16 years ago today, after initial rumors that WWF was not in the running to buy WCW, WWF announces via press release they had bought WCW. The press release that shook the wrestling world:
STAMFORD, Conn., March 23, 2001 - World Wrestling Federation Entertainment, Inc. (NYSE: WWF) today announced its purchase of the World Championship Wrestling (WCW) brand from Turner Broadcasting System, Inc. (TBS Inc.), a division of AOL Time Warner.
The purchase of WCW creates a tag team partnership with the World Wrestling Federation brand that is expected to propel the sports entertainment genre to new heights.
In keeping with the company's strategic alliance with Viacom, new WCW programming is anticipated to air on TNN in the near future. The possibility of cross-brand storylines and intrigue, however, may start as early as Monday night during WWF Raw Is War on TNN and the final performance of WCW Monday Nitro Live on Turner Network Television (TNT).
The binding agreement provides World Wrestling Federation Entertainment with the global rights to the WCW brand, tape library, and other intellectual property rights.
"This acquisition is the perfect creative and business catalyst for our company," said Linda McMahon, Chief Executive Officer of World Wrestling Federation Entertainment. "This is a dream combination for fans of sports entertainment. The incendiary mix of World Wrestling Federation and WCW personalities potentially creates intriguing storylines that will attract a larger fan base to the benefit of our advertisers and business partners, and propel sports entertainment to new heights."
"The acquisition of the WCW brand is a strategic move for us," said Stuart Snyder, President and Chief Operating Officer for World Wrestling Federation Entertainment. "We are assuming a brand with global distribution and recognition. We are adding thousands of hours to our tape library that can be repurposed for home videos, television, Internet streaming, and broadband applications. The WCW opens new opportunities for growth in our Pay Per View, live events, and consumer products divisions, as well as the opportunity to develop new television programming using new stars. We also will create additional advertising and sponsorship opportunities. In short, it is a perfect fit."
Brad Siegel, who made more than a few enemies at CNN Center after keeping WCW employees out of the loop during the process, issued the following internal announcement after the deal went down:
"Today, World Wrestling Federation Entertainment, Inc. is announcing that we have reached an agreement for the sale of WCW. This agreement with WWF holds tremendous potential for the WCW brand and assets. The press release announcing the news is attached.
As we told you last week, WCW programming will not appear on TNT and TBS Superstation after March 27. We will share more information with you about the WWF's immediate plans for WCW in the all-staff meeting scheduled for Wednesday, March 28, at 10 a.m. at the Power Plant. Thank you."
So how did we get here? (All images via WWE.com unless otherwise noted)
World Championship Wrestling had caught fire beginning in the summer of 1996 with the New World Order storyline; by the end of 1997, the company had made more money in one year than any wrestling company ever. It would top that mark the next year, reportedly $55 million.
But by 1999, WCW’s biggest adversary, the World Wrestling Federation, had caught and passed WCW in the ratings, merchandise revenue, and show attendance. It wasn’t until after Wrestlemania XV that WCW began to feel the heat. In September, Eric Bischoff, WCW’s top man since taking over for Bill Watts in 1993, was relieved of his duties.
Taking his place was WCW accountant Bill Busch. His first act was luring away WWF senior writers Vince Russo and Ed Ferrara to lead WCW creative. WCW had hopes that the “Crash TV” format would garner the same success as it did in the WWF. Not only did it not (despite pushing younger talent), it only widened the gap between the two companies. After suggesting that former UFC fighter Tank Abbott become WCW champion, Russo and Ferrara were sent home. Bill Busch was removed soon after as well.
Enter Time Warner executive Brad Siegel. In one of his first acts, he installed Kevin Sullivan and Terry Taylor as head writers for WCW. Sullivan and Taylor were not long for this world in WCW creative, especially after four of its top stars, Chris Benoit, Eddie Guerrero, Dean Malenko, and Perry Saturn , all left the company (it could have been worse all things considered). The foursome were quickly snatched up by the WWF.
Not helping matters: in February 2000, twelve wrestlers filed a class action lawsuit against WCW, citing racial discrimination (the suit was settled in 2003; financial terms have not been disclosed as a condition of the settlement. An interesting bit of trivia: one of the plaintiffs in the suit, Harrison Norris, Jr., is serving life in prison without parole for his role in a sex trafficking ring).
