MR. TITO: Does AEW have an EVP Problem? Submitted by Mr. Tito on 08/11/2020 at 12:49 AM
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Allow me to run this hypothetical scenario by you... What if Brock Lesnar became fed up with how he was used in the WWE and wanted to join All Elite Wrestling (AEW) for a challenge? How about if John Cena inquires about a brief WWE run to win just 1 more World Title to break Ric Flair's record and the WWE tells him "no"? Better yet, what if CM Punk actually wants to return to pro wrestling again as a full-time wrestler?
But would AEW actually reward those top stars big money to join their promotion?
Consider the following recent examples... Both Edge and Randy Orton were both confirmed to have held contract talks with AEW. For both cases, both wrestlers opted to re-sign with the WWE for much more lucrative multi-year deals. Still, they went through the process of negotiating with AEW and were outbid by the WWE.
Or were they?
For the past year, as I've been heavily advising AEW to sign Free Agent CM Punk to become a splash signing and difference maker, I was always pondering this question: Could any potential free agent wrestler earn a higher contract than the 4 Executive Vice Presidents (EVP) of AEW who also double as wrestlers?
In case you didn't know, the All Elite Wrestling company awarded Cody Rhodes, both Young Bucks (Matt & Nick Jackson), and Kenny Omega titles of "Executive Vice President" of AEW. They also awarded the title of "Chief Brand Officer" to Brandi Rhodes. In case you didn't know, Stephanie McMahon is the Chief Brand Officer of the WWE and she doubles as a EVP in title herself (quite bold for Brandi to have the same exact title as Stephanie this early).
All Elite Wrestling is listed as a "LLC" which stands for "Limited Liability Corporation". The Khans created AEW as a LLC in order to create an entity that absorbs liability or debt instead of collectors personally going after the Khans themselves should the business fail. The latter part of the abbreviated letters, "Corporation", is what I want to focus on as it relates to workplace titles and responsibilities. It is my belief that AEW, with time, will try to keep growing and them file articles of incorporation to become a full blown public company. And why not? It's an easy way to raise capital and would justify the concerns raised by this column about paying wrestlers.
Usually within a Corporation, an employee structure is prepared known as an "Organizational Chart". Within the "Org Chart", it shows the reporting structure of the company that helps show segregation of duties, contingency plans, and reporting lines within the company for examiners and investors to clearly understand.
Typically, the structure works like this:
Board of Directors (if Public Traded, optional if not)
Executive Vice Presidents aka "Chief" Officers
Senior Vice Presidents (sometimes "Director" titles used)
Assistant Vice Presidents
Staff or Non-Officers
For most Publicly Traded Corporations, the Executive Vice President roles are taken very seriously and are often awarded with Shares of ownership by the company. If you study the WWE's Proxy Statements, you can see how much the company awards Vince, Triple H, and Stephanie per year because of their top executive titles. In addition to that, anytime that Vince, HHH, and Stephanie SELL their shares, they have to make public filings because it's important news to know when an executive buys or sells their shares. It is an Insider Trading protection... Also for most corporations, they take out Life Insurance policies on their top executives. In the event of someone passes away, the corporation obtains a financial benefit because that is lost entrepreneurship and managerial ability that is not easily replaced. The corporation, itself, pays into that Life Insurance policy on an annual basis.
My point is this... It is very likely that the Khans and/or All Elite Wrestling LLC has awarded private shares of ownership to Cody Rhodes, Kenny Omega, Matt Jackson, Nick Jackson, and Brandi Rhodes. Thus, their salaries are likely to be a base salary as a wrestler, any house gates/PPV gates/merch bonuses as wrestlers, base salary as an executive, bonuses earned as an executive, and then the shares awarded to them by the company. In other words, Cody, Brandi, Matt, Nick, and Kenny have deep roots into the AEW LLC and it may take a decent $ amount for Tony Khan to terminate any one of them.
Getting back to my original hypothetical... What if CM Punk contacted AEW today and insisted that he's ready to wrestle. Quotes from Tony Khan, the Bucks, and Cody have indicated that they are definitely interested in Punk's talents... But what if he asks for $2 Million per year or more to make that happen?
