Could AEW be in trouble under the new Skydance regime?

So, it’s official: the merger of Paramount and WBD will happen, and the new mega-studio will be named Skydance. With that, the new studio will have over a billion dollars of debt, which means one thing: they will fire a lot of employees and will also be looking to make as much profit as possible to be able to pay off some of that debt, especially since they have a high interest rate on that debt. But what does all of that mean for AEW? For that, you have to look a little bit deeper into this merger.

1. The money side of things:

Like I mentioned in the beginning, Paramount will pay $110 billion to acquire WBD. On top of that, they have to pay stockholders $17 million every day the deal isn’t finalized past October 1st, which means that since the deal will probably be finalized on the 6th, they would have to pay them that amount every day from the 1st until the 6th. That increases the amount of the debt, which means less money to spend. So that also means that every project they sign or keep will have to be profitable for them. Is AEW a strong enough product to keep after 2028? I’m not sure.

2. The streaming side:

Let’s face it, the streaming industry isn’t what it was in 2020. Since we came back from the pandemic, the popularity of streaming has plummeted to the point that pretty much every streaming service is losing money right now. That’s why all the services have increased their prices over the last few years and also have an ad-supported tier now, because they spend a lot of money on content and aren’t seeing a return on their investment.

Skydance will now own two streaming services, Paramount+ and HBO Max. Two services that have problems turning a profit despite having some great content on both services. So you know that, as something, Skydance will merge the two services, as it’s better to only have one service that’s losing money rather than having two. When that happens, where does this leave AEW and their current deal? Would they be able to just move to the new platform, considering that they’re not the game-changer that WBD was hoping they would be for HBO Max? Probably until their current deal is done, but after that, you could see them lose it.

3. The settlement between Paramount and the attorneys general of multiple states:

This is the biggest part that could hurt AEW when it comes to a new deal, as this is where Skydance will have to spend the most money to respect the deal they made with those who were against the merger.

While the TV side isn’t really affected by the movie side, it doesn’t change the fact that if the movie side isn’t profitable, it does mean a lot less money to spend on the TV side.

Just look at the box office before the merger from the two studios.

WBD only had one somewhat big hit, which was Wuthering Heights at the beginning of the year. Mortal Kombat 2 barely turned a profit thanks to all the outside stuff, and everything else was a big flop, with the biggest flop being Supergirl.

Paramount didn’t do that much better. Primate did decently, and Scream 7 was a mild hit alongside Paw Patrol 3, but the Billie Eilish concert film was a huge flop. Scary Movie didn’t light up the box office like it was expected to, Passenger wasn’t able to take advantage of the horror movie popularity created by Backrooms and Obsession to turn a profit, Jackass was a money loser, and the same goes for By Any Means.

The only project left under the old Paramount studio is Heart of the Beast, which seemed to be popular, but the project had a big production budget, so it might be hard to turn a profit.

So, starting next year, the new Skydance studio will have to release 30 movies a year, with half of them being big-budget movies. They can’t have any of those 30 movies be re-releases, and the majority have to be indie releases. If they aren’t able to release those 30 movies a year, they will be penalized by being forced to sell Miramax, and those movies that weren’t released will have to be released the next year, which means that they will have to release even more movies the following year.

So, most of their energy will be focused on making sure that the movie side of the studio becomes profitable, which means fewer resources will be put into the TV side. That also means less money will be put into projects on the TV side, and that means less money available for AEW to get a better deal.

4. So what does this all mean for AEW’s new deal?

The thing is, AEW has a deal that will end in 2028. That means negotiations will start with the new bosses, as Skydance will have two CEOs on top, and I’m sure that they will put their own people in charge of both departments. AEW will have to prove that it is a product worth keeping if they hope to get a stronger deal than they have right now.

Last time they negotiated, they had to give up Rampage in order to get more money. Right now, they can’t afford to lose another show to get more money, as they need to keep both shows, even though Collision is doing awful in the ratings and is probably a money pit, if they want to continue to grow.

They will also need to keep the streaming deal they have, even though they could be doing just as well without it since they could just use their own streaming service in the States if they can’t renew that side of the deal. But the TV deal is still important for them, and they will have to be realistic about how much they will get for a new deal.

If they go and ask for WWE-level money for their next deal, I could see Skydance dropping them quickly, as they aren’t doing WWE-level ratings, especially when it comes to Collision. So, with them being in cost-cutting mode for the next few years, AEW could be in trouble if they ask for too much.

Conclusion

We don’t know exactly how this merger will affect AEW in a few years, but with Skydance trying to save as much money as possible to pay down the debt, they won’t be willing to take as many risks as WBD loved to do. That means AEW could be on the chopping block if they see them as a risky project to invest more money into.

That doesn’t mean that AEW will be doomed if they lose this TV deal, as they could use their own streaming service to air everything until they get a new deal. But how many cable networks are willing to take a risk on wrestling outside of WWE in the States right now? I’m not sure, but I doubt there are a lot of cable networks that are truly looking to put wrestling on the air right now.

So, I don’t see a lot of possibilities for AEW to find a Plan B if, by some chance, Skydance decides to get rid of them after their current deal ends. Tony will have his work cut out for him to negotiate a new deal, as they really don’t have a lot of rope to play with and will need to lower their expectations if they want to get a better deal in 2028.