What is Actual Competition?: The Monday Night Wars

Competition does some weird things to a work environment. I’ve seen co-workers get tense, speculate wildly, see threats everywhere, and go in directions that probably revealed more about their personal psychology than the company’s strategic situation. And I understand. Competition is scary and disrupts the status quo. Competition brings the threat of instability, layoffs, benefit reductions, culture disruption, and pressure to make big moves. It can be a big deal. A big enough deal that increasing competitive pressures is credited with bringing analytical advancement to the corporate strategy field since the 1970s. So, I’m empathetic to people facing actual competitive pressures and moves.

Keyword being actual. Sometimes, there can be a “boy who cried wolf” nature to competition in the workplace. People will see another company make a move (any move) in our direction and will want an immediate and big response. Otherwise, the end is nigh. Meetings are scheduled; analysis is done; political hackles are raised; and often non-meaningful policies are made. And weeks, months, and years later, we’re still in business in the same market position. In similar situations, my best teammates place industry development in a strategic context. These teammates don’t find value in being alarmist and burning focus and energy on “threats” that have yet to materialize. And in most cases, they never will.

So, I’m writing today to discuss actual, not potential or imagined, competition. The kind of competition that would freak me out to the point of action. I’ve also brought a very helpful example of what actual competition looks like. And, while I could search the annals of business case studies to find examples that played out in boardrooms and conference calls replete with suits and briefcases abound, I would rather talk about one that happened live on television. After I briefly relay the key points of actual competition, you’ll need to cue the entrance music because we’ll be talking about pro wrestling in the late 1990s and early 2000s.

If you watched wrestling at the right time, then you can hear this picture

The Kind of Competition that Concerns Me

First, I’m not saying ignore the competition or other companies that can impact your market or business model. You should always have market and competitive dynamics in mind when making strategic or even day-to-day decisions. And competition needs to be monitored. However, there is a difference between making careful competitive study and entering an existential crisis for every new product, entrant, or highly-publicized M&A in your industry. When you spot competitive moves, it’s a good idea to keep studying them. This is the best way to make simple course corrections or start rethinking your business without actually going into panic mode.

By some mix of training, schooling, and experience, I’ve made two observations that have honed my competitive intuition. First, it usually takes years for a business to succumb to competitive pressures. This is why you don’t want to burn yourself out at every competitive move. Second, companies will usually succumb to competitive pressures because of long-standing vulnerabilities. Companies that have lost relevance with consumers, allowed key capabilities to deteriorate, diversified irresponsibly, operate on narrow margins, or failed to account for industry dynamics will be more susceptible to competitive pressures. And all of those conditions can slow response time and limit strategic options. Therefore, if you have been practicing sound strategy (be honest with yourself . . . no overconfidence or discounting the positive in your assessment), then you should only consider a drastic reset under certain conditions. When you have all of the following working against you, then it is time to panic:

The competitor is coming for my market position- Companies hold market positions in several ways. Geography, consumer segments, and product offerings are just a few factors to look at in defining your position. You must have an accurate view of your position because all activity in your industry might not impact you. Only panic if a competitor is coming for your spot;
In an industry that can only support one company in that position- Sometimes, there is enough market size to support more than one company in a market position. However, if there is only enough room for one, then your competitive hackles need to be raised;
In a way that exposes or amplifies my vulnerabilities- No business model is perfect. Even the best ones are susceptible to customer needs being fulfilled by others in an unforeseen way. Therefore, you can be pressured in many ways from latent customer disapproval. Be honest about your weaknesses and, if competition makes them a bigger than normal problem, get concerned;
And pushes my finances into a downward spiral- I’m going to feel different about competition if I have plenty of cash to fight back than if I don’t. If the cash flow is a trickle and the competitors are drying it up because of the first three things, then it might be time to submit.

Of course, competition is potentially costly and exhausting. So, any one of those circumstances individually might be enough for you to move on to other ventures or cash out, but that’s a matter of preference. Most days, you can keep studying competition and make incremental course adjustments that don’t require the energy of a full panic or reset.

