Pros and Khans - Would you pay $2 Billion Dollars for AEW?

Mike Ozanian, the Assistant Managing Editor of Forbes Media and co-host/Managing Editor of Forbes SportsMoney, recently did a study on AEW business as of late, and he valued the company at more than $2 billion.  Many in the Wrestling media disagree.  

After listening to Legendary Wrestling Writer Vince Russo, I decided to do my own analysis on what actually goes into the though process of someone who wants to purchase a business.  

Let's look at at the Pro's and Khans of AEW. 

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Transcript

Speaker 1: 0:00

I enjoy professional wrestling, right, I love the business of the business. That's it in one of my other podcasts you know I listened to. You know I'm a brand member of Ben's Crew, so is the brand I listened to Strictly Business by with Eric Bischoff and you know Conrad Thompson Network, you know. So, yeah, I really liked the business and it's state right now, but I think it's worth two million. I would say, probably back. Oh, yeah, dig it. You're talking the girl Gray, the world champion of business life, launched with cars. You thinkin', thinkin', thinkin', thinkin'. I'm sorry, I had to do it. I've always wanted to. But you see, I got the belt. I'm a mark for myself, I am. You gotta be. Sometimes you know if you're gonna be your own fan, who will be. But look so as someone who loves business. Right, I love business. I also love professional wrestling and I've watched it since I was a child. You know my dad would be like don't watch that fake stuff. He knew how to punish me Don't let me watch wrestling. My father was literally locked up right and in Lord and the Queen of Tentury and I did something wrong and my mother put me on the phone with him and he was like. So your punishment is you can't watch wrestling for two weeks. I was upset, but of course I listened. My dad, he miles away, he can't get to me, but I listened to him. Nothing to him, though, that right. But all I have to say is I enjoy professional wrestling, right, I love the business of the business. So I sat in one of my other podcasts, you know I listened to. You know, I'm a brand member, vince Rousseau's, the brand. I listened to Strictly Business by with Eric Bischoff and you know, on the Conrad Thompson Network, you know. So, yeah, I really liked the business. But recently I heard something that was wild.

Speaker 1: 2:05

I'm like really thinking about this. You know, listening to Cass Strader and Marks on the Vince Rousseau, vince Rousseau the brand and they talked about there was an article that came out in fours or somebody from I don't know if it was the articles I could not find the exact article, but there were a lot of people that were talking about it that said AEW would go for two billion dollars, right, and they got into the discussion like this no way it will go for two billion dollars, because I don't know if any of you have a watched aw, but, um, let's just say it's not a wrestling we were ever used to. You know it's. It's really meant for a very, very small niche group of people who you know and I don't get into. You know why they think how they think.

Speaker 1: 3:03

But, yeah, I just say this it does not appeal to the normal person. Um, you know, the normal man like, you know those of us who like the attitude era when, when wrestling's at its heyday, you know, when everybody watched it or everybody know about it and stuff like that, with the rock, stone, cold and all that, but so it's it's really caters to them. Um, you know, like, and I watched, I wanted to, actually I wanted a very first show and I'll be honest, it was yeah, yeah, you know it's not very watchable, uh, in my opinion, for somebody who's not like, uh, uh, somebody who you know here's a whole lot about the names of the moves and athleticism. I really like storyteller, like really good storytelling that's relatable to, to normal people. But so, uh, so, you know, when they were talking, like, there's no way, you know, with um, with WWE just selling for over nine billion dollars, um, that anybody would pay, you know, one to two billion for aw, and so I had to sit back and think.

Speaker 1: 4:04

And I, you know, you know I'm in business, so I know people who are emerging acquisition and so, you know, I kind of ask the question, you know what goes into emerging acquisition? Because, you know, in my mind I automatically agree with, like, hey, that's no way, why was one paid two billion dollars for it? But we had to think about it. Um, people don't buy businesses, you know, to keep them the way that they are. They buy them to improve them and they, you know, buy them based upon potential that is there.

