Controversy Creates Cash (33 page)

Arn gave a retirement speech on
Nitro
August 25, 1997; the speech is still talked about as one of the most emotional in the history of the business. Arn had an ability to do an interview like no one else in the business. Add to that the real emotion of the situation, and it’s not surprising that people in the cheap seats were wiping tears from their eyes.

The next week, WCW staged a tribute to him on
Nitro.
Midway through, nWo members began tearing into him, using clips from the speech the week before to make fun of him. Scott Hall and Kevin Nash had a ball with it.

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The bit was highly effective. The audience related to Arn and showered Hall and Nash with abuse—which was the idea. But Arn’s family was deeply hurt by it, and so was Arn. There were also bad feelings with other wrestlers behind the scenes who felt I went too far and disrespected Arn.

I’ve come to know and understand Arn much better since I started working with him in WWE. He’s a very proud individual.

Looking back at it, I asked too much—or most likely I didn’t even ask. I just assumed and expected Arn would let us weave the reality of what he was going through into a storyline that would benefit others. I didn’t take into consideration the emotional impact his forced retirement had on him and his family.

I thought if I was in his shoes, I’d do it, and therefore felt it shouldn’t be an issue. The problem was, I wasn’t in his shoes. I hadn’t spent my professional life creating his character or legacy.

Quite frankly, it’s one of those things that if I had to do it over again, I wouldn’t.

A Man of Courage

Arn’s hard feelings toward me stayed with him for years. When I came into WWE, he was one of the people who turned white as a ghost when he saw me backstage for the first time. The look on his face mixed shock, anger, and fear—and probably some emotions I didn’t even understand.

The first two and a half years I was in WWE, our relationship was very strained. I think on the surface we tried to pretend that we were moving on, but there was underlying tension and baggage between Arn and myself. Although we tried to ignore it, it was still there.

Arn went through some personal issues of his own while he was in WWE. He dealt with them with a great deal of dignity and courage. Afterward, I approached Arn and told him how much I ad-mired him and the way he tackled things head-on in his life.

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I think that was around that time we started to heal the old wounds. As it happened, Arn was one of the last people I said good-bye to when I got “fired” by Vince McMahon in 2005. I didn’t know for certain if I’d be back, or when I’d have a chance to talk to him again. So I made sure I told him I appreciated the opportunity to work with him, appreciated the opportunity to get to know him better, and hoped that down the road we’d get to work together again.

Abuse of Power

As the head of nWo, my on-air character had an incredible reign of terror through 1996. He began to show signs of vulnerability in 1997, getting taken down a peg or two so the viewers would have some hope that he might finally be busted. Harvey Schiller even came on air and “suspended” me. It was a simple story, really. Someone rises to power, abuses that power, and appears to be unstop-pable. Then something happens and reveals a flaw or a weakness, giving an opportunity for things to be reversed. Hope.

In real life, a reversal of fortune seemed unthinkable. Things at WCW were going extremely well. We were meeting and beating all of our financial targets. Harvey would tell stories about being on the golf course with other top executives from Turner, and all anyone wanted to talk about was WCW.
In a positive way!
I would get a phone call every Tuesday at three o’clock from Scott Sassa and Brad Siegel congratulating me on the ratings from the
Nitro
show the night before. We were high-fiving each other over the phone. I’d get calls from Ted Turner maybe once a month, saying how proud he was of WCW.

WWE wasn’t real competition. They had their own style and appealed to a different audience. We were clearly different from what they did, and our audience loved what we were doing.

We were doing so well that no one, myself included, recognized the problems brewing. We were operating at the limits of our ca-THE REVOLUTION TAKES HOLD

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pacity, maybe even beyond. As much as I hate to admit it, I was going too fast. As hard as it is to create success, I would soon learn that managing it is even more challenging.

Horsepower Under the Hood

Part of the problem was personnel. We didn’t have enough horsepower under the hood.

