WWE creative plans for Cody Rhodes and a potential turn to the dark side have become a focal point of backstage discussion following his recent loss of the Undisputed WWE Championship. A new report indicates that management is firmly against a full heel turn for “The American Nightmare” due to his overwhelming success as a business asset.
According to the latest Wrestling Observer Newsletter, Rhodes’ status as a top babyface is protected by his consistent performance at the merchandise stand.
Dave Meltzer reported that WWE officials view his sales figures as “nothing to be tinkered with,” drawing parallels to the company’s long-term refusal to turn John Cena heel during his peak years as a merchandise mover. Rhodes finished 2025 as one of the top ten merchandise sellers on WWE Shop, appearing alongside stars like CM Punk, Roman Reigns, and AJ Lee.
While a traditional heel turn is off the table, the company is reportedly moving forward with a “character shift”. Following his title loss to Drew McIntyre in a Three Stages of Hell match on SmackDown—a defeat caused by an inadvertent distraction from Jacob Fatu—Rhodes has displayed a more aggressive, frustrated edge. This evolution is intended to add layers to his character without sacrificing his appeal to younger fans and corporate partners.
The immediate path for Rhodes involves a grudge match against Jacob Fatu at Saturday Night’s Main Event on January 24 in Montreal. Additionally, Rhodes has officially declared for the 2026 Royal Rumble on January 31 in Riyadh, Saudi Arabia. His goal is to become only the second wrestler in history, alongside “Stone Cold” Steve Austin, to win the Rumble match three times.
This could set up a championship rematch at WrestleMania 42, perhaps a triple threat match with McIntyre defending the WWE Title against Rhodes and Fatu.
