I forget where I read it now, but they're going to announce the winner at SummerSlam. My guess would be that they're hoping for someone they can make further use of, but I don't believe there's a guaranteed contract included with the prize.
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That just sounds like wrestlers with too much time on their hands, coming up with conspiracy theories and The Torch getting wind of them. As far as Austin coming back, I'd love to see him back if he's motivated and wants to be there.