By Vidya Lakshmi - Analysis
BANGALORE (Reuters) - The macho world of World Wrestling Entertainment Inc (WWE.N) is kidding around.
The sports entertainment company, better known for staging dramatic and occasionally violent wrestling matches, is all set to woo a younger audience as it collaborates with toymaker Mattel Inc (MAT.O) and tones down the violence in its TV shows.
Over the last few years culminating in 2008, the company has gotten all of its TV shows rated Parental Guidance (PG), allowing more children to tune in and bringing in more advertising dollars.
WWE’s new licensing agreement with Mattel, the largest toymaker in the world, will replace its existing toy license deal with toymaker Jakks Pacific Inc (JAKK.O) in January.
“What Mattel is going to do that Jakks Pacific never did is make a line for young kids,” WWE Chief Operating Officer Donna Goldsmith said, adding that the deal will positively impact results in the second quarter of 2010.
WWE will launch a new range of products for children aged 6 and up -- including Ultimate WWE Championship belts, megaphones, action figures and replicas of masks worn by wrestlers -- as well as a line of collectible action figures aimed at their parents.
And though WWE, founded and run by the McMahon family, does not have plans for any stuffed toys for children, the company sees this as an option in the future.
“Part of (WWE‘s) strategy has been to try to grow their fan base down younger,” Hudson Square Research analyst Marla Backer said.
“They are having in-school initiatives, they just launched a kids magazine, they are doing a number of things to generate interest among younger children.”
The PG rating for the company’s TV shows helps reach young fans who can then grow with the brand, analyst Backer said.
“We have taken away some of the edginess, and as a result have signed on a number of advertisers,” COO Goldsmith said.
While the rating change could lose the company some of its audience who like violence on shows like “SmackDown,” any loss would be offset by new fans, said Jorge Orduna, who writes the popular “Pro-Wrestling Blog.”
“I think the company will not be affected adversely,” Orduna told Reuters.
“We must remember that (people who are dropping out) are not spending a lot of money on merchandise, pay-per-view and other products.”
In the second quarter, WWE derived 15 percent of its revenue from consumer products -- including top-selling action figures of stars like John Cena, Rey Mysterio and Undertaker -- while live and televised entertainment contributed 79 percent to sales.
By catering to a younger audience, the parents of these kids will shell out a lot more money than the more jaded WWE fan, Orduna said.
Fans of WWE -- whose former Chief Executive Linda McMahon recently resigned to run for the U.S. Senate from Connecticut and handed the reins over to husband and WWE Chairman Vince McMahon -- seem to echo the sentiment on online forums.
“You can only go for so long with extreme programing before it become tiresome,” a fan said on a WWE public forum.
Reporting by Vidya Lakshmi in Bangalore; Editing by Anne Pallivathuckal