Why was WCW sold for so little?

[SOR]

I understand that at the last minute Time Warner said they wouldn't air the company on TNT or TBS which caused Bischoff to bail on the project and the price significantly dropped because of that but I still feel the rumoured 3 million is way too little even if there were no TV deals in place.

If you look at the assets they had multiple wrestling rings, championship belts, tape library, rights to logos such as Nitro, WCW, nWo, Wrestling Sets, Merchandise etc. Surely all that is worth more than 3 million USD right? Surely the belts, rings and remaining merchandise equalled up to about 1-1.5 million if sold in auction or something.

How did McMahon get such a great deal? Why didn't Eric buy and find a network right away? It wouldn't of been hard I believe the last Nitro drew 3.0 which is an awesome rating. Why didn't a group of local business men just buy the entire company and individually sell the assets?

[thecrusherwi]

What did they have that was of any value to anyone but Vince McMahon?

Wrestler contracts - Even if you were a startup wrestling company, this is a very risky investment and likely would bankrupt you before you did a show. You have to renegotiate all of them, so it would just be better to wait until they all expired and scrape up the ones that would be willing to work for you with new deals (ala TNA) Any big star would likely not want to work for you anyways.
Trademarks - Meant nothing without the wrestlers and tape library
Tape Libraries - Unless you had a distribution company that was targeted at the correct fan base, these are practically worthless. Unless you are a filthy rich wrestling fan who just wants to watch them.
Rings/Hardware - Worthless to everyone, including Vince

The TV deal is what gave WCW all it's value. Vince was basically the only buyer that made any sense once the TV rights were taken off the table. They're lucky they got that much for it.

[Milkman Norm]

Once distribution was of the table Bischoff's investors back out. The cable market in 2001 was a lot smaller than it is now. With the Turner networks out, WWE on Spike and the people responsible for programming USA then having new interest in wrestling that pretty much left FX as the only viable network to carry WCW, and they weren't in nearly as many households as TNT

[jimmyjames]

Also, WCW never made a profit. It was a loss leader for the Turner networks. Even if FX for instance had signed them, they changed there programming focus a couple of years later and would have dropped it, like TNT.

[Baldobomb-22-OH-MAN!!!]

didn't Vince also have some sort of Right of First Refusal clause because of TBS' shenanigans to get rid of WWF after the Black Saturday catastrophe back in the 80s?

[Can you afford to pay me, Gah]

Apr 21, 2013 14:19:03 GMT -5 thecrusherwi said:

What did they have that was of any value to anyone but Vince McMahon?

Wrestler contracts - Even if you were a startup wrestling company, this is a very risky investment and likely would bankrupt you before you did a show. You have to renegotiate all of them, so it would just be better to wait until they all expired and scrape up the ones that would be willing to work for you with new deals (ala TNA) Any big star would likely not want to work for you anyways.
Trademarks - Meant nothing without the wrestlers and tape library
Tape Libraries - Unless you had a distribution company that was targeted at the correct fan base, these are practically worthless. Unless you are a filthy rich wrestling fan who just wants to watch them.
Rings/Hardware - Worthless to everyone, including Vince

The TV deal is what gave WCW all it's value. Vince was basically the only buyer that made any sense once the TV rights were taken off the table. They're lucky they got that much for it.

Pretty much this. A lot of the big names took the money and sat at home until they deal was over. Others like Booker T and DDP took the pay cut because I guess they wanted to work. The contracts didn't matter because from what I saw the wrestler got WWE contracts offers most less the WCW over paying deals or had the opinion to let Ted pay them to do nothing. Flair in his book said he would brought WCW himself if he knew it would sell that cheap. But it was one of those thing and shady situations. Where Bischoff had investors ready if there was TV and was about to get WCW. Then once the TV feel out so did Bischoff's investors. Not Eric himself. The shady part came in that Vince and only Vince had a chance to make an offer. But not many would jump on it just for what most people would just want The tape libraries. Which a lot of people would like them.

I mean you could sit on that and hold out for an A. Larger payout from the WWE or get someone to distribute the footage. That what WCW wanted the most anyway was the footage. They pay for all kinds of old companies stuff. WCW was one of the biggest ones.

[molson5]

It happened so fast, probably nobody else was in a position to put anything resembling a bid together. I bet if it was on the market longer, there would have been more wrestling types trying to get involved - like the Jarretts, or Hogan, or even Bischoff if he could regroup and find new investors. The no-TV thing was a huge issue in the short term, but it's hard to believe someone couldn't have gotten a slot somewhere eventually. But Time Warner obviously needed to sell immediately and the WWE was the only ones in the position to acquire it.

[Glitch]

I believe it was a settlement in a lawsuit Vince had with wcw back then, when he sued them for implying the nwo was instigated by the wwf. Vince could get first dibs on a bid, and the lawyers over at wcw didn't take into that the company might go up for sale.

