In 1984, Vincent Kennedy McMahon took control of his father's World Wide Wrestling Federation -- the wrestling promotional firm with exclusive control of the lucrative Northeast territory -- dropped a "W," launched an aggressive national expansion, and gambled everything on a wrestling super-card held in Madison Square Garden and broadcast nationally through closed-circuit television.
The event, which featured the day's most recognizable faces in music, television, sports, and movies as well as wrestling, was a resounding success. Dubbed Wrestlemania, the annual event has become the culmination of the professional wrestling year and a reminder of how far from the smoke-filled bingo halls Vince McMahon has dragged his industry.
But if the cultural relevance of a professional wrestling event seems small, I'm sure the economic significance will be that much more surprising. Since 2007, when World Wrestling Entertainment (NYSE: WWE) executives decided to host Wrestlemania exclusively in football stadiums, the event has taken on a Superbowl-like quality. Cities bid for the event, hoping for the economic stimulation such a large-scale exhibition brings with it.
This year, Miami, Fla. will receive a little boost. Next year, the economic impetus will belong to the New York-New Jersey metropolitan area, where MetLife Stadium outbid 14 other stadiums to be named the host of the 29th installment of Wrestlemania.
"This is not a one-day thing," New Jersey Governor Chris Christie said during a Meadowlands press conference last week. "This is a week-long celebration that is going to be brought here to New Jersey and the surrounding area. You will have fans from all around the country and around the world who are going to come and generate tens of millions of dollars in all types of economic activity for this area."
Last year's Wrestlemania, which was held in Atlanta's Georgia Dome, generated $62.1 million dollars for the city and was attended by 71,617 fans from all 50 states and from 30 countries. Of those, 43,687 fans stayed in hotel rooms for three nights or more, and more than 130,000 people participated in the week-long "Wrestlemania Axxes" fan fair, which included an art show, a Hall of Fame ceremony, and fan signings, as well as taping of WWE's two cable television programs, Monday Night Raw and Friday Night Smackdown.
According to a press release from WWE and a study performed by the Enigma Research Corp., the economic impact on the city of Atlanta was equivalent to the creation of 621 full-time jobs.
Last year's $62.1 million dollar figure was an increase over the previous year's economic contribution of approximately $45 million to Glendale, Ariz., and next year's figure is expected to be higher due to the greater expenses around the N.Y.-N.J. metro area.
I'm sure this will leave a few people scratching their heads, what with the common relegation of professional wrestling to the dredges of popular culture, enjoyed only by illiterates and rednecks. But Vince McMahon is no stranger to big money -- the WWE rakes in about $500 million annually, even though things have been a little tough lately. Last week, the company reported a drop to a loss in the fourth quarter driven by higher costs. The company had a loss of $8.6 million on net income of $8.1 million, and revenue fell 7.8% to $112.9 million from the year-ago quarter.
The lower revenue is causing some analysts to grow a little pessimistic about the WWE. But as recently as last year, one Forbes stock analyst called WWE a “very attractive stock” that is “under appreciated because of the somewhat silly product it sells.” Who would have thought?