Heyman, you seem to miss the point that Smackdown draws as many if not more viewers than RAW on a regualar basis. And as Ive said a million times, if you do anything to make SD look like a "Sunday Night Heat" type show, they will draw SNH ratings, which aren't great.
Even though its true that RAW will always get special treatment because its been around longer, and mostly because HHH is on that show, SD still gets their own PPVs, their own house shows and they get half billing on the major PPVs. So even though RAW may seem like #1, SD isn't treated as a minor league organization like you are suggesting. They may get treated as the #2 group, but its not to the point that people see it as the minor leagues compared to RAW.
Once they do that (turn it into a B show), then people will turn away from SD in droves and ratings will go down to similar levels to Heat and Velocity. At that point UPN is going to call Vince and say "what the hell is going on?" and will likely cancel SD. Which would cost Vince a lot of money.
Most people on the 'net see Bradshaw as a joke of a champion, but I think he would have got the title even if he was on RAW. You have to understand Vince sees JBL as an extension of himself, so he was going to get pushed to the moon (especially after the Germany incident) regardless of what show he's on.
As for the Diva Search deal, that was originally booked for SD, but they got flack from UPN saying that it was too close to America's Top Model and would create confusion. As a result the concept was moved over to RAW.
But the main point is that you cant just tell the fans "this is a B show", because at that point they will stop watching. And since SD does as good, if not better than RAW, why would they even consider doing that?
Another thing is that any talk of the brand extension ending is very unlikely to happen. Both RAW and SD are drawing decent numbers on TV, they have added extra single brand shows and they have all done reasonably well. And finally, because of the brand extension they have been able to massively increase their international business, which has remained relatively strong while the live event business in NA has been soft. So there are NO plans to get rid of it.
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