This article examines the myriad ways in which RFID (Radio Frequency
Identification) technology will impact the world of sports. In this paper,
we look at how this “weird new media revolution” will have
a transformative impact both on the games themselves and the fans’
experience at the stadium. We will examine how RFID is being used in sport
applications from golf to soccer to racing of all forms to add previously
unimaginable real-time richness and accuracy to the sports. We will also
look at the use of RFID in ticketing and payment applications that will
add security, control, and new revenue streams to sports operations, while
giving enhanced value and services to the fan. We will conclude with a
look at what this new version of Sports 2.0 will mean in the future both
in and out of the sporting arena.

Introduction

RFID stands for Radio Frequency Identification, and it is poised to be
the successor technology to the bar code in identifying “things”
in our economy. Using small microchips embedded in objects, RFID can create
unimaginable levels of control and visibility in a whole host of applications.
Evidence of such can be seen in the mandates of major retailers, such
as Wal-Mart, Target, and Albertson’s, along with the U.S. Department
of Defense, to have their suppliers begin affixing RFID-enabled labels
to shipments of goods to their distribution centers (Morphy, 2005, n.p.).
As outlined in Table 1, RFID is currently being employed in a whole host
of areas.

Table 1 – RFID Applications

Source: Wyld (2006, p. 159)

While creating new efficiencies in distribution and new opportunities in
retail may mean billions of dollars and while the application of RFID in
pharmaceutical and animal tracking applications may save thousands of lives,
the wide world of sports is no doubt one of the sexiest applications for
RFID on the horizon. It is also an area where RFID can enhance both the
participant and the spectator experience, impacting people’s lives
in a positive manner. As such, innovative companies across the globe are
rushing into sports applications for the technology.

Take golf balls for example. Anyone who has picked-up a golf club has
been there. You hit your drive off the 1st tee, and it goes, and goes,
and goes – where? All golfers have spent countless hours combing
the banks of creeks, looking in crevices, and pouring through thickets
in often fruitless searches for their wayward shots. But what if there
was a high-tech way for the ball to tell you where it was and guide you
to it? Radar Golf is a small company, based in Roseville, California,
seeking to RFID-enable the game of golf with its Radar Golf System. Such
a prospect led Stephanie Stahl (2005), the editor of InformationWeek,
to say that finding lost golf balls may be the “killer app”
for RFID in the consumer world.

Radar Golf has developed a golf ball that is manufactured by a Chinese
contractor that has an RFID tag embedded inside its core. The ball has
been certified as conforming to the rigorous standards of the United States
Golf Association (USGA), enabling it to be used in tournament play. The
company’s patented Ball Positioning System (BPS) is built into a
handheld unit, which is essentially an RFID reader that transmits a specific
radio frequency signal to search for the lost ball. It provides a visual
LCD signal strength display and pulsed audio tone feedback to the golfer
looking for his/her ball, with the beep increasing (like a Geiger counter)
as the golfer nears the location of the wayward ball. The BPS presently
has a detection range of up to 100 feet (LaPedus, 2005). The company began
marketing the system in mid-2005. The Radar Golf System retails for $249,
which includes a dozen golf balls (additional dozen balls sets retail
for $39). It plans to license the technology to other golf ball manufacturers
to equip their branded balls with RFID tags (LaPedus, 2005).

We are seeing that, as with the golf ball example, games themselves can
be enhanced through the use of RFID technology. We are also seeing that
RFID can be used to secure ticketing and enhance the in-stadium spectator
experience. RFID can also create new metrics – and new gambling
opportunities – in the sports world. In this article, we will take
a look at Sports 2.0, as RFID helps reshape the sporting life and experience.

RFID on the Field

RFID is fast getting “in the game,” as we are seeing exciting,
in-event applications of RFID technology in sports ranging from the “beautiful
game” to road racing of every form.

Football (Soccer)

Indeed, the most noteworthy in-game example to date comes in the world’s
most popular sport – football (or soccer as we in the U.S. know
it). The Erlangen, Germany-based Fraunhofer Institute for Integrated Circuits
has developed an RFID-based system to give complete visibility to the
soccer field. Both the ball and a shin-guard on each of the twenty-two
players are outfitted with RFID-chips, and readers positioned to scan
the entire field can read the position of both the players and the “Smartball”
up to two thousand times each second. The Fraunhofer system will not only
allow for referees to consult the data to potentially aid in correctly
calling disputed goals and troublesome off-sides penalties, but it will
permit soccer clubs and their fans to access performance metrics on their
teams and individual players. Although FIFA (Fédération
Internationale de Football Association), soccer’s world governing
body, passed on using the technology for the 2006 World Cup, the system
is likely to be approved for tournament use later this year (Collins,
2005).

Racing

We have also seen that RFID can add value and visibility to racing events
of all types. One of the longest standing applications of RFID has been
in the area of marathon racing. The ChampionChip Company pioneered the
use of RFID-chips attached to runners in the Berlin Marathon in 1994.
Since then, the firm’s namesake tracking device has been worn by
millions of road racers, cyclists, in-line skaters, cross-country skiers,
and triathletes in thousands of events worldwide. The tracking device,
which uses passive RFID technology with antennas built into specially-designed
mats over which the athletes must pass, allows for the racers’ real,
net times to be recorded as they pass the start-finish and other intervals
along the course, as well as the “value-add” of for real-time
tracking via the Internet for friends, fans, press, and family members.
It has been used in the New York City Marathon, where five thousand runners
per minute crossed the thirty-six meters-wide starting line at the Verrazano
Narrows Bridge. And in the June 2000 Broloppet Half Marathon, in which
runners raced across the new bridge connecting between Denmark and Sweden,
a record 79,837 competitors were tracked using the ChampionChip (ChampionChip,
2006). Commenting on the state of marathon technology, Judith Donohue,
manager of the HP’s New England Initiative, whose firm has worked
with the Boston Marathon for over a decade, observed: “We’ve come
a long way from when we used to draw a line in the street with chalk”
(quoted in Ewalt, 2004, n.p.).

