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The Warner Bros. Discovery budget cuts are very bad news for AEW

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The aggressive cost-cutting measures at Warner Bros. Discovery (WBD) are happening 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 the anticipated budget cuts. The story of WBD’s ongoing mass layoffs is in the news again this week. For example, as part of an effort to save billions of dollars, it sounds like WBD plans to merge the HBO Max streaming service with Discovery+.

Wrestling Observer Radio’s Dave Meltzer described how WBD’s budget cuts are changing the landscape for AEW as the company tries to secure a lot more money on a new TV deal with WBD:

“If you’re an AEW fan, the last two days, not good news at all.”

“We knew that [WBD was] gonna do slashing of the budgets, but it really feels like...the prestige programming that TNT had, that that’s gonna be out the window. I just have this feeling aside from the NBA, that TNT [and TBS] is just gonna be another station on looks like they just want to slash things, and CNN too for that matter. They’re slashing everything.”

“...a lot of the executives at HBO Max are gonna be gone. A lot of the budget from HBO Max is probably gonna be down. They’re really trying to cut a lot of money. And they know that the one thing that they feel that they have to keep, which is gonna cost them a lot of money, is the NBA.”

“It’s probably the worst time possible to go in there and ask for a big raise in rates. It’s gonna be very interesting.”

“As far as giving it a big increase in rights, they’re really going to have to find outside bidders. And then that becomes problematic because if you go to a weaker station, your numbers aren’t gonna look as good.”

“[TBS] is the perfect fit for AEW. But at the same time, the key way the company’s gonna be able to make money is through television rights. And if you want to make it a profitable company, and your parent company is slicing budgets everywhere, and in ways that people do not expect it, such as stopping movies in production, stopping TV shows in production, I mean it’s been a bloodletting there. And there’s probably still more to come. So the timing for AEW, with their deal coming up which would be at the end of next year, the last two days haven’t looked good.”

The big concern here for AEW isn’t about having their television shows canceled, because Dynamite performs well in the ratings on a weekly basis. The issue is that AEW will need to land a much more lucrative TV deal in order to keep growing and maintain competitiveness with WWE in the pro wrestling free agent market. The critical period for AEW’s TV rights negotiations begins towards the end of this year. AEW is hoping to have top stars like CM Punk and Kenny Omega (and presumably sort out whatever is going on with MJF) back by then to deliver better ratings and put them in a stronger negotiating position.

But if no other company besides WBD is a serious bidder for AEW’s content, and WBD is slashing budgets everywhere, it’s just the latest sign that AEW might not have much leverage to land a significantly better TV deal.

How do you see this situation playing out, Cagesiders?

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