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If you’ve already read my tweets today, you can skip this.
Behold the latest crumb of reporting about AEW’s media rights negotiations, this from Puck’s Matt Belloni:
“I’m told the exclusive window closes in July, and AEW leader Tony Khan is said to be disappointed with the offer currently on the table. Khan also surely knows that Zaz losing the NBA would give AEW more leverage, even though the money to re-up AEW is a mere drop in the NBA bucket. If the window closes without a deal, others could swoop in for those rights, as Comcast has done with the NBA. (Extra awkward because WBD is said to own a stake in the league.)
“I’m not sure how alluring AEW would be to another platform, especially since only non-WWE partners could bid. But the wrestling shows still do okay on the Turner networks, it’s reliable programming, and a rival suitor could further push Zaslav into hot water in his cable carriage deals.”
Aggregators ran at the opportunity to put “disappointed” in a headline about a subject so determinative of AEW’s financial future, sure to get you clicking and glimpsing a dozen-or-so low-CPM anchor, rail, vignette, multiplex, and banner ads.
I didn’t view Belloni’s report as negative news for AEW as some (ironically AEW defenders) have. Belloni’s report is consistent with what I believe is probably happening with negotiations and what’s been reported up to this point by others (including Fightful).
It seems possible the offer AEW has received from WBD at this point is decent, maybe even high enough to secure AEW’s financial sustainability, but that AEW is confident its rights are worth a certain value which WBD’s offer is significantly below.
So it could be that the offer just isn’t yet high enough to dissuade AEW from shopping at least some rights on the open market, based on what they’re confident they can sell their rights for.
Remember there’s Dynamite, Collision, Rampage, PPVs, library, next-day rights, maybe unscripted series, even (and I’m not an optimist on its value but) ROH rights — all of which could be packaged in any combination to different partners.
I think AEW domestic rights could end up split between WBD and another media partner, or more than two partners even. The likeliest bidders besides WBD seem like Fox (maybe for FS1) and Amazon (Prime Video).
Or maybe someone else will come out of left field. No one expected Netflix and CW to be wrestling broadcasters a year ago. Or, considering the likely loss of the NBA, maybe WBD will make a sufficient offer for all AEW rights sometime just before the exclusive window closes.
I also wouldn’t rule out the possibility of international rights playing some role a domestic renewal. AEW’s deals with VIX in Latin America and DAZN in certain European territories (despite, yes, AEW PPV still on DAZN in some regions) recently evaporated, which is probably not great news for AEW’s international media value but does at least free up more rights in the related territories. WBD, as well as other potential bidders (including Amazon and Fox), distribute globally and might be interested in rights more broadly than just the U.S.
“But wasn’t it debunked that WBD owns a take in AEW?”
No, quite the contrary.
I believe WBD owns a minority, non-controlling, possibly non-voting ownership stake in AEW.
On the Sep 26, 2023 media call, Tony Khan was asked directly about WBD ownership and responded ambiguously. He didn’t directly confirm or deny whether WBD owns a stake. He alluded to the possibility of a deal involving WBD “having a piece or a bigger piece, potentially”.
Here’s Khan’s full comment from last year on the subject (and the audio is here):
“And as for them [WBD] and their stake in the business [AEW], I mean, that is something that would be between us. But I would also be open to that, to Warner Brothers in a future deal, having a piece or a bigger piece, potentially. But I would always want to maintain 100% voting control, as I have now, and want to maintain, you know, the supermajority of stock which I have now. So I think these are things that are really important to me. But in a future deal, I mean, these are things that, you know, I would be open to. It’s not– There’s nothing bad about it. I mean, we’ve seen in pro wrestling this year, a change of control [at WWE]. I have no interest in a change of control [at AEW]. Would I be interested in taking on additional investment? Yeah, potentially. But it would have to be at the right numbers and it would have to make sense for us based on how much our business has grown this year. But as for a change of control or giving up any of the voting stock, I have no interest in that.”
“But wouldn’t WBD have to disclose that because WBD is publicly traded?”
No, they wouldn’t have to disclose that.
The SEC requires public companies to disclose what’s material, what a reasonable investor would need to know to evaluate the value of the company. It’s a common misconception that public companies have to disclose everything about their businesses.
WBD’s market cap is about $19 billion. Without opening the can of worms and fountain of hysteria around the question of what AEW’s proper market capitalization might be, a minority non-controlling stake in AEW, especially if it’s a small percentage, probably isn’t material on WBD’s scale. Consider when Sinclair Broadcasting Group, a public company, sold Ring of Honor to Khan, there weren’t explicit disclosures from Sinclair about the transaction. Sinclair rarely ever mentioned ROH in earnings materials despite owning the majority if not the entirety of ROH.
As I learned more about what the SEC requires in the course of reporting on WWE over the years, I too was surprised to learn that the world doesn’t revolve around the pro wrestling industry and that the commission is not concerned with matters that would resolve long-running debates among belligerents on social media and message boards.
As a media meta-narrative, though, there’s one thing I’m sure of, which is that whenever AEW’s new media deal is finalized and announced, and even after an average annual value is reported (assuming it is), no matter how high or low the number, there will be no consensus among the masses of wrestling fans chattering online, nor among pundits with podcasts and YouTube thumbnails, about whether the new deal is in fact a good one.
Brandon Thurston has written about wrestling business since 2015. He operates and owns Wrestlenomics.