In April 2000, both Vince Russo and Eric Bischoff had been brought back to the fold in a last-ditch effort to make the promotion viable. But by July, Bischoff was gone (alongside Hulk Hogan after Russo had infamously shot on him in a promo at Bash at the Beach). Though program quality had improved under Terry Taylor and John Laurinaitis (who had left All Japan to join WCW), fan interest was almost non-existent. Also almost nonexistent was revenue, as the company was losing over $1 million a week on average (it would lose $62 million in 2000).
In October, speculation began to grow that Time-Warner was considering selling WCW, speculation that would be formally confirmed by the end of November. In the front of the line to buy the sinking company was venture capitalist firm Fusient Media Ventures, led by Classic Sports Network founder Brian Bedol and former WCW president Eric Bischoff. Bischoff would assume the role again following the purchase, with Turner Broadcasting retaining a minority interest.
An important side nugget: earlier in the year, WCW and WWF settled a years-long lawsuit involving two defections that sparked WCW’s meteoric rise: Scott Hall and Kevin Nash. One of the terms of the settlement was that WWF had right of first refusal in the event WCW’s assets were liquidated. Translation: no matter who bought WCW, if WWF could match the offer, the company was theirs instead.
The offer, rumored to be between $80 million to $100 million by Fusient (the actual purchase price was around $50 million), was not matched by the WWF, and the company was theirs, and they even announced the sale on January 11, 2001—even though the sale had not been officially finalized. There’s a reason why: on the same day Fusient announced their purchase of WCW, the Federal Communications Commission green-lighted the merger of America Online, a leading Internet service provider, and Time Warner, the parent company of WCW.
Under new management, Ted Turner, who had pro wrestling on his networks since the 1970s, had almost no power at all. That wasn’t good news for WCW, who wasn’t exactly well-liked by the rest of the big players in Time Warner (being a major money loser probably didn’t help). Days became weeks. Weeks became months. The sale was still not final in March 2001, and WCW’s future was in limbo. Only one show was scheduled after the spring break Nitro on March 26, a PPV on May 6 (a PPV that still didn’t have an arena booked for it yet). The idea is that the company would go dark for the month of April, before returning with the PPV in May.
But on March 16, everything changed. New Turner Programming president Jamie Kellner announced that WCW programming would no longer air on the Turner networks following the March 26 Nitro. With no television (and therefore, no way to promote live events—remember, this is 2001; social media was years off still), WCW was virtually worthless. Fusient scrambled to get a new TV deal, but the deal fell through, and Fusient bowed out. An elaborate angle, some of the wrestlers probably thought. And why wouldn’t they? Their creative was handled by Vince Russo most of the last year. But some prepared for the worst.
With Fusient officially out of the running, the WWF was back in the game and began performing due diligence. Vince McMahon said during the week the company was “likely” to purchase WCW, a complete 180 on his stance just a few months earlier. The “likely” became definite at the end of the week. A week later, the transaction was complete.
In a conference call, Linda McMahon said (among other things) that the possibility of a wrestling channel is there, but not imminent. Linda was also asked how much did WWF get for WCW, but she would not say. The figure, depending on who's telling the story, ranges anywhere from $2 million to $7 million, or a LOT LESS than what WCW was worth in its prime (an SEC filing late in the year revealed that WWE bought WCW for just over $4 million, including trademark costs, the tape library, about two dozen wrestler contracts, and legal fees concerning cases involving WCW).
Stuart Snyder, at the time WWF's chief operating officer, said that negotiations went on for about a month, and due to their connections with Viacom (WWF programming was on Viacom networks at the time), cancelling WCW programming needed to be done before they could further negotiations with AOL Time Warner. WWF had plans to keep WCW as a separate entity, but with the brand being so tarnished, no network would take them on, and there would be no official revival of the company.
As for the WCW meeting on March 28: after a 45-minute meeting, their staff was let go; some weren't even allowed to return for their personal effects. When the meeting ended, they were walked out of CNN Center; one staffer even lost an entire screenplay he had been working on. WCW employees were allowed to submit applications to the WWF Human Resources staffer on hand, but only a few would be brought in.
With HHG Corporation, the parent company of ECW, filing for bankruptcy in early April, the World Wrestling Federation, today known as World Wrestling Entertainment, would have a virtual monopoly on major professional wrestling in North America, a spot it enjoys to this very day.
Discuss the sale of WCW, including your feelings about it and where you were when you first heard or saw the news, in the comments below.