What the sale of WCW means for TNA
“There’s a lot of moves being done behind the scenes. There are, no matter what anyone is gonna say right now, big things behind the scenes as far as the future ownership of the company and at that point God only knows where it goes…. There’s people looking at getting it and I think the Carters are looking to get out. They’ve lost enough money and all that and as far as what that means, who knows? But they’ve been looking to get out for awhile, now everyone is going to scream at me and all that, but that’s a 100%, but that’s the stuff they don’t want you to know…. They’ve been looking to get out when they stopped, you know, when it became incumbent, when they didn’t want to fund them anymore….”
And we’re off! With those words on a recent Wrestling Observer Live podcast, Dave Meltzer officially kicked off the firestorm for the inevitable news that TNA is officially for sale.
Rumors have been floating around for months now but nothing as profound as what Meltzer said last year. The writing was on the wall as the company was cutting talent left and right and reducing costs to their absolute lowest point but there a glimmer of hope that it was just the Carter Family making TNA a viable option for their bottom line. Nope, they are ready to get out and there are others looking to get it.
What I’ve found particularly interesting is the discussion online and especially on Twitter that TNA isn’t worth much. Accounts have been (tongue-in-cheek) discussing raising money in an attempt to buy the fledgling promotion.
The number I’ve seen far too often is $2.5 million. Any hardcore wrestling fan will remember that number as the price World Wrestling Federation, Inc. paid Turner Broadcast for World Championship Wrestling. I want to say this right now, stop referencing this number, stop using it. The price of WCW has nothing to do with the price of TNA and guess what, TNA will sell for a hell of a lot more than WCW.
@WrestleSubtitle Not even close to the $3 million WWE paid for WCW.
— Ed Scoglio (@ScoglioSpeaks) October 28, 2013
Why is that? Let’s go back and discuss the sale of WCW.
Vince Russo went scorched earth on the promotion during the year 2000 and WCW lost a reported $60 million in 2000. Yes, that’s the real figure. All the blame shouldn’t go to Russo though, WCW was simply not a money making venture at any point. Ted Turner’s undying loyalty to the business that helped established WTBS saved a company that routinely lost money since Turner owned it.
In 1996, Time Warner bought out Turner’s media empire and during the early stages of this relationship WCW was extremely successful. However, when the tide turned and WCW lost huge amounts of money in 1999 and 2000, it became too much for Time Warner’s bottom line and they were looked to sell the company to anyone who would entertain them. This was compounded when AOL merged with Time Warner in 2000, forcing Ted Turner out of the company and allowing the conglomerate to finally strip themselves of this bleeding assets.
Time Warner found an interested party fairly quickly, he was right in their backyard, in the form of former Vice President of WCW, Eric Bischoff who along with a venture-capital group by the name of Fusient Media Ventures were extremely interested in buying WCW. Fusient was headed up by Brian Bedol and Stephen Greenerg who made their fortunes selling their Classic Sports Network to ESPN (the channel later became ESPN Classic).
In a bit of little-known trivia, the deal was done. WCW sent out press releases to their employees, newspapers reported it, Bischoff and Bedol even appeared at WCW’s Sin PPV to talk with the talent and give them their plan for the future.
Somewhere along the line, something happened. It’s unsure exactly what made the deal delayed, rumors of a primary backer leaving played a bit part but as we came to find out, it may have been a decision made at the top of Turner Broadcasting.
It was reported that while the deal hadn’t totally fallen apart, it was on life support and Time Warner was extremely close to shutting the company down and selling off assets one-by-one.
Fusient made one last charge, but on March 23, 2001 the wrestling business was transformed forever as WCW was sold to Vince McMahon and World Wrestling Federation Entertainment, Inc. for a mere $2.5 million. An astronomically low number given WCW’s assets and a number that was assuredly lower than what Fusient Media Ventures was planning on paying. So what the hell happened?
Jamie Kellner happened. Kellner became head of Turner Broadcasting during the brief period when Fusient pulled their offer and almost immediately after assuming the role, Kellner deemed WCW out of line with the image of their networks and would no longer give WCW television time.
Once news got to Fusient that they could have all they wanted of us but no TV time, the company was essentially worthless to them. A major wrestling company without television is devoid of value. Bischoff and Fusient desperately tried to find a channel that would take them, but the brand had been so destroyed so nobody would bite and Fusient officially backed out leaving McMahon as the sole interested party.
