Well with the permission of Jay Bower who writes for TheSmarks, I am posting this article as I think it is very well written and a very good read, so without further adieu.....enjoy!
We are now in the third week, of the third month, of the third year after professionally wrestling statistically hit it's biggest peak of the decade. The time period was the culmination of one of the most remarkable runs that the sport has ever experienced.
Three promotions were firmly entrenched in the national spotlight and thriving. Vince McMahon's WWF was doing phenomenal business and in the process drawing one of the highest buyrates of all time for it's flagship event Wrestlemania. Down in Atlanta, Ted Turner's bastard child World Championship Wrestling, nearly a decade after shedding the skin of the National Wrestling Alliance, had finally broken away from the WWF's shadow and enjoyed a short but successful run as the top promotion in the country. While the WWF and WCW were butting heads on center stage, an innovator by the name of Paul Heyman was quietly introducing the world to a unique and revolutionary movement that began in an 800 seat converted bingo hall and ended up changing the face of the sport as we know it forever. Three years ago, Extreme Championship Wrestling truly arrived with a weekly broadcast on a major cable outlet. Raided of talent, beaten down with injury and backed into a corner, Heyman's group marched into the spotlight.
Three years later, ECW is dead. A promotion that's fire of innovation lit the way for the sport and burned the path into the future has been extinguished. Nothing remaining but a stack of unpaid bills and the fond memories of the promotions loyal fans.
Three years later, World Championship Wrestling is dead. A promotion who's legacy can arguably be traced back for nearly a century has been laid to rest. No one thought that the day would come, but the grim reaper came calling and took World Championship Wrestling back in it's arms.
Three Years later, the World Wrestling Federation remains a strong force in the world of entertainment. After swallowing up the remains of WCW and absorbing the brand name and creative genius behind ECW, Vince McMahon holds the last decade of our sport in his grasp.
The following is a multipart look at the current state of professional wrestling and the shifts in the landscape that we can expect to see in the not-too-distant future.
Successful Competition and Why it Probably Won't Happen:
While the word "monopoly" certainly could be thrown about by some in regards to Vince McMahon's sole-proprietorship over the American Wrestling industry, the truth is that the American public is simply not willing to support another organization at the current moment.
The chances of a new wrestling organization going national are slim to none. The way that television has been produced, contracts have been given, and cards have been run in the last five years is simply not conducive to profitable upstart business and several well-meaning promoters have unfortunately reached that morbid conclusion the hard way.
John Collins upstart Main Event Championship Wrestling was a perfect blueprint for failure. Collins was a fan and a mark for the business in every sense of the word. He had money to invest in something and he thought what better to do than start a wrestling promotion with the large pool of talent that was readily available. Collins had relatively little experience in keeping books, resource management and no knowledge of the true red tape involved with the wrestling business. Collins payed big money to big names who in turn drew small gates and small short term returns on his investment. John thought things would improve and when they didn't he damn near had a nervous breakdown and literally ran away and hid from his creation.
When it comes to a wrestling promotion, management is far and away the most crucial element of the project. World Championship Wrestling crumbled under inadequate management who invested in wrestlers via large contracts yet saw very low returns. Extreme Championship Wrestling folded after Paul Heyman constantly raped his own wallet by booking house show tours that saw maximum profits outweighed by the cost of flying in his own wrestlers. He also accepted a horrible deal from TNN that saw his company paying the bulk of the bills while it's network reaped almost the entirety of the profits.
What the WWF has always possessed and continues to retain is an excellent source of management and economic awareness with Vince and Linda McMahon always directly in the middle of the system. Even in times of prosper, the WWF acknowledges the fact that wrestling is cyclical by nature and a downturn in business is expected sooner than later. The WWF is bracing itself for this by branching out into several other fields such as Smackdown! Records, a publishing company and a new attraction in Toronto. Sure, the WWF isn't really spreading itself out that wisely if all of their side projects are wrestling related, but they know what must be done and they are attempting to do it. Prudent management and level heads are probably the only reason that the WWF did not close down in the mid 90's when they were going through their worst financial period since 1984/1985.
Today, with several promoters having big dream of going national, the fact of the matter is that the majority of high profile professional wrestlers who aren't under WWF contract are spoiled. In World Championship Wrestling, wrestlers were receiving mid-range, six figure contracts even though business was tanking on all cylinders and zero evidence existed that plausibly showed that the wrestlers were effective enough contractors to warrant the exorbitant salaries that they were earning. When the WCW sunk, the price tags of the wrestlers involved did not sink accordingly.
The price for an independent upstart promotion to sign Kevin Nash? Around $800,000, as offered by the WWA for one year of Nash's services. Jeff Jarrett is rumored to come at around $400,000-$600,000 a year. The price to book Brian Christopher for one show? Ten-thousand dollars of the promoters money.
