How Profitable Is AEW?

On the latest edition of Wrestlenomics Radio, Brandon Thurston and Chris Gullo broke down a Forbes feature on AEW CEO Tony Khan and All Elite Wrestling. Underneath colorful language in the article about piledrivers, sleeper holds, and chairshots, there were also some details about AEW’s finances. Thurston and Gullo dove deep into AEW’s financial state.

Chris Gullo: On AEW profitability [the article reads], “Khan expects its wrestling division to be profitable this year, though an eight-figure investment in video game development will keep the company in the red for now.”

And this line blew up on social media from people that understood what he meant, understand the investment, and people that are like, “Oh, this company, they’re putting all their money into a video game, and they’re gonna go bankrupt.” People can take a step aside and realize that they’re making an investment in a video game industry, which honestly, I think they’ll do very well in, and they’ll make that money back tenfold.

Brandon Thurston: Maybe. The takeaway for me here is that this implies that AEW has not been profitable yet, even though the Wrestling Observer Newsletter has said that AEW became profitable after they made their January 2020 deal where they renewed their deal with Warner Media at a higher rate, $175 million over four years, which, as this article also mentions, $43.75 million on an average annual basis.

So AEW has not been profitable, on an annual basis anyway. There’s different ways you can cut up time, but on an annual basis, they have not been profitable, apparently. That’s takeaway number one. Secondly, eight figures is a lot of figures. That’s somewhere between $10 million and $99 million. Who knows how much money they’re really investing. A lot though, more than $10 million.

Thurston estimated AEW generated about $64 million in revenue in 2020. The majority of that money he believes comes from U.S. broadcast partner, WarnerMedia, which owns Turner networks TNT and TBS.

Another challenge for profitability is the expense of producing television programs like Dynamite on a weekly basis. Each taping costs the company more than $500,000 before paying talent, Thurston believes. AEW likely saved on costs, though, by consolidating tapings and airing non-live episodes of Dynamite this and last year during the pandemic.

When AEW and WarnerMedia announced in May that Dynamite and new program Rampage would move form TNT to TBS, there was one report that AEW might’ve gotten an “eight figure payday” from Turner in exchange for agreeing to the move. Thurston is skeptical AEW was compensated to that degree.

Gullo: You could say that eight-figure number that they got to move [Dynamite and Rampage] from TNT to TBS [in 2022], they could basically invest that amount of money.

Thurston: I don’t believe that. You’re saying that they’re getting more money because they’re moving to TBS? Over what time, on an annual basis? You’re telling me they got a $10 million increase on an annual basis? On a deal that’s about $40 million per year, they got a 25% increase?

Gullo: The point I’m trying to make is that the world is burning, that’s the perspective that a lot of people are taking on social media because of this investment in the video game. It’s not. I think they’ll do well on that, and then there are other areas they can replace that investment.

Thurston: I will say this, there’s a tremendous amount of misleading information and incorrectly-believed information about AEW’s financial state that I think people in AEW are fine to have out there.

Tony Khan gave an interview to PWInsider on Tuesday where he said, “I know the wrestling end is profitable this year.”

The Khan family made an earlier investment, the AEW CEO mentioned, in Epic Games, the developer and publisher of Fortnite, among other games.

“I’m an investor in the gaming space, and I think I’ve been a savvy investor,” Khan said. “I made a large investment with my family that I pushed my family to make and kind of, along with AEW, I would describe it as one of the two investments where I’ve kind of dragged my dad across the goal line a little bit.”

“We put $20 million into Epic Games, which looks pretty smart now because it’s worth a lot more than that now.”

It’s not clear what gaming companies AEW has invested in. AEW’s gaming partners seem like likely candidates. Those include console game developer Yukes and mobile game developers KamaGames (maker of AEW’s casino game) and Crystallized Games (creator of the AEW GM currently developing).

The original transcript of the podcast was edited for conciseness and clarity.

