The Professional Wrestling Industry and Market Competition
The 2024 documentary Mr McMahon, directed by Chris Smith and currently streaming on Netflix, chronicles the rise and fall of Vince McMahon, Jr, co-founder of the modern WWE (World Wrestling Entertainment, formerly known as the World Wrestling Federation – WWF). McMahon purchased the company from his father, Vince McMahon, Sr, in 1982 and revolutionised the wrestling industry with his entrepreneurial vision and business acumen. The documentary series, in six parts, presents differing opinions on what true competition is. The pure free market view is that true competition occurs when one company is trying to ‘destroy’ or ‘kill off’ its competitors.
In the early 1980s, the professional wrestling landscape in the United States consisted of three major organisations: the World Wrestling Federation (WWF) based in the Northeast, the American Wrestling Association (AWA) based in the Midwest, and the National Wrestling Alliance (NWA), which operated through various regional territories across the country. Over time, two companies began to dominate the industry: the WWF and World Championship Wrestling (WCW), owned by media mogul and the creator of CNN, Ted Turner, which arose from the NWA.
The documentary portrays McMahon as a savvy businessman who, upon purchasing the WWF, disrupted the established order that had existed for decades. He broke an unwritten rule by picking off top talent from other territories, angering the territory owners in the process. In the documentary, Vince McMahon justifies this by arguing, “I’m in business. You don’t own anything. I’m competing with you.”
Eric Bischoff, a former high-level executive at WCW, explains that McMahon was ‘shattering the territory mould’, which led many wrestlers from other organisations to join WWF, as they were attracted by better professional and financial opportunities. Former WWF and WCW star Bret Hart, whom McMahon recruited from Hart’s father’s Stampede Wrestling in 1984, adds, “He was quite cutthroat. He basically went into almost every territory and bought out their top guys.”
Trying to dominate the market or attain a complete market share is not anti-competitive behaviour; rather, it is what real competition looks like. Any business can gain a dominant or sole position in its marketplace by providing superior value to consumers.
McMahon responds to these criticisms by arguing, “I’m not taking anything away from anyone… I’m building. And if you can’t compete with me, it’s America – tough.” Hulk Hogan, the WWF’s top attraction during its 1980s peak, adds, “He (McMahon) wants to destroy (his competition) and then eat it.”
With this, the documentary begins to explore the meaning of competition. In economics textbooks, competition is typically portrayed as a static situation with unrealistic assumptions. However, in the real world, competition is dynamic – it is a process, not a fixed state. The mainstream view of economics often condemns ‘cutthroat’ tactics, ‘predatory pricing’, and CEOs working to ‘eliminate’ their competitors, and it wrongly labels these practices anti-competitive. However, striving for total market dominance and aiming to be the ‘sole survivor’ is, in fact, competitive behaviour. Trying to undercut your competition through lower prices, superior advertising, better contract offers, and most other tactics (except for violating their property rights) exemplifies competitive behaviour.
Competition is a process in which businesses compete to become the leading producers of goods or services. This ongoing endeavour can result in a marketplace where there are many companies or just one dominant player. Neither outcome is inherently good or bad; both are driven by competition and market dynamics. Therefore, there can be no external benchmark for the ‘ideal’ number of companies that should exist in any market. Moreover, ultimately, it’s futile to view the market at a single point in time because conditions are constantly changing: one company might grow into many, only for a single producer to later dominate again.
Striving for total market dominance and aiming to be the ‘sole survivor’ is, in fact, competitive behaviour. Trying to undercut your competition through lower prices, superior advertising, better contract offers, and most other tactics (except for violating their property rights) exemplifies competitive behaviour.
In 1994, Ted Turner and Eric Bischoff signed Hulk Hogan and ‘Macho Man’ Randy Savage, two of the WWF’s biggest stars in the 1980s, to challenge the WWF and become the top wrestling company in the country. Then in 1996, they hired Scott Hall and Kevin Nash (known as ‘Razor Ramon’ and ‘Diesel’ in the WWF and two of the company’s biggest stars in the early 1990s) and had them appear on WCW’s flagship show, Monday Nitro, presenting them as invading WCW. In response, McMahon sued WCW, accusing them of stealing his talent. McMahon explained, “When you have the resources of a Ted Turner, and you use these resources in a predatory fashion to try and put a family-owned business out of action… There has been a systematic attempt to raid the World Wrestling Federation of its talent.” In response, Bischoff suggested:
Stealing is in the eye of the beholder, isn’t it? It’s funny because immediately, Vince went into sympathetic babyface mode. He started whining like a little schoolgirl with that ‘Big bad Billionaire Ted’s trying to run us out of business’. Vince did the exact same thing to Verne Gagne and the AWA and other territories. He literally went into those territories and offered their talent better deals…That’s exactly the MO of Vince McMahon in 1984 and 1985. He took stars other people had created in certain parts of the country and signed them up for money, and God bless him, he had the right to. It’s free enterprise. But they (WCW) had the right to do it too, because it’s free enterprise.
From a true free-market perspective, Bischoff is correct. In the competitive process, you aim to eliminate your competition. In fact, one could argue that not attempting to outcompete your rivals is anti-competitive.
Noticing McMahon’s amended view on competition, the Netflix interviewer asked him, “You didn’t see any similarity to what you were doing in the territories?” McMahon responded, “No. Again, Ted’s philosophy was, ‘Let’s go hurt…. I’m gonna hurt my competitor.’ And that’s not mine. I want to go compete.” Through this response, McMahon was trying to play both sides. In the mid-1990s, McMahon was being overtaken by a stronger competitor, and he didn’t like it. Moreover, his terminology is incorrect and misleading. To hurt someone else means to violate their property rights or deny them something they are owed. However, Ted Turner did not violate any property rights or deny McMahon anything he was owed. Turner simply engaged in competitive behaviour. Turner spotted a weakness in the WWF and struck while the iron was hot. In fact, WCW had higher ratings than WWF from 1996 to 1998 and was the top wrestling company in the country.
While WCW enjoyed success for a few years, it began to lose steam in the late 1990s. Issues such as internal management struggles, poor creative choices, and a failure to develop new stars contributed to its decline. By the start of the millennium, WCW programming was behind that of the WWF, which featured new stars such as Dwayne ‘The Rock’ Johnson and ‘Stone Cold’ Steve Austin, and the company was losing lots of money. Ultimately, in March 2001, WWF bought its competitor, signalling the end of WCW.
The lesson is simple: trying to dominate the market or attain a complete market share is not anti-competitive behaviour; rather, it is what real competition looks like. Any business can gain a dominant or sole position in its marketplace by providing superior value to consumers. This should be viewed as a positive feature of competition, not an ‘inefficiency’. A real monopoly can only be obtained by the government or by a business granted a privilege from the government.
True competition is based on freedom of association, property rights and the ambition to be the best. When a company executive complains about his or her rivals being ‘predators’ or trying to ‘monopolise the market’, this is usually a sign of a weak competitor attempting to convince the government to intervene on their behalf. If a business rises to the top in a free market environment, it’s because consumers pushed them to the top. If other companies want to get to the top, they must be better, smarter and faster than their rivals. If they cannot do this, they deserve to be ‘body slammed and counted out’. That’s the bottom line because Stone Cold – well, the market process – says so.
