CM Punk’s return foreshadows stronger competition for WWE

On the latest edition of Wrestlenomics Radio, Brandon Thurston and Chris Gullo discussed CM Punk’s return to pro wrestling on AEW Rampage. Punk is set to make his in-ring return against Darby Allin at All Out on September 5. Thurston discussed on the podcast what Punk symbolizes for fans.

“I think there’s a lot to unpack as far as CM Punk being a symbol for the discontent that wrestling fans have felt, especially in the time between now and when he left WWE in early 2014,” Thurston said. “So much has happened, and it’s been really a whole era since his exit and return to pro wrestling, but it sort of bookends this era of professional wrestling that began in 2014, the beginning of the WWE Network era and this other era here where AEW continues to do some really interesting stuff.

“The story of the business of pro wrestling, the most interesting story to me, and I think to a lot of people, judging by what our audience reacts to here, is the story of AEW vs. WWE, even though they are on dramatically different scales in many ways. I think what Punk meant as a symbol to people is the frustration that fans felt, and secondarily, a lot of the unfairness and the issues that WWE has with workers rights, if you will, in terms of the classification of wrestlers as independent contractors, some of the medical treatment that he had that he was unhappy with.”

Despite the discontent fans have for WWE’s core product, many defenders will point out that WWE continues to make record profits. Thurston explained why this dichotomy exists.

“If you go back and listen to the Art of Wrestling podcast that [Punk] did [in November 2014], it’s really just an amazing highlight reel of all of the issues and complaints that fans and wrestlers have and would more so publicly have in the years to come, and I think part of the reason why there’s an additional interest in the AEW vs. WWE story, is the fan discontent, but also, at the same time, WWE has made more and more money while putting out a product that many people feel is worse and worse,” Thurston explained.

“I occasionally have people who, when I dare to have an opinion about the WWE product, which I think is ultimately important to our topic when we discuss the business of pro wrestling, the quality of product matters, and people will tell me, ‘Well, if you think it’s so bad, look at your spreadsheets, pal. They’re making more and more money. So what are you talking about?’ The reason WWE is making more and more money is largely for external reasons.

“There’s some internal things happening on the corporate side, like what Nick Khan is doing to help them make incrementally more revenue. He’s facilitating good media deals for the company and already has, but that’s despite the quality of WWE’s content, not because of it, and WWE’s media deals, I believe, would be even more valuable if the quality of their content was better, which I think it easily can be.”

On a previous edition of Wrestlenomics Radio, Gullo and Thurston discussed the business effect Punk could have for AEW. Thurston added to that point on this week’s Wrestlenomics Radio as he talked about what Punk’s pro wrestling return symbolizes from a business point of view.

“If you watched AEW Rampage on Friday night and then you sampled the ‘epic’ WWE SummerSlam the following night, it’s quite a contrast,” Thurston pointed out. “The reason why WWE’s making more money over time is because of the external media economy, that it is fortunate to find itself in. Live sports content has become exceedingly valuable in this media environment in a way that it was not in prior eras, and WWE is still popular enough, in fairness to them, they are still popular enough to justify those fees, but I think those fees could be much higher.

“Punk’s return sort of symbolizes excitement for fans and the story about whether WWE is going to get even stronger competition or if a competitor is going to exceed WWE in popularity in some ways in the future. It feels like we’re getting closer to that time, and you’ve got, in many ways, a spiritual leader, like CM Punk, coming back to join the opposing team.”

Excerpts from Wrestlenomics Radio were edited for clarity.

Header image courtesy of All Elite Wrestling

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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NXT Hasn’t Become A Third Media Rights Brand For WWE

On the latest edition of Wrestlenomics Radio, Brandon Thurston and Chris Gullo went into detail on the recent WWE NXT cuts made on Friday. It was reported by Dave Meltzer on Wrestling Observer Radio that these cuts were led by Vince McMahon, with support from Bruce Prichard and John Laurinaitis. The moves are an effort to revert NXT back into a developmental brand.

In 2014, Paul Levesque (Triple H) led NXT to become a prominent third brand away from the earlier reality series origins of the show. Thurston went into detail on this week’s Wrestlenomics Radio on NXT’s new deal with USA Network.