Jason Ounpraseuth has covered pro wrestling since 2019. He co-hosts the Gentlemen’s Wrestling Podcast.

Brandon Thurston has written about wrestling business since 2015. He’s also an independent pro wrestler and trainer. For more, see our About page.

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WWE gets a run as a meme stock after r/WallStreetBets hype

On the latest edition of Wrestlenomics Radio, Brandon Thurston and Chris Gullo dove deep into WWE becoming a “meme stock” last Wednesday, June 9, when WWE’s stock rose to a 52-week high of just over $70 before settling back down.

The company’s share price is still holding at well over $60, as of this writing, up from high-$50s of previous weeks.

WWE shares are trading at $62 as of 1:00pm ET on June 15, 2021.

A Reddit user posted a thread on the Wall Street Bets subreddit stating their reasons as to why WWE passed their “SMELL Test”.

The WSB subreddit, whose bio reads as “like 4chan found a Bloomberg Terminal”, went viral earlier this year with a campaign to target specific stocks, like GameStop, AMC and Blackberry, that were being shorted by major hedge funds. On the WWE thread, the user described their SMELL test.

Let me introduce to you my patented SMELL system. The acronym is reverse engineered to make sense for this ticker and so it might seem like I was piledrived as a child, but bear with me. It’s important to put memes first. Here it goes:

Short Interest is high
Market cap is high
Extremely Memeable
Low IV
Low Float

Thurston and Gullo then broke down the thread starting with the first subheading ‘Fundamentals’, which the redditor summarizes with the preface, “For those even lazier than myself, here are the cliff notes:”

They are effectively a monopoly on pro wrestling, which is apparently growing in popularity
They make money from Media, Live Events, and Consumer Products.
COVID wasn’t too bad for them. It cut Live Events, but Media revenue popped up.
Live Events are coming back… and they’re taking it international. This will significantly boost their revenues, especially since during COVID it was zero.
Strong social media following (more YouTube subs than NBA, NFL, and GME combined). More IG followers than NFL.
PT of $75/sh from some fancy FCF model thing
Lots of acquisition suitors

Many posts on WSB are not the most sincere and are sometimes there for laughs. However, Thurston broke down the cliff notes of the post to test the merit in the writer’s argument. One claim in the post was that WWE has an effective monopoly on pro wrestling.

“Non-WWE promotions are taking up a greater amount of the mindshare in our kind of wrestling media space, and there’s tremendous interest in AEW now, especially in relation to WWE,” Thurston said. “However, yes, WWE still dominates the general mindshare, I believe, and you see that manifest in Google web search data. You see that manifest in YouTube views data. More than 90% of YouTube views that are happening among all the wrestling brands, you might name off the top of your head, 90% of that is still WWE. Is the popularity of wrestling growing, not WWE. I don’t believe the popularity of WWE is growing. I’ve argued and presented data to argue that the popularity of WWE has declined over the last few years.”

The post also mentioned that Covid wasn’t too bad for WWE.

“WWE was more profitable in the Performance Center era (mid-March to late August 2020) where they were doing TV out of the Performance Center because it cut costs tremendously,” Thurston said. “That’s largely why media went up. When they moved to the Thunderdome, things became more expensive and even more expensive than they would have been if they were still on the road. Live events weren’t very profitable overall. Media revenue popped up though also, in part, because they entered in the new year of 2020, that was the first full year when WWE was on its new set of U.S. TV rights deals, which were more than triple the value of the previous term. So that had a lot to do with just the contractual nature of their rights fees.”

“Revenue’s nice but if revenue’s not producing the margin for you, like is the case with live events, with the exception of Wrestlemania and other major events, then it doesn’t make your company more profitable,” Thurston continued. “You could argue that there’s a marketing value and maybe other hidden values involved with running live events,” Thurston said. “But we have no news, that I would consider real news, about international events. WWE would love to do a Saudi Arabia event this year, which they will get $50 to $55 million for doing just one of them.”

