AJ Styles is one of the top guys in the WWE right now, and has been for nearly three years at this point. He’s a two time WWE Champion, and a former United States Champion. Bet you forgot about that title, eh?
Well according to Fightful.com, Styles’ deal is nearly up and the two sides are negotiating a new three year deal. Styles is seeking some demands, namely a drastically reduced house show schedule, just like the Apex Sexual Predator Randy Orton. Styles, according to Fightful, wanted to drop the WWE Championship in order to have more free time with his family.
Why is re-signing with the WWE not necessarily a good idea for both sides? Well, for Styles, he may not get what he wants deal-wise. Then again, the WWE is throwing money at every schmuck with a name, so why wouldn’t they over pay for the guy? It’s not like Styles is terrible, or unpopular. He’s far from what he was five years ago, but he’s still good enough.
So why is letting Styles walk an idea the WWE should entertain? It simply comes down to something Fightful even hinted at; more wrestlers are going to be requesting lighter work loads, and the WWE is heading towards a period of time where they’ll be doing more international travel than ever before. More and more talents are expected to request lighter schedules, while in turn making big money for events in Australia, Saudi Arabia and who knows where to next? North Korea? It’s Vince, so it’s 50/50 at worse!
That schedule sounds like a good idea for wrestlers; more money, less time. Where’s the problem? The problem comes down to one simple thought; the WWE needs house shows to pay their talents. Most talents have a downside guarantee, where working or not they’ll get paid X amount per week/two weeks/month, etc. Then they’ll have their per date fee, where on top of the guarantee, they’ll get a nice big pay day for each show they work.
So sometimes a contract will be no more than $40,000 for the sake of argument, but with the number of dates they take and all of a sudden you could be making half a million. However, there was a time when the size of the gate would also affect the payout. If you showed up to a show with 10,000 people, that might be five grand for you. If only 1,000 people showed up, you might make five hundred dollars instead.
Now, on the indies, there’s usually a flat fee. No contracts or adjusted rates needed. However, there’s also no downside guarantee. So that’s usually the trade off. So if you’re working the house show loop for the WWE, and you’re Tye Dillinger, and you know John Cena, Randy Orton, AJ Styles, The Undertaker, Triple H, Rey Mysterio, Daniel Bryan and Brock Lesnar aren’t working on your show, then you know you won’t be getting a huge gate.
Most WWE house shows range around 3,000-4,000 a show. When the WWE rolls into Madison Square Garden, they’ll sell out. Why? The aforementioned names show up. If you keep doling out contracts where the top guys don’t work house shows, then all you end up do is “killing the town”. Which means that the market becomes so damaged that whenever you run the area, with whoever headlining, your show won’t pull in the people you could.
This is part of the problem with the WWE and their touring right now. They’re going out of country more and more it seems because they get better gates, at a higher rate and a nice full arena with pictures a plenty to show the WWE Board of Directors. In the states though, they are struggling to pull in half the arena for television. Now this was a recurrence event in the early 90’s, the early 00’s and now again – the late 2010’s.
So if the WWE keeps signing these major names, and keeps giving them these deals where top guys don’t have to work the house shows, then house shows will continue to decrease. If house shows keep dropping, and people stop going to the live events, then that’ll affect the t.v. and pay per views when they come back to town. When you go to a live event, you’re paying something like $20 or $30 for a decent seat. A pay per view event? Could see something like $80 or $100 for the same seats.
So if you had a bad experience at a cheaper show, why would you believe that a more expensive show would be any different. And if modern WWE major events are any hint, they won’t be.
The WWE needs to re-focus on building their crop of young talent as well. Which is ironic, considering I once chastised the WWE for ignoring older talents. However, including Shane McMahon, team SmackDown averaged out at 42. Think about that? The WWE has spent so many years putting down WCW and they essentially became them.
There is another option, reduce the number of shows the WWE has on their schedule. That would fulfill the same desired effect. With less live events, there’s less need to make these deals. I’m not sure how necessary house shows are anymore, experts have said that they are still a big backbone for the company financially.
Then there’s the other problem, the “too big to fail” problem. The WWE is constantly said to be too big to ever fail. Experts say they’re too massive, too ingrained for them to ever fail completely. Yet it happens all the time. Things balloon, with more money comes more opportunities. With more opportunities come more costs. With more costs, comes less profit. With less profit comes more risks. So if you get $400 million from t.v. deals, $450 million from the Saudi’s, and countless others from various sponsors, then you turn and invest that money.
You build non-profitable outlets like NXT, the Performance Center, you start giving out huge deals to Brock Lesnar types; who will never truly live up to his deal. Then, if the bubble bursts….Uh Oh Spaghettios. That’s what happened to the housing market. Too many banks borrowed money they couldn’t pay back if things went bad and guess what happened; things went bad. It was so bad loans by multi-billion dollar companies had to be forgiven to keep these companies afloat. The WWE is investing all of their eggs in murky looking baskets, a bad scandal could ruin the company. Why do you think the WWE said nothing about Orton? That’s a career killing scandal. But the WWE did what they do best in that situation; covered it up and buried it.
The deal with Styles on it’s own isn’t problematic, but it signifies a potential issue with the future of the WWE and contracts. Guys like Keith Lee, Ricochet, and others are giving up a lot of money to wrestle for NXT. The hope is the call up money is worth it. Yet, will Ricochet, Lee, Matt Riddle and others be fine working 300 days a year while Styles, Orton, Bryan and others work, maybe, at best, 80?
Then you gotta pay the Riddle/Lee/Ricochet types more to keep them from going elsewhere. Then they want less dates too. Considering the WWE has a tendency to horde talent, this can become very expensive very fast because you’re still paying a lot money on contracts for people you’re not using. Wrestlers sit at home and do nothing, because the WWE can afford to do just that. Then you realize that Fox has an out clause if the WWE drops below a certain rating and the Saudi deal, which is becoming very hard to manage already….All of a sudden you could see massive layoffs. That’s always bad for business.
You can see why it may be best to let Styles go to the indies, IMPACT, New Japan, ROH or elsewhere. The WWE is a machine, they brag about this. Even Stone Cold, back in 2003 knew he was merely just a cog. To think the WWE couldn’t replace a soon to be 42 year old A.J. Styles is asinine. They easily could. The WWE itself is the draw, and that’s the way they want it.
To preserve the future, it may be time to let go of the present.