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Can WWE's NXT Body Slam the Company's New Rival?

Daniel B. Kline, The Motley Fool

World Wrestling Entertainment (NYSE: WWE) has made a deal to bring its NXT brand to Comcast's (NASDAQ: CMCSA) USA Network from 8-10 p.m. starting Sept. 18. The move gives the company another show on a major cable station airing at the same time as upstart All Elite Wrestling's (AEW) as-yet-unnamed show on the TNT network.

It's a defensive move by WWE that acknowledges that the company would rather slow AEW's momentum. It's also a plan that could backfire and make the No. 1 pro wrestling (or "sports entertainment", as WWE would describe itself) company look weak, which may hurt its overall business.

WWE Universal Champion Seth Rollins.

WWE plans to add another night of television to its lineup. Image source: WWE.

What's happening?

AEW grew out of a one-off show put on by wrestlers Cody "Rhodes" Runnels, Nick and Matt Jackson (The Young Bucks), and Kenny Omega. In response to an off-hand remark by wrestling journalist Dave Meltzer, the four booked an arena and proceeded to hold a sold-out show.

That got Jacksonville Jaguars owner Shahid Kahn and his son Tony, a lifelong wrestling fan, to consider creating another major pro wrestling company. Once the two were able to secure the services of Runnels, the Jacksons, Omega, and wrestling legend Chris Jericho, they announced AEW.

Since then the company has staged another sold-out show, put on two other smaller shows, and signed a TV deal with TNT. That program will begin on Oct. 2, airing live from arenas around the country, and the first three TV tapings have all sold out. That clearly has WWE concerned, and to keep AEW from gaining a major cable foothold with its TNT show, the company has made the USA deal for NXT.

The company's so-called "developmental" brand, NXT has previously aired on the company's streaming network. It features a number of performers who came from the same independent wrestling world where AEW drew most of its talent. And while it's ostensibly a training ground for younger or less-experienced performers, much of the crew that appears on its TV shows is made up of experienced performers that are well-known to hardcore fans.

Is WWE making a mistake?

WWE has not had any significant competition since TNT canceled WCW's weekly programming in 2001. That company was sold off to WWE for just a few million dollars, and since then there have been only minor players in the space compared to WWE (with a few having lower-end TV deals).

AEW has a roster sprinkled with big names, international stars, and up-and-coming talent. The company has clearly captured the attention of fans of independent wrestling, and its ability to sell out shows without even having a television show has been impressive.

What's not known is whether enough of an audience exists to make the TNT show a hit, or exactly who the audience for that show will be. Is it WWE fans who are disillusioned by the company's recent efforts? New fans? Or lapsed fans eager for something different?

WWE is putting NXT on USA in order to take fans away from AEW. That may not work, as AEW may be drawing from a different pool of fans and former fans.

If WWE fails to take audience from AEW, it's hurting its own network by taking away one of its most popular original programs. It's also angering its other broadcast partner, FOX, which was rumored to have also been in negotiations to air NXT.

This deal should bring more eyeballs to NXT, which may help it sell more tickets and make its talent bigger stars. It could also steal viewers from WWE's more important shows, and it could make AEW look even stronger (if it wins in the ratings). This is a risk for WWE. And while it offers a strong product in NXT, that product may not be enough to derail AEW, which could turn a competitor that once seemed a minor threat into a strong contender.


Daniel B. Kline owns shares of World Wrestling Entertainment. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy.

This article was originally published on Fool.com