“With live events, it’s not clear that WWE is going to be this massive beneficiary of the pent up demand, as they say, for live events, ticket sales. The first events are gonna do really well. The subsequent events are very much in question,” Thurston said.

Gullo and Thurston then broke down the ‘catalysts’ sub-section of the post. One factor listed was ‘Live Events Resuming’.

WWE will resume touring. Despite this revenue being missing in 2020, they managed to haul in nearly a billion dollars. So the second half this year, and all of next year, is going to be pretty good. Not only will revenues be driven up, but fan engagement and brand appeal will go up as well. WWE’s IP has a ton of value and they’ve leveraged it well during COVID. as live events come back and increase engagement, it should provide some synergy to everything else they sell — PPV, IP rights, merchandise, etc.

“This idea is that WWE will go back on the road with fans finally in attendance once again, and this will have all these downstream benefits for WWE, including TV ratings for one thing,” Thurston explained. “Yeah, I think there will be a short term bump to TV ratings. They’ll advertise a big Smackdown. That’s the first one that’s back. So that’ll probably be the biggest one in terms of hype, maybe John Cena is returning to WWE for that Smackdown on July 16.

“Maybe Cena starts off a feud with Roman Reigns heading towards Summerslam [August 21]. That seems plausible, but the quality of the core product is such that this company is capable of little more than short-term bursts in interest. WWE’s inability to plan and execute long term storylines is pretty weak. They misevaluate talent. The product is inauthentic in many ways. While it will be a short-term benefit for WWE to have fans back in attendance, I don’t think there’ll be a long-term benefit.”

The post’s next subheading under ‘Catalysts’ that Thurston breaks down reads, “Video Games are booming”.

WWE Supercard is Take Two Interactive’s (a $52b company) highest grossing mobile game, and it’s growing at around 23% YOY. A lot of that money will flow into WWE. WWE also sells rights to other titles. As video games continue to grow, so too does WWEs revenue.

“Video games are reported within WWE’s ‘licensing’ revenue line,” Thurston noted. “WWE did just under a billion dollars in revenue last year. Their licensing line was $42 million. The video games are worth somewhat less than that, because you’ve got to at least clear action figures out of that, plus a number of other categories.

“The video game business to them is worth around $20 million per year. That’s not a Saudi Arabia event. It’s less than half of one. Video games are an important part of their business. I think it does lead to kids to discover wrestling through video games. There’s so many anecdotes about that. I don’t see that as a massive growth area to get excited about, though.”

Thurston then discussed the last subheading, “Rumors of acquisition”.

About a week ago, WWE cut some talent assets. Some apparently important guy tweeted that it’s likely due to them cutting costs and preparing for an acquisition.

Rumors aside, there is a strong case for WWE being acquired, should McMahon decide to sell. From the SA article:

It is not unrealistic to suggest that WWE could one day be acquired. If McMahon indicated an interest to sell the business, there would be no shortage of potential suitors given the scarcity value of its content. Whilst Disney, Fox and Viacom could be prospective interested parties, arguably top of the list is Comcast, who may decide owning WWE may generate more value to its shareholders than perpetually leasing its content.

“I agree strongly with the idea that NBCUniversal, which is a subsidiary of Comcast, would be the one to acquire WWE. I think it makes the most sense for them,” Thurston stated. “They’re the biggest customer of WWE. They’re giving them probably $300 million this year and more over time because of the nature of their contracts for Raw and for WWE Network content on Peacock.”

“I think WWE would like to have people believe that they might sell the company because that might help the stock price, but I don’t think they’re going to sell it. I don’t think it’s in Vince McMahon’s personality to relinquish control during his lifetime, but it does make for a great story if you want to get engagement on social media. It does make for a great news article to put on your news site if you need people to click on your news site, and it might make for even a good Reddit post if you want your Reddit post to get up-voted, because it gets people very excited, this notion that WWE could sell and Vince McMahon could relinquish control.”