RFID has moved into a motor racing. Texas Instruments has developed the
Race Timer system for motorcycle racing, in which an RFID transponder
is placed either on the motorcycle’s front fender or in the rider’s
chest protector. The system is a quantum improvement over the former use
of single-file gates and either manual recording or scanning bar codes
attached to riders’ helmets. With the TI system, the size of motorcycle
events can grow significantly, supporting up to one thousand riders in
a single event (Texas Instruments, 2005). RFID has also been adopted by
the IRL (Indy Racing League), with active transponders being positioned
in the same point in the nose of the Indy Car and with antennas positioned
around – and in – the track. With speeds of over two-hundred
miles per hour, the system can distinguish between two or more racecars
passing the same point within 10,000ths of a second of each other. The
system allows for real-time race tracking via the Internet for all IRL
races, including the Indianapolis 500, where antennas are installed in
the track surface in the Indianapolis Motor Speedway’s famous Yard
of Bricks at the start-finish line of the “Old Brickyard”
as the track is known (Karle, 2004).

While NASCAR has not announced a similar in-race system, the fast-growing
racing circuit is employing RFID for tracking tires used by all racing
teams in its three racing circuits. The system will enable for centralized
control over the Goodyear tires used in NASCAR events, in order to allow
for an even playing field between the race teams and better control over
tire stock (Anonymous, 2005). RFID also presents a very practical advantage
over the former bar-code based labeling of tires for NASCAR events. Goodyear
had in the past attempted to track tire inventory for race teams by applying
bar code labels to the sidewalls. However, they quickly found that the
bar code labels could be intentionally rubbed off or smudged when in use
(Sullivan, 2005). With the new system, the tire inventory is centralized
by NASCAR, and race officials can use handheld readers to quickly scan
both cars and the pits to make sure they have the proper quantity and
type of tires in their possession before, during, and after the races
(Swedberg, 2005).

Finally, in a slower speed form of racing, RFID has been introduced in
the ancient sport of pigeon racing. In the past, to determine timing and
ranking in pigeon races, handlers had to catch pigeons one-by-one and
read an identification number from metal rings attached to their legs.
Today, the standard practice for almost a decade has been to attach RFID-enabled
plastic bands to the birds’ legs with the positioning of antennas
at points along the course from the release point to the home loft (Anonymous,
1997).

RFID in the Arena

RFID-enabled Paper Ticketing

There have been exciting developments recently to integrating RFID chips
into a paper-form ticket. Doing so has several advantages, including:

• Preventing counterfeiting
• Promoting security
• Inhibiting the secondary “black market” for prized tickets
• Facilitating faster patron entry into sports venues.

The recently concluded FIFA World Cup in Germany was the largest use
of RFID in sports ticketing to date, with:

• Twelve venues
• Sixty-four games
• 3.5 million tickets (Blau, 2006a).

FIFA had previously employed RFID-equipped tickets in its “dry
run” for the 2006 event in staging its Confederations Cup in Germany
in 2005 (Blau, 2006b).

The World Cup ticketing was based on Philips Electronics MIFARE technology,
enabling ticket-holders to gain entrance to the venues by sliding their
tickets into fixed scanners, positioned at the entry gates to the stadiums.
As can be seen in Figure 1, the tickets are personalized with the name
of the ticket buyer. While FIFA collects identification information on
all ticket buyers, the RFID tag does not contain info on the ticket holder,
only access information for the FIFA ticketing system (Stensgaard, 2006).

Figure 1 – World Cup Tickets

Besides security concerns, one of the principal reasons FIFA chose to
employ RFID-based security in its ticketing for the World Cup was out
the organizer’s desire to significantly cut down on the secondary
or “black market” for these highly coveted tickets, which
FIFA prohibits from sale or transfer outside of family members except
in cases of undue hardship (Blau, 2006b). According to Carrie Johnson,
an e-commerce analyst for Forrester Research, the size of the global secondary-ticket
market is difficult to precisely pin down, with projections ranging anywhere
from $2 to $25 billion annually (cited in Sandoval, 2006). While World
Cup tickets for this year’s event averaged approximately a $180
face value, one estimate from the United Kingdom projected that FIFA leaves
as much as $3.6 billion (US) on the table by not charging market rates
for tickets (Blau, 2006a). FIFA’s prohibition on illegal ticket
sales, whether by what are known as “ticket brokers,” “scalpers,”
or “touts” by region, has not stopped those engaged in the
banned practice from trying to sell tickets. In fact, bids rose to $3000
or more per seat on eBay for World Cup tickets, even though the buyer
had no assurance they could actually enter the venue with a ticket, the
name on which could not possibly match the ticket holder (Kelly, 2006).
Buyers were betting on the fact that gate personnel would not bother checking
the ticket holder’s ID to match the name on the ticket to the person
presenting it at the turnstile – a bet lost by some fans, according
to media reports from the game sites. One sports industry analyst stated
that better control over the pricing of tickets brings FIFA additional
worldwide revenues in areas such as licensing, sponsorship, and broadcast
rights through marketing the World Cup as a “people’s game,”
rather than as entertainment for the wealthy and powerful (Higgitt, 2006).
Still, it is not a fool-proof system, as even one member of the FIFA Executive
Committee, Ismail Bhamjee of Botswana, was asked to leave Germany during
the World Cup when it was discovered that he had sold match tickets for
the England versus Trinidad and Tobago game for more than three times
their face value (Anonymous, 2006a).

