Where AEW Television Deal Stands, As WBD Prepares To Lose NBA

Warner Bros. Discovery (WBD) remains in the news over its contentious negotiations with the NBA. The expectation around the NBA is that the league will sign new rights deals with Disney, Amazon and Comast, leaving WBD's TNT out of the mix. 

However, the NBA is not the only package WBD has been trying to retain. The network's rights deal with All Elite Wrestling (AEW) runs until early next year and its exclusive negotiation window expires in July.

AEW is the second-largest wrestling promotion in the world, behind WWE. The company provides WBD with five hours of live programming per week. "Dynamite," AEW's flagship program, is often one of the top three-rated shows on cable on Wednesdays, often topping all non-NBA programming. 

If WBD loses the NBA, AEW would be its most-watched show on cable, ahead of the NHL and MLB. 

A report from Puck News on Tuesday claimed AEW owner Tony Khan (son of Jaguars owner Shad Khan) is "disappointed" with the current offer from WBD. What does  "disappointed" mean? Not much.

It's typical for negotiations to run until the final inning. Khan has little incentive to agree to a new deal until at least July.

Right now, AEW is one of the biggest bargains in television, costing WBD only around $50 million a year. AEW is worth substantially more than that. But how much more?

Longtime wrestling journalist Dave Meltzer reported on Friday that the current offer from WBD to AEW is worth more than double its current rate:

"[Per-year figures being discussed between AEW and WBD] are said to be considerably more than the estimated $110 million per year, or slightly more, that would in theory take the company into profitable range. 

"There is talk of figures being between 50 percent above (and as much as nearly double) the current number said to be already on the table. The latter figure in particular would open up the potential of tens of millions more annually for talent acquisitions and other expansions in the budget."

For comparison, WWE sold "Raw" and SmackDown" for $500 million and $287 million annually, respectively, to Netflix and Comcast last year. Granted, those are weekly shows. The AEW deal would include three different shows a week ("Dynamite," "Collision" and "Rampage") and possibly monthly pay-per-views. 

In theory, Khan should not take any offer from WBD and open up bidding to potential partners later this summer. Here's the problem: there are a limited number of potential suitors.

WWE recently signed new rights deals with Netflix, Comcast and CW. You can count those three out of the AEW sweepstakes. 

AEW doesn't have the mainstream cachet of WWE, thus probably not as appealing to Amazon or Disney – both of which expressed interest in WWE rights last year.

(Still, Amazon Prime would be wise to move into the AEW business to offer along with its recent investment into PBC boxing.)

Fox could be an option. But after opting not to stay in business with WWE after four years, Fox would likely only have FS1 to offer AEW.

Same with Paramount.

Sources tell OutKick that Paramount showed interest in AEW at its inception in 2019, perhaps to air programming on Showtime. Yet unless Paramount would air AEW on CBS – it won't –  the Paramount cable channel (on which "Yellowstone" airs) and Paramount+ would be significant downgrades from what WBD offers.

Where else is there to air a wrestling company that's going to cost nine figures a year?

You see the problem. 

Ultimately, we expect AEW to re-sign with WBD. 

AEW is a valuable property to WBD's cable networks, TBS and TNT, and offers wide streaming potential for WBD's Max service. With the impending loss of the NBA and the declining state of CNN, AEW is the last sure bet Warner Bros. Discovery has on cable.

And, to no fault of its own, AEW will be hard-pressed to find a better partner in terms of reach than Warner Bros. Discovery.