AOL/Time Warner Merger: The Last Nail in WCW's Coffin

[SSJPhenom]

Over the past month I've tried to take us on a journey of reflection. Reflection on what I feel caused WCW to go out of business. I've discussed PPV's, people, events, and different circumstances that I believe all lead to WCW's demise. I'd be remiss in my duty, however, if I didn't discuss one of the most over touted and downright misconceptions of WCW's demise. The AOL/Time Warner merger.

I'm not going to spend a lot of time on this because it's simple for me. The AOL/Time Warner merger did not kill WCW. Did it have something to do with WCW's sell? Yes it did. Was it the sole reason that WCW was sold? No it wasn't. Eric Bischoff can say all he wants that It was the merger that killed WCW and that Jamie Kellner was the one that pulled the trigger and part of that's true. Jamie Kellner is the one that decided that WCW should no longer be on Turner's broadcasting. I think it's important, though, to understand why the man made that decision.

It's well documented that the people that were in charger of the company after the merger didn't like nor did they know what professional wrestling was. So knowing that information it's very easy for fans to think that they just wanted to get rid of it. Do you know what they did like and what they did know, though? Money and profit! Which was something that WCW didn't have and wasn't making at the time the decision was made to get rid of it. How anyone in their right mind can tell me that Jamie Kellner would have still decided to get rid of WCW were it continuing to make the kind of money it did in '96, '97, and '98; I'll never understand. WCW went from making anywhere from 80-150 million dollars a year in profit those 3 years. Let me stop for a second and explain what the word profit means. It means that after all of WCW's production costs, salaries they had to pay, materials they had to buy, etc they were 80-150 millon dollars to the good. Now think about how much those production costs, salaries, and what not actually cost. That means, in actuality, WCW was probably making over 500 million in those years with the 80-150 million of it just going to the bank. When the AOL/Time Warner merger was finalized; they were no longer making 80-150 million in profits a year. They were losing that much, if not more. They had lost sponsors and their fan base and as we have covered over the last month, that wasn't a result of the AOL/Time Warner merger. So losing that kind of money, any business man worth their salt would've tried to stop the bleeding and that's exactly what Jamie Kellner did. Business wise, he made the right decision.

If the merger never happened, would WCW have lived on? It probably would've limped on in some form or fashion for a few more years until Turner finally realized that he was going to lose all of his money trying to keep it going, but I damn sure don't think that it'd still be around to this day. So again, the AOL/Time Warner merger did not kill WCW....

WCW killed WCW!

[Makaveli31]

I had to to LOL at this post. AOL-Time Warner was one of the, if not THE biggest financial disasters of all time. AOL Time Warner lost over 99 BILLION in 2002 alone. WCW was a drop in the bucket of this monstrosity. Everything was bleeding money not just WCW. AOL stock went from 226 billion to 20 billion. News Flash: WCW would've been sold if they made or lost 500 million dollars.

The issue here is Eric Bischoff put together a group on investors ready to buy WCW. Fusient Media Ventures. They were offering close to 50 million to purchase WCW and were offering Time Warner a minority stake in the company to keep WCW on TNT and TBS (keep in mind Nitro was still the highest rated cable show on TNT.)

Brad Siegel, head of WCW at the time, conspired with Stu Snyder (then-president of WWE) to make sure WWE could acquire WCW. Snyder and Siegel had a previous relationship. The only way WWE could counter Fusient's offer was if the WCW shows were cancelled. With no TV WCW was worthless. Siegel convinced Kellner to cancel the shows. With the shows cancelled Fusient was forced to withdraw their offer and WCW was sold for a paltry 2.5 million to WWE. There were four offers that were much more than what WWE offered. Siegel basically sabotaged his own company.

THAT is the TRUE story of how WCW died.

[SSJPhenom]

Lol. I just don't get how people don't see the folly of keeping something that's losing millions of dollars. Idc what the AOL/Time Warner deal eventually became because that had jack and shit to do with WCW. Idc how the sell to WWE took place either. FACT is, AOL/Time Warner had nothing, NOTHING, to do with the pitiful state WCW found itself in at the end and it was going out one way or another.

How people fail to see this is beyond me. I guess people don't understand how business works.

[relentless1]

AOL/ Time Warner is the only reason this company went out of business; Ted Turner kept WCW around for years when it was bleeding cash so thats not even a factor for guys that didn't like wrestling.