When I’d taken over, I didn’t have the ability to go out and hire the best of the best as a support staff. For the most part, I had to work with what I had. Not only didn’t I have the budget to go out and hire the right people, the unique nature of our business made it difficult to find the right people in the first place.

In the beginning, that was okay. We could make mistakes and survive them. Expectations were low.

As we became more successful, the mistakes we made were more noticeable. But everything we touched was so profitable, the mistakes didn’t seem to have an effect. Our house-show business was going through the roof, our Pay-Per-Views were doing very well, and we were developing licensing and marketing platforms. All of the revenue streams showed tremendous growth, so it was easy to overlook mistakes. It was only as the load became heavier and the stakes became higher that the mistakes began taking a very noticeable toll.

We needed more mental horsepower to keep up with our success, and we didn’t have it. If I had to do it all over again, there would be a laundry list of people I’d have fired early on, because they were unqualified for the positions they were in. For whatever reason, whether it was a soft spot in my heart or because I thought I could get them on board, I didn’t can them.

Despite my reputation, I never really enjoyed firing anybody—

particularly people who had been in the business all of their professional lives. In many cases, they didn’t have anywhere else to go.

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And in some others, it was easier to keep them around than to rock the human resources boat.

There were individuals who worked for WCW overseeing our live event promotion who weren’t up to the job. Gary Juster, in particular, was in my opinion the most ineffective, untalented individual I’ve ever had the misfortune to work with. He’d been with the company from day one, but his only claim to fame was being a great politician. He was a protégé of Jim Barnett. The only real skill Gary developed was being an ass-kisser. But he occupied a position that was critical to our success—or lack thereof.

Sharon Sidello bounced around from marketing to Pay-Per-View. She was very intelligent. She impressed me from time to time, but overall I don’t think she had the kind of vision to grow her department to the extent she should have grown it. She didn’t have the horsepower and presence. Moreover, her relationship with Ole Anderson tainted her point of view. She was constantly positioning for more power, but couldn’t make things happen in the areas where she had control. I debated often whether I should keep her on staff, and in retrospect I wish I hadn’t.

We also had our own unique challenges because we were part of a large corporate structure. Accounting and legal did not report to me, and it was sometimes difficult to manage them because they had their own agendas and points of view. In terms of checks and balances, I understand and agree with the structure. But I wish I had had someone working directly for me who could have done a better job interfacing with those two departments than I did. I didn’t really have the time to do a good job. Even if I had, I didn’t have the personality, and I wasn’t really interested.

Hiring Freeze

We were growing and needed more people to handle the work. The increased revenue would have justified a larger payroll. Why didn’t I go out and hire more people?

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I couldn’t. There was a companywide hiring freeze. Even if I had the money for a position, I didn’t have the ability to go outside the company and find someone to fill it. I had to take someone from inside the company. I soon discovered that the only people available were on the bubble—they were either earmarked for termination from the jobs they already had in other departments of Turner or had put in a request to be transferred to another division.

I wasn’t allowed to “steal” people from other departments either.

They had to be thinking of quitting or, like I said, about to get fired; then human resources would send them my way.

Turner’s merger with Time Warner had led to pressure for more revenue, lower costs, greater profit. That applied to everyone, not just WCW. Things were tight in 1997. They would get a lot worse in 1998 and then 1999 as Time Warner ramped up for its merger with AOL.

For us, the squeeze came with
Thunder,
the Thursday-night show we added in 1998.

Yet Another Show

This Isn’t a Joke

Right after the Sturgis Pay-Per-View in the summer of 1997, I took a short vacation. I was beat, and I needed time with my wife and kids. We’d recently bought some property up in Wyoming, so we decided that after the event we’d rent a van, drive up to the property, and spend some time with the kids.

About halfway there, I got a phone call from Harvey Schiller.

“Eric, how are you? Congratulations, great Pay-Per-View,” all the yada yada yada stuff.