Certainly, preventing counterfeit tickets from being presented at the
turnstile is a concern of any promoter of a sporting event – from
one as large as the World Cup, as pricey as the Super Bowl, or for hosts
of professional sports events and even prestigious amateur competitions,
such as college football games and skating championships. For instance,
at this year’s Super Bowl XL in Detroit, local police arrested twelve
people on felony charges for selling counterfeit Super Bowl tickets, and
seventy-three bogus tickets were confiscated from people who tried to
enter Detroit’s Ford Field on the day of the game (Anonymous, 2006b).

How can RFID help to curb counterfeiting? In November 2005, Texas Instrument’s
Tag-It RFID inlays were embedded into all 100,000 tickets for the Tennis
Master’s Cup 2005, held in Shanghai, China. The event organizers
used sixteen stationary readers at the entrance gates to Shanghai’s
Qi Zhong stadium, which is slated to host the event for three consecutive
years through 2007. As Yang Yibin, Deputy General Manager of New Sports
and Entertainment (Shanghai) Ltd., a subsidiary of the Ba-Shi Group, explained:
“Prior to using RFID, spectators were required to purchase a pre-event
ticket holder and then exchange it for the physical ticket at the stadium
box office. This new system not only offers peace of mind that the tickets
purchased are genuine, it puts tickets in the purchaser’s hands faster
and provides more efficient entry come event time” (quoted in O’Connor,
2005b, n.p.). In addition to the gate verification of the ticket, New
Sports and Entertainment outfitted event staff members with handheld RFID
readers to spot check tickets inside the stadium for an added level of
security (O’Connor, 2005b).

Many of the best practices and lessons learned emerging from the FIFA
World Cup and other high profile events will be employed at the next global
sports event on the horizon at which organizers plan to use RFID-based
ticketing – the 2008 Beijing Summer Olympics (Campbell, 2005).

RFID-enabled Smart Cards – The “Golden Ticket”?

The hybrid solution of RFID-enabled, paper-form tickets may be a short-term
solution to the problems of crowd control, security, and resale prevention.
Indeed, the longer-term solution may be a move away from hard copy tickets
entirely to an electronic “Golden Ticket,” – a smart
card solution that offers benefits in both ticketing and payments.

That is the vision of a number of competing firms today. Stadiacard,
a division of the UK-based TelCo Management Limited, is working with several
leading football clubs in the UK in proving the viability of such a contactless
card solution. Most notably, there is the example of the Liverpool Football
Club, which has been at the forefront of using contactless technology
in its stadium since 2003. For the upcoming 2006/2007 season, the Liverpool
Club, winners of the 2006 FA Cup, will be shifting its season ticket buyers
entirely to Stadiacard’s contactless solution, providing them with
what they are branding as the Fan Card. Liverpool has now equipped its
historic Anfield Stadium, which dates back to 1884, with readers at all
of its entry gates. The Liverpool Club believes that the system will not
only speed entry of season ticket holders into the stadium, but also eliminate
the possibility that these buyers could resell individual game tickets
from their season-long package or provide them to “ticket touters.”
This is because the Fan Card will be required for entry throughout the
season. If sold, the season ticket purchaser would lose the right to enter
the stadium for not just a single match or series of games, but the remainder
of the season. While Anfield only has a capacity of 45,400 seats, the
Liverpool club has issued over 130,000 Fan Cards to date. Supporters who
are not season ticket holders can use their Fan Cards as ID when purchasing
individual game tickets via the phone or the Internet (Stadiacard, 2006).

A similar solution, also aimed for the football market, is being marketed
by the St. Andrews, Scotland-based Scotcomms Technology Group. Scotcomms
TeamCard contactless solution is being employed by several leading football
clubs in the UK, including:

• Bolton Wanderers
• The Celtic (Glasgow)
• Chelsea
• Crystal Palace
• Everton
• Ipswich Town
• Millwall (Scotcomms Technology Group, 2006).

One of the significant benefits of such contactless ticketing is the
ability of the sports’ team/club to derive incremental revenue from
what would have been unused tickets by season ticket holders. One of the
British football clubs making use of the TeamCard, the Bolton Wanderers,
has turned a season ticket holder’s inability to attend a game into
a “win-win” for all parties. Gareth Moores, a director of
the club, estimates that 5-8% of season ticket holders can not attend
a given game. The Bolton Club rewards season ticket holders who notify
the organization in advance of their inability to attend a game with £10
worth of points loaded onto their TeamCard. These points can then be used
for purchasing either refreshments in the club’s stadium or team
merchandise from the club. The club is then able to resell that unused
seat – for an average profit of £15. Likewise, football clubs
have begun to offer seating upgrades to better sections on an availability
bases to card holders, with the ability to charge their registered payment
option immediately should they choose to sit in a better seat for an event
(Thomas, 2004).

There is also a significant security benefit to the use of contactless
tickets for sporting events in general and for football specifically.
Unlike with paper-form tickets, if a fan’s ticket card is lost or
stolen, the team can simply issue a replacement and cancel out the original
lost item. Also, the team retains significant control over the use of
the card, which is especially important in venues such as football in
England, where crowd rowdiness and hooliganism has been of paramount concern
in recent years. If a team can identify trouble making fans, they can
simply deactivate that person’s contactless ticket card and ban
them from the grounds. In the same fashion, as has been done in Liverpool
since the 2003/2004 season, stadium security and support personnel have
themselves been issued contactless cards, allowing for the club to maintain
required staffing levels throughout the stadium and monitor staff movement
for both management and payroll purposes. Finally, since the fan’s
card also operates as a form of payment in the stadium, the benefits of
contactless payments at concessions and merchandise sales locations can
be reaped. And, in the United Kindgom, unlike at sports venues in the
United States, where sports betting is not legal in the stadium setting,
fans can place wagers before and even during games using the same contactless
ticket card (Scotcomms Technology Group, 2006; Stadiacard, 2006; and Thomas,
2004).

