In early-2000, AOL officially merged with Time Warner, a move, like all mergers, that took a few years to get through all the hurdles of the corporate regulations to be declared a done deal. As we know from the slew of modern podcasts that cover the boom period of the late-90s, the corporate merger shifted the power within the Turner organization a few years before it received the official stamp. Essentially, Ted Turner, the media mogul that vowed to keep pro wrestling on his networks since the genre was such a key part of his TBS expansion in the 80s, didn’t have the power to protect it. Just over a year after the merger was official complete, Turner executive Jamie Kellner infamously cancelled WCW programming from the Turner channels, and the company was sold to Vince McMahon for pennies on the dollar in March of 2001.
More than two decades later, in some ways, history might repeat itself.
The Wrestling Observer’s Dave Meltzer reported that Endeavor CEO, Ari Emanuel made the decision to downsize Vince McMahon’s power within the WWE structure, giving full creative control to Triple H, who was theoretically the head of creative since McMahon’s brief “retirement” last year. The move came after Emanuel recently cited McMahon as a possible reason the TKO stock dropped. While Vince was named the head of WWE after the merger, which was officially completed last month, Emanuel is the only one with more power in the corporate structure than the emperor of sports entertainment. For the first time in more than four decades, Vince McMahon has a boss that he has to answer to and the decision was made to install Triple H in a more prominent position that reduces Vince’s impact on the product.
Given the often sleazy corporate world and the jaded nature of the pro wrestling business, there are a few possibilities to what this decision actually translates to, and depending on what that is, it might have a major effect on the company going forward.
On one hand, this could all be a smokescreen to pay lip service to the shareholders. The stock price dropped more than 20% since the new conglomerate went public last month so the corporation at least has to give the impression that it made changes to boost the price that shares will trade for on Wall Street. It’s at least possible that this could all be a work and that Vince will still have decision-making power for the major portions of the creative direction of the organization. Plus, this isn’t the first time we’ve heard that Vince was away from creative before his finger prints were back on the scripts and his influence was seen on WWE programming. Plus, Vince strong-armed his away back into power late last year so he obviously wasn’t content with just the billions of dollars he made from the WWE empire, but rather wants the power that goes along with it. All things considered, it wouldn’t be too surprising if Vince still made the big picture decisions behind closed doors, especially when the format on the weekly shows is almost cannon fodder in the grand scheme of things.
On the other hand, this might be a legitimate shift in power, and Vince will find himself in a similar spot as his old rival Ted Turner. Vince might get the lavish office and the title on the door, but his role might be minimized in an attempt to prevent him from damaging the public image of the TKO group. Granted, the notion that Vince is too far behind the times and that his sports entertainment philosophy was antiquated isn’t anything new, and there might be some validity to that argument, but Emanuel isn’t concerned with pro wrestling philosophy. He runs a billion dollar corporation, he doesn’t care if Johnny Gargano gets a push on Raw. However, Emanuel’s priority is to maximize the value of the brands under the Endeavor banner, and as important as it is to leverage the drawing power of the organization, it can be just as important to avoid the pitfalls that can damage the public image of the corporation.
Keep in mind, prior to the official merger of the WWE and the UFC to form the TKO group, Vince was served with a search warrant and a subpoena from the Securities and Exchange Commission based on the hush money payments he made over several years to keep affairs and misconduct allegations quiet.
As I wrote at the time, the government doesn’t spend the time and the money to use subpoenas and search warrants unless they are reasonably sure they can secure some type of legal action from it. The district attorney doesn’t want an expensive and highly-publicized search warrant to result in something that doesn’t justifies that cost, especially if they want to maintain their position. It’s important to remember that not only did it appear that Vince used company money at the time, an amount that he had to pay back along with the cost of an investigation conducted by a firm hired by the previous WWE Board of Directors prior to the merger, but also the fact that the entire scenario was kept from the public. It’s possible that if shareholders knew what he was doing as the boss of WWE that they might’ve opted not to invest in the stock. If it was still a privately-held organization then all of the non-disclosure agreements would be considered personal agreements, but investors weren’t aware that Vince spent millions of dollars to keep his affairs quiet. Remember, the SEC was put in place to protect investors from being deceived when they purchase stock in a company, which is why the WWE had to have quarterly earnings reports so that shareholders were aware of the business the company had done.
The biggest potential issue of this move away from McMahon might be that Endeavor is trying to distance itself from him in case the SEC finds something that could result in legal action. If Vince is deemed responsible for any type of violations, it obviously won’t be wise business for TKO stock if he was still involved in WWE.
Right now, I’d say that this is all a precautionary measure from Endeavor, specifically to make sure that any negative PR from Vince has a minimal impact on the TKO stock price. Again, Ari Emanuel isn’t a wrestling guy and ultimately isn’t concerned with the weekly format of Raw or Smackdown. If Triple H has a direction that can increase viewership for WWE programming remains to be seen. It’s a completely different matter, but for several years, particularly during Brock Lesnar’s originally title run after he returned and was rarely on television, the booking of the shows often told the audience that they could skip weeks of television without actually missing anything important in the storylines. If that dynamic could shift or if WWE has the star power to make the weekly shows “must watch” again is also a different situation because of the amount of entertainment options in the modern era. I don’t think Triple H with full creative control is necessarily going to generate a major change in the direction of the company, mostly because the organization already has record-setting profits so there’s no reason to take a different path.
However, it will be interesting to see if this is finally the situation that takes Vince McMahon away from the WWE empire. It’s very ironic that taking the company public is what made him a billionaire, but it might also be the reason that isn’t the king of sports entertainment in the future.
What do you think? Share your thoughts, opinions, feedback, and anything else that was raised on Twitter @PWMania and Facebook.com/PWMania.
Until next week
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