Speaker 1: 4:33

And so I started to look at, you know, the business in and of itself and Of aw, which is ran by Tony Khan, who, you know, seems to be an extreme fan of wrestling, like he loves what he does. Uh, you know, no knock on that, but it kind of seems like this is more of a hobby to him Then a business, and the reason I say that is because he does not seem to be growth focused. Uh, when it comes to the fan base, you know, on television and making sure that more people desire to watch it, like he really feels like he just wants to hyper serve the audience that he has. Uh, so you know um, in its state right now? Do I think it's worth two billion? I would say probably not, based on what I know about business and I am not emerging the acquisition expert, but it is something that I'm interested in. I did talk to some people who Are that and so these things they say.

Speaker 1: 5:21

So the first thing we have a look at is the assets of the company. So, you know, obviously it has, you know, intellectual property. That's there, you know, of course they have the ring equipment, camera equipment, all the negative stuff, so he's invested a lot just in that, and also the contracts of the wrestlers themselves. You know that's worth something there, you know. So there are a number of wrestlers there that are Pretty popular amongst their fan base and probably have potential to expand under the right leadership. And Then also they have, you know, they have a pretty global reach, like they just did, you know, a show over in England that where you know, I think they reported it's reported anywhere like 70 to 80 thousand Tickets sold of people in attendance or something of that nature, and this is controversy behind that. But whatever was, it was a great number.

Speaker 1: 6:15

So there's obviously that they're live event, special event things. They're able to get a lot of people there, get some buzz. I'm not to mention they have the backing of billionaire. You know the back of a billionaire is nothing to sneeze at, right. And then you know then there's a advantage of, you know, live entertainment. Weekly live, episodic entertainment is at a premium. You know, when things go live, especially in prime time, you know there's a, there's a premium that's put on top of that, which also would increase the worth of it. So One, a cable network, a couple of cable networks, and then have a relationship, you know, with one of the Largest, you know, in the tamer companies out there. You know Warner Brothers, discovery, and so all of that is taking into consideration.

Speaker 1: 7:03

But I think the biggest thing that would make it worth that amount is the fact that somebody coming in To take over. If they were to buy it, they would change everything as far as how it's put together, like, for instance, chances are Tony Khan would no longer be booking. You know he would no longer be the one making decision on what goes on the ring. The person who comes there would be very growth focus, you know, focus on growing the audience trying to relive the heyday of the 90, late 90s, early 2000s, when wrestling was at its peak. You know, and that's been 20 years since that's happened, and you know the fact that you know Outcomes are predetermined is something that could be used to the advantage in order to bring more eyes, you know, get it, make it water. Cool to talk again. Maybe we're really talking about it in a way where folks take it seriously, and so that's what I really want to focus on is what would make it worth that money.

Speaker 1: 8:02

So, again, I know a bit about the biz not a whole lot, but I do know some of the people who are backstage. Like you have one of the greatest Tyler relations people in the his probably the greatest Tyler relations person in the history of wrestling, jim Ross. You know everybody knew him as the announcer don't add it to there but he's also the one who managed the talent. He did the recruiting, make sure they got paid, kept people happy backstage. Nobody has managed a locker room for what I've heard and I do know some people in the business and nobody has ever managed a locker room better than general Jim Ross has, and they have him backstage. You have Aaron Anderson. You know who is somebody who knows how to. You know make matches work the right way. You know Jake the snake Roberts, who you know, one of the greatest promos, somebody you know talkers ever.

Speaker 1: 8:52

So you know you start to look at those pieces that they have. It is like, hey, somebody who has a growth mindset would say, hey, let's utilize these people who have a history of success, a history of drawing. You know big numbers and doing great things. I mean the founder of the full horsemen, let's be serious. You know, like they have those people that you know, jeff Jarrett, who you know, like you know I mean they a double T people remember that type of stuff. You know characters that are on it. You know Billy Gunn. You know everybody knows Billy Gunn from DX.

Speaker 1: 9:24

So you know, when you start to see that some of the pieces can be moved around, rearranging, taking advantage of, as opposed to only focusing on, you know, the people who are now, who may not have the same amount of knowledge, industry knowledge and things that makes like there's some silos of knowledge that could be, you know, pulled out in bloom to make it worth even more. And you look at the fact that, like we said before, they have a TV time in prime time right, which you know. You know you start to change some of the storylines. You know making it. You know. Let me think about when we watched, you know, wrestling and we really liked it and loved it. You know everybody cared about the storyline. You know you start to say, hey, if we start, you know, switch from.

