Lord of the Ring, and Beyond

Emerging from a black stretch limousine in Mobile, Ala., Vince McMahon slips into his trademark character, the power-crazed wrestling promoter.

It’s not a hard fit. McMahon, chairman of the World Wrestling Federation, is the nation’s most powerful wrestling promoter. But now it’s show time.

As the cameras catch him outside the city’s sold-out Civic Center, he flies into a screaming rage at his driver and fires him for delivering him late. He strides inside to the roar of nearly 10,000 fans who have come to revel in the WWF’s body-bruising circus.

They shout obscenities at McMahon, who is as much a character in this soap opera as any of his masked and tattooed stars.

“I don’t appreciate the way you’re disrespecting a man of my distinction,” he sneers, stoking the crowd.

Respect is beside the point for McMahon. Operating outside television’s establishment, doubted by Wall Street, dismissed as a purveyor of sleaze, McMahon has made himself a billionaire by transforming backwater wrestling matches into a national spectacle that draws millions of viewers each week.

On this night, McMahon gets walloped in the head with a metal tray and knocked to the floor by his “son-in-law,” a towering 246-pound wrestler known as Triple H. But everyone in the place knows McMahon will rise again. Indeed, he is on the verge of taking his act much farther than anyone ever imagined.

NBC-TV debuts McMahon’s XFL football league in prime time tonight, betting an estimated $55 million that wrestling fans will follow the promoter to the gridiron.

McMahon has pledged to microphone dozens of players to capture their taunts. Locker room cameras will broadcast coaches’ halftime shrieking. He’s loosened the rules for more teeth-rattling collisions. And he’s offering heavy air time for scantily clad cheerleaders. In other words, signature McMahon.

“I don’t think anybody will ever come close to touching him,” said Dean Valentine, president of the UPN television network, which is also carrying weekly XFL games. “I wouldn’t want to be the guy betting against him.”

The rest of the entertainment industry may be seeking cover from politicians and moral crusaders appalled at the level of sex and violence on television and movie screens. Not McMahon. When Hollywood studios pledged to curtail marketing of R-rated films to children last fall, he asked, “Where’s your chutzpah?”

Unlike the studios, McMahon’s company wasn’t targeted by the Senate Commerce Committee last year when it met to study the marketing of violent entertainment to kids. The committee is chaired by GOP Sen. John McCain of Arizona.

“I was waiting for the phone to ring, for McCain to say, ‘Vince, come on down and testify.’ I would’ve loved that,” McMahon told the Hollywood Radio & Television Society last fall.

He said he has toned down the explicit violence of “WWF Smackdown!” the WWF’s weekly two-hour program on UPN. Politicians and parents’ groups who criticize his company for allegedly marketing violence to children “don’t have a leg to stand on,” he said. WWF officials note that 60% of his wrestling audience is 18 or older. “We have always appealed to a mass audience. . . . I consider it a family show, no question.”

But plenty of children are watching, says Dave Meltzer, editor of the Wrestling Observer newsletter, which analyzes the WWF’s ratings. Sales of branded merchandise--the action figures, video games and fan magazines primarily aimed at teens and younger children--have increased faster than television advertising and pay-per-view revenues over the last two years.

“Should there be a conscience? Yeah,” Meltzer said. “If you’re looking for one from a wrestling promoter, you’re looking in the wrong place.”

Bringing Participants to Political Arena

Trying to stay ahead of the lawmakers and parents’ groups, McMahon has been greasing the political machinery. Wrestling star The Rock took the stage at the GOP convention in Philadelphia last summer. The guest list at last month’s nonpartisan “Smackdown Your Vote” inaugural celebration was stocked with Republican and Democratic lawmakers alike.

McMahon also has been not-so-subtly illustrating his willingness to command voters as well as viewers. His registration drive, conducted at WWF events and at the WWF Times Square restaurant in New York, signed up an estimated 135,000 new voters. In September, his wife and company CEO Linda McMahon also made a $5,000 contribution to the Connecticut Republican Campaign Committee, her largest on record, which she said was unrelated to the company’s effort.