So a promoter wants to book Brian Christopher to main event an upcoming independent show. Assuming an average ticket cost of $10 for the card, the name value of Brian Christopher on the flier alone would have to be significant enough to bring in an astounding 1,000 fans to the building just to break even for the former WWF stars services. The promoter still must pay for the rented venue, electricity, security, and of course for the other fifteen wrestlers who appear on the show. A turnout of one-thousand is a very strong number for an Indy show and assuming that the promoter wants to put at least one or two more big names on the card, turning a profit is obviously not an easy task to accomplish.
What promoters like John Collins hoped to do was take this formula and use it on a bigger scale. While wrestlers can get away with making large salaries in the WWF due to inflows of revenue from advertising, merchandising, licensing and multiple house shows a week, upstart promotions simply don't have the outlets for returns on huge contracts that Vince McMahon enjoys.
While most unsigned, big name wrestlers would rather sit at home than work for lower pay checks, it is the only way for a new promotion to see it's second birthday. What organizations like MECW were doing was doling out $5,000 each to about fifteen well known wrestlers to appear at each house show. Using common sense, you can't help but wonder what in God's name the promoter was thinking. Paying your talent pool a combined upward of $80,000 for a show that draws 800 fans is absurd.
The reason garbage federations like Combat Zone Wrestling have existed for so long now where many other fail is simple. CZW's roster is made entirely of either homegrown or little known talent. This talent comes at an extremely low price tag with some of the wrestlers in all probability making less than a hundred dollars a night and the champion of the promotion likely bringing in about $500-$1,000 per show. By cutting costs via little known talent a promotion can hope to break even at first and through time and exposure build a loyal and faithful fan base and in turn more revenues and a higher profit margin.
The central problem of building any new national promotion with former WCW/ECW talent at the current moment is that the promotion would have to come right out of the gates selling thousands of tickets per arena show and extremely large amounts of merchandise to compensate for the large amounts of capital per show going to talent booking alone. One obvious solution would be lower pay for the wrestlers or giving the wrestlers a lower base pay in addition to a percentage from the gate. Ten years ago this system would have had a fighting chance of success, but gone are those days and here are the days of athletes like Lex Luger thinking that the wrestling world owes them $300,000 a year when they have not done anything to prove their ability to draw money in eight years.
The only promotion with shrewd enough business savvy to turn a big name roster into small time revenue is the WWA, a touring group that has been in existence for around a year. The promotion is doing something that no other wrestling organization in recent times has had the desire and prudency to do, and that is to run a large portion of it's shows in Europe and Australia, two of the most untapped markets in the history of our sport. These two continents have not only a history of strong interest in American wrestling, but a history of being deprived and unsaturated of a product that America as a whole is burning out on. Whenever WCW passed through the territory at the end of it's existence, they could guarantee on drawing a good eight to ten-thousand more fans per show than they were averaging in America. With fewer tickets being "papered" and more paying customers, the gates for the shows were obviously very lucrative. What the WWA has done different than other past American promotions is the shifting of the Australian and European dates from a three days on the yearly schedule to a significant amount of dates that will cover a much broader area of the map.
Unfortunately the WWA's logic seemed to hit rock bottom upon re-entering the states. Once again, the perils of bad management could not have been more clearly demonstrated in the two weeks leading up to the promotions virgin attempt at live pay-per-view. The problems began with the company nearly losing it's venue for the event two weeks before it was set to take place. Things only got worse as it was discovered that the promotion did not have the proper licensing necessary to run a wrestling event in Nevada. Several of the stars involved in the show, including Buff Bagwell and Randy Savage whom the entire first pay-per-view was set to be based on, pulled out at the last minute and in turn made the promotion look horrible. The WWA pulled through at the last minute, delivering Jerry Lynn, Rick Steiner and the Cat to make surprise appearances and putting on a show that could best be described as "watchable", but the cracks in the new promotion were already beginning to show. The WWA has gone on the record as saying that before the companies next PPV, they must lock of all the competing talent into contracts to ensure another host of no-shows don't occur. With an offer of 5 to 8 million dollars being made to Randy Savage alone earlier in the year, I can only imagine what kind of fiscal valleys the future may hold for this eager new entry into an unforgiving industry.
While wrestlers will probably be willing to take less money to work at some point down the road, the economics of a new national promotion using already established talent is failure by design. The options for a new national promotion are simple and twofold; A new company with ungodly financial backing can sweep up every major name that the wrestling world has left behind, promote the organization heavily and be willing to accept several years of heavy loss that MAY in due time lead to a profitable organization, or a new organization can start from scratch with fresh new talent and reinvent the turf much like Paul Heyman, Todd Gordon and ECW did in the early to mid 90's.