“Let’s talk about what’s causing this. Every wrestling fan wants to talk about AEW vs. WWE and the fact that AEW beat NXT consistently in the ratings, in the Wednesday Night War, almost every time in terms of key demo viewership [viewers aged 18-49] and most of the time in terms of total viewership in the 70 some odd weeks that those programs ran head to head from late 2019 to April 2021,” Thurston said. “I think that’s probably part of the story and part of the perception in Vince McMahon’s mind, and by the way [WWE’s repeated public message is that], ‘they’re only focused on themselves,’ but I don’t believe that.

“I believe WWE cares about what AEW is doing, to a significant extent. There’s that, but I think what’s as big a piece is what happened earlier this year in March, where we got this press release. NXT had a two-year deal that started in fall 2019 to be on the USA Network. USA Network’s parent obviously is NBC Universal, and that deal is coming to an end this fall in two months.

“They renewed, WWE announced on March 30 that they’ve signed a multi-year extension. Now, we don’t know how long it is, but it’s multi-year, so at least two years, and this is when they also announced that WWE would move from Wednesday to Tuesday, and that began on April 13.”

Thurston continued as he discussed NXT’s move from the WWE Network to the USA Network. He examined WWE’s efforts to make NXT into a third rights brand and compares NXT’s financials to that of Raw, SmackDown and AEW.

“We never got an idea of what WWE really got in terms of TV rights fees from NBCU for NXT,” Thurston noted. “Of course, NXT was on the WWE Network. It was essentially the flagship show for the WWE Network for the first several years in the pre-Peacock era, and they decided to move it away from being essentially an exclusive Network show.

“Yes, it was on Hulu too but moving away from the Network to be on the USA Network. There was some worry from stock analysts, media analysts and investor types. ‘Why are you taking content that’s exclusive or almost exclusive to the Network and putting it on television when you’re trying to grow Network subs.’ And I think the media analysts who aren’t inundated in the wrestling industry every day probably didn’t appreciate the extent to which WWE wanted to compete head-to-head with AEW and sort of stamp out AEW’s progress before it got too far, but the public message, and I think there’s some legitimacy to this, was that maybe NXT could grow into this third media rights brand, in addition to Raw and SmackDown.

“Raw is getting $265 million a year from NBCU, that’s just in the U.S. SmackDown is getting $205 million from Fox. WWE in 2020 made over $500 million, more than half of its revenue from Raw and SmackDown rights fees. To an extent, NXT is bundled in there too, but if you took NXT out, it would be a minimal difference. So did NXT turn into this media rights brand? When the move was announced in 2019, there was speculation from stock analysts who cover WWE that the NXT deal to go to USA was worth maybe $50 million a year, early estimates were $100 million a year.

“We don’t know how much it was really worth, and we don’t know if it’s even all guaranteed or if it’s to a great degree, an ad revenue share, but my current belief is that it’s worth well less than what AEW getting from Turner, which is $44 million a year on an average annual basis. I believe it’s something probably closer in the neighborhood to $20 million a year. That’s what I believe about the first term, which is a two-year term.”

Thurston discussed WWE’s attitude towards NXT’s deal with USA Network. He explained what it meant to WWE, based on WWE’s public statements about it and the market’s reaction to it.

“Again, that first term is coming to an end this September, and the new deal will go into effect,” Thurston said. “They announced the new deal this past March, and was it an upgrade? Well, the stock price didn’t move when this deal was announced. The market didn’t feel like it was a big deal, and if this is a $50 million deal or $100 million deal on an average annual basis, that would be a big deal. That would be along the lines of WWE’s second biggest global TV deal, which is India, $50 million a year they get from Sony in India.

“If WWE is really getting $50 million, or something in that neighborhood, for NXT on USA Network, I would think the stock market would respond, but the stock market didn’t respond in March when this deal was announced or in early April when the stock market had the opportunity to react. And then we had the Q1 call on April 22. Stephen Cahall from Wells Fargo asked Kristina Salen about it.

“Basically, what I read this to be saying is that whatever the NXT deal was worth, the new deal was not a surprise to them. Or the value is too small to even really affect their financial guidance. The NXT deal, number one, was not a surprise to them.

“If it was a really great deal, they wouldn’t report a number on these earnings calls or in the press release, but they could have at least, if it was a great number, celebrated it in some way or given some indication about how happy they were about it. I know she’s happy saying, ‘We’re really pleased with that result,’ but it wasn’t a highlight in the press release.

