Sunday, 28 September 2014
Cash Flow Positive By Stel (@Che_Stel)
In November 2013, Dixie Carter stated in an interview with Sports Illustrated that TNA “has been cash flow positive for the last four or five years”.
I’m no economist, so I thought I’d try to find out what “cash flow positive” means.
http://businessdictionary.com defines this as;
“Normal situation where the cash inflows during a period are higher than the cash outflows during the same period. Positive cash flow does not necessarily means profit, and is usually due to a careful management of cash inflows and expenditure. Persistent and large positive cash flows may indicate the firm is not keeping enough stocks of raw materials or finished products, and might be losing sales due to shortages.”
A lot of this confuses me because, while I’m not an economist, I’m also not the CEO of a wrestling company and don’t know “how things are done”.
However, what I DO know is that Dixie didn’t use the word “profit”. As the above definition suggests, just because a company is cash flow positive, it doesn’t make it profitable.
TNA’s yearly outgoings could be, say, $5M – but if they’re only taking $3M, then how are they making up that $2M just to break even?
Let me think…Loans? Or could it be “The Bank of Daddy”, Dixie?
Well, Dixie then went on to say;
“After that point, Panda (Energy) stopped putting money in the company”.
Ummm, OK, so a company invests its money into a new venture for four or five years, just stops pumping money into it when it becomes profitable? Am I the only one who thinks this makes no sense?
Why on earth would you stop investing your money into a profitable organisation? Surely you’d invest more, with the aim of obtaining a bigger return on investment?!
Here’s another question.
If TNA were so cash flow positive, then why would Universal Studios grab them by the scruff of the neck and escort them off the premises?
Wouldn’t Universal be begging TNA to stay, if they were such a successful company?
Coincidentally, TNA and Universal went their separate ways two months after Dixie’s interview with Sports Illustrated.
So, TNA decided to go on the road from January 2014. What happened next? Five months later, TMZ Sports reports that Spike would not be renewing its deal with TNA.
Again, why would a big network like Spike drop a cash flow positive organisation like TNA?
After all, a cash flow positive company suggests that its successful – and in this case, TNA would be quite prosperous.
Sponsors would be queuing up to pay for ad time during peak hours, given that TNA’s ratings are so high, as a result of such a groundbreaking and original product.
Don’t make me laugh!
I have no problem with TNA and I really hope that things change for the better.
The industry in America needs more than one successful company, so that viewers and fans have something to look forward to watching.
I also hope TNA stays in existence, as its not nice to see and hear about talented Wrestlers being out of work. Sure they can explore the indies, but lets face it – being on national and global TV is a dream for all of them.
I’m glad TNA are exploring the UK and showing a genuine interest in the talent out here. However, if the winner of TNA British Bootcamp 2 is to be a success out in the states, he/she will need a massive amount of attention, i.e. vignettes, mic time and a respectable gimmick.
Let’s hope Dixie can make fans feel more positive about the company.