In either case, both options take a considerable amount of time to unravel and to be quite honest have a relatively small chance to thrive in a waning marketplace.
The New WWF Contract:
An unfortunate consequence of no competition is the unfortunate fact that almost no one gains financially with the exception of the lone companies ownership, stockholders and management. With pay-per-view prices increasing, wrestling fans have no other choice but to either swallow the additional cost or cut out the shows that they love so much.
The dust has settled on the bitter Monday Night Wars and as the WWF stands alone, the malefic and unsettling repercussions of the victory are starting to become clearer and a little more morbid by the day. The entire roster of the WWF stood beside Vince McMahon as his troops and his support throughout a battle with World Championship Wrestling and the rosters final victory may have actually hurt the battalion more than anyone realized.
In mid 2001, Joanie Lauer was at a crossroads in her career. Portraying "The Ninth Wonder of the World" Chyna, she had broken barriers that no other woman in the sports history had. Like her or hate her, Chyna was a household name in America and an inspiration to a legion of little girls who looked like little boys. Chyna was making a considerably lower salary than most wrestlers with her name value as her contract was constructed at a time when she was being brought into the WWF as little more than enhancement talent. When Lauer's contract ran up in August of 2001 she was hoping for the healthy raise that was rightfully due to her. When Joanie entered into negotiations with the WWF she quickly realized that things were not going to work out quite as she had hoped. WCW was no longer around to make Lauer a higher offer so the WWF now had little fear of losing her or anyone else to a rival promotion. The WWF made a very low offer to Chyna. Her choice, accept the deal or sink into obscurity without the promotional machine of a major wrestling organization behind her. Joanie chose the latter and has rarely been heard from since.
Many wrestlers possibly thought nothing of this fallout at the time and some may have even been relieved to have to no longer lock up their athletic supports and protective cups in fear of Joanie borrowing them. But make no mistake about it, This instance was the proverbial opening shots in a battle that sees the WWF now holding all of the leverage over it's talent in terms of financial negotiations. A lot of the employee's of the WWF have their contracts set to roll around in the next twelve months. They will most likely be faced with the option of taking a sizeable pay cut (yet still making a decent amount of money) and being promised more "incentives", or they can leave the WWF and jump to Japan and make even less money or tour the Indy scene making peanuts. The incentives that the WWF offers it's competitors include hefty cuts of the wrestler's merchandise sales. This can obviously look very bleak to a Bob Holly who hasn't been given a meaningful spot on television in eighteen months and thus sells very little merchandise. The incentives system for a wrestler take a lot of trust in the management and creative team, and at the current moment most of the undercard has very little reason to have any hope that their characters will see a meaningful program anytime soon.
The WWF is now asking most of it's talent to take a 20% pay cut. This pay cut is due to the WWF being in a bit of a down period as they put it. Ratings are still spectacular, the gate for Wrestlemania set an all time record, pay-per-views have been selling consistently well and the WWF just wrapped up a successful and profitable Asian tour. A European tour is upcoming and should be a major source of revenue while an Australian show is being booked for a 50,000 seat arena that several of my good friends in Australia tell me should sell out in quick fashion. So where is this lack of revenue coming from? Why must the talent take a pay cut when professional wrestlers as a group are only enjoying 30% of the WWF's net profit, a fraction compared to the "piece of the pie" that NFL, MLB and NFL's players take in while still allowing owners and sponsors to become filthy rich? Why are the wrestlers, the corporate empires most vital asset, personally eating the losses for a failed football league, an unprofitable theme restaurant and a temporarily derailed deal with In Demand?
In reality, what has occurred is that the WWF has pushed it's employees to the max for the past five years and now that the staff has finally put WCW out of business, the WWF turning the monopoly against the very men who helped create it.
Some say it's the way business has always been done, I say it's shady.
The measuring stick for the contract structure of the future of the WWF could very well be Chris Jericho. Three years ago Chris Jericho was one of the hottest free agents in the sport as both major American promotions realized the immense future star potential of the young Canadian. Chris Jericho chose the WWF an on August 9, 1999, Chris Jericho made one of the greatest debuts in wrestling history, became a major star in the sport and hasn't looked back yet. Depending on who you ask, Jericho makes between $350,000 and $600,000 a year. In the next few months Chris Jericho's contract runs up. Chris has come from being a misunderstood former WCW cruiserweight to the undisputed champion of the world, one of the WWF's most dynamic performers and a major cash-cow for the federation. Coming so far since signing with the WWF in 1999, one would think that it was a given that Jericho was in for a raise. Jericho is working much harder and more dates a month than Kevin Nash and Scott Hall yet is receiving substantially less money. The "Outsiders" are already causing tension in the locker room, have yet to prove their ability to draw fan interest and are constantly late to shows. At the same time, their base salary doubles and even triples that of 95% of the WWF's hardworking and respectful roster. Is Vince McMahon setting himself up for a civil war amongst his own employees?
