NEW YORK — Vince McMahon, chairman of the World Wrestling Federation, has achieved a virtual monopoly in U.S. pro wrestling by purchasing the competing WCW (World Championship Wrestling) from AOL Time Warner.
Calling the deal “an achievement” and “a smart, strategic business decision,” WWF CEO Linda McMahon told reporters in a conference call that she plans to keep the WCW operating with its own group of wrestlers in regularly scheduled series on the TNN cable network. TNN already carries the WWF’s “Raw Is War” Mondays at 9 p.m. That two-hour cablecast draws more viewers — year-round — than any other series in basic cable, logging ratings of between 5 and 6 in cable homes, with young men making up a large proportion of the viewers.
Linda McMahon declined to discuss terms of the deal, or which contracts of WCW wrestlers the WWF would take on. Analysts’ estimates put the WWF’s cash payout at $10 million-$20 million. Marquee WCW wrestlers like Goldberg and Sting are the likeliest performers to join the McMahon stable.
The WWF’s purchase price is low, but AOL Time Warner’s Turner Broadcasting division accepted the deal because the division lost up to $70 million on the WCW last year. Turner announced earlier this month the cancellation of the two WCW primetime programs, “Monday Nitro Live” on TNT every Monday and “WCW Thunder” on TBS every Wednesday.
McMahon said the WWF would not be responsible for making good on the advertising dollars that TNT and TBS had sold for future cablecasts of the two WCW series that Turner has scrapped. TNT and TBS plan to schedule movies and other general-entertainment programming in the time periods vacated by wrestling.
Peter Swan, an analyst with Pacific Growth Equities, said the WWF thrived over the last few years while the WCW fell on hard times at least in part because the WCW “ended up getting tucked away in the small nooks and crannies,” first of Time Warner, which bought Turner Broadcasting in 1995, and then AOL Time Warner.
Another analyst, Wit Capital’s Jordan Rohan said that the WWF “has creatively outperformed the WCW, bringing in fresher talent and drawing up more interesting plotlines.”
One revenue stream that could become a torrent this year for the McMahons is the monthly pay-per-view “Wrestlemania” spectaculars, said Dennis McAlpine, an analyst with Auerback, Pollak & Richardson. In the past, the WWF and the WCW produced their own separate events. But now the McMahon scriptwriters will be able to create grudge matches between the stars of the WWF, like Stone Cold Steve Austin and the Rock, and the WCW bellwethers like Goldberg and Sting. PPV buy-rates should get a healthy bounce.
WWF Entertainment president Stu Snyder said the WWF has bought thousands of hours of WCW tapes that it will recycle into areas such as homevideo, TV and Internet streaming.