What if Brock Lesnar becomes available and insists that he'll ONLY work with AEW if they match his WWE salary of around $3 million plus limited dates and access to a private plane?
John Cena is a known quantity throughout the world now as a longtime WWE superstar and now he is receiving some Hollywood buzz. Wouldn't that be worth paying $2-3 million?
I'm assuming that AEW is still a new company and that their cash rewards of Cody, Bucks, Brandi, and Omega aren't that high yet... So what would happen if Tony Khan personally wanted Brock Lesnar, CM Punk, and/or John Cena and was willing to pay them whatever? Would that potentially impair the decision making abilities against a higher paid star?
I'm just asking questions...
Sportskeepa estimates that Randy Orton earns a base salary of $1.1 Million and we have heard through various sports reports that this is a 5 year deal. In addition to that base salary, Orton can earn an additional $1.6 million from attendance gates, Pay Per Views, merchandise, and other bonuses. By all means, Orton was listening to AEW's free agent offers but ultimately, WWE outbid them.
Or did they?
Did Tony Khan and the EVPs not want to sign Orton for a specific amount? In other words, would they be willing to pay Orton $2 million per year if the young EVPs have yet to earn that much? Remember, AEW is still a brand new company as established during early 2019 and only began to exceed breaking even with the revised TNT deal with the AT&T Corporation. Additionally, AEW hasn't grown since their 2019 debut. In fact, they have declined... Attendance and viewership were consistently declining through early 2020 before the Coronavirus hit.
Did the Orton deal not make financial sense to AEW? Or is there a Paywall between what incoming wrestlers could make versus what the Executive Vice Presidents earn annually? In other words, a "Salary Cap" for what any wrestler could make in AEW. This contrasts differently from the WWE because their EVPs have been in charge for decades and because the WWE is a publicly traded corporation, much of their earnings are from shares of stock awards.
I'm not being critical of AEW, but I'm just asking questions... I'm honestly wondering why the Bank hasn't been broken to bring in CM Punk who clearly doesn't want to wrestle for the WWE again based on how outspoken he has been about Triple H and to an extent, Vince and other executives. To me, CM Punk is that "Kevin Nash/Scott Hall like" signing that would put AEW over the top to really challenge the WWE. In addition to being a great wrestler, CM Punk is the best talker in the business. Give him a live mic and let him shred it!
AEW's corporate structure is actually very unique to the wrestling business... Sure, we have seen promotions employ a "Booker" who was also, at times, a wrestler. However, many of those wrestlers were at the end of their careers and when they dipped their toe too much into the water, it had consequences. Sometimes that booker would get frustrated at the reactions of the fans to their pushed wrestlers and insert themselves into the matter to generate heat. However, it has usually been 1 guy with such power. Dusty Rhodes during the late 1980s Mid Atlantic NWA is an example, as is Triple H as an Executive and trying to remain a wrestler is another example. See Dusty's attempts to push that Road Warriors heel turn (spike to the eye) from 1989 and Triple H's injection into the "Summer of Punk" during Summer/Fall 2011.
AEW has 5 people who are co-opting as both wrestlers AND executives. That's unique...
So far, to their credit, the Bucks, Cody, and Omega have been generous as both bookers and wrestlers. I could argue that maybe those 4 have been too generous, as the caliber of stars on AEW is a bit thin and maybe the Bucks/Cody/Omega have tried too hard to get midcard ceiling type wrestlers over (particularly those of the 5'10", 180 pound variety). However, you can see where the executive and wrestler dual roles can get out of hand with the Nightmare Collective group that was pushed hard with Brandi at the helm but then just disappeared one week during early 2020 after poor fan perception. Brandi has since scaled back her role to just being a manager of her husband or brother-in-law.
To their credit as well, Bucks/Cody/Omega/Brandi have given some creative freedom to their wrestlers. Jon Moxley, Chris Jericho, and Brodie Lee have all been quoted about how much they enjoy the creative freedoms in AEW versus what they endured in WWE. They seem to be more hands off than the restrictive WWE structure.