Michael Richardson, Chief Technology Officer of New York-based Smart
System Technologies (SST), points to the fact that professional sports
teams “have to look for new ways to raise incremental revenues beyond
selling seats” (quoted in Collins, 2004, n.p.). Contactless payment
technologies, integrating RFID into either credit cards or key fobs, may
indeed be the key to unlocking more revenue potential from fans inside
the stadium. Early trials of such systems have been promising. In one
pilot, fans using the PowerPass system of New York-based Smart System
Technologies (SST) consistently bought double the amount of brewskis,
hot dogs, foam fingers, and other concession items, while speeding the
transactions (between two and six times faster than cash or credit card)
and taking cash-handling out of the equation (Collins, 2004).

This season, Major League Baseball’s Texas Rangers have worked
in partnership with Chase to provide their fans with the convenience of
contactless payment technology. During the 2005 season, only one concession
stand at Ameriquest Field in Arlington, Texas was even equipped to accept
credit-card payments. For this season, the Rangers have installed more
than two-hundred contactless credit-card terminals throughout the ballpark,
at a cost of approximately $150 each. According to Scott Rau, a Senior
Vice President for Chase, contactless cards can take thirty seconds off
the time required for each cash transaction. Thus, fans can speed through
the process of buying concessions and souvenirs in the stadium, enhancing
the spectator experience by reducing their time waiting in lines and not
enjoying the event. Rangers Vice President Brad Alberts is excited about
the new technology, believing “it’s easier for the fans, it’s quicker
for the fans, and people will probably spend more money” (quoted
in Koenig, 2006, n.p.). The system is expected to grow in use as Chase
distributes more of its branded credit cards with contactless payment
capabilities. As of June, the company has distributed over seven-million
of their “blink” cards in major metropolitan areas in the
U.S., including the Dallas/Fort Worth Metroplex, home of the Texas Rangers
(Koenig, 2006).

At present, MasterCard is undoubtedly the leader in the field. MasterCard’s
PayPass technology has been implemented to date in a total of nine Major
League Baseball ballparks and seven National Football League stadiums
(Anonymous, 2006c). These current installations are detailed in Table
2 below.

Table 2 – Stadiums in the United Stateswith PayPass Installations

Source Info: MasterCard International – June 2006

From the perspective of Lawrence Flanagan, Worldwide Chief Marketing
Officer for MasterCard International, “stadiums represent the ideal
venues to showcase the promise of PayPass,” which the firm is fast-expanding
in its credit card operations (quoted in Anonymous, 2006c, n.p.).

What’s the next level for contactless payments? Well, it can be
found in Atlanta’s Philips Arena. In a test that began earlier this
year, 250 season ticket holders of the Atlanta Thrashers NHL hockey team
and the Atlanta Hawks NBA basketball team are receiving a specially NFC
(near field communication)-enabled Nokia cell phone which they can then
use in the arena for concession payments. Moreover, the cell phones can
detect the passive RFID tags embedded in “smart posters” positioned
around Philips Arena. With the phone held within a few inches of the poster,
they can download news, graphics (such as pictures of players or wallpaper
images) and promotional video clips which are presently inaccessible by
the general public (O’Connor, 2005c). According to a recently released
study from Philips Electronics and Visa International on the utility of
Near Field Communication (NFC) and contactless payment technology, consumers
like the convenience, ease of use, and “coolness” of making
transactions with their mobile phones (Philips Semiconductors, 2006).

Analysis

Will RFID be “the next big thing?” At this point in the technology’s
life cycle, it is too early for anyone to tell, but the stars certainly
seem to be in alignment for the next decade to be a tremendously exciting
one. Many share the sentiment of Kuchinskas (2005) that: “RFID will
change business and society as much as cell phones and the Internet have”
(n.p.). Futurist Paul Saffo believes that we are in the early stages of
“a weird new kind of media revolution,” in that “RFID
will make possible new companies that do things we don’t even dream about”
(quoted in Van, 2005, B1). Saffo views RFID as a media technology, making
it possible for what he categorizes as “’smartifacts’
or intelligent artifacts, that are observing the world on our behalf and
increasingly manipulating it on our behalf.” Saffo thus stresses
the importance of thinking outside the box on RFID and looking beyond
today’s problems to find “unexpected applications,”
which is where “the greatest potential for RFID lies” (quoted
in O’Connor, 2005a, n.p.).

Today, we are seeing the first fruits of this “weird” new
media revolution that RFID is sparking, including those found in the sports
field. What we are seeing with the advent of RFID in the sports marketplace
is the introduction of a technology that has the power to transform the
experience of playing and watching games. Sports 2.0 promises to be an
exciting – and richer – experience, and it will be interesting
to observe the innovations that will surely come over the next few years
as RFID-based applications become more commonplace in sporting venues.