McMahon bought the WCW trademarks for $2.5 million ($3.3 million with inflation) and later secured the archived tape library for $1.7 million, bringing the total to $4.2 million which translates to roughly $5.5 million with inflation. Not a bad price to pay. An extra caveat was most of the main event level stars (Ric Flair, Bill Goldberg and Sting) had contracts through the AOL Time Warner parent company instead of WCW meaning that they were not part of the sale and did not have to be paid by McMahon or the WWF.
Not a bad deal at all.
So what does this mean for TNA’s sale? Well… nothing. Nothing at all. Let’s look at the differences and see what any figure associated with WCW means nothing for TNA and their assets.
The biggest one is television. We don’t know what Fusient Media Ventures was planning to pay for WCW, but I’m going out on a limb that the price was far beyond the $2.5 million that McMahon secured it for. The sole reason for that is WCW had prime time television. For any wrestling company, that’s the biggest and in most cases, impossible hurdle. You can start a wrestling company tomorrow with a ton of venture capital behind it, but chances are 99.5% of established television networks are going to laugh in your face about bringing wrestling to their network.
The days of mavericks like Turner owning a network are long gone. Corporate suits simply don’t associate with the product, feel it’s low-brow or understand the business of professional wrestling isn’t a very profitable one unless you’re the WWE. Even then, ad rates are lower than that of competitive sports. The wrestling business is simply not something easily sold to television executives. Bischoff and Fusient tried desperately to get someone to take their already established, albeit damaged brand and nobody would bite.
Flash forward to today and TNA has that television. They have an established, primetime television slot on a major cable network. Moreover, Spike TV needs and desires the ratings that TNA provides to prop up the Viacom (Spike parent company) Bellator MMA. When TNA is the lead in for Bellator, it almost universally does better. As wrestling goes, so goes their MMA promotion.
Where WCW became worthless once Kellner put the hammer down, TNA will (for now at least) have the backing of the network and a primetime television slot. That’s more valuable than any assets, logos, tape library or history of success.
A more apt reference to use when thinking of what TNA would be worth is when McMahon and the WWF bought the Georgia Championship Wrestling time slot “World Championship Wrestling” on Turner’s TBS station. The famous 6:05 p.m. time slot any WCW fan grew up with was purchased by McMahon after a conversation with the Brisco Brothers and Jim Barnett, who agreed to sell their shares in GCW to McMahon effectively handing WWF the 6:05 time slot on WTBS.
The deal didn’t work out for the WWF as rating plummeted and angry fans boycotted the change. McMahon’s product was simply not something that audience wanted to watch, especially when they were getting high quality “Southern”-style wrestling and it had been replaced with taped “New York” style matches from Madison Square Garden. Just not the target audience. McMahon eventually sold the 6:05 WTBS time slot to Jim Crockett Promotions in turn creating the World Championship Wrestling promotion.
Either way, the dollar figures are important here. McMahon purchased the time slot, just the time slot and whatever little assets Georgia Championship Wrestling had for $900,000 ($2 million with inflation). McMahon turned around and sold the time slot to Jim Crockett Promotions from $1 million which with inflation is roughly $2.2 million.
Let’s put that into context: Jim Crockett Promotions bought a 6:05 pm Saturday time slot for almost $2.2 million. Are you starting to see why assuming the $2.5 million WWF purchased WCW for is not only a horrible benchmark but completely irrelevant?
I don’t have to explain to you the current value of television rights, go check out some of the deals Major League Baseball or the NCAA recently inked to see we aren’t talking about the same game here. The ratings for the WTBS show were astronomical and tower over what TNA gets, but the TV rights game is a different animal in 2013. TNA isn’t on Ion either. Spike TV is a major cable network and TNA’s current timeslot is as primetime as you can get. It’s worth a lot of money.
No matter how you slice it, TNA is far more valuable than WCW was at the time of it’s sale. WCW was a more established professional wrestling brand, but without television it was essentially worthless. It was a few logos, some ring aprons and a bunch of tapes. TNA, although not the gold standard of wrestling promotions has far more to offer at this point. Their recent cost-cutting has left them pretty lean as a far as assets go, especially if Hulk Hogan is still off the books. Add in a primetime television slot and TNA is a very desirable asset. They haven’t done much with this tape library and I’m not sure there’s a ton of money there but it’s still an asset worth some money.
We have to let our personal bias go and realize wrestling is still a business. I’m glad you think TNA sucks and isn’t worth $20, but, well, it is. It’s worth a lot of money. Rest assured, nobody is going to raise that money on Twitter or Kickstarter. A big company will purchase TNA for a ton of money and while you may be shocked by the figure, do yourself a favor, look back at wrestling history and see why that figure isn’t ridiculous.