Warner Bros. Discovery’s (WBD) aggressive cost cutting moves come at a very bad time for Tony Khan and All Elite Wrestling.
When WarnerMedia merged with Discovery earlier this year, it created some uncertainty about AEW’s future due to anticipated budget cuts. The story of WBD’s ongoing mass layoffs is back in the news this week. For example, as part of an effort to save billions of dollars, it sounds like WBD plans to merge streaming service HBO Max with Discovery+.
Wrestling Observer Radio’s Dave Meltzer described how WBD’s budget cuts are changing the landscape for AEW as the company looks to secure much more cash for a new TV deal with WBD:
“If you’re an AEW fan, the last two days haven’t been good news at all.”
“We knew that [WBD was] I’ll be cutting budgets, but it really feels like TNT’s prestige program is going out the window. I just have this feeling, apart from the NBA, this TNT [and TBS] will be just another station on cable… looks like they just want to cut things down, and CNN for that matter too. They cut up everything.”
“…many of the HBO Max executives will be gone. Much of HBO Max’s budget is likely to go. They are really trying to save a lot of money. And they know the only thing they have to keep that’s going to cost them a lot of money is the NBA.”
“It’s probably the worst possible time to go in there and demand a big rate hike. That will be very interesting.”
“To give him a big raise in rights, they really need to find outside bidders. And then that becomes problematic, because if you go to a weaker station, your numbers won’t look as good.”
“[TBS] fits perfectly with AEW. But at the same time, the main way the company can make money is through television rights. And if you want to make it a profitable company and your parent company is cutting budgets all over the place in ways that people don’t expect, like stopping production of movies, stopping production of TV shows, I mean, it was there a bloodletting . And there’s probably more to come. So the timing for AEW, with their upcoming deal set to happen late next year, hasn’t looked good the past two days.”
The big concern here for AEW isn’t that their TV shows will be canceled because dynamite performs well in the ratings weekly. The problem is that in order to continue growing and remain competitive with WWE in the pro wrestling free agent market, AEW needs to land a much more lucrative TV deal. The critical phase for AEW’s TV rights negotiations will begin towards the end of this year. By then, AEW hopes to have top stars like CM Punk and Kenny Omega (and presumably sort out whatever’s going on with MJF) to provide better ratings and put them in a stronger negotiating position.
But when no company other than WBD is a serious bidder for AEW’s content, and WBD is cutting budgets everywhere, it’s just the latest sign that AEW may not have much clout to land a significantly better TV deal.
How do you see this situation, Cagesider?