“By the way,” he added, “I just got out of a meeting with Ted. Because of the success of
Monday Nitro
on TNT, Ted wants to launch a show on TBS.”

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“Harvey, I’m on vacation, I’m not going to let you piss me off.” I thought he was kidding. “I’m not taking the bait. Come up with another joke.”

“No, Eric, I’m serious. Ted wants to do this.”

“Harvey, no matter how hard you try, I’m not going to take the bait.”

It took him several minutes to convince me he was serious. The new show, which we eventually called
Thunder,
was supposed to be another two-hour live event broadcast every week in prime time.

I thought to myself, My God, we’re already operating at 110

percent capacity. This
has
to be a joke.

EBITDA

We had a big meeting with Brad Siegel, TBS, and other people at Turner Broadcasting. It was the first time I heard the term “EBITDA”: Earnings Before Interest, Taxes, Depreciation, and Amortization.

The term, which is a way of measuring profitability, has been around in accounting circles for a long time. But it really came into vogue in the 1980s and ’90s during corporate takeovers and mergers. The emphasis on EBITDA led to wholesale layoffs in many industries, since the easiest way to increase profits in the short run is by cutting expenses, and the biggest expense in many industries is salaries. Of course, that’s a very short-sighted approach, since it can be difficult to sustain a business and almost impossible to grow without adding more employees. Looking at EBITDA instead of thinking about ways to grow the company can choke a business—as many corporations, AOL Time Warner in particular, would eventually discover.

I was to hear about EBITDA a lot over the next few years, as the Time Warner corporate mentality gradually strangled Turner’s entrepreneurial culture. What EBITDA meant in this case was that no one wanted to do anything that would increase their division’s expenses—like contributing toward the costs of a new wrestling show.

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They were concerned that their “profit centers”—whether TBS or TNT or Turner Sports or whatever—had good numbers at the end of the year. Their stock options depended on it.

Ted had mandated that we were going to have
Thunder
on TBS, but he hadn’t specified where the money for it was to come from.

Before the merger, this wouldn’t have been as much of an issue.

Mandates rolled downhill from Ted Turner, who expected his people to figure out how to implement them. He kept people focused on the company as a whole. But now the corporate culture had changed, and everyone worried about their own division. We knew what the mission was, but no one wanted to pay for it.

The additional production expense in running another show was huge. Another
Nitro
-like show would call for another forty or fifty people. I’d have to hire fifteen to twenty new production people alone. I had no idea where to find them, since I couldn’t hire from outside the company.

And then there was the talent. If I used just the wrestlers I already had in another two-hour show, I’d overexpose them. I’d also run the risk of watering the stories down to the point where they wouldn’t be significant any longer. And that assumed that I didn’t run them down to the point of sheer exhaustion. Another show meant I had to add on-air talent and writers or bookers as well.

The cost to produce the show would have run somewhere between $12 and $15 million a year. TBS, in theory the buyer and beneficiary of
Thunder,
refused to pay it.

The Power to Say No

It’s possible that I had the power to say no.

Maybe if I had said,
“No, Ted,”
we wouldn’t have gone through with it. Maybe if I said, “This decision will have a long-term negative impact on
Nitro
and WCW,” I could have stopped the train. But I didn’t.

I didn’t think I was in a position to argue against anything Ted 258

CONTROVERSY CREATES CASH

wanted. He didn’t call and say, “Hey, Eric, do you think we should or shouldn’t?” Had I gotten
that
message, I would have been happy to give Ted all the reasons why we shouldn’t. But that wasn’t the situation. I wasn’t given an opportunity to vote; I was given an opportunity to do what I was told to do.

Brad Siegel pulled me aside and said, “Eric, this is a mistake; don’t walk the plank on this one. Don’t step out there if you’re not a hundred percent sure. This is a mistake.” I wish I had taken Brad’s advice at that time.