But sometimes . . . the competition hits you with a steel chair in the back while the referee isn’t looking. The competition gets in the middle of the ring, calls you out in front of everyone, and tries to put you through a table. You’ll start trading haymakers with your competitor until you can put them in an ankle lock.

Those days can come. And they did for professional wrestling when they fought. . .

The Monday Night Wars^[1]

Before going forward, these wrestling organizations, particularly Vince McMahon, have had numerous scandals around a bevy of terrible acts ranging from domestic violence, sexual misconduct (in and out of the workplace), steroids, athlete safety, racism, and more. Even as I write this post, Vince McMahon has stepped down as CEO under allegations of sexual misconduct.^[2] While we’ll be looking at business moves (sometimes in light tone), my intent is not to aggrandize, rationalize, or approve of these bad acts. These people aren’t role models, but we can learn from this business battle. In many ways, competition reveals who we are. And, if competition comes your way, let it reveal the best version of yourself. So, we’ll press on and examine how the Monday Night Wars showed us what actual competition looks like.

The Lead Up to War

In 1982, Vince McMahon bought the World Wrestling Federation (now called World Wrestling Entertainment or “WWE”) from his father.^[3] Back then, professional wrestling promotion operated under a territory system that allowed promoters to operate with minimal competition in predetermined geographic areas.^[4] The National Wrestling Alliance (“NWA”) operated as the governing body and would keep promoters from invading each other’s territory.^[5] The WWE promoted in the northeastern territory.^[6] Like many business people looking at a fragmented market, Vince McMahon had no intention of staying in his territory. He spent the 80s and early 90s poaching the best talent (e.g., Hulk Hogan, Bret Hart, etc.), buying other wrestling promotion companies, leveraging cable television’s expansion with shows on MTV and USA Network, and using pay-per-view specials like Wrestlemania to secure cash flow.^[7] This chokeslammed the territory system, which had been previously buoyed by exclusivity and local tv markets. McMahon’s next innovation would come at a pivotal time. With WWE stars like Hulk Hogan leaving the company (more on that soon), Monday Night Raw innovated by advancing key storylines each week in front of a live audience as opposed to being a clip show or mere commentary.^[8] This created a constant stream of content for fans to enjoy between pay-per-view events. Premiering in 1993, Monday Night Raw is our first entrant in the Monday Night Wars.

For decades and during WWE’s ascent, Georgia Championship Wrestling (GCW) operated in one of NWA’s southern territories.^[9] For years, GCW promoted talent and broadcast its matches on WTBS.^[10] When WTBS was declared a superstation in 1976, GCW automatically gained a national audience.^[11] Boosted by this rise in cable television, GCW changed its promotional name to World Championship Wrestling (“WCW”) in 1982. As a promising wrestling promotion in the 1980s with a golden slot during primetime TV of course Vince McMahon bought them in 1984, an event later referred to as “Black Saturday”.^[12] Vince shelved the WCW storytelling in favor of his WWE characters and programming, which turned out to be mainly a clip show.^[13] The ratings sank, which drew Ted Turner’s ire, and Vince had to sell WCW to Jim Crockett Productions.^[14] In 1988, Jim Crockett Productions hit money troubles and sold to Ted Turner.^[15] Turner’s WCW acquisition gave the organization deep pockets and a desire to be the only national pro wrestling organization.^[16] WCW would spend the next few years finding their way, but started to hit its stride in 1993 after Eric Bischoff took over as Executive Producer and Senior Vice President. The company signed away major WWE stars (e.g., Hulk Hogan, Macho Man Randy Savage, and others)^[17] and brought wrestling styles from other countries, including, most notably, its lauded cruiserweight division.^[18] With Monday Night Raw running for two years and Ted Turner looking to compete with Vince directly, he instructed TNT executives to give Eric Bischoff an hour slot against Monday Night Raw.^[19] In 1995, WCW Monday Nitro premiered at the Mall of America.^[20] And thus began the Monday Night Wars.