How the WWF deals with Chris Jericho's contract and the guaranteed backlash could be as interesting as any storyline the WWF has recently given us and should give a clear indication as to what direction the company plans to take into the new frontier of sole dominance.
The Future:
The future of the World Wrestling Federation, like any entity in the entertainment industry, is always in danger. What the WWF needs to focus on is not letting it's proverbial sex drive die after the orgasm that is Wrestlemania. Twelve months ago the WWF blew off the entire direction of the company at an explosive Wrestlemania and then let storylines blow aimlessly in the wind for months after the event, trying a little bit of everything but never finding much true direction. The result was a steep loss of a viewership that the WWF has yet to recover come twelve months later.
While the WWF is maintaining a steady fan base using the formula of wrestler X having a conflict with wrestler Y, cutting several attitude-style promos and then meeting on pay-per-view several times before both finding new opponents, it is not the way to bring back the mainstream fans that the WWF desires so badly.
In order to do this the WWF must think outside of the box and not just change the storylines of the companies wrestlers, but the entire presentation and concept of the product. The outlandish and cartoonish WWF Rock n' Wrestling connection made the WWF hundreds of millions of dollars in the 80's and the unwillingness of the WWF to change that formula nearly drove Vince McMahon and company into the ground in the 90's. The Attitude Era and edgy new spin on things brought the WWF resounding success in the late 90's and 2000, but as much as the WWF claims that the era is new because of a slightly toned down product, the WWF presentation still wreaks of attitude.
While the WWF should certainly enjoy the prosper that the tail end of this "boom" is bringing, they should be planning for the future in the back of their heads at all times. The unfortunate fact of the matter for the WWF is that artificially trying to create a new wrestling renaissance is nearly impossible as proved by the lack of success in can't miss prospects like the Russo-Bischoff Era as well as the InVasion. The WWF does not determine what will spark a billion dollar fire, the fans, pop-culture, time and a little bit of luck must all be in perfect alignment, a fact that must be extremely frustrating for the WWF.
Regardless, the WWF is pushing ahead with perhaps its most bold and ambitious move since Vince McMahon put the very existence of his company on the table in 1985 and forged ahead with Wrestlemania.
The WWF will hold a draft and "extend their brand" by dividing all of the organizations talent into two rosters. One roster will call WWF Raw on TNN their home, while the other will do the same with UPN's Smackdown. While their is certainly enough star power to make the idea plausible, it is inevitable that problems will arise. After several broadcasts, one promotion will definitely seem just a little better than the other, causing veterans in the inferior promotion to become irritated. Some Raw talent may be upset that they can't enjoy the exposure of appearing on a network each week. On the other hand, Smackdown talent will no longer be competing on live television and in turn will lose the spontaneity and fun that come with a live broadcast. Sponsors will almost certainly not like the fact that the rosters have been depleted. TNN and UPN both seem to be especially big fans of the Rock and use him heavily in network advertising as he is the most marketable member of the promotion that brings in not only the highest ratings on UPN, but TNN as well. How will one of the two networks feel about being told that the Rock will no longer appear on their network? I don't think they will be too pleased. The WWF will have to expect disappointed crowds and a fall off in attendance for Raw and Smackdown tapings as fans are now getting 50% less main event talent for the same price they were paying before.
According to tentative plans, the WWF Raw and WWF Smackdown rosters will share one monthly PPV and inter-promotional will be limited Wrestlemania and the Royal Rumble.
Remember when WCW debuted and inter-promotional matches would NOT occur? That lasted roughly three weeks, so the WWF is going to have to expect some heavy skepticism until they prove otherwise to fans.
It is far too early to know how the divisional split of the WWF will play out, but it is a safe assumption that this could be the move by the WWF that either keeps momentum strong for another year, or it could the catalyst for a dangerous decline in business.
Final Words
The WWF is in a highly transitional state both behind the scenes and in the middle of the arena. With World Championship Wrestling and Extreme Championship Wrestling dead, the name "WWF" is truly synonymous with American wrestling. No modern precedent exists and how WWF contracts, moral and inner workings react to monopoly will largely determine the future, or lack there of, of professional wrestling. WWF storylines and booking style is still enthralling yet running out of steam. Sometimes in order to take two steps forward, one must take one step back...something has to give and the frightening thing is that no one, not even the WWF, quite knows what that is. As is life, only time will tell...
Jay Bower
TheSmarks.com/A1Wrestling.com