“You want to fight to keep what you built. That’s all we’re doing,” McMahon said in a recent interview. “You’ll fight when you should, instead of rolling over and playing dead.”

When McMahon cranked up the mayhem in the ring a few years ago and spiced the story lines with pimps and porn stars, he drew the ire of L. Brent Bozell, a conservative commentator and president of the watchdog group Parents Television Council.

“When you have the kind of ultra-violence that he’s depicted and the kind of raw sexual perversion that his wrestlers have performed . . . and then to put it on at the start of a family hour on broadcast television is an absolute outrage,” Bozell said.

He pressured advertisers to pull out of McMahon’s “Smackdown!” show on UPN. Some, including Coca-Cola and MCI WorldCom, did. McMahon responded in November by suing the Parents Television Council, seeking to recover lost advertising revenue.

When a 13-year-old Florida boy was charged with murdering a 6-year-old neighbor by, among other things, flinging her against a wall, the defense attorney blamed televised wrestling for influencing the youth. A jury last week rejected that argument and convicted the boy of first-degree murder. As part of the lawsuit against the PTC, McMahon claimed he had been defamed by the boy’s attorney.

“If you see more reports on the links between WWF programming and injuries and fatalities to children, the pressure on them is going to mount,” said Dan Gerstein, spokesman for Sen. Joseph I. Lieberman (D-Conn.). Lieberman met with WWF representatives last fall and “did not leave that conversation feeling as though his concerns had been addressed,” Gerstein said.

McMahon is not intimidated. “We’re very much looking forward to having the highest of profiles,” he said. “I’m truculent by nature, I admit to that. But I don’t try and start this stuff. Once somebody does, we’re going to finish it.”

Behind the bravado is a shrewd entrepreneur who has a fortune on the line.

With the XFL, McMahon, 55, has limited his financial risk and greatly increased his chances of success by splitting ownership of the league and start-up costs with broadcasting partner NBC, whose promotional support is critical to the venture.

McMahon has set relatively low ratings guarantees, decreasing the chance of disappointing advertisers. Only 70% of the advertising inventory has been sold, according to NBC, but the league has sold a startling 80,000 season tickets.

Television history, McMahon acknowledges, is littered with failed attempts to launch sports leagues. McMahon himself flopped financially when he tried to start a televised bodybuilding competition a decade ago. And for the WWF, the league represents a different sort of business: Instead of a traveling road show, McMahon must establish an infrastructure with continuing operations in a variety of markets.

Wall Street analysts project the league will realize $80 million in revenues its first season. At that rate, it could become profitable in its third year, they say, based on estimated start-up costs of $110 million.

Investors slammed WWF’s stock last February on the day McMahon announced the XFL, slashing 25% off the company’s market value. The stock gradually has recovered, and over the last month--amid a multimillion-dollar marketing campaign for the XFL--it has climbed back to $19.20, about $2 over its October 1999 IPO price.

NBC, which also bought $30 million in WWF stock as part of the XFL deal, isn’t the only major media player to gamble on McMahon.

Aside from its regular wrestling programs on UPN and cable channel The Nashville Network, the WWF is producing a new wrestling show for MTV, an action-adventure series for UPN and has other wrestling specials in the works.

All of that comes as the company aims to increase wrestling’s TV audience internationally and diversify its empire in the U.S. with everything from cookbooks by wrestlers to an in-house record label--prompting some analysts to suggest the company is moving too hastily.

Hairline cracks may be appearing. Ratings for “Raw Is War,” McMahon’s flagship weekly show on TNN, have declined 13% this season--though it remains the highest-rated program on cable. Unsold merchandise has started to pile up.

Confident of Continued Growth

Analysts also say some of the WWF’s key sources of growth, such as pay-per-view, are maturing. Company documents show that 73% of the increase in live event revenue last year came from higher ticket prices, not attendance.

“The tendency is to stretch yourself thin. That’s the danger for Vince,” the UPN’s Valentine said.

WWF officials scoff. “I bet nobody ever asks [Time Warner Chairman] Gerald Levin, does he think they’re spread too thin,” Linda McMahon said. “We will grow.”