What does all this portend for the “Average Joe Six-Pack”
sports fan? As a player, as a coach, as a spectator, and as a gambler,
RFID is on tap to transform the sports world over the next decade. We
will see RFID-based systems replace some of the fundamental rule elements
of sports, to the betterment of the game. After all, it is hard to believe
that in 2006, the way we measure first downs in football is with a chain!
We may also see the automation of some routine scoring and statistics
compiled in major sporting events, such as line crossings in a wide variety
of sports and distance calculations in golf. RFID will also bring heretofore
unimaginable levels of information and intelligence to our games. Already,
there is speculation that RFID may enable new forms of wagering on sporting
events with the new metrics that can be uncovered by RFID-chipping of
balls and players, making new opportunities for casinos and sports books.
In baseball for instance, RFID could enable gamblers to bet on things
– in real-time – like the precise distance of a home run and
the positioning of individual pitches. Finally, there is speculation that
some players and teams may not want to release such new statistics, such
as how far they ran during a soccer or football game, for fear of revealing
efforts that they may not be especially proud of. This is hardly information
overload; it’s revolutionary on many, many levels.

References

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Abstract

World Wrestling Entertainment (WWE) is best known for its
promotion of professional wrestling as sports entertainment. Today, World
Wrestling Entertainment is an integrated media and entertainment company
principally engaged in the development, production, and marketing of television
programming, pay-per-view programming, and live events, and the licensing
and sale of branded consumer products featuring the highly successful
World Wrestling entertainment brand. As the WWE brand continues to grow,
a strategic decision has been made to place a greater emphasis on the
expansion the WWE brand globally. This paper will present an overview
of WWE from its beginnings as the WWWF (World Wide Wrestling Federation)
to its recent decision to capitalize on the significant operating leverage
of its business model through increase in its brand in markets throughout
the world.

Background

Originally named the WWWF (World Wide Wrestling Federation),
then the WWW (World Wrestling Federation), and currently called the WWE
(World Wrestling Entertainment), professional wrestling has come a long
way from its beginnings in the 1930’s. Today, nearly 50 million
fans admit to watching the Monday night WWE flagship television program,
WWE Raw Is War on the USA television network. This is the number one regularly
scheduled cable TV program among young women. Among men aged 12 to 24,
it topped Monday Night Football. More people attend the WWE’s live
shows than attend an average music concert; the WWE’s Website gets
more viewers than either the NFL or the NBA sites (Sully, 2005).

Wrestling was an early favorite of network TV, but it faded
when the Dumont network folded in 1956 (Assael, 2002).

In an October 5, 2005 interview Kurt Schneider, Executive
Vice President of Marketing, provided a macro perspective on the corporation’s
international expansion efforts, outlining four reasons why logic would
suggest that the WWE will be successful in this venture: 1. Unlike major
sports leagues, there are no game “rules” to understand. It’s
just a “Good vs. Evil” premise; 2. Fans do not need to understand
a “language”; 3. Every single country has wrestling (in some
form) as part of their culture; 4. WWE wrestling is seen as a “uniquely
American export” (Schneider, 2005).

The WWE is, in effect, a hybrid of entertainment and sport.

Viewer Profile – Age Demographics

• 71% male / 29% female 73% are 18 or older
• 37% are between the ages of 12 and 34
• 23% are between the ages of 18 and 34
• 50% are 34 or younger
• 14% are younger than age 12

Perhaps most importantly, WWE made a conscious decision
to create and develop two distinct brands: Raw and Smackdown! Each brand
is unique and has different story lines and separate talent. This creates
opportunities to capitalize not only on television programming, but also
on highly profitable live event tours, doubling the merchandising revenue
streams. Also, in keeping with its known youthful fan demographic, the
company has fostered and encouraged new media ventures and a heavy internet
presence (Rosner and Shropshire, 2004). The division of the WWE talent
roster into two distinctive and separate entities proved to be a stroke
of genius, reviving a company and sport that had previously suffered sagging
ratings and significantly lowered attendance numbers from live events.
This shift – a change in production strategy – was a necessary
one, and resulted in higher quality for both entities (Lamb, et al, 2005).

Beginning to formalize its expansion process, WWE Corporate
held true to its business model, a model which was highly successful domestically,
which has proven even more successful in internationally. Figure 1 depicts
the WWE model.

WWE Expands Internationally

The internationalization of professional wrestling can be
traced back to Japan at the end of WWII, specifically the 1950’s.
Originally, no Japanese wrestler ever won a match, being associated with
being the loser after WWII. In effect, wrestling became a metaphor for
international politics.

The internationalization of wrestling then moved on to the
United Kingdom, Germany, and Australia, its primary markets.

As early as 2002, the WWE had already begun to position
itself within the international market. “WWE provides us with a
global identity that is distinct and unencumbered, which is critical to
our U.S. and international growth plans” said Linda McMahan, President
of WWE. “As WWE, we will launch our further expanded U.S. and international
touring, our international expansion of branded merchandise and licensed
products, and further integration into the film, publishing, and music
business” (Wagner, 2004.)

International expansion represents an important component
of the continued growth of WWE. The broad appeal of its content has yielded
high international demand for its television programs and its live events.
To further nurture this growing demand, WWE plans to continue its international
television distribution, currently available in more than 100 countries
in thirteen languages, and increasing its television penetration internationally
has the potential for increasing the demand for WWE live events, which,
in turn, has the potential to greatly increase the sales of its branded
merchandise. These brands enable WWE to execute its strategy by freeing
up schedules for talent to perform at more events in more countries.

“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 DVD’s and everything else imaginable.
And we haven’t integrated all of that in our international platforms,
and (doing that) is one of our goals” (McMahon, 2004).

Regardless of country and culture, the insemination process
at WWE is shockingly consistent and regimented. WWE Corporate Headquarters
adheres to a simple three-step plan when tapping into new markets: 1.
Sell TV programming first; 2. Sell live events tour; 3. Bring merchandise
overseas.