Thurston pondered the reasons why fans get so excited about the idea of a WWE sale, despite, in his view, the unlikelihood of an acquisition of the company happening.

“I think why it appeals to some people is that it’s a way to craft a narrative or to apply some meaning to what’s happening. ‘See, it’s not about the quality of the storylines or the quality of the TV programs and the pay-per-views. It was all business all along and, really, Vince was a genius and now he’s got multiple billions of dollars in cash from Comcast, and now he’s so rich and see? All that whining and arguing people did on social media about the creative for all those years really meant nothing because it all means nothing; it’s all about money at the end of the day.’ I think there’s some great appeal in this sort of cynical, almost nihilistic conception of the world. It allows us to at least put this wrestling world, which is so frustrating and sometimes makes so little sense to its fans, into some sort of narrative.”

The original transcript of the podcast was edited for conciseness and clarity.

Jason Ounpraseuth has covered pro wrestling since 2019. He is a co-host of the Gentlemen’s Wrestling Podcast.

Brandon Thurston has written about wrestling business since 2015. He’s also worked as an independent wrestler and trainer.

This article is available ad-free for everyone because of support from our subscribers.


WWE may be “open for business” but don’t expect it to sell anytime soon

Vince McMahon addresses the audience at Wrestlemania 37

In a Patreon exclusive livestream version of Wrestlenomics Radio, Brandon Thurston and Chris Gullo discussed the idea that has permeated across wrestling media: WWE potentially preparing for a sale. The idea grew hotter after the releases last week Wednesday of many WWE talents like Braun Strowman, Lana and Aleister Black. That news followed lay-offs of dozens of corporate employees the week prior.

Fans, at least one former WWE writer, and reportedly some current WWE wrestlers believe a sale might be in the works.

While Gullo was open to either side of WWE selling or not, Thurston expressed his pessimism of Vince McMahon selling his company. He first cited a 2019 Variety article that profiled Vince McMahon as that issue’s cover story. “He doesn’t look like a man who’s ready to retire,” Variety wrote.

“We’re open for business,” McMahon told Variety at the time about the possibility of whether he’d be open to selling the company.

The article mentions that while Fox Corp. may look to buy WWE after entering into a TV rights deal involving Smackdown, McMahon wasn’t looking to sell.

On an earnings call in 2016, McMahon was also asked about the subject and used the same “open for business” line.

“We’re open to anything. I think controlling your own destiny is so important,” McMahon said in 2016. “I don’t know how much you lose control of that by being sold.”

Thurston cited WWE President Nick Khan’s interview with Colin Cowherd in April of this year where the topic of McMahon selling WWE came up. Khan also said he didn’t expect McMahon to see the company. He noted how deeply involved and invested McMahon is in WWE, citing how McMahon does not “summer” to exotic locations like many other executives.

Thurston believes Khan is being honest about McMahon’s lack of intent to sell WWE, and that the CEO has few interests outside of his working life. 

Thurston detailed the current state of WWE ownership.

“Vince owns 38% of the shares, but because he, Stephanie and Linda own class B shares, their class B shares give them 10 times voting power per share versus everybody else. Yes, including Triple H,” Thurston noted. “Shane used to be a stockholder; he’s not a stockholder at all anymore. The other major shareholders are financial firms. The biggest by far is Lindsell Train.

Source: SEC filings

“So when it comes to voting power, when it comes to who actually controls the company, because of his class B shares, which again give him 10 times the voting power per share of non-McMahon family members, he controls just over 80% of the voting power in WWE. Depending on how the math works out, he could sell his stock down to a small minority but still own 51% of the voting power.”

Thurston also pointed out that WWE’s stock price hasn’t responded much to recent talent releases and employee downsizing. Nor have any of the usual stock analysts who cover the company given these issues much notice. As of this writing, no stock analyst has updated their report on WWE since April 23 and trading volume patterns have so far been normal.

