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This is the only question that I've never been able to find an answer to. The only thing I can figure is that McMahon knew the financial mire that Bret's contract was but kept to himself and his inner circle while trying to figure out if it would last or not.
People forget that UT'S reign was a backburner reign that was consistently overshadowed by Bret and the America/Canada Border Wars that started after WM 13. It was a good idea to put the belt on Bret because he was getting insane heat and could carry the belt in good feuds. However, about a month later, Bret was put on the backburner with cold angles(not helped either by Austin's broken neck) with the Patriot and Vader while UT and Michaels became the main event feud. I think this is when the booking reflects that Vince and the booking committee realized the contract was a bad deal and must be terminated.
The rest is all history with Bret refusing to drop the belt to anyone and Michaels being the biggest blight on wrestling since early 90's Hogan.
But getting back to the issue, at Summerslam I don't believe Vince knew the contract was fucked, and he was just putting the belt on his hottest heel. The booking afterwards kills the heat on the Border Wars and exposes Bret as a weak champion. That is when I believe Vince stated to panic and the Screw Job was set in motion.
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