Why Was Jose Lothario Managing Shawn Michaels?
Remember this push coincided with the bombshell that Hall and Nash were leaving... Shawn's two big "party buddies" and backstage allies were going to be gone and while Hunter was part of the group he hadn't progressed past the "bag carrier" phase until he "took the fall" for their "curtain call". There was legit concern not at "what Shawn would do outside" without Nash and Hall but that the solid group dynamic that had controlled the backstage area was going to end and Shawn, being put in the "top man" position, when so few felt he deserved it, with his two biggest running buddies/bodyguards out the picture could cause chaos.
While Lothario wasn't a Hall of Famer, he was a legend to many in the business and good friends and respected by guys like Monsoon, who had ultimate stroke in the company. Guys weren't gonna mess with Shawn or disrespect Jose because it'd draw Gorilla's displeasure and thus Vince's... likewise Bret would have had a large amount of respect as he was someone Stu would have known and passed through Stampede at least once while he was growing up.
It's the classic story of taking an abrasive person and putting them with someone so benign and respected that any ill feeling towards the other guy gets neutered... they did the same the following year with Rick Rude... Bret and Shawn hated each other and it was getting to the groups, but guys like Davey, Anvil, Pillman all loved Rick Rude... so it acted as a buffer/neutraliser.
Onscreen clearly they wanted to erase Shawn and rebuild him as others have said, into that WWE cornbread hero Vince has always craved. There was an element of Shawn understanding his weaknesses and excesses and seeking out the original passion and the guy who developed that... the hope was that the "new" Shawn would be known for his passion but also dedication and loyalty, traits not seen in him prior... of course he blew it completely within a year... the writing was on the wall the moment he made his "lost smile" speech... the fans had seen through the facade, as had the boys and it meant they had to go further with the DX stuff and literally surround Shawn with people...
Rude being the one guy who was not only legit tough enough to protect him if it went south (Even Taker would never mess with Rude) but able to diffuse tension with Bret's crew long before things got to that point by taking them for beers or talking through it with a joint... When the time came to "choose a side" Rude saw for himself the levels Shawn (and Vince) had used him to and walked on his terms... knowing Bret was gonna be there in WCW, who he was always closer to and that the others would head over if they could... and whoever was left and wanted Shawn, could have it.
Jose couldn't do all that, he was an older guy out of his depth and place... it led to a business relationship at "Shawn's school" that in reality was Jose's with Regal as the main guy bringing guys on... just rebranded. If they'd have stuck with heel Shawn in 1996 and put Rude with him then... things would have been a LOT different. Or if they'd poached Harley Race over in 1993/94 to manage him...
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