Will WWE sell?  Moguls May Eye Powerhouse Vince McMahon Brand Retires

Will WWE sell? Moguls May Eye Powerhouse Vince McMahon Brand Retires

It is the end of an era. But is this the beginning of a new dawn? For 40 years, Vince McMahon reigned as head of World Wrestling Entertainment. after this The Wall Street Journal After reports that he had sex with employees and gave them millions in alleged cash payments, he abruptly resigned on July 22 as chairman and CEO. The company now says it will review prior financial statements of $14.6 million in “unrecorded expenses” incurred by McMahon between 2006 and 2022, also hinted at in the investigations.

The transition has caused some financial observers to raise a question that has arisen over the years: Could McMahon, its majority shareholder, sell WWE? Loop Capital analyst Alan Gould is among those who see an opportunity for growth. He upgraded WWE stock from “hold” to “buy” on July 25 and raised his target price for the stock by $31 to $90 “raising expectation that the company will be sold on Vince’s resignation. McMahon”. On the same day, WWE shares rose to a 52-week high of $73.34. They have already emerged as champions in 2022, up 35% through July 22, compared with a 16% drop in the broader S&P 500 stock index.

A possible suitor? Comcast. The company holds the national rights to various WWE content, starting with the main weekly show. RealA new generation program. NXTMonthly premium live events and reality shows lady and lady. And the former WWE Network airs on Peacock under a deal with the sports entertainment company. “Comcast represents nearly a third of WWE’s revenue,” said Gold, who was also more cautious: “CEO Brian Roberts has always prioritized long-term shareholder value, but especially after the $39 billion acquisition of Sky, this can be difficult. justify. Cut Comcast’s share buyback program to buy WWE.

MKM Partners analyst Eric Handler also sees the door to the deal opening a little wider: “If anything, speculation about a possible WWE sale is mounting, and we believe there will be no shortage of suitors.”

Another option could be Endeavor. CEO Ari Emanuel’s team is already competing for live events and television audiences with the mixed martial arts giant UFC so WWE can fit into the live mix. And since fighters like Dwayne Johnson and John Cena also have successful careers in film and television, Endeavor’s agency business could support artists with similar ambitions. “We expect Endeavor to be aggressive,” says Brandon Ross of LightShed Ventures. But Handler isn’t sure it’s a good fit: “They’re similar businesses, but different, they have overlapping audiences. But ultimately, I think the financial synergy is greater with a platform provider than with someone like Endeavor, which is also a content provider. So you can get bigger deals on any kind of platform. “

Given Disney’s broadcast and franchise focus, the company regularly appears as a potential buyer for WWE. Airing in the UFC is seen by some as a potential natural home for WWE programming. But Gould noted another big problem on the horizon: “Disney’s balance sheet is still stretched by the Fox acquisition and the pandemic, and it has more than $9 billion in commitments in January 2024 to buy the remaining third of Hulu from Comcast.”

The company was built in 21 years.St. The sale of Century Fox to Disney, Fox Corp, also has a strong focus on sports and live programming. As he already runs the big WWE weekly. slap It seems like it would be wise to look further to complement its original programming. But “it will be very difficult to justify buying WWE,” Gold argued, citing Fox’s smaller size compared to other media giants, including its commercial value and various stocks.

As Netflix, Amazon and others compete for the best sports and entertainment content to power their streaming services, they are also mentioned as potential claimants to the rights of WWE or the company as a whole. “Netflix is ​​unlikely because it has moved away from sports and event programming, but WWE is a hybrid of entertainment and sports, has a worldwide following, runs 52 weeks a year, and is much cheaper than most shows. sports,” Gold said. WWE Rights Agreement.

Other factors depend on the sale. McMahon’s daughter Stephanie McMahon, a former chief brand officer, has been hired as president and co-CEO, which is seen by some as a factor in keeping the company in the family. Her husband, retired wrestler Paul “HHH” Levesque, returned as head of talent relations. The other co-CEO is former ICM agent and CAA TV co-head Nick Khan, who has served as WWE President and Chief Revenue Officer since August 2020 and has distinguished himself as a successful trader. “With Stephanie at the helm now, I don’t think a WWE sale is more likely,” said Rob Ruth, an analyst at FBN Securities. That is, “unless an offer comes along that has an assessment, a structure, and a partner that the McMahons just can’t refuse.”

Source: Hollywood Reporter

You may also like