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More On AEW TV Rights Fees: AEW Believed To Be Profitable By 2020

May 16, 2019 | Posted by Joseph Lee
AEW fire logo, Tony Khan

The Wrestling Observer Newsletter has some more details on the deal between AEW and WarnerMedia that will see AEW air on TNT this fall, including the situation over the TV rights fees which has created some conflicting reports over how things will be handled. As we noted yesterday, TSN’s John McMullen said there were no rights fees on the All Elite Wrestling TV deal, but Bryan Alvarez denied that.

According to the WON, the terms of this deal were ‘very complicated’, unlike ITV. In that case, ITV is having its sports side handle wrestling, instead of the entertainment side that handled World of Sport. This deal will include both the sports and entertainment sides of WarnerMedia. It has some similarities to Vince McMahon’s XFL deal. There are no direct rights fees, but there are financial guarantees and the financial value is said to be “incredible” for a brand new company like AEW.

AEW going to TNT had been discussed by AEW President Tony Khan and TNT/TBS President Kevin Reilly for almost a year, even before All In. The first serious talks began in mid-November. Khan promised a strong roster and then signed every person he promised. He negotiated the deal with Bernie Cahill, the co-founder of Activist Artists Management, LLC, which Khan is a partner in. AEW also negotiated with Showtime, but TNT was always the favorite. Showtime would have likely held major shows, possibly longer than two hours like Strikeforce, but not weekly.

The WON notes that WarnerMedia will indeed pay for production, but it’s unknown what the value for that will be. However, most wrestling deals these days don’t actually pay for production. WCW had production and other costs paid for because they were owned by Turner Broadcasting, similar to how Paramount does for Bellator. But in non-ownership deals, television only paid for production when wrestling on a local basis had a history of huge ratings. WWE still pays for its own production. It should be noted that whoever pays for production controls the final product, and both WWE and UFC for years wanted full control of that.

As far as ad revenue goes, AEW and Warner will have a split with a downside guarantee. The final value will be directly related to ad rates and the “attractiveness” of the product, along with ratings. That means AEW will likely want to do a show that attracts advertisers. It’s believed within the company that this deal will make them profitable by 2020.

There is still the question of if AEW can draw primetime ratings on TNT. TNT averaged 1,171,000 viewers in 2018, which was good enough for seventh place on cable (behind Fox News, ESPN, MSNBC, HGTV, USA and TBS). However, since wrestling can be on multiple platforms and TV doesn’t have to be the sole driver, AEW may not have to bring in the network average to be considered a success. TNT is available in just under 90 million homes, slightly more than USA (just under 90 million). USA only beats TNT due to Raw and Smackdown.

It’s unknown if AEW will air live on the West Coast like a sports program would or three hours later in prime time like WWE does. When Nitro aired, TNT actually aired two airings: a live feed and then a replay in prime time.

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AEW, Joseph Lee