Can AEW compete with WWE?

After putting together All In, an independent supershow that sold more than 11,000 tickets, the Young Bucks and Cody Rhodes became part of a coalition that joined Jaguars ownership to form the wrestling promotion AEW. George Napolitano/MediaPunch/AP Photo

Cody Rhodes had heard the pitches before. He was a teenager in 2000 when his father, the legendary Dusty Rhodes, founded Turnbuckle Championship Wrestling in Atlanta after the then-World Wrestling Federation (now WWE) acquired its top competitor, World Championship Wrestling (WCW).

There were interested parties back then, outsiders with money, who said they wanted to enter the wrestling business. None of them ended up being legitimate.

"Their sincerity wasn't really there as much as it looked like something more peripheral for them," Cody told ESPN.

So when Tony Khan, co-owner of the NFL's Jacksonville Jaguars with his father, Shahid, first approached Rhodes in 2018 about the idea of starting a new wrestling company, Cody said he blew him off.

"I think I kind of was defensive, because my dad had wanted so badly after WCW folded to start his own wrestling promotion and compete with WWE or be an alternative to them," Cody said. "And then ultimately he would go back and work for WWE."

Cody himself would also work as a wrestler for WWE for about a decade. Three years ago, he asked for his release from the industry leader. Perhaps that action is what triggered the chain of events that eventually piqued Khan's interest and led to Saturday night's sold-out Double or Nothing pay-per-view at the MGM Grand in Las Vegas, the first card promoted by the brand-new All Elite Wrestling (AEW).

There were other pieces to the puzzle. Complementing Cody's experience and mind for the business, the Young Bucks (brothers Matt and Nick Jackson) were marketing geniuses, turning their Being the Elite vlog into a cult YouTube hit and building a merchandise empire with best-selling T-shirts at Hot Topic. Kenny Omega was changing the way people thought of pro wrestlers with his athletic, hard-hitting in-ring performances in Japan.

At this time last year, the four of them were part of the wildly popular wrestling faction Bullet Club in New Japan Pro-Wrestling and Ring of Honor. Now they are the core -- executive vice presidents -- of AEW, the first upstart wrestling promotion since the death of WCW that appears to have a chance of competing with WWE.

"People have had the type of wrestling they've had with WWE, and it doesn't mean they don't like it, but there's definitely an element of it that's missing. A grittier, more violent, more sports-centric, less insulting product can exist. Not a product that's solely for kids. I know that's what we aim to be." Cody Rhodes

In the fall, AEW will air weekly live shows in prime time on TNT, much like WCW once did in the 1990s. The contract reportedly does not include a rights fee (unlike WWE's recent cumulative deals with Fox and NBCUniversal, worth $2 billion), but Turner will pick up the production costs and there will be an ad revenue split. An AEW deal has also been brokered with ITV, one of the biggest television networks in the United Kingdom.

"It's really big," said wrestling historian Dave Meltzer, who has run the Wrestling Observer Newsletter since 1983. "It's the biggest thing in wrestling since WCW. When WCW went out of business, to me that really changed the whole landscape of wrestling, and in a bad way. And this is the most significant thing since then. Somebody getting real prime-time TV on a top-10 station with real talent -- it's big. It's huge, it really is."

It's been an auspicious start for a new promotion, but many questions still remain, especially with regard to the elephant in the room: WWE.

Last year, WWE made $930.2 million in revenue, the most in company history. Despite reported first-quarter losses in 2019, WWE has never been healthier economically. WWE Network, the streaming service that airs all of WWE's formerly pay-per-view events, has more than 1.5 million paid subscribers.

But there is some concern with the industry leader. WWE ratings have declined steadily, with Monday Night Raw (on USA) lately drawing fewer than 3 million viewers per week, some of its lowest numbers ever. SmackDown, which airs on Tuesday on USA (before moving to Friday nights on Fox in October), averaged 1.827 million viewers the week of May 15, the worst number in show history. The SmackDown mark was down 20.5 percent from 2018. While cable television ratings in general have gone down, WWE's ratings are falling at a faster rate on average.

How does AEW fit into the equation? Can the U.S. television market sustain another big player in wrestling with WWE's popularity seemingly waning?

"It depends if the pie grows," said AXS TV Fights CEO Andrew Simon, whose network has the New Japan U.S. broadcast rights and also airs the nascent Women of Wrestling promotion. "If it's a static pie, then there will be an issue. If the 2 million viewers that watch Raw just get broken down into AEW, then it wouldn't be a success for anybody. If they make WWE up their game and increase the market share to 5 million, then it's a huge hit."