BUT - Nobody on that AEW roster exceeds any of the Executive Vice Presidents in salaries... Both Moxley and FTR are quoted on podcasts about receiving lesser money to join AEW and that can be assumed with Brodie Lee and Matt Hardy as well. Not sure on Chris Jericho, though, as he has been pushed as a top star from day one.
Again - What happens if a major free agent like CM Punk, Brock Lesnar, or John Cena (my buddy Virtue would argue adding "Roman Reigns" to that grouping) become available? In my opinion, any of those 3 will draw hundreds of thousands of viewers per show especially if the Creative is perfectly done.
Would AEW pay them big time salaries? And would that be a problem for the Executive Vice Presidents? Or would those EVPs get paid more with automatic kickers in their contracts (favored nations clause)? After all, if they land CM Punk/Brock Lesnar/John Cena, you could technically argue that the EVPs helped make that happen and their creative decisions based on that talent could make AEW more money.
Or would AEW be open to making CM Punk, John Cena, or Brock Lesnar become yet another EVP as a perk instead of money?
It was a big calculated risk taken by Tony Khan to promote them to those titles... The Bucks, Brandi, Omega, and Cody have been mostly wrestlers. Sure, they have helped to put on various shows, but being an Executive Vice President of a LLC is a much different role. They should ask Jim Ross who knows all about Talent Relations, Human Resources, Payroll, Health benefits, and other things associated with managing people. Do they have any experience in setting up side projects, such as the "AEW Heels" group? Stephanie McMahon, similar in title to Brandi Rhodes, acted as Creative Lead for years and then began to start her own side projects within the company. Brandi might be rushing to try new things without gaining valuable experiences as an executive.
Then, what happens if you have to punish wrestlers for inappropriate things? I was watching very closely on the #SpeakingOut wave of sexual accusations that was sweeping through wrestling lately on top of Sammy Guevara past comments about WWE wrestler Sasha Banks that appeared. In addition to being responsible the products, creative, and signing of talent, it's also the management of people part that most new Officers cannot comprehend. If the EVPs are giving some creative power to their wrestlers, what happens when they need to impose discipline? What happens when the wrestlers' own creative decisions get out of hand and need to be pulled back?
Just saying, this corporate structure is unique for wrestling companies and for any company to grant "Executive" title roles to those without managerial experience. As AEW quickly grows, the salary structure of its wrestlers should be a valid question to ask of any wrestling reporter who happens to see AEW President/CEO Tony Khan.
I'm not begrudging Cody, Brandi, Kenny, or the Bucks of their titles or earnings... At the end of the day, the Khans are the ones who gave them their titles and salaries. But I'd like to know what happens if a high priced Free Agent suddenly arrives who can instantly help AEW grow in leaps and bounds...
Could that wrestler exceed what the AEW Executive Vice Presidents earn annually and what say would the EVPs have over said highly paid wrestler?
Potential free agent wrestlers should legitimately ask that question... After all, if nobody can earn more than the EVPs, then that may artificially keep wrestler salaries down and may not make AEW appear as a financial destination for wrestlers. Last time I checked, Moxley, FTR, and Brodie Lee could have all stayed with the WWE for more money.
If only AEW was publicly traded, we could find out all of these answers so easily because information is required to be made public if shares of stock are offered to be bought or sold. Then we'd know the Salary Cap of AEW and if any bonuses were offered for a promotion that can't remain above 800,000 viewers on a Wednesday Night on a network available to 85 Million homes. We'd also be able to know the terms of annual evaluations of executives and how expensive it could become to terminate an EVP.
Money talks... If Tony, Cody, and the Bucks have all reached out to CM Punk as they say they have, then a financial offer would have been made to get him. They've had 19 months to sign him already and they haven't. Are they not willing to sign him as a new company or is there a Salary Cap imposed by the EVP contracts that has been put in place?
So just chill... Until the next episode!
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