NEW YORK — Media giant Time Warner Inc. agreed to sell the money-losing World Championship Wrestling operation Thursday as part of an effort to remake the company now that it has been acquired by America Online Inc.
While terms weren't disclosed, Time Warner's TBS cable television unit will keep a minority stake in the wrestling business and long-term rights to continue broadcasting the programming on its TNT and TBS cable outlets.
The sale of the wrestling operation is part of a broader housecleaning in Warner's cable operations, marking the diminution of WCW's chief backer, Ted Turner, within the new company.
The announcement of the sale to closely held Fusient Media Ventures, a group of investors including the creators of the cable television channel Classic Sports Network, comes on the same day the Federal Communications Commission gave its approval of the AOL Time Warner deal.
Declining viewership for WCW programs has been dragging down revenue at TNT and TBS, particularly as advertisers flocked to the rival World Wrestling Federation on Viacom's UPN. WCW lost an estimated $80 million last year, but TBS executives said they still believe wrestling is a growing market.
WCW's twice-weekly broadcasts remain among the top-rated programs on TBS and TNT.
Bradley Siegel, president of TBS Inc.'s general entertainment networks, said the sale to Fusient shouldn't be viewed as Time Warner laying down its arms.
The merged AOL Time Warner "is a very different business than WWF," he said. Wrestling "is their business, exclusively. As the company continued to grow and evolve, we realized wrestling was not a core business for us. [And] it was better operated outside the confines of [Time Warner]. I don't think it's throwing in the towel at all."
Analysts agree there is room for competition in the wrestling market, but said the WWF's dominance may prove difficult to overcome.
"WCW is going to have a hard time competing in the marketplace," said Chris Dixon, a media analyst at UBS Warburg. But he said Time Warner could ultimately benefit from the deal because it still holds the broadcast rights for WCW shows. "If the [WCW] is able to turn around, all of a sudden [Turner will] benefit."
But WCW has a steep road to climb after competing with WWF for more than a decade. Turner purchased and renamed the business in 1988, adding it to TNT's prime-time lineup in 1995. The next year, WCW began toying with higher production values and more elaborate "story lines," the behind-the-scenes soap operas that form a backdrop for the wrestling matches.
WCW took the lead in the ratings and kept it for more than 80 consecutive weeks before the WWF roared back with raunchier story lines of its own.
WCW has tried to slow down its rival, even hiring away WWF writers, but continued to fall behind in the ratings. Critics said Turner overpaid for WWF stars, many of whom faded under his tent, and wasn't willing to push the envelope like the WWF's chief, Vince McMahon.
"WCW was never comfortable pushing the envelope the way the WWF does," said one cable programming executive. "WWF is like a slow-motion train wreck, and WCW could never tap into the teen libido in quite the same way. Family values and wrestling just don't mix."
WCW isn't the only Turner operation facing changes under the AOL Time Warner corporate structure, with hundreds of layoffs rumored to be coming at CNN as early as next week. The layoffs, which are expected to hit CNN's online operations hardest, are part of a wide-ranging restructuring of AOL Time Warner.
Following completion of the merger, Turner is expected to relinquish his operating role, which includes supervision of the cable operation.
Time Warner shares on Thursday closed at $71.19 on the New York Stock Exchange, up $4.19 on the news of the FCC's approval of its acquisition by AOL.