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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