WWE Studios: Can It Be Saved, or Should WWE Just Put It out of Its Misery Now?

At last week's quarterly conference call, it was acknowledged by Vince McMahon that the WWE had had its first money-losing quarter in years. While other areas of business have declined and the company also had to face start-up costs for their upcoming network, the losses were mostly blamed on the company's floundering movie division, WWE Studios.

Alas, it seemed WWE Studios' latest batch of movies were huge money-losers, bringing about the mediocre results, as Dave Meltzer explained succinctly in this week's edition of the Wrestling Observer Newsletter:

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The fourth quarter of 2011 ended with $112,942,000 in revenue and a net loss of $8,629,000 after taxes, with the key to the losses being $12.2 million in an impairment charge because video sales and other revenue related to movies The Reunion, Bending the Rules, Barricade, See No Evil, Knucklehead and The Chaperone were far less than company projections. In particular, DVD sales were $13.2 million below what the company had projected for the aforementioned titles...A big part of the decline in profit from the prior year was $28.4 million in losses in the film division.

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It appears WWE's idea of bringing out low-budget movies (filmed for $2 or $3 million dollars), giving them short theatrical runs and then releasing them on DVD hadn't worked out like the company intended, and only set the beleaguered film division only further into the set.

As noted previously, in response to these disappointing results, WWE have a fresh new attempt to turn the division around: They will buy completed movies, rather than producing their own original films starring wrestlers, and then market them on Raw and Smackdown. Horror-thriller The Day was the first feature signed under such a deal.

Additionally, they've also signed a deal with 20th Century Fox to produce three straight-to-DVD movies, including The Marine 3, which means the company haven't totally given up on producing their own films starring wrestlers (no doubt some lowly mid-carder will be called upon to do a bad acting job in the film). Presumably, Fox will be sharing any potential losses, which should help limit any financial damage to WWE if these films are unsuccessful too.

A humble McMahon was startlingly candid at the meeting when discussing the movie division, acknowledging it had been a money-loser and promising that if this new direction failed, the company would most likely disband WWE Studios altogether.

“If the new film strategy does not work, we will in all likelihood be out of the film business,” he stated. “I still feel strongly the new film strategy will work because it represents a significant change in approach, with partnerships with major studios. I feel strongly under this new guidance this will really work. We’ve pretty much written off most of our old stuff.”

McMahon went on to note that the results of these changes and the ability to examine if the new tactics were a success would not be apparent till at least 2013, likely even 2014. So the film division is going to be around till then at least.

But we can probably call it borrowed time at best. Because it appears that after nearly eight years, WWE Studios is down to its very last chance.

Does it even deserve one, though? Would McMahon perhaps be more astute to cut his losses and run now?

One issue is, that in these struggling economic times, it's difficult for any movie to make money. Indeed, while you have your occasional huge money-maker, most films don't make their money back when all is said and done, even when they're produced by hugely talented people who know what they're doing. WWE is still fairly new and inexperienced Hollywood, so what hope do they have of succeeding?

Another factor to consider is that, by and large, WWE movies are simply not very good quality-wise and do not have much appeal to wrestling fans—or anyone else, for that matter.

See No Evil, WWE's first-ever film release, was typical slasher movie fare, with saw Glen "Kane" Jacobs basically playing a version of his on-sceen character. The Marine and 12 Rounds were only passable, and even then failed to correctly utilize leading man John Cena's on-screen appeal or charisma.

The Condemned, starring Steve Austin, was a muddled action movie with a confusing message about how bad and morally wrong on-screen violence was...whlie basically being an incredibly violent movie with lots of brutal murders and torture scenes.

Military-inspired flicks Behind Enemy Lines: Columbia and The Marine 2 were mediocre even by already-low standards straight-to-DVD action films, with neither Ken Anderson or Ted DiBiase, Jr., respectively, coming off like anything resembling stars.

In recent years, films like The Chaperone and Knucklehead were both lame, cringe-worthy attempts at humour by people who clearly have no clue what comedy is. Inside Out was a boring, forgettable drama (and HHH playing essentially the same “grizzled criminal out of jail a changed man” role he had being playing in The Chaperone) that served as a waste of time to everyone involved. Legendary and The Reunion looked to have sank without a trace.

Oh, and last year's arty period drama, That's What I Am, was mainly notable for Randy Orton claiming he was going to to the papers. In fairness, Academy-award nominee Ed Harris actually gave an extremely good central performance in the piece, which is regrettable because virtually no one saw it.

As for WWE's recent release action-comedy, Bending the Rules, the trailer for which debuted on Raw last week? While the charismatic Edge seemed to demonstrate a fair amount of screen presence and acting ability in the clips shown in the recent trailer, it is highly unlikely this film, which co-stars Jamie Kennedy, will fair much better than the countless films before that. Aside from Edge, the entire trailer looked like a bad amalgamation of every screwball buddy cop movie ever made.

Of course, the news that WWE Studios are now buying already made and produced films can be seen as an antidote to this. However, the company will still be choosing the films, and considering his dubious taste in scripts in the past, you've got to wonder just how shrewd Vince McMahon is going to be when it comes acquiring film rights.

Summarily, things look as bleak as ever for WWE Studios. Even more so now that the clock is ticking and they are under pressure to produce results. Maybe things will turn around soon, but all indications are that WWE Studios is on the same way to following the WBF, the XFL, Smackdown Records and The World restaurant as failed Vince McMahon side projects.