Source: Yahoo! Finance

On Thursday, the day after this discussion, Thurston tweeted that he raised the notion of a company sale with five people in the WWE investment community. None believed WWE’s recent cost-cutting moves indicate a sale is likely coming soon.

Thurston gave his thoughts on Vince McMahon potentially selling WWE.

“I just can’t imagine Vince McMahon in his lifetime selling the company. I can’t imagine him doing anything else,” Thurston admitted. “This is a man who has no known hobbies, except for working out of course. I think above any amount of money, he values the control he has of the company, especially over creative, and I don’t ever see him relinquishing that as long as he has more time to do that job.

“All these layoffs, which are substantial to the finances of the company, but the layoffs, and the releases and the restructuring, I think they have more to do with the new WWE president and chief revenue officer Nick Khan and the new WWE chief financial officer Kristina Salen. I think it’s more about them critiquing what they’ve been handed, what they’ve inherited from the former executives, the co-presidents George Barrios and Michelle Wilson, who left in January 2020.

Nick Khan and Kristina Salen were brought on in August 2020. This is about the new executive team reviewing what was left to them by the old executive team and saying, ‘Well, why are we doing this this way, and why do we have these employees who are doing the same job across two or three different departments? Why do we have all these wrestlers when we’re not using them all the time?’”

Thurston continued reiterating his point that he doesn’t see McMahon selling in his lifetime, and he talked about who would buy the company.

“I think Vince will never relinquish control in his lifetime, and I think that tendency to control his environment has increased over the time that he has been the leader of WWE,” Thurston said. “I think when he’s gone, you might see WWE sell to NBCUniversal or another media company. I think, at this moment at least, NBCUniversal is the most obvious suitor. It’s the one that makes the most sense. NBCU is by far their biggest customer, which has been laid out as we’ve noticed in certain SEC filings, and I understand there are wrestlers out there who believe that they’re looking to sell the company. And I think that’s wrestlers looking for a grand reason about why they or their friends were cut, rather than looking at the more boring minutiae of the company.”

Thurston also discussed the amount of talent that WWE has across all their brands compared to how many are actually being used weekly.

“WWE has roughly 254 wrestlers currently under contract after these cuts that were announced. And then I looked at Raw, Main Event, Smackdown, NXT UK, NXT, 205 Live in the past week. Those are all of their weekly programs.

“There’s 77 wrestler spots in that period. That includes things like Riddle being at ringside with Randy Orton, Commander Azeez being at ringside with Apollo Crews. 77 wrestler spots across all of those programs. Again, you’ve got at least 254 wrestlers under contract. So you’re using 30% of your wrestlers on a weekly basis. That ratio doesn’t make a lot of sense to me. I think a lot of that was just motivated by the fact that they wanted to keep talent away from their competitors, especially AEW, and even if you take into account some inactive wrestlers, you’ve got a lot of wrestlers who are just going to be in developmental and who aren’t going to be used on screen just yet.

“I still don’t think that that ratio makes a lot of sense, and I think that’s one strategy along with the strategy to put NXT head-to-head with AEW on cable, that has a cost to it that’s proved to be ineffective. In the case of putting NXT head to head with AEW on cable, it has an opportunity cost, whether that’s keeping NXT on the WWE Network, whether that’s putting it on its own night. In April, they decided to put it on Tuesday. So that was a cost. It’s costly to keep talent under contract when you don’t really need them. It’s costly to try to use NXT as a bulwark against AEW, and ultimately, it proved to be ineffective. AEW won the Wednesday Night War. AEW did better in the ratings. It seems to be finding an audience regardless of what WWE throws at them, and now we’re seeing that strategy get undone.”

The original transcript of the podcast was edited for conciseness and clarity.

Jason Ounpraseuth has covered pro wrestling since 2019. He co-hosts the Gentlemen’s Wrestling Podcast.