Speaker 1: 10:09

You know seeing how many times somebody can do a flip or cartwheel in the ring or land on the table to do the exact same moves every single match and then start focusing on how stories can be told, created cliffhangers, making people want to watch, making more must see television. You know, and this could be done. You know, actually, this could be improved in both companies. But I'm really talking about this in particular, because we're talking about what would get it to a $2 billion valuation, because, again, there are so many things that it has potentially that could work better.

Speaker 1: 10:42

You start telling these storylines and then, as I said before and I put this out there and I know people are laughing at me like yo, this will never happen and I know I'm probably going to be like Carl. I don't know why you said that It'll never happen. Eric, if he ever watches this, he'll be like no way it's gonna ever happen, but those two minds coming together. You know even Jim Cornette, like you're wild dude but the man of the man For in these people. But, but in particular I'm talking about Vincent Eric people who know what works.

Speaker 1: 11:12

You know folks from that school, from that era that know what draws the masses and that's what we're talking about, because professional wrestling, I believe, still had the ability to draw the masses. I know when AEW was coming out, there were people who were you know, people called them lap fans, former fans or whatever who were looking forward to it coming because they felt like this will be a return, this will be an opportunity to watch. You know, more entertaining wrestling. You know what we were used to, not necessarily some of the, some of the risque stuff that happened, but just the fact that storylines are being told that were enjoyable. The same way, you know many of these shows that we watched get all these viewers. You know, like I mean, I'm a game of. You know some people watch Game of Thrones. You know Breaking Bad, sopranos, all of those they made it because of storylines, you know, and AEW has the potential.

Speaker 1: 12:09

So if I'm looking to buy something and thinking that, you know a turnaround will net me, you know, $2 billion over time. Yeah, I would definitely say that it could be worth that on the open market Now would somebody be overpaying, paying a premium for it? Yes, but I think that with the right leadership, the right business model, that will be more growth-focused as opposed to fan-focused, which there is a difference, you know growing the fan base. You know to include, you know young people, to include women to include. You know men who you know have a heavy desire to see. You know wrestling. You know it's something about the competition. You know the machismo piece of it that we really, you know, we really like, you know those of us who are masculine men. You know, like they, I like this type of stuff as opposed to it being catered to a niche audience who, you know, wants to know what goes on backstage.

Speaker 1: 13:14

Yes, I do believe that AW could be worth $2 billion on the open market. It'll be a premium price. But, yes, they already have the assets, they have the television time, they have a relationship with the network. It's already been stated that, you know, the TV rights deal themselves could be worth close to a billion dollars. You know they have great personnel backstage. I mean just putting Jim Ross in position would probably make things go so much better, you know. And then, like you say, aaron Anderson, jake Roberts and most of them would never, you know, say that because hey, tony's paying good money right now. There'd also be probably be some pay cuts that go on there. You know streamlining of assets and things of that nature. They're taking advantage of the global restate it has and even, you know, putting yourself in a position where it could actually compete with the WWE. Because part of what made the evaluation, you know, where WWE could go public, you know, 20 years ago, was the fact that it has spent so much time in competition, which made a step its game up. You know, right now WWE has no competition. Aw could be the competition for it, but it really isn't. You know, it's an alternative, not a competitor. You know, like people aren't. You know, like you know, well, I ain't even getting all like that's a whole other you know thing. But all that to say wow, you know talking in circles at this point, do I believe that AW could be worth $2 billion? To somebody out there? My answer is a resounding yes.

Speaker 1: 15:02

This has been Friends with Business Podcast, the no paper, no ink, just what I think. Episode. Hey, please like subscribe for the friendsofbusinessnet. You know to subscribe to the world on YouTube. We're on Spotify. I have a podcast, all that great stuff, you know. If you have any questions, comments, concerns, I'd love to hear your thoughts. Would you pay $2 billion for AW? You know, what do you think about what I say? If you agree with me, disagree with me, let's talk about it. I'd love to hear your thoughts. I'll answer them here. Peace.