Tony Khan, the president and founder of AEW, certainly believes they can increase that market. He said he had an idea of building a wrestling promotion around the group, which previously dubbed itself The Elite. But what really sealed it was All In, the event this quartet ran last September in Hoffman Estates, Illinois.

All In brought 11,263 fans to the Sears Centre, the biggest crowd for a non-WWE wrestling show in more than two decades. It sold out in minutes and was promoted mostly through Being the Elite and social media, not traditional television.

"I loved them as performers and thought they'd be great people to build around," said Khan, a lifelong wrestling fan who always had thoughts about starting a promotion. "But I didn't know before I saw what they put together with All In that they'd be the perfect people to also run this business beside me."

Khan, whose main role with the Jaguars is in analytics, saw what he calls an "undersaturation" in the wrestling market. There was a fan base, he felt, that WWE was not hitting -- a fan base that wanted higher quality in-ring action without diminishing the characters.

Khan believes Cody, the Young Bucks and Omega are the nucleus to help draw it out. Coincidentally, all of them were becoming free agents -- Cody, the Bucks, fellow Elite member Adam "Hangman" Page from Ring of Honor, and Omega from New Japan -- within months of one another. Omega was the final one to pen a deal with AEW, in February after the initial January launch. Chris Jericho, a former headlining act with WWE, among other organizations, was also brought on. He and Omega will headline Double or Nothing, a rematch of a bout that co-headlined New Japan's annual Tokyo Dome show, Wrestle Kingdom 12, in 2018.

"It was probably in the last 20 years the best combination of availability of great performers and undersaturation of market," said Khan, citing the booming interest in live sports content on television and streaming.

Khan told the core four that he had the connections and relationships at WarnerMedia, TNT's parent company, to get AEW on prime-time TV. Cody was unsure about that, much like he was on Khan's initial approach, but by that time he was already sold. Not for Khan's money or ability to crunch numbers, but because Khan was a true fan of professional wrestling.

"I never had to sell anyone on Tony, because the moment that guy walks in a room and starts talking to you about wrestling, my gosh," Cody said. "Why wouldn't you want that guy to be part of this world? He's in love with the sport; he's in love with the entertainment aspect of it. He knows so much about it. And he's got an open mind."

The voracious following that The Elite built through Bullet Club, what Cody describes as a "revolution," led AEW to sell out Double or Nothing at MGM Grand Garden Arena in minutes, like All In did. Sid Greenfeig, MGM's vice president of arena booking, said there will be more than 10,000 in attendance Saturday night, and the speed in which tickets moved was a major success.

"I would say this probably ranks with an unbelievable Conor McGregor-like card for UFC," Greenfeig said. "It compares to a Mayweather-type fight in Vegas. I would say it compares to announcing something like, say, Taylor Swift or Justin Bieber or the Eagles or a Madonna-type show. Your A-plus talent announcement. That was how quickly the tickets went. It was very pleasantly surprising."

AEW has buzz in the wrestling community, but outside of Jericho, Cody and maybe the Bucks and Omega, there are not many names familiar to a casual audience. While there have been a few recent additions from the WWE roster, most significantly Dustin Rhodes (formerly Goldust) and Shawn Spears (formerly Tye Dillinger), AEW's star-building will have to happen on television. Khan said the promotion will be in the market for any "established" stars from other places who might become free agents.

Meltzer said the unanswered question is this: Are there fewer wrestling fans now than ever before and just a small, hard-core fan base that consumes everything? Or is there a dormant fan base that just isn't watching WWE and is waiting for something else to ignite it?

Meltzer said that in 1995, when WCW premiered Monday Nitro to go up against WWF's Monday Night Raw, people thought it would be "the death of the industry." Instead, both sides drew record ratings, leading to a deep pop culture penetration, birthing characters like "Stone Cold" Steve Austin, The Rock and the nWo. Six years later, though, WCW was on its deathbed and WWF purchased it for pennies on the dollar.

"The idea that [AEW] could grow the entire business is not only not far-fetched, but when you look back when it's done right, history kind of tells you in a wrestling war ... at first, the whole business gets bigger," Meltzer said. "And both sides flourish. Then usually at the end, there's a winner and a loser. It's usually a [few]-year cycle. And then after there's a winner and a loser, the business goes down."

But Khan doesn't want a war. Khan wants to show they can be something different and appealing to the widest wrestling audience possible.

"I don't see it [as a war] at all," Khan said. "I think we're trying to be the best wrestling company that has ever existed. In doing so, I think it's gonna get a lot of interest across the board, in everybody's wrestling. Obviously, WWE is a very large and very profitable company. They have a lot of fans and we don't discourage anybody from being a fan of theirs. I've watched a ton of WWE in my lifetime, and I still watch a lot of those shows, to be honest."

