Under the first term of President Barack Obama’s administration, Congress gave Detroit the auto bailout of all auto bailouts. Ford didn’t take the bait and saw their sales increase. General Motors became Government Motors and Chrysler found itself swallowed up in a merger with Fiat, the Italian car company that was practically a punchline in the 1970s. In the process of the Great Car Bailout, first-line creditors like pensioners from teacher groups got screwed while top management at the United Auto Workers union were busy keeping multi-million golf courses like Black Lakes in tip-top shape. The Middle Class got screwed… again. That’s the nature of bailouts, whether they be corporate or government-based.
A few years after the Great Car Bailout, Detroit filed for bankruptcy. The city has lost everything. And now there is a push for the Feds to give the city itself one massive bailout. Proponents of such a bailout are pushing the line of reasoning that if Germany can bail out Spain, Portugal, and Greece to save the European Union that the US Government should bail out cities like Stockton and Detroit. Naturally, Germany loaned money to Greece in exchange for a strings-attached agreement that would require austerity cuts. The Greeks took the money, proceeded to riot in the streets, and threw a fit over austerity measures. And with more European Union countries in trouble, the Germans are being asked to once again bail out another country.
The moral of the story? Bailouts rarely work and the recipients of funds often don’t change their ways.
A year ago, Bellator was Spike’s premiere MMA property. Bjorn Rebney was running the show with money thanks to hedge fund Plainfield Asset Management. Eventually, the money ran out and Viacom purchased Bellator. Since the purchase, Bellator’s television ratings have declined for live events. The ratings for the new Fight Master reality show have dropped each consecutive week. And now, Viacom is about to announce PPV plans for Bellator. The hook? Quinton “Rampage” Jackson, who Viacom just inked to a big-money deal, will reportedly face Roy Jones Jr. at the end of the year in a boxing match. The same Quinton Jackson who got out-boxed by Ryan Bader, the man who lost to Tito Ortiz, will face Roy Jones. Rebney’s past history in boxing is coming back into play here. It should be of no surprise to anyone.
For corporations like Viacom, they are not interested in building from the ground-up. They are only interested in turn-key operations where a product is established and can be bought out with the hopes of maximizing a profit. This means cost-cutting. It means implementing financial benchmarks where the shareholders and management rule the day. For Viacom, Bellator was simply a turn-key opportunity. There are two ways to make money in combat sports in North America — network television or PPV cash. Naturally, Viacom wants Bellator to make cash on PPV. If it fails? Viacom will likely sell Bellator or kill the promotion off. Get in, get out.
As a PPV property, Bellator will likely fail. Perhaps they won’t fail on the same level that TNA has, but they will fail. Either the UFC will buy out Bellator’s assets from Viacom or the promotion will die. Viacom’s bailout of Bellator will likely lead to a quicker-than-expected death.
With TNA struggling financially and many wrestlers reportedly being paid late by several weeks, there are cries from hardcore supporters for Viacom to step in and bail out TNA in order to prevent WWE from purchasing the company’s assets. With Viacom already having poured millions of dollars into the Treadmill Promotion, the thought process is that Spike’s loyalty to TNA will save the day. It is important to note that when push came to shove, Spike sided with TNA on Thursday nights and demoted Bellator to Friday nights. So, there is something to be said there. However, TNA is not a growth property in television. It is a property with a fixed result. There is something to say for stability in today’s economic climate but pro-wrestling generally draws far less advertising cash than other television properties.
What would happen if Viacom bailed out TNA by either buying out the company or implementing a rent-to-own scenario? Wrestling history tells us that bailouts don’t work. In fact, the only modern company that was successfully bailed out by a rent-to-own scenario was New Japan Pro-Wrestling. Yukes, the game company that bought out the company from Antonio Inoki, had to practically rebuild the foundation of New Japan. New talent, new business protocols, new business relationships. Everything had to be reworked. This required a significant amount of cash to be spent for restructuring. Yukes got a rent-to-own deal with Bushiroad, a card game company whose owner happens to be a pretty damn smart businessman and very smart pro-wrestling fan. In order for the rent-to-own scenario to work for New Japan, it required the right businessmen at the right time to pull off a miracle.
Those kinds of people simply don’t exist in the world of TNA. Additionally, many of the people required to help restructure TNA want no involvement in the organization given who is currently involved. Pro-wrestling is an industry where 99% of the time you are going to lose your ass as a promoter. One thing fans have learned over time is that even rich people don’t like losing money on a joy ride and will be the first to pull the plug when needed to get out of business.
While Paul Heyman was busy convincing everyone that ECW was the anti-establishment league, Vince McMahon was giving him financial support. WWE’s money didn’t change Heyman’s bad business habits.
Given wrestling’s past history of bailouts, Viacom’s bailout of TNA would largely keep the company in tact except everything would be done on the cheap — or as cheaply as possible while maintaining ‘big names.’ Those who are making the big money now would likely be kept around while those who deserve more money or deserve a better push will simply get pushed aside. The best way to think of a corporate bailout of TNA is to use a real estate analogy. A corporation like Viacom is more likely to act like one of the flippers from Property Wars than a renovator from a show like The Property Brothers. What TNA needs is a complete restructuring of management, not a face lift. TNA is like a modern fixer-upper with some nice butcher block counter tops and maple cabinetry on basic ceramic tile. You look at the house and think that it only needs a few fixes when in reality the foundation is disintegrating due to termites, the kitchen is laced with asbestos, the dry wall is invaded with black mold, and the electrical wiring is aluminum and ready to catch on fire at any time.
Once Viacom realizes that managing a pro-wrestling organization is a perpetually expensive business proposition, they will bail out of the business in a hurry. Much like what is happening to Bellator right now, a Viacom bailout of TNA would only accelerate the time line of the organization being sold off to the highest bidder or killed off for permanent extinction.
My words of advice to those advocating for a bailout of TNA are the same to those advocating for a bailout of the entire city of Detroit: get ready to answer to your Wall Street corporate shareholders who don’t have your best interests in mind. Be careful for what you wish for because you might just get it.