[wrestlinggod13]

I think the actual sale price was $4.2 million for the tape library and trademarks/copyrights, but that's still ridiculously low.

[Deleted]

I seem to remember reading that the sale wasn't of the actual company, but the intellectual property(logos, tape libraries, etc), and select, individual talent contracts with WCW (but not Turner/Aol-Time Warner). Apparently, the actual wrestling company still exists on paper as Universal Wrestling Corporation, and is still owned by AOL-Time Warner. Or, something along those lines.

[Milkman Norm]

I think that exactly write. Because WWF told the media they bought WCW that's the story that went out. And it sounds better than "we bought a tape library and associated name" but that's pretty much what happened.

[ICBM]

Apr 21, 2013 14:55:38 GMT -5 jimmyjames said:

Also, WCW never made a profit. It was a loss leader for the Turner networks. Even if FX for instance had signed them, they changed there programming focus a couple of years later and would have dropped it, like TNT.

They did turn a profit. When they got into the black, Harvey Schiller had to pay Eric Bischoff one dollar. Read the details in Controversy equals cash, available on WWE shop doctor or at your local book retailer

[ICBM]

*dotcom not doctor.

Also, you were right about them being the biggest money pit at turner for yrs. they did turn a profit in 95, 96, 97 and 98. They lost their ass in 99 and 00. Reports in mid 00 suggested they were on track to lose $88million by end of yr

[Can you afford to pay me, Gah]

Apr 21, 2013 16:02:09 GMT -5 molson5 said:

It happened so fast, probably nobody else was in a position to put anything resembling a bid together. I bet if it was on the market longer, there would have been more wrestling types trying to get involved - like the Jarretts, or Hogan, or even Bischoff if he could regroup and find new investors. The no-TV thing was a huge issue in the short term, but it's hard to believe someone couldn't have gotten a slot somewhere eventually. But Time Warner obviously needed to sell immediately and the WWE was the only ones in the position to acquire it.

Hard to say because Hogan still had the AOL deal for several months. The Jarrett's didn't go for TNA over a year later. My best guess would been the whole XWF group may have gotten involed but still they had no TV deal either and went away fast. The whole weekly PPV concept was unheard of before TNA but it worked. Now days it's easier to get something going I think with money. While the IPPVs, and online streaming. That could be away to get exposes for a big money company to get a bigger TV deal and there are more networks now.

[blackmegaman]

Apr 21, 2013 19:38:53 GMT -5 wrestlinggod13 said:

I think the actual sale price was $4.2 million for the tape library and trademarks/copyrights, but that's still ridiculously low.

So if the Rumor of Brock's salary is true (apparently it was 5 mil for one year) that means to Vince and the WWE 2 ppv matches with Brock Lesnar is worth more than most of NWA/WCW's legacy.

[Oh Cry Me a Screwball]

As everyone has already stated, WCW had no value to everyone but TV networks and Vince McMahon without the Turner time slots. And the former would rather have the promoters do wrestling shows on their dime and pay them for it. There's also the fact that wrestling makes less ad revenue, so just because Nitro and Thunder does 2.0s doesn't mean that it's going to be as profitable as a regular drama show doing a 2.0. That's probably why all the networks didn't offer to bail out WCW when Kellner cancelled the time slots.

[Wolf Hawkfield no1 NZ poster]

Who else was going to buy WCW as the only thing of value there was the tape library.

[celticjobber]

Without TV, it was essentially worthless.

As most networks avoid pro wrestling because of it's trashy stigma and the fact that it has a mostly low-income viewer demographic who are considered some of the least desirable viewers for high-valued advertisers.

[Sparvid]

Apr 21, 2013 15:17:49 GMT -5 Baldobomb-22-OH-MAN!!! said:

didn't Vince also have some sort of Right of First Refusal clause because of TBS' shenanigans to get rid of WWF after the Black Saturday catastrophe back in the 80s?

Apr 21, 2013 18:04:42 GMT -5 Glitch said:

I believe it was a settlement in a lawsuit Vince had with wcw back then, when he sued them for implying the nwo was instigated by the wwf. Vince could get first dibs on a bid, and the lawyers over at wcw didn't take into that the company might go up for sale.

IIRC, Vince had the First Refusal after the Hall & Nash lawsuit, but declined on the offer. Then Bischoff and Fusient were interested, but didn't want to buy it without a TV outlet. Then AOL Time Warner went back to Vince and basically said "Are you sure you don't want to buy? You'll get it really cheap."

[Oh Cry Me a Screwball]

Apr 21, 2013 14:19:03 GMT -5 thecrusherwi said:

Tape Libraries - Unless you had a distribution company that was targeted at the correct fan base, these are practically worthless. Unless you are a filthy rich wrestling fan who just wants to watch them.

Also, we were still a year or so away from the entertainment business realizing what DVDs could do as far as the home video market goes. So, Vince was about the only one that really could do anything with the tapes.