Brandon Thurston has written about wrestling business since 2015. He’s also an independent pro wrestler and trainer. For more, see our About page.

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AEW Double or Nothing sold an estimated 115,000 pay-per-view buys globally, grossed revenues just short of Revolution

Inner Circle celebrates their win at AEW Double or Nothing 2021

Header image courtesy of All Elite Wrestling

All Elite Wrestling’s Double or Nothing pay-per-view on May 30 likely came just short of the company’s highest gross revenue from a single event. The show drew about $6 million total for AEW and its pay-per-view distributors and sold 115,000 buys on all platforms globally, by our estimate.

The record high is probably still held by the previous pay-per-view event, Revolution, which we estimate grossed just under $7 million. That show, on March 7, attracted greater pay-per-view sales but sold fewer tickets with a socially-distanced capacity.

Double or Nothing was held at full capacity at Daily’s Place in Jacksonville, Florida. It sold about 4,700 tickets, generating approximately $300,000, according to the Wrestling Observer Newsletter. At the same venue, just 1,150 tickets were sold for Revolution.

After carriers including FITE, B/R Live, and various cable systems collect the majority of the pay-per-view sales, each of the two events likely netted AEW around $3 million in revenue. 

Full breakdowns of our estimates for both events are at the end of this article.

We’re also raising our estimate of the Revolution event from 125,000 buys to 135,000. The Observer’s recent estimate that Revolution sold 158,000 buys is 10% to 20% high, we were told.

Double or Nothing appears to be AEW’s second-highest-selling pay-per-view in its history. Our estimate of this event and all earlier AEW pay-per-view sales were determined based on information from people with knowledge of the sales.

Merchandise sales estimates of $71,000 for Double or Nothing and $21,000 for Revolution are based on an assumption of $15 and $18 in merchandise revenue per paid attendee, respectively. The average sales per capita for WWE events is about $10, according to public filings. We believe per capita sales for major events like pay-per-views are higher than average and we were told Revolution performed better in this area than most AEW pay-per-views.

Estimated revenue breakdown of AEW’s two most recent PPVs

Dollar values are rounded to the next lowest order of magnitude.

AEW Double or Nothing (5/30/2021)AEW Revolution 2021 (3/7/2021)
Domestic buys: 80,500
x Domestic average price: $50
= Domestic gross revenue: $4,000,000
x AEW average domestic split: 45%
= AEW domestic net PPV revenue: $1,800,000
Domestic buys: 94,500
x Domestic average price: $50
= Domestic gross revenue: $4,700,000
x AEW average domestic split: 45%
= AEW domestic net PPV revenue: $2,100,000
International buys: 34,500
x International average price: $50
= International gross revenue: $1,700,000
x AEW average international split: 45%
= AEW international net PPV revenue: $780,000
International buys: 40,500
x International average price: $50
= International gross revenue $2,000,000
x AEW average international split: 45%
= AEW international net PPV revenue: $910,000
Worldwide buys: 115,000
x Worldwide average price: $50
= Worldwide gross PPV revenue: $5,700,000
x AEW average worldwide split: 45%
= AEW worldwide net PPV revenue: $2,600,000
Worldwide buys: 135,000
x Worldwide average price: $50
= Worldwide gross PPV revenue: $6,700,000
x AEW average worldwide split: 45%
= AEW worldwide net PPV revenue: $3,000,000
Paid attendance: 4,700
Average ticket price: $64
Ticket revenue: $300,000
Paid attendance: 1,150
Average ticket price: $65
Ticket revenue : $75,000
Venue merchandiseVenue merchandise
Revenue per capita: $15
Venue merchandise revenue: $71,000
Revenue per capita: $18
Venue merchandise revenue: $21,000
Total gross revenue: $6,100,000
Total net revenue to AEW: $3,000,000
Total gross revenue: $6,800,000
Total net revenue to AEW: $3,100,000

Note: Net revenue is not a measure of profit. ‘Net revenue’ refers to revenues AEW receives after PPV carriers take their share. An estimate of the profitability of an event would require an estimate of the event’s expenses, which this article doesn’t attempt to do.