As of 2003, admittedly, the process of expanding internationally
was not overly formal within the company. There were essentially 3 groups:
a) TV Sales (with a goal of disseminating product (ex: Raw, Smackdown),
b. Live Event Touring (many “one off” events), and c. Licensing
(completely dependent on a & b). Shortly thereafter, Jonathon Sulley
was hired to handle the expansion efforts, with an overall goal of integrating
all existent strategies. The new process helps WWE to build primary markets;
while in the primary market, it allows WWE to build a secondary market
and finally tertiary markets (such as Chile, Ecuador, and Panama City
– all places that WWE has never been). WWE has plans of going to
Australia in late 2005, New Zealand in early 2006, and the Philippines
sometime in the near future.

Italy is currently the hottest market, surpassing success
seen even over in the United States. According to company research, the
licensing business is the deepest in Italy, and the WWE phenomenon is
at peak. For Italian fans, pro wrestling is “polarizing” –
you either love it, or you hate it. As Sulley (2005) said in an interview,
“the Italian market is like no other.”

Revenues on the international front have more than doubled
in the last three years, and steadily increased every fiscal year since
2002 – $38.5M (2002), $51.8M (2003), $63.2M (2004), $87.5M (2005). Figure
2 illuminates revenues, both for international expansion, but all in comparision
to domestic revenues, which have steadily declined each year over the
same period.

Figure 2: Comparison of Revenues (in $ millions

Television:

One strategy for the further expansion of the WWE brand
internationally is to duplicate its successful domestic business model
overseas (Figure 1) by building on its already established television
presence in over 100 international markets. One way to continue this market
penetration is through the expansion of its live event touring. The following
figures are representative of its growth in the international marketplace.

Looking toward FY2006, business is expected to move into
emerging markets such as Latin America, Eastern Europe, and China. This
fits the WWE strategy to broaden its international footprint in the following
manner:

Conduct 55-60 international events as compared to 49 in FY 2005
Attract over 1.6 million attendees worldwide
Sell television rights in over 100 international markets
Continue to develop and further pay-per-view distribution internationally
Expand WWE licensing agreements

Television Live Events:

For fiscal 2005, events were held in:

Additional cities under consideration for future events
include:

Rome, Italy
Bolzano, Italy
Ancona, Italy
Livorno, Italy
Montreal, Quebec Canada
Toronto, Ontario Canada

The WWE Show Stops in Israel

As early as October 1994 the WWF, as it was called before
becoming the WWE, began presenting its live shows in Tel Aviv and Haifa.
The WWF become one of the biggest fads in Israel. The fad is being fueled
by an expensive but effective promotional campaign which included WWF
photo albums being distributed to all six Israeli high schools at lunch
hour, free of charge. The WWF was broadcast on Israeli cable television
once a week, on Friday afternoon when the streets are devoid of teenagers.
Wrestling is enormous, but not all wrestling programs are. Only the WWF
is. As an example, in 1995 the WWF returned for shows in Jerusalem and
Tel Aviv. The prior November saw ticket agencies scrambling for blocks
of tickets to sell and within weeks half the 16,500 seats had been sold.
he best seats, selling for $50.00, were sold within days.

1994 saw many of Israel’s major corporations joining
the WWF bandwagon. The country’s largest confectioner, Osem, sold
WWF snacks, and Israel’s largest sport shoe manufacturer, Gali,
signed a deal to emboss WWF stars on a line of sport shoes. Israel’s
second largest ice-cream manufacturer, Whitman, negotiated for the rights
to put WWF stars on its boxes for the summer season.

The popularity of WWE merchandise can be seen in the Israeli
example. Distributor of WWE merchandise in Israel, Boaz Dekel has stated
that, “This is the fad of all time, way bigger than even the Ninja
Turtles, The Simpsons, or Dinosaurs.” (Chamish, 1994). The items
he distributes include WWE notebooks, shirts, lunch boxes, and dolls.
Most popular are stickers and cards traded by teenagers. Monthly sales
are reported to be in the area of millions of dollars.

WWE Asia

Wrestling’s reach is not exclusive to Europe. The
Hong Kong free-to-air satellite platform, TVB, acquired 119 hours of wrestling
programming from the WWE. Indonesian free broadcaster RCTI has bought
98 hours of WWE Smackdown, its weekly program that airs on Friday evenings
on USA as well as eight specials to be aired in the next year and a half.
South Korea’s SBS has committed to 208 hours of programming including
the WWE programs Heat, Smackdown! and Raw is War.

From FY 2002 through FY 2005 international revenues increased at a compound
annual growth rate of 23%. The forty-nine international events in FY 2005
attracted audiences in excess of 450,000 attendees.

“WWE provides us with a global identity that is distinct
and unencumbered, which is critical to our U.S. and international growth
plans” said Linda McMahan, CEO of WWE. “As WWE, we launch
our further expanded U.S. and international touring, our international
expansion of branded merchandise and licensed products, and our further
integration into the film, publishing, and music businesses” (Wagner,
2002).

The WWE is now in the midst of a major paradigm shift from
controlling everything to giving up partial control to enter new markets,
such as, in this case, China, where it will partner with local business
ventures to establish a foothold and learn the workings of the Chinese
market.

In addition to live events, further expansion of WWE pay-per-views
in new and additional territories along with increased marketing and associated
sales of WWE licensed branded merchandise is expected.

Always seemingly ahead of other countries in terms of creation,
adoption, and use of technology, Japan and WWE reached an agreement in
2005 for a “subscription video on demand service” via Plala
Networks, Inc. of Tokyo. In essence, WWE will offer its content as usual;
however, the medium will be broadband internet instead of TV, and the
format will be a broadcast titled WWE 24/7. The impact of such a deal
has yet to be assessed, yet it appears to be an incredibly low-risk venture,
given that the Japanese company is actually a subsidiary of one of the
major telecommunications companies in Japan. In addition to driving subscription
sales for Plala, it also positions WWE on the technological cutting edge
in an extremely large international market.

