Sunday, October 12, 2014

Has the written contract ruined wrestling?

Ole Anderson lambasts the written guaranteed contract in his autobiography, contrasting this with talent being paid a percentage of the gate. He presents considerable evidence from the late 1980s and early 1990s showing World Championship Wrestling (WCW) spending lavishly for talent, ostensibly with little regard to how such contracts will effect profits and attributes this change in wrestling economics to the "Suits" (corporate interests with no background in wrestling).

I found this coverage fascinating, especially Ole's coverage of the ballooning of talent contracts down the roster. While spending lavishly for top stars, especially when trying to compete with the WWF makes some sense for WCW, similar spending for mid-card and lower talent does not.  Ole suggests this shift to written guaranteed contracts breeds laziness as a talent's earnings are not connected to the company's nightly earnings or the quality of shows. I'm not sure how wrestling promotions could feasibly work nationally without written contracts, but these contracts, especially in a company headed by those with limited to no experience in wrestling, change the dynamic of booker-talent relations that appears to limit coherent story designs. One should also take particular notice to how Ole suggests that Vince McMahon has been able to overcome these constraints.

With the current lack of meaningful competition for the WWE, I'm unsure whether the guaranteed salary contracts are still necessary. Certainly the WWE has clear rationales in preventing talent from working elsewhere (see Alberto del Rio as of late), but the performance-based pay would seem to encourage innovation. A change might even make Ole's day. 


Tony Smith said...

Tim, I heard a comment recently by Jim Ross about the difficultly with the accuracy of performance-based pay in the current WWE. He noted that when "talent" complains about a small bonus (which is probably closer to performance-based pay than anything else), the stance from the company may very well be that the WWE name sold the pay per view and not any particular wrestler being added to the card. I wonder with the juggernaut that the WWE has become if percentages of the gate or the buy rates are even possible? Or if possible, if they would be that much of an incentive? I am not an economist, so I don't know how this affects the ability for performance-based pay.

However, Wade Keller or the PWTorch among others have espoused the idea that heels should get a percentage of the baby face's merchandise sales when they are feuding with them as an incentive for playing their role well. I think this idea suggests a way to incentivize good work. Surely there are other ways for the WWE to do this, so that the fans get a really good product. I would argue that having just one company makes the product dull, until the company wants to make more money. Ole's point is a good one.

Timothy S. Rich said...

Tony, these are great points. I do agree that as a company goes national or global, performance-based pay becomes a bit more problematic. Lower card names in particular are seldom bringing many fans to the arena either. There are a few ways around this, but most would likely create additional headaches or might encourage the talent to focus just on the incentivized factors and not the performance as a whole. I'd also be concerned that talent would not sign with a company like the WWE if at least a guaranteed minimum salary is not offered. Otherwise, talent could easily generate a considerable net loss just in traveling from town to town.

I would certainly support the notion that heels should get a cut of the merchandise, although heel merchandise is far more common today than twenty years ago.

Sam Ford said...

Agreed. WWE's model of the "downside guarantee" has long made sense. Here's your bare minimum; your family can rest assured knowing that, if you suffer injury and are on the shelf for awhile or if we have a crap year, we've promised to pay you this. But you'll almost surely make more than this if you are on the road regularly, performing on PPV, selling merch, etc. But the new $9.99 solid subscription makes that awfully hard to tabulate, because you can no longer say how well one show did versus another in quite the same way...But I think the merch question is a good one. Many have pointed out that the incentive is for heels to be cool...for people to secretly like them...because they want to sell merchandise. If they don't, it's a major dent in their salary as compared to what faces draw. But that means heels don't always do all they can to be hated...they want to be secretly admired.