Brandon Thurston has written about wrestling business since 2015. He’s also worked as an independent wrestler and trainer.

This article is available ad-free for everyone because of support from our subscribers.


WWE pursuing New Japan is good strategy, AEW’s reaction wasn’t

On the latest edition of Wrestlenomics Radio, hosts Brandon Thurston and Chris Gullo broke down the news of WWE and New Japan Pro-Wrestling in talks over the past few months.

According to the Wrestling Observer Newsletter, WWE president and chief revenue officer Nick Khan is in talks with New Japan about WWE being the exclusive U.S. partner with the promotion. New Japan currently have working relationships with All Elite Wrestling and Impact Wrestling, and they have worked with CMLL and Ring of Honor in the past as well.

PWInsider reported the focus of these discussions centered around free agent Daniel Bryan (Bryan Danielson), related to having him re-sign with WWE but also able to work dates with New Japan. In the past few years, Bryan has expressed interest in wrestling outside of WWE.

The news has had fans come up with fun photoshop memes, as well as think up some potential dream matches. Thurston noted the timing of this news.

“So consider the timing of this,” Thurston said. “If this information was dropped from the WWE side to Dave Meltzer, on the week of AEW’s Double or Nothing pay-per-view, then from a media strategy standpoint, you’ve absorbed some of the conversation, some of the energy directed towards AEW on one of its biggest weeks of the year. You’ve got people talking about New Japan and WWE, instead of AEW.”

Thurston continued as he gave his thoughts on a WWE-NJPW relationship from a strategy point of view.

“This would be a working relationship that no one was clamoring for, but it would, from a strategy standpoint, from WWE’s perspective, at least block AEW from doing something valuable,” Thurston noted. “A relationship between AEW and New Japan is one of the most valuable cards from a talent standpoint, from a fan attraction standpoint, that AEW has to play.

“A lot of the energy New Japan lost since 2019 with the western market, including in the United States, was a result of New Japan losing Kenny Omega and to a lesser extent, the Young Bucks. Those two are now with AEW. AEW was able to absorb a lot of that fan energy. So getting Kenny Omega back in the ring to rekindle some of these feuds with people in New Japan including Kazuchika Okada, Tetsuya Naito, Hiroshi Tanahashi, and Kota Ibushi is obviously another big one, that’s a big play for AEW to get ahold of if they can put a big, let’s say, an Omega vs. Ibushi match on an AEW pay-per-view.

“That could be huge if it’s built and executed correctly, and it’s important here to note that the Observer mentions WWE pursuing an exclusive relationship, at least among U.S. partners with New Japan. So that would exclude, presumably, AEW from having a relationship. When you think about whether or not you’re going to leave WWE, like Jon Moxley did, and think about where else you’re gonna go, one reason why you might more strongly consider AEW is they’ll let you work New Japan like they have let Moxley work New Japan. They have let Chris Jericho work in New Japan. So if you take that away from them, then you’ve got one less piece that’s going to attract talent who may not be feeling creatively satisfied in WWE.”

Thurston broke down more of WWE’s strategy behind a working relationship with NJPW.

“What’s the result for WWE in this? Maybe get a few really cool matches out of it but at the end of the day, you’ve got Vince McMahon in control of the main roster creative, so I don’t think this is going to be a very good thing if this happens and comes to fruition,” Thurston admitted. “It’s not gonna be this great thing for fans or for WWE, and maybe there will be some benefit for New Japan. New Japan’s probably feeling some financial pressure right now from the state of emergency that’s been declared in Japan related to Covid-19, causing New Japan to postpone events. New Japan relies on live event ticket sales for the majority of their revenue, unlike these U.S. companies that have enormous media revenues.