“WWE is a global franchise, and WWE 24/7 was conceived
as salable concept that would scale worldwide for partners and fans,”
said Tom Barreca, Executive Vice President, WWE Enterprises. “Signing
with a leader like Plala is a significant breakthrough for WWE 24/7 internationally,
and we see a great future in contracting with other telephony and telecommunications
providers around the globe” (WWE 24/7).

Wrestling Hits South America

In late 2005, WWE struck a television deal with Latin America’s
FOX station – FX Latin America – to broadcast bilingual (Spanish
and Portugese) programming for the next two years. The station reaches
approximately half of all television homes in the Pan market. Emiliano
Saccone, VP of Marketing for FX-LA, was pleased that professional wrestling
will now be a significant driver of viewership for their network. “We
are thrilled to have World Wrestling Entertainment on FX featuring WWE
Velocity and WWE Experience. FX is committed to offer to its viewers the
best quality in programming. WWE, having been involved in the sports entertainment
business for more than 20 years, is one of the most popular forms of global
entertainment today on FX screen, and will contribute to establish stronger
brand loyalty with subscribers, affiliates and advertisers in all Latin
America” (WWE Signs, 2005).

International Television

It is expected that international television will pay an
important role in WWE’s expansion into international markets. Presently,
7,500 hours of WWE programming are syndicated each year in the 100 markets
WWE serves. WWE programming is currently distributed throughout Europe
and Asia in the following manner:

• Sky Sports – England, Wales, Northern Ireland, and Scotland
• J Sports channel – Japan
• TAJ TV LTD – India
• PREMIERE – Germany
• CJ Media – Korea

Pay-Per-View

Pay-per-view also plays an important role in the internationalization
of WWE events:

• Canadian Partners
  • Viewers choice
  • Shaw Communications
  • Bell Express
• International Partners
  • BskyB – England, Wales, Northern Ireland, and Scotland
  • J SPORTS – Japan
  • Premiere – Germany
  • CJ Media – Korea
  • Sky Italia –
  • Main event – Australia

Branded Merchandise

Branded merchandise leverages WWE talent with their television
products. Within the WWE brand, WWE branded merchandise includes:

• Licensing of books, home video, video games, toys and, apparel
• Apparel, novelties, and memorabilia sold through events, catalogs, and online
• Home video of pay-per-view events and feature performer titles sold through retailers and available on VHS and DVD
• Magazines such as WWE and RAW sold at the newsstand and through subscriptions
• Digital Media such as WWE’s interactive website: www.wwe.com

All of these are available internationally. Watching his
son Shane play with his GI Joes, McMahan decided that wrestlers would
make great action figures too. In 1984, his wife Linda called Hasbro to
learn the licensing business.

Role of the Internet in International Expansion

It is a strongly held belief within the WWE that Globalization
holds the key to its continued growth. It is believed that the Internet
levels the playing field, since anyone can watch from anywhere with a
computer. For instance, in Japan WWE events are broadcast as early as
three weeks after the event has aired in the United States. The Internet,
as a medium, is involving. WWE research has shown that half of the Internet
users who get WWE information are international.

Expansion Efforts by U.S. Major Professional Sports Leagues

NBA

In terms of an international presence, the NBA has had a
history of playing teams from around the world both at home and abroad
dating back to October 23 – 25, 1987 when in the McDonald’s Open
played at the Mecca in Milwaukee; the Milwaukee Bucks played Tracer Milan
and the Soviet National team. This trend of exhibition games continued
throughout the 80s, 90s, and into modern day when several NBA teams played
in such varied locations as Madrid, Rome, Barcelona, Tokyo, Paris, the
Bahamas, Mexico City, Japan, London, Tel Aviv, the Dominican Republic,
and Puerto Rico.

As is the case with the WWE, expansion into international
markets began in Europe. Since 1988, NBA teams such as the Boston Celtics,
the New York Knicks, Miami Heat, the Houston Rockets, and the Seattle
Super Sonics have played exhibition and regular season games in the following
countries: Spain (1988, 1990, 1994, 1996, 2003); Italy (1989, 1994, 1999);
France (1991, 1994, 1997, 2003); Germany (1993, 1996); England (1993-two
games-1995); Russia (1988, 2004).

In addition to Europe the NBA also played exhibition games
in the Middle East (Tel Aviv, Israel on October 11, 1999); Latin America,
where the NBA has staged twenty-two games preseason games (sixteen in
Mexico, five in Puerto Rico, and one in the Dominican Republic); and Asia
(six regular season games in Japan since 1990 and a 2004 game in Beijing,
China).

The NBA, under David Stern’s leadership, has made
a concentrated effort to specifically promote the international players
who have come into the NBA. Stern is credited as being a marketing mastermind
in the international arena, and the effort of the NBA commissioner has
helped the NBA to advance its growth in international markets through
fan identification with players from countries throughout the world. It
has also indirectly altered the face of scouting, drafting, and developing
talent (Stone, 2002).

MLB

Major League Baseball has two prominent internationally
focused baseball initiatives. The most recognizable and recent was the
World Baseball Classic (WBC) which was held in March 2006. Organized by
MLB, the WBC was a tournament styled after the Soccer World Cup, and involved
sixteen nations from across the world. Players were allowed to play for
their “home” countries. Overall, the tournament – won
by Japan over Cuba in the final – was considered a success from a media
standpoint. There are plans to hold future WBCs every four years, starting
in 2009. From this standpoint, MLB is well-positioned to maintain and
grow their presence in other countries, even though the U.S. team did
not finish in the top four in this most recent WBC.