Actual Business Competition

Before we begin, let’s get the tale of the tape by looking at where we are on the actual competition requirements listed earlier. 1) WCW was coming for WWE’s position as the best national wrestling promoter and for the Monday night timeslot. 2) There is only one Monday night wrestling audience, especially with no DVR, YouTube, or streaming back then. And, speaking personally as a wrestling watcher for a year or two around this time, I only needed one good wrestling show. 3) WCW had the nostalgic pro wrestlers that built the WWE and quickly matched the cable tv advantage, which hit a WWE vulnerability and degraded a historical competitive advantage. 4) Ted Turner also had more money than McMahon. If anyone was going to run out of money first . . . it was the WWE. This is actual competition. . . . Or in pro wrestling parlance, the following contest is scheduled for one fall, and it is for the heavyweight championship of the wooooooorld!

And if this is happening to your company, then you must come off the top rope and put your opponent down for a three count. Let’s see how it went for these combatants.

The Match and the Victor

The company with the largest audience was going to win this fight. This meant having the superior storylines, the best action and stunts, and the most compelling characters. In this fight, Monday night ratings was and will be our proxy for business health. Higher ratings mean financial and business stability overall. And the WCW would open the fight landing punch after punch on the WWE.

After a 6-month period of even ratings,^[21] the Monday Night Wars swung in WCWs favor when Bischoff, using his standard playbook of deep pockets and guaranteed contracts, signed Scott Hall and Kevin Nash from the WWE^[22]. Bischoff used this real-life development to start a storyline around the New World Order (“NWO”), a group formed by the two wrestlers and later Hulk Hogan after his infamous heel turn.^[23] The NWO was determined to take over and wreak havoc on the WCW. Bischoff placed star wrestlers on both sides of the conflict, and the storyline would progress from there. The realistic storylines, taking WWE’s top talent, and the presentation innovations (e.g., live episodes, cruiserweight division, etc.) simply made WCW the best product on the market. Bischoff built his strategy on WWE’s weaknesses and hit them repeatedly in the solar plexus.^[24] The wrestling audience rewarded WCW with 83 consecutive weeks of ratings wins.^[25]

Meanwhile, WWE was on the mat. At the time, the WWE was considered cartoon-like with very straightforward heel vs. face stories that broadly ignored the outside world.^[26] Characters were considered flat, and the WWE was very much seen as outdated. Vince’s finances suffered, which contributed to him losing more talent like Bret Hart.^[27] If the WWE was going to make it, then it had to become relevant again. McMahon had an eye for talent, and he raided WCW’s midcard, which WCW management often overlooked, all throughout the 90s. The Undertaker, Triple H, Mankind, and Stone Cold Steve Austin are just a few notables.^[28] The Rock, via family lineage, was also sitting on Vince’s roster.^[29] However, under current character archetypes and storylines, this talented roster wasn’t moving the needle.

In 1997, the WWE would start changing. Borrowing concepts from Extreme Championship Wrestling (“ECW”)^[30], WWE would enter its “Attitude Era.”^[31] Characters like The Rock and Stone Cold Steve Austin would be retooled to be more complex. The WWE would ditch family friendly content (read: more violence and sexualized content) to target an older demographic. The WWE would also adopt more reality-based storylines, somewhat similar to WCW’s NWO, with Vince McMahon adopting the evil boss persona who was foiled by Stone Cold Steve Austin, as a solo character, and D-Generation X, as a group. Monday Night Raw’s presentation would be retooled as well to look more modern.^[32] And the fans responded. The Attitude Era was a full counter suplex that hit the WCW at the wrong time. In late 1998, WWE retook the ratings lead only to lose it briefly once before regaining it permanently.

