for 35 years or whatever it is. But it won't even
have a hiccup if I get hit by a bus tonight. It
really won't.
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