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Vince McMahon, WWE



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.



Photo Copyright 2004 World Wrestling Entertainment Inc. All rights reserved.







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Copyright 2004 The Hollywood Reporter







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