Why All Elite Wrestling’s TV Deal Could Be Key

Just days after the WWE’s biggest event on the wrestling calendar, rumors began to swirl about the potential television deal for All Elite Wrestling, the group founded by the Young Bucks and Cody Rhodes, and funded by the billionaire Khan family. All Elite sold out its first pay-per-view, Double or Nothing, a spin off of last year’s All-in event, a few months ago in mere minutes. Next month, the MGM Grand in Las Vegas will host the kickoff PPV as the new promotion officially launches. Considering the money behind it and the talent already inked for the project, this is probably the biggest chance at a true alternative in the professional wrestling industry since WCW shut down.

Warner Media, which was included in a merger purchase by AT&T last year, has a complex history through its acquisitions, sales, and mergers. However, the point being that networks such as, TBS, TNT, and HBO are under that umbrella. As reported by the Fight Oracle on Twitter, Warner Media is scheduled to promote All Elite Wrestling at its “upfronts”next month for potential advertisers. A television-based term, “upfronts” is essentially a conference that allows networks to sell commercial time to different advertisers and sponsors. For Warner, it gives them a chance to secure revenue and guarantee that revenue prior to a show’s debut. For advertisers, it gives them the best possible price to get that slot for the commercial time because obviously, higher rated shows demand a higher price for advertisements. So, in theory, it’s a win-win situation for everyone involved. That being said, this showcase and more specifically, the initial response to it could give an indication if AEW could be a main stream success.

One of the main reasons that WWE is the publicly-traded global company that it is today is based on its ability to generate multiple revenue streams. As reported a lot, the promotion will have record-setting revenue and profits next year because of the new TV contract that starts in October of this year. Networks wanted live sports to attempt to offset DVR viewing and were willing to invest major cash because despite any complains about the shows, WWE delivers a consistently solid ratings in terms of the television business. The WWE network subscriptions, merchandise, live event tickets, international TV deals, and ad revenue are among the other revenue streams for the company. Main stream sponsorships from Snickers, and licensing deals from Mattel not only generate money, but also add to the intrinsic value of the organization, which helps the stock price.

The point being, AEW or any other entity that attempts to be a major force in the sports entertainment industry simply can’t rely on just ticket sales and pay-per-view buys to be successful. All Elite’s ability to secure decent money to produce their television show and to garner advertisers are some of the keys to success for the organization. You can produce the best wrestling show on TV, but if networks aren’t willing to pay for it, and it’s not easily accessible to fans, what difference does it make?

Don’t get me wrong, All Elite has the talent and the funding, but distribution might be the biggest piece of the puzzle for them. Remember when ECW went out of business? Ultimately, what tanked ECW? The fact that they spent themselves into debt to produce a TV show that didn’t do anything to generate money beyond the platform to further promote live event tickets or pay-per-view buys. When TNN cancelled ECW, how exactly was the company supposed to advertise there was going to be an event in a specific city? Even with television, the promotion of live events or pay-per-view isn’t an automatic success, which was proven by TNA’s dismal numbers during their run on Spike TV.

Ironically, since TBS and TNT are a part of the same cable package, both channels yield nearly 80% television clearance, which is comparable to the now-Paramount Network, formerly Spike TV. Assuming that the speculation is true and AEW would land under the Warner Media banner, that would give their show main stream exposure and the easy accessibility for the promotion to get off the ground. Furthermore, if the “upfronts” of Warner show that advertisers want to invest commercial time into the product, that’s a solid indication of stability for the project on a long term basis. Keep in mind, as great as the All-In and MGM sellouts were, it’s very different to book a company successfully on a continuous base than booking individual shows based on dream matches.

Some have already jumped to the conclusion that All Elite Wrestling is already competition for the WWE, but those fans are very misguided. The WWE empire has decades of history and establishment behind it. As I’ve mentioned several times before, success for AEW shouldn’t be measured by competition against Vince McMahon, but rather its ability to generate revenue and become profitable. From a business prospective, profitability is the only measure of success that matters. With HBO under the Warner umbrella, some speculation surfaced that perhaps a few AEW specials might land on the channel, and while it would be unique, I doubt it will happen. HBO, which had 45 years of boxing coverage in its history, was more or less pushed out of the boxing business by DAZN’s mega offers to Canelo Alvarez, Gennady Golovkin, and Anthony Joshua, as well as the Top Rank/ESPN deal that brought boxing bouts to that network on a regular basis. HBO could use a spark in terms of its sports-based programming, but if AEW is going to run on any type of premium platform, it makes sense to broadcast on pay-per-view to maximize the potential revenue from the event.

When and where AEW lands on TV remains to be seen, but this story and the potential impact it could have on the structure of the industry is one of the most intriguing scenarios of the past decade and a half. There’s a promotion with a stacked roster and a TV deal to at least put them in the same conversation as the WWE, which was something that didn’t seem possible just a few years ago. While it’s under different ownership, it’s still somewhat ironic that the same channels that broadcast WCW, Vince McMahon’s last legitimate competition, might be the same network to showcase the next alternative in the industry.

What do you think? Comment below with your thoughts, opinions, feedback and anything else that was raised.

Until next week
-Jim LaMotta

E mail drwrestlingallpro@yahoo.com | You can follow me on Twitter @jimlamotta