Born in rural North Carolina, Vincent Kennedy McMahon was raised by his mother and a sequence of stepfathers. He met his father, wrestling promoter Vincent James McMahon, when he was 12.

The elder McMahon owned a regional wrestling company that promoted its events from Baltimore to Bangor, Maine. On visits from Fishburne Military School, teenage Vincent watched his father run wrestling matches at New York’s Madison Square Garden and fell in love with the family business.

“This business has always been about fun, and when you’re around these larger-than-life guys, it’s a riot. I naturally gravitated to it,” McMahon said.

Back then, promoters divided the nation into “territories,” each agreeing not to tread on another’s turf.

But the younger McMahon had national ambitions. He convinced his father to sell the business to him and his wife in 1982 for $1 million.

The young couple--former high school sweethearts--made the four quarterly payments of about $250,000 in part by expanding in ways the elder McMahon opposed, such as syndicating matches to TV in other promoters’ regions.

By the mid-1980s, McMahon had swept away nearly every competitor, adding pay-per-view events to his lineup and creating a kid-friendly roster of cartoon-like wrestling characters, such as the Ultimate Warrior and Hulk Hogan, who pitched children’s breakfast cereal and WWF action figures.

In the early 1990s, however, McMahon stumbled badly. A Pennsylvania urologist was tried and convicted of selling steroids for nonmedical purposes to WWF wrestlers. Among the people he admitted selling steroids to was McMahon, who was charged with conspiracy to distribute the drugs. McMahon said it was “a trumped-up charge” and was acquitted in 1994.

Substance abuse continues to haunt the industry, however. Indiana’s state medical board in 1999 suspended the license of physician Joel Hackett after he was accused of illegally prescribing painkillers or steroids to at least 11 professional wrestlers, including some WWF employees. WWF officials said Hackett had been banned from their dressing rooms since 1995. He was charged last week by an Indianapolis prosecutor with 48 counts, including falsifying prescriptions.

But despite the scandals, McMahon said he doesn’t require drug tests for his wrestlers. “This is not some sort of Olympic sport. This is entertainment,” he said.

The WWF’s sole competitor, Ted Turner-created World Championship Wrestling, subjects all wrestlers to random drug tests.

Briefly the Underdog, the WWF Recovers

In 1996, the WWF fell behind its rival in the ratings. WCW had begun experimenting with more elaborate story lines, including a behind-the-scenes soap opera that took place between wrestling matches. The rival company, which also hired onetime WWF stars such as Hogan, kept the lead in the ratings for more than 80 weeks. McMahon’s company lost $6.5 million for the year in 1997.

McMahon fought back by developing raunchier stories and piling on the attitude. And he put his family in the ring: Daughter Stephanie plays the role of a spoiled daddy’s girl; son Shane has been cast as being on a quest to overthrow his father and take over the company.

McMahon also developed a reputation as a fierce enforcer of intellectual property, claiming copyrights to his wrestlers’ stage names, appearances and even signature gestures to prevent defectors from aiding Turner.

McMahon’s newfound dominance of the WCW--which lost an estimated $80 million last year--played a role in prompting its parent, AOL Time Warner, to sell the business last month to private investors.

Today, McMahon is worth an estimated $1.1 billion. His wrestlers’ autobiographies have topped the New York Times’ bestseller list. WWF’s wrestling-anthem records have pierced Billboard magazine’s Top 10 and its action figures outsold the Power Rangers last Christmas.

“We have what America wants,” McMahon said.

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Cable Champ

WWF’s flagship weekly program, “Raw Is War,” has exploded in the last five years. Ratings have dipped slightly since it moved in September from USA Networks to TNN, but it remains the highest-rated regular cable TV program.

2000-2001 season to date: 3.9 rating points

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Note: Each rating point equals 1% of 102.2 million U.S. television households

*October through September season

**October 2000 through Jan. 28

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Source: Nielsen data

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Stock Comeback

World Wrestling Federation Entertainment went public at $17 per share in October 1999. Investors initially trashed the stock when the XFL football league was announced, but the share price has recovered.

Friday: &19.20, down $1.14

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Source: Bloomberg News