“It only came up because an analyst asked about it, naturally, because NXT rights are something that has been hyped in the past. They justified putting it on the USA Network with the idea that they would be able to grow this third brand as a major media rights producer. We didn’t get any sort of hype. It’s not leaked to the Hollywood Reporter or to Sports Business Journal, that this is a big deal. If this was a big deal, something like that might happen, but it didn’t.”

Thurston then discussed what this all means for NXT now. He talked about NXT’s business performance over these past two years.

“Yes, NXT did not win the Wednesday Night War. AEW did, and NXT did not transform itself into just being some hybrid version of developmental and good content for the WWE Network into being, whatever value that has, this real tangible value of producing dozens of millions of dollars in media rights every year,” Thurston explained. “That’s not happening.

“NXT did not turn into this third media rights brand, yet it’s still on the USA Network. It’s probably producing some money. I would guess somewhere around $20 million a year. It doesn’t sound like it got a major upgrade and I think that’s sort of the financial, tangible, quantifiable, if you want to call it, failure. NXT didn’t meet those expectations.”

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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What Effect Could CM Punk Have On AEW’s business?

On the latest edition of Wrestlenomics Radio, Brandon Thurston and Chris Gullo discussed AEW running another Chicago show, this time at the United Center on August 20 for the second episode of Rampage. The event sold over 10,000 seats in presale and sold out quickly on Monday.

On the July 28 episode of Dynamite, there were many CM Punk references throughout the show as a report came out that Punk is in talks with AEW for an in-ring return. The most clear reference for many fans was in a Darby Allin promo that was played after the announcement of the United Center event on for AEW Rampage on August 20.

Allin said, “I’ll be in Chicago. You know I’ve been around a lot of men in this world that have laid claim to how they’re the greatest, and there’s only one place to really prove that, right here in AEW, even if you think you’re the best in the world.”

Thurston and Gullo discussed what they will be looking out for when it comes to the United Center show and the future ahead.

Brandon Thurston: Let’s try to look ahead here. Let’s say CM Punk debuts on the August 20 Rampage. He doesn’t wrestle, probably, but maybe he wrestles by the time he’s on the All Out pay-per-view. Maybe that’s CM Punk’s first professional wrestling match since early 2014 at the Royal Rumble.

If he wrestles on the pay-per-view, All Out on September 5, what is that going to draw? It depends greatly, obviously, on the rest of the card. It depends greatly on who his opponent is. It depends on how it’s promoted, what the angles are promoting it and the sentiment around the match, but I think it’s reasonable to expect maybe he wrestles Darby Allin just because why else would you have Darby Allin do that promo saying, “even if you’re the best in the world,” on Dynamite after the United Center announcement.

I could see CM Punk being interested in wrestling somebody Darby Allin. That adds up to me. What does he draw on pay-per-view? At this point, the biggest AEW pay-per-view is Revolution at about 135,000 buys.

Chris Gullo: What do you think? Do you think it breaks 150?

Thurston: Yeah, I think it does. Again, it depends greatly on the execution and the other context. All Out did roughly 90,000 last year. Maybe 175,000 to 200,000?

Another thing I wanted to talk about in this context is the viewership. I think they do have CM Punk. I think they would be insane to do anything other than already have CM Punk under contract and then book and advertise this United Center with hints all around that CM Punk is going to be there. I think they have CM Punk. If they didn’t have Bryan Danielson, I don’t know why Tony Khan would say “no comment” in relation to both of them in an interview that he did recently.

Gullo: If he’s going to be there, and just thinking previously about how Turner didn’t want AEW to not advertise debuts of major talent and all that, do you think they advertise by the 13th, the first Rampage, “Hey, next week, CM Punk will be in the United Center.”

Thurston: I don’t know. I think that’s a calculation that’s debatable. Which way is there more interest? You’re already going to sell out the building. You don’t need it for ticket sales. Is there more buzz and talk that leads to stronger viewership by leaving it strongly implied or by being explicit? I think if the reaction was weaker, yeah, just make it explicit.

Gullo: But people will tune in expecting it and not have to have it out there publicly.

Thurston: If Bryan and Punk are on their way to AEW, I want to think about how that affects TV ratings too, especially in September.

I know AEW’s not really competition to WWE, but ratings between Dynamite and Raw might get closer than ever. Raw will be against Monday Night Football in September. Meanwhile on Dynamite you might have the addition of Punk and Bryan and whatever other momentum they have, assuming that they continue to be at least as well booked and well produced as they are currently.

Excerpts from Wrestlenomics Radio were edited for 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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