Cody promised that AEW will fill in the holes in WWE's approach with the hope and potential of bringing in new fans to what they believe will be a different kind of wrestling show.

"People have had the type of wrestling they've had with WWE, and it doesn't mean they don't like it, but there's definitely an element of it that's missing," Cody said. "A grittier, more violent, more sports-centric, less insulting product can exist. Not a product that's solely for kids. I know that's what we aim to be."

Khan said AEW will have an "emphasis on match quality." He said wrestling should be viewed as a sport and it will be presented that way by AEW. "It's wrestling, it's not sports entertainment," he said, that last bit referencing how WWE describes its product.

"I think our presentation is going to be very different, and you'll see that," Khan said. "When you see our shows, I think you'll get a sense that we really care about what happens in the ring. ... [WWE has] a lot of great matches, too. There's a lot of places to see great wrestling, but there will be nowhere else that you'll see more great wrestling than AEW. We plan to constantly emphasize it, but I don't want to diminish the performers that so many other great companies have, because there are a lot of great performers in the world."

Cody and Khan hope that AEW won't just be a financial success but will also be a better place for wrestlers. Cody criticized WWE's "antiquated" live event system that keeps talent on the road most of the week with some shows never airing anywhere. AEW will run very few "house shows" only for the arena crowd, Khan said, and wrestlers will be able to keep full-time jobs in addition to making full-time pay from wrestling. One member of AEW's women's roster, Britt Baker, is a dentist. The majority of wrestlers, outside those working in the AEW office, will remain independent contractors, though.

"The work-life balance that we're offering is the best anybody has ever offered [in wrestling]," Khan said.

Jake Hager, a free-agent wrestler who asked for and was granted his WWE release in 2017, is bullish about the way AEW's presence will affect the industry for wrestlers. Hager, who is currently focusing on MMA with Bellator, said he believes WWE has already started paying its existing talent more.

"One hand plays the other," Hager said. "Competition makes everything better. For everyone."

Along with the questions around the WWE-AEW dynamic, it's unclear how AEW's presence will affect wrestling's flourishing "independent" scene, from which almost all of AEW's talent came. AEW has already sapped Ring of Honor (ROH) and New Japan of some of their biggest stars. Both of their businesses will likely be affected, if they haven't been already.

Out of all the indies, ROH -- which ironically helped Cody & Co. get All In off the ground through production and talent sharing -- stands to lose the most. ROH COO Joe Koff said he has "no regrets" about how all of that went down and maintains a strong relationship with his former talent, but he said his one misgiving is about whether the non-WWE promotions in the U.S. are all pulling from the same audience.

"I think AEW is certainly entering that space looking at a bigger slice of the pie," Koff said. "But if you look around the country and at all these smaller promotions, we are sometimes in the same boat fighting for that same fan. ... We're trying to get more people on the product that aren't the same fans, because they aren't the same shoppers."

Fite TV, the digital service that distributes combat sports pay-per-view events, streamed 32 live "independent" pro wrestling events during WrestleMania weekend last month in the New York area. Fite COO Mike Weber, who worked for both WCW and WWF, said the indie scene is "smoking hot." Weber said All In, which became like the all-star game of indie wrestling, was the third-biggest pay-per-view event in Fite history, trailing only the two blockbuster boxing matches between Canelo Alvarez and Gennady Golovkin.

ROH, meanwhile, has been a mainstay in the industry for 17 years, through the ups and downs. This past weekend was marked by the company's 400th show. The Young Bucks started with Ring of Honor back in 2009.

"I think what All In did was show and illustrate that there is an appetite for possibly a different kind of wrestling promotion," Koff said. "It's also just been one show. Not that I don't think their television is going to be good or whatever they're going to do is going to be good, because those guys are really smart at what they do. But it's one show.

"Let's talk after we get to 400 shows. Let's see where that is at that point. But I have no regrets at all, and I only wish them the best. They're terrific, terrific people and they did nothing but great work for us. And I'll always be thankful."

AEW begins Saturday. Where it ends up, no one is quite sure. But Cody goes back to the meet-and-greet events he used to do with the Bucks when they were in Bullet Club -- the energy from fans that was palpable. The black Bullet Club shirts that seemed to be more prominent at WWE events than actual WWE shirts. The quick sellouts of Sears Centre and MGM Grand. The social media outpouring.

There's something there, he thought then. And now, with all the other pieces in place, it's becoming a reality.

"You could just feel it in the air," Cody said. "I know that sounds like whimsical, but that's just it. You can feel it. It's a damn revolution. And that's a risky thing to say and it's a dangerous thing to say. But revolutions like this, they're dangerous in the first place. There's no better time."