WWF Pinned WCW Deal On the Cheap8/12/2001 8:00 PM Eastern
It was only four years ago that World Championship Wrestling produced the top-rated show on basic cable and beat its main rival, the World Wresting Federation, on a weekly basis.
And when World Wrestling Federation Entertainment Inc. acquired WCW from Turner Broadcasting System Inc. in March — after pounding it into submission in the ratings battle over the last few years — news reports put the price tag at up to $20 million. That marked a big drop from the reported $75 million that Fusient Media Ventures had offered for WCW during January, in a deal that later fell apart.
As it turns out, the WWF — which has seen its ratings for fall since it moved to new cable home TNN: The National Network — only paid a measly $2.5 million for WCW, plus an additional $1.8 million in related costs, the company revealed in a recent earnings report.
That's $4.3 million in total: the same price that Los Angeles Dodgers outfielder Gary Sheffield was seeking for his Tampa home, the exact amount it recently cost to build a new air traffic control tower at Central Illinois Regional Airport, or the cost of a couple of Super Bowl commercials.
How did WCW's value fall from a reported $75 million offer to $4.3 million? The $75 million was a bogus number leaked by Turner executives "to save face," a source familiar with the deal said.
In reality, the source said, Fusient's original WCW offer in January was for $10 million, which included a guarantee that it would be allotted 5 percent of the primetime schedule on Turner Network Television and TBS Superstation for WCW programming.
Fusient agreed to pay up to an additional $65 million in seven years if WCW hit certain benchmarks, including increasing the value of the business to $1 billion, the source added.
Fusient later pulled its offer after it reviewed WCW's books, and made a second offer for WCW, which included no up-front money and an agreement to spend $5 million in advertising on properties owned by AOL Time Warner Inc. (Turner's parent company), a source said. Turner ended up taking WWF's offer.
TBS and Fusient executives declined to comment on the offer. All WWF president Stuart Snyder would say about the bargain price WWF paid for its longtime rival was, "It was the right number for both parties, and we've moved on."
After it acquired WCW, WWF executives originally said they would spin the company's wrestlers off into a dedicated series, and that WCW and WWF stars would eventually battle head to head in pay-per-view matches. But WWF has put off plans to launch a WCW series, and the company has only signed a few big-name WCW wrestlers.
Indeed, it hasn't picked up WCW's biggest stars, such as Bill Goldberg, Sting and Hulk Hogan, who will still remain under contract to AOL Time Warner.
"We never hesitate to take a step sideways or backward for the long-term gain. And yes, while we had thought about going and doing that, [launching WCW series], we didn't put a clock to when we would get there," Snyder said last week. The company still plans to eventually launch a WCW show, but "it's not as if we have a sense of urgency that it has to be accomplished in the next 30 days," Snyder added.
Yet, WWF is slowly beginning to integrate some WCW wrestlers into its programs on MTV, TNN and UPN. The WCW wrestlers have been grouped into the "Alliance," which includes grapplers from the bankrupt promotion Extreme Championship Wrestling and some big WWF names who have "jumped ship" in the storyline, including the popular Stone Cold Steve Austin.
New Saturday-Night Show On TNN
WWF will debut a new magazine-style program on TNN later this month, which will run on Saturdays from 10 p.m. to midnight. The program, which premieres Aug. 25, will replace LiveWire
and Superstars, two weekend morning shows that have been running on TNN.
Snyder said the show will contain a review of each week's WWF highlights, and probably a live segment that would include fan interaction through call-ins and the Internet. The later time slot will allow the WWF to offer edgier content, as the show will carry a TV-PG rating, Snyder added.
Ratings for WWF shows have fluctuated over the last year, largely because of its switch from USA Network to TNN and MTV: Music Television last September.
The WWF's most popular cable show, Monday night's Raw Is War, has averaged a 4.94 Nielsen Media Research rating since it moved to TNN last September, a drop from the 6 rating it pulled during August 2000, its final month on USA.
While the return of WWF star The Rock from a four-month hiatus helped TNN pull a 5.7 rating on July 30 — its highest rating ever — WWFE's acquisition of WCW hasn't sparked a jump in its numbers.
"I believe we have captured a fair amount of WCW fans. At the same time, there are most likely fans of the old WCW who are not quite there yet," Snyder said. "We will continue to work hard to get them."
Snyder said TNN's channel position on cable systems— and the fact that USA was viewed as a more mainstream network — also had an impact on the ratings dip since the shows moved. But Snyder said TNN's marketing commitment to the WWF, and a slate of new shows aimed at young males that are set to debut on the network this fall (including Baywatch
and Star Trek: The Next Generation), bode well for improved WWF ratings.
Excluding its top-rated wrestling programming, TNN averaged a 0.6 rating in the second quarter, flat with last year, noted USA senior vice president of research Ray Giacopelli. TNN dropped 11 percent in adults 18 to 49, excluding WWF shows, he added.
But TNN vice president of research and planning Mark Loughney said ratings have been improving lately. Excluding wrestling, TNN was up 3 percent in household ratings during the first five weeks of the third quarter, and grew 6 percent among the 18 to 49 demo, Loughney said.