Nearly one-fourth of all professional baseball players have
Latin American roots. Consequently, Major League Baseball has exerted
great effort in scouting and developing the future talent of their league.
Puerto Rico is a hotbed for baseball, and a location that MLB has already
tapped as host to some of the leagues’ games in the last few years.
Almost five years ago, in 2001, the first-ever regular season Major League
Baseball (MLB) game on Puerto Rican soil was played between Texas and
Toronto. Two years later, in 2003, the (Montreal) Expos played approximately
half of all of their “home” games in San Juan, Puerto Rico.
And in April 2005, MLB celebrated its annual “Opening Day”
of games by announcing that 25 percent of all players on MLB rosters (204
players) had been born in Latin American countries. This is a significant
increase over the 170 total Latin major leaguers reported by MLB during
the 2000 season, of which, thirty-four were from somewhere in Puerto Rico
(Sanchez, 2005). These figures are astounding and continue an upward trend
of talent migration (Bale and Maguire, 1994) predicated by advanced scouting
techniques, greater global communication, and increased talent development
in these countries.

Once an off-season haven for American big leaguers –
where a winter baseball league was immensely popular – Puerto Rico
gained considerable steam in the world of professional baseball. After
serving in 2003 as the part-time home of the Montreal Expos (a franchise
now known as the Washington Nationals and located in Washington, D.C.),
San Juan, Puerto Rico should have become a bustling year-round sport attraction.
In the winter it hosts a very competitive and popular “Winter League”,
where developing talent showcases for the ever-growing contingent of scouts
and media. However, that has not been the case. Lou Melendez, Major League
Baseball’s vice president of international operations, states that MLB
is now considering assisting the Puerto Rican league financially, and
he admits that an eight year decline in interest and attendance is a concern
(Ortiz, 2006).

MLB is grappling with larger issues surrounding this, as
well, namely: a) The issue of “stacking”. In other words,
as noted by González (1996), despite a healthy on-field Latino
representation, there are still virtually no Latino managers, and there
are an incredibly small number of Latinos in MLB’s team management
offices. b) How can Major League Baseball assess and improve on their
expansion and outreach efforts? Arbena (1992) stated that Governments
have long tried to use sports to promote national unity and political
stability, but often without success. Klein (1997) studied how baseball
contributes to nationalism on different levels outside of US borders.

NFL

In 1991, the World League of American Football was formed,
and eventually became ‘NFL Europe.’ Known essentially as an
NFL-backed and funded developmental league, NFL Europe currently boasts
six teams (Amsterdam Admirals, Berlin Thunder, Cologne Centurions, Frankfurt
Galaxy, Hamburg Sea Devils, and Rhein Fire). The league has thus far been
unstable and unpredictable at best, due mostly to lack of star power and
media coverage. However, other attempts to further expand the NFL’s
brand internationally have been made, most significantly, plans for U.S.
teams to play on international soil. Proposed sites are Mexico, Canada,
the United Kingdom, and Germany. This addresses both of the stumbling
blocks encountered by NFL Europe, infusing existing U.S.-based stars (and
teams) with the proper amount of television, internet, and radio coverage.
“It now gives us a platform to grow the game internationally with
a concept of clarity,” says Mark Waller, head of NFL international
development (Haniman, 2006).

While none of the major professional sports leagues would
appear to be natural competitors for the unique “sport/entertainment”
offering by WWE, the recent move of Monday Night Football to ESPN surely
will impact cable-television ratings, something previously dominated by
professional wrestling (Jones, 2006).

Assessment

Most successful businesses conduct extensive market research
to assess the effectiveness of their efforts. This is of paramount importance
when attempting world domination as the WWE is currently doing in its
expansion throughout various countries of the world. WWE depends upon
four major research streams to keep in tune with its fan-base: 1) Online
research surveys. They use a 900 base method with their fans, hoping to
pinpoint consumer attitudes. Specifically, “What do you think of
this property?” (attributes), 2) Live events. WWE conducts exit
polling at events, with an average of about 10,000 people per event. Goal
is to assess attitudes regarding items such as ticket prices and merchandise,
3) TV Companies themselves. WWE is able to garner information from networks,
which helps to shape their other research efforts. Ex: “how many
people view their wrestling shows?” 4) Licensees/consumers. Some
corporate partners are willing to share some of their information with
WWE.

Conclusion

World Wrestling Entertainment is indeed a unique business
entity that has, thus far, been incredibly successfully as it has expanded
its fan-base into international waters. In fact, the data shows that while
domestic earnings have continued to diminish, they have steadily climbed
each of the last five years internationally. More success is yet to come
as even more countries become partners with the wrestling corporation,
and as new revenue streams continue to develop. Many sport corporations
(NIKE, Adidas, etc.) have expanded into other markets, and have done so
successfully. But Jonathan Sully, WWE’s VP for International Marketing,
pointed out that while the company traditionally likes to totally control
its own Intellectual Property, the key to its success is embracing a fundamental
shift towards more corporate partnering.

Manchester United is a recent case that paralleled some
of what WWE experienced when they first plunged into new markets: increased
bootlegging issues and difficulty tracking revenues in foreign countries,
branded television channels, and tours that bring talent to the consumer
(Grimshaw, 2005). However, as WWE’s domestic marketing head Schneider
pointed out, this brand of professional wrestling is still seen as a “uniquely
American export”, a form of entertainment that essentially has no
direct competition and is so dissimilar from its indirect competition
that it operate on its own cloud. The WWE simply must stick to its plan,
adhering to its business model, and achieve continued growth by continuing
to bring its brand of entertainment to new markets around the world.

NOTES
¹SOURCE: http://corporate.wwe.com/documents/WWEPrimerAugust2005.pdf

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