Like most great matches, the Monday Night Wars took a surprise turn when a new entrant intervened in the match. In 2000, the AOL-TimeWarner merger would hit the WCW with a steel chair while the ref wasn’t looking.^[33] In the deal, Bischoff lost Ted Turner, along with his deep pockets and competitive zeal, and started facing pressure from inside TimeWarner.^[34] Also, contrary to the WWE’s Attitude Era, WCW didn’t have fresh talent on standby. And to the extent it did those wrestlers were subjugated to the demands of older stars.^[35] To pile on, the older stars’ guaranteed contracts weighed down WCW’s finances.^[36] Additionally, the NWO storyline had reached no resolution and became diluted and stale.^[37] Stars like Bill Goldberg would give WCW a short-term boost, but fans continued to lose interest.^[38] And the WWE built a dominating ratings position. With TimeWarner out of patience and finances going south, Eric Bischoff attempted to buy WCW.^[39] But TimeWarner beat him to the punch and pulled WCW’s timeslots.^[40] With nowhere else to go, Vince McMahon bought WCW for a bargain and left the guaranteed contracts at TimeWarner.^[41] The Monday Night Wars ended with a triumphant speech by Vince during an airing of Monday Night Raw. Simultaneously, Shane McMahon, his son, appeared at the last Monday Nitro to begin the “Invasion” storyline.^[42] ECW would also be later purchased by McMahon as well and be included in the Invasion storyline.^[43] WWE had won the Monday Night Wars and this example of actual competition.

Conclusion

The Monday Night Wars met all the elements of actual competition and provided a perfect example of how these competitive situations can end. It also played out with the drama & surprises of a great wrestling match. For the rest of us, actual competition can happen. When it does happen, you must fight to win by knowing what is strategically important and how it changes, especially managing vulnerabilities and strengths. However, you must also know if you are in a real fight or not. Exhausting focus and resources repeatedly at every competitive move will leave you personally and your company resource depleted. Even in our wrestling example, it took 8 years for a winner to emerge from actual competition. You have time. Just know what you are up against, respond accordingly, and maintain perspective.

Sources:

Pictures Sources (in order appearance): Wikimedia Commons; Wikimedia Commons

^[1] The Monday Night Wars and the history of pro wrestling generally is a vast and complicated web of promotion companies, moving talent, multiple championships, tv rights, the rise of cable television and pay-per-view, change in consumer tastes, etc. My research did not reveal an all-inclusive treatise of this history, but it could certainly use one that, just to be clear, someone else should write. So, while certain interpersonal dynamics and momentous events (like the Montreal Screwjob) have been stripped for brevity, I’ve worked to simplify and keep the essence of what I can confirm happened.

^[2] https://www.cnn.com/2022/06/17/investing/wwe-vince-mcmahon-steps-down/index.html

^[3] https://abcnews.go.com/Sports/vince-mcmahon-steps-wwe-chairman-ceo-amid-investigation/story?id=85459494#:~:text=McMahon%20bought%20the%20then%2DWorld,Steve%20Austin%20and%20John%20Cena.

^[4] https://bleacherreport.com/articles/313206-the-sad-story-of-the-nwa-national-wrestling-aliiance

^[5] See note 4.

^[6] https://www.youtube.com/watch?v=g9gIyjo8HNA&list=PLCjwFLItEzuEiSYYCO6Dit4ptPwJ31eWL&index=1

^[7] See note 6 and https://www.youtube.com/watch?v=FPAQJ-Uv1EU&list=PLCjwFLItEzuEiSYYCO6Dit4ptPwJ31eWL&index=3

^[8] https://bleacherreport.com/articles/1227186-wwe-monday-night-raw-looking-back-at-the-first-year-of-the-show

^[9] https://www.youtube.com/watch?v=FCYwcVE3vj0&list=PLCjwFLItEzuEiSYYCO6Dit4ptPwJ31eWL&index=30

^[10] See note 9.

^[11] See note 9.

^[12] https://www.thesportster.com/wwe-incredible-story-black-saturday/ (Side note: You can also see the takeover here: https://www.youtube.com/watch?v=rPHcM4e5kLg )

^[13] See note 12.