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VIP - MCNEILL FACTOR: The Lemonade Stand and the Carters (PWTorch #1015) Mar 12, 2008 - 4:09:09 PM
"McNeill Factor"
Newsletter Headline: "The Lemonade Stand and the Carters"
Originally published: March 15, 2008
From Pro Wrestling Torch Newsletter #1015
Hypothetical: Let's say you're a parent. You're a proud father, or maybe even a mother, who has a full-time job and has enjoyed a good deal of success in the business world. You, like any other parent, want your children to have better lives than you did. You want them to be happier and more successful than you are.
Let's say one of those children is a little girl. Your daughter. Your daughter wants to grow up and work hard and become a successful capalist like her mom or dad. Most parents would be proud and would be looking to help the child gain experience that would her later in life.
One day, your little pre-teenager asks for a couple of dollars. She has found some boys and girls with a lemonade stand in your neighborhood, and the stand is losing money. Your daughter wants to buy the lemonade stand and turn it into a profitable business. Granted, you don't know much about lemonade stands. You never had one, and you never had interest in running one. But you check around, and it turns out an acquaintance of yours nearby has a kid who pulls down hundreds of dollars a month from his lemonade stand. So you pull a couple dollars out of your wallet and stake your little girl's business. What the heck, right?
A couple months later, you've shelled out about forty or fifty dollars on your daughter's lemonade stand and you're a little less enthusiastic about the whole project. On the other hand, you've gone by the lemonade stand a couple times, and your daughter looks like she's working very hard. Then, one day, one of your neighbors comes back with his kids, offering to buy out your daughter's lemonade stand and to reimburse every penny you've put into it. Obviously, your budding young lady's business is valuable to someone. You decline.
A few months pass. Your daughter has received some nasty comments on her MySpace and Facebook from people who think she's spending too much with the boys at the lemonade stand, but she doesn't seem to mind. What's more, she's not coming around nearly as often for money. You hear tales from other parents about kids who tried to start their own lemonade businesses, but didn't do nearly as well. They either quit when the going got tough or weren't smart enough to figure out the microeconomics involved. Finally, your daughter lets you know one evening that she's breaking even, and she'll be able to start paying back your initial investment after a while.
You're proud of your daughter. Why wouldn't you be? This experience has been good for her. Maybe after she grows up, she can take over your family business someday.
The Payoff: As silly and simplistic as that little parable was, it's a pretty good explanation for why TNA Wrestling isn't going out of business any time soon.
There's not a lot known about the finances of Panda Energy. Panda, the company that owns seventy-one percent of Total Nonstop Action Wrestling, is a privately held corporation. They are not bound by the reporting requirements that public companies, including WWE, have to fulfill every quarter. But the information that's available about Panda and Panda CEO Robert Carter is enough to make the "lemonade stand" analogy stick.
According to the Panda Energy International website, Panda's primary business is developing, constructing, financing, and operating power plants. Its latest project is a 200-acre power plant in North Texas that will take two years to build and is expected to light up 400,000 homes once completed. PEI still owns and operates the Brandywine Generation Station, which supplies a good chunk of the energy used to power Washington D.C.
All of that is impressive, but the key word in Panda's business model is "financing." Robert Carter, like many wealthy businessmen, is a believer in O.P.M., or "Other People's Money". The PEI website claims that Carter and Panda Energy have delivered almost $6 billion in financing total for the various plants, and that Panda financed two separate plants for a total of $3 billion simultaneously. Compared with that, the $250,000 that Panda used to purchase a majority stake in Total Nonstop Action seems like pocket change.
Over the past several months, TNA President Dixie Carter, founder Jeff Jarrett, and others within the TNA power structure have hinted that the promotion isn't hemorrhaging money the way it was when Panda took over in late 2002. At one point, Total Nonstop was reportedly losing a million dollars in month. They claim not to be losing that much now. But there aren't any actual financial reports to be found. Plus, if you read Dixie Carter's interview last summer where she touched on TNA's financials, she never actually claimed the company was making money.
But even if TNA is still losing money, there is additional information which could shed light on how much patience Robert Carter and Panda Energy will have with their daughter's wrestling promotion. It has to do with another......
That concludes our free preview of the latest Pat McNeill "McNeill Factor" newsletter column. The second half of this article is available exclusive to PWTorch VIP members and newsletter subscribers. To become a VIP member, click here.
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