Why is WWF 'saving face' for Siegel over WCW sale?

commentary by Tom Zenk

What clarity does Steve Donohue's Multichannel News article (8/13/2001) bring to the saga of the WCW sale?

Previously, I suggested one scenario that fitted the facts then known about the WCW sale -
 

WCW‘s situation was so awful - financially, legally, scandal wise, whatever -that (a) Time Warner had NO CHOICE but to get rid of WCW - and fast! (b) Fusient, after due diligence, still wanted WCW, and put in a last minute bid of $48.3 million, just days before the sale to WWF (c) someone in Time Warner became so concerned at some aspect of the Bischoff deal they decided to block it (d) while discussions with Bischoff’s group ‘continued’, Siegel contacted WWF to revive negotiations (e) Vince and Snyder, playing hardball, used the ‘Viacom obligation’ to get the TBS and TNT shows canceled (f) with WCW now stripped of its remaining value, WWF closed the deal.

The Multichannel News piece helps confirm aspects of (b) through (f) of this scenario, relating to the actual process of the sale.

But it still leaves some giant questions unanswered -
 

(1) Why did Kellner and Siegel need WCW off their hands QUICK – and AT ANY PRICE?

(2) Why did Time Warner kill the remaining value of their property by canceling the TV shows to allow a firesale to WWF?

Anyone with a smattering of managerial competence could have gotten a 2.5 or a 3.0 rating out of a significantly restructured WCW. As Linda McMahon noted in her conference call, following WWF's purchase of WCW - "While their ratings have been a fair amount lower than ours, if you look at cable programming in general, WCW really has a very respectable rating. A brand that has been built for this many years and does have global recognition, is something of great value to us." What Vince and Linda subsequently did with this 'valuable brand' is a story for another time, but ....

What had gone so wrong with the whole WCW enterprise that Time Warner couldn't wait to offload it? Why did Siegel choose to deal with his former Time Warner colleague Stu Snyder (WWF) rather that the principals of other more lucrative offers? Were there reasons - other than purely financial reasons - involved in Siegel refusing to consider other deals on the table? There was a $25 million offer from Jarrett that Time Warner didn't even acknowledge. Reportedly, Steinbrenner had put together a huge package. Another New York company showed interest as did a Pittsburgh company. Like the Fusient deal, most if not all of those offers included picking up the remaining talent contracts as well.

The major source for Donohue's piece is apparently WWF's Stu Synder. Officially, "TBS and Fusient executives declined to comment on the offer". That begs the questions of Snyder's motivation in "clarifying" the WCW sale story. The hope is, as Synder puts it, that we will all "move on." That's the language of trauma counseling. So what was the trauma?

Snyder's motivation may be to provide Time Warner with a cover story for stockholders angry over the sale price - "Hey" Snyder is telling them, "all those numbers were fake, here's why, no need to look any further into the sale. Let's move on."

But none of this clarifies why Time Warner WANTED Vince to
get WCW, no matter what, and pushed aside other offers and killed  the company's remaining value (TV) to make sure he got it. Here are two possibilities -
 

(i) that Time Warner needed to ensure WCW didn't pass to Bischoff, under any circumstances - so what had Bischoff done that was so wrong? or  

(ii) that Time Warner trusted Vince/Synder to deal with any fall-out/ scandals from the old WCW - after all, who in the business would opt to make waves with monopolist Vince McMahon? That may explain why WWF's Snyder is now out there doing Time Warner's PR work.