Nitro was still one of the highest rated shows on TNT by far and thats what network execs care about; if your theory about them canning WCW because of the money were true they they'd have let Eric buy it and gave him the TV time but they didn't; they didn't want wrestling around them period.

This is the only reason that WCW folded and thats a fact; don't let WWEs agenda of superiority make you think that somehow storylines of a wrestling company affected the real corporate world LOL

[relentless1]

Originally Posted by SSJPhenom

Lol. I just don't get how people don't see the folly of keeping something that's losing millions of dollars. Idc what the AOL/Time Warner deal eventually became because that had jack and shit to do with WCW. Idc how the sell to WWE took place either. FACT is, AOL/Time Warner had nothing, NOTHING, to do with the pitiful state WCW found itself in at the end and it was going out one way or another.

How people fail to see this is beyond me.

lol do you know anything about how corporate taxes work? companies that lose money actually save money; their losses are compared against their earnings and this lowers yearly taxes for said corporation so even if it was about the money they'd have kept it if they liked it just to get the tax break

[Makaveli31]

Lol. I just don't get how people don't see the folly of keeping something that's losing millions of dollars. Idc what the AOL/Time Warner deal eventually became because that had jack and shit to do with WCW. Idc how the sell to WWE took place either. FACT is, AOL/Time Warner had nothing, NOTHING, to do with the pitiful state WCW found itself in at the end and it was going out one way or another.

How people fail to see this is beyond me. I guess people don't understand how business works.

Well you're statement that WCW "killed" WCW is factually incorrect. The FACT is WCW could have lived on with the sale to Fusient and keeping WCW programming on TNT. The FACT is Time Warner could've made a hell of a lot more money by selling to Fusient and OWNING a minority stake in WCW rather than selling off to WWE for nothing and basically killing the company off. The "state" of WCW had nothing to do with what ended the company. Like I said, it was being sold one way of the other.

[SSJPhenom]

So let me see if I understand you two correctly. Your theory is that if the AOL/Time Warner merger never happened then WCW would have continued on, losing business left and right, with horrible storylines, and continuing to get worse and worse all the time?

My ideas on WCW have nothing to do with WWE agenda. It's just what I believe. I also believe that if the WWE weren't the only legit game in town for professional wrestling that they'd be in trouble as well. WWE continues to get worse and worse and the only reason they've survived is because they've cornered the market for big professional wrestling. I honestly believe that if something doesn't change for them and fast that the WWE as we know it is on borrowed time.

[SSJPhenom]

Originally Posted by Makaveli31

Well you're statement that WCW "killed" WCW is factually incorrect. The FACT is WCW could have lived on with the sale to Fusient and keeping WCW programming on TNT. The FACT is Time Warner could've made a hell of a lot more money by selling to Fusient and OWNING a minority stake in WCW rather than selling off to WWE for nothing and basically killing the company off. The "state" of WCW had nothing to do with what ended the company. Like I said, it was being sold one way of the other.

Let's say they did sell to Eric and his group. How long do you think Eric and his group could've kept WCW running losing as much business as it was? They definitely didn't have the money Turner had. Hell, they had to put together a group of several investors just to make an offer. So how long do you think they could've weathered the storm of losing ratings, fans, sponsors, and money?

I'm thinking not long and then what would've killed WCW?

[Makaveli31]

So let me see if I understand you two correctly. Your theory is that if the AOL/Time Warner merger never happened then WCW would have continued on, losing business left and right, with horrible storylines, and continuing to get worse and worse all the time?

Yes. As relentless1 stated no one actually loses money in a multi media corporation like Time Warner with a multitude of assets. As stated previously, they write off the losses and compare that to earnings. It's a tax break. As I said Nitro was still the highest rated show on TNT so it was generating ad revenue and still pulling in a sizeable TV audience.I would suspect they would eventually cut costs as contracts expired and downsized production costs but there is absolutely no reason to suspect they would have sold the company despite "horrible storylines."

[Makaveli31]

Let's say they did sell to Eric and his group. How long do you think Eric and his group could've kept WCW running losing as much business as it was? They definitely didn't have the money Turner had. Hell, they had to put together a group of several investors just to make an offer. So how long do you think they could've weathered the storm of losing ratings, fans, sponsors, and money?

I'm thinking not long and then what would've killed WCW?

That is pure speculation. I deal with facts.