“So I see this, from WWE’s standpoint, being along the lines of other things that they’ve done in recent years with their strategy, including warehousing 300 wrestlers, many of whom they don’t have anything to do with in their content. It’s along the lines of moving NXT off of the WWE Network and onto the USA Network. It’s not really clear what the financial benefit was. It’s not really clear if moving NXT made WWE more profitable than it would have been otherwise. The value of NXT’s TV rights are, in my assessment, not huge, well under $50 million, probably closer to $20 million per year. The new deal that they just signed, that will go into effect this fall, does not appear to be any significant up step.

“So it’s more about defense, I think, for WWE than it is about offense. And purely capitalistically speaking, I think that’s a smart move by WWE, if this is really happening.

“If I’m Nick Khan and if I really understand the wrestling landscape the way that I think one should, I think to myself, well, the biggest problem for fan retention and for talent retention is Vince’s creative. I can’t get the pencil out of Vince’s hand. Vince isn’t going to change. Vince is so out of touch now that his son-in-law is showing signs of being out of touch.

“So I can’t improve the content internally, and the external threat to the WWE brand is everyone else’s superior content, but maybe I can create a relationship that will mitigate the superior content or get some of that superior content under my control. That means taking the access to New Japan away from AEW and putting it into your own hands. Whether it bears fruit for yourself or not, it’s a net win for you.”

Gullo pointed out how on the New Japan side of things, the move is most likely financially motivated. He noted that New Japan do not take kindly to their talent being mistreated citing World Championship Wrestling under Bill Watts and TNA.

On the same day the news dropped, AEW CEO Tony Khan filmed a promo released on Twitter before AEW Dynamite and during WWE Smackdown. Tony Khan took shots at Nick Khan, addressing the report of WWE’s talks with New Japan. Thurston noted what Tony Khan’s promo signals as well as what it means for WWE’s strategy.

“So not even thinking about whether it’s a good promo or not, I think this is a bad strategy move by Tony Khan. It’s the actual WWE and New Japan offices that are talking to each other. I’ve been told by people on both sides, that between New Japan and AEW, it’s mostly Rocky Romero, who’s the New Japan USA office, talking to AEW, as opposed to the Japanese office.”

So when Tony Khan said New Japan agreed the promo was a good idea, it’s questionable whether he’s referring to the Japanese office.

“I know a lot of people think the promo is the greatest thing. They’re really positive on it.

“It did make me want to watch Dynamite more,” Thurston said. “The promo was posted during Smackdown when a lot of people are on Twitter, thinking about wrestling. So there’s probably some people who watched Dynamite more than would have otherwise. But again, if I’m WWE and if I feel threatened by AEW, which to some extent I should, and if I think an exclusive New Japan relationship hurts AEW, which it would, then this promo reassured me of that notion and I would double-down on pursuing that deal.

“Personally, I want the wrestling industry to be more competitive. I want the content in all companies, especially the highest profile companies to get better, and this promo tips his hand. Tony Khan encouraged WWE, in my view, if WWE is as smart as they supposedly are, to swallow up more good wrestling into their inauthentic universe, which means the greater consolidation of power for WWE in the wrestling space and a weaker wrestling industry than there would be otherwise.

“And secondarily, it’s another step down the path we’ve seen so many other wrestling executives take. It seemed a year or two ago when AEW was in its first days as a company, if you paid attention to things that Tony Khan said, his background and his demeanor, you’d think, okay, we’re safe with this guy. This guy is not going to turn into an Eric Bischoff, a Vince Russo, a Jeff Jarrett, a Dixie Carter, or a Vince McMahon in terms of putting themselves out there as an on-screen character too much.”

The original transcript of the podcast was edited for conciseness and clarity.

Jason Ounpraseuth has covered pro wrestling since 2019. He co-hosts the Gentlemen’s Wrestling Podcast.

Brandon Thurston has written about wrestling business since 2015. He’s also an independent pro wrestler and trainer. For more, see our About page.

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