Vince McMahon, President of World Wrestling Entertainment Inc., is introduced during the WWE Monday Night Raw show at the Thomas & Mack Center on August 24, 2009 in Las Vegas, Nevada.
Ethan Miller | Getty Images
Vince McMahon has returned to the World wrestling entertainment board of directors to facilitate potential sales talks prior to the renewal of the company’s media rights.
The idea of WWE sales isn’t new. TBEN reported that it looked like a sales target in April and only seemed more attractive in July after a sexual misconduct scandal. The rationale is pretty simple: WWE is valuable intellectual property.
Ownership of IP allows streaming services to offer exclusive content without the annoyance of winning licensing rights in an auction every few years. WWE also has value to offer in terms of merchandising and theme parks.
WWE hired JPMorgan to help advise the company on a possible sale, according to people familiar with the matter. JPMorgan declined to comment. A WWE spokesperson was not immediately available for comment.
If there is a deal, it will likely happen in the next three to six months, the people said, asking not to be named because the discussions are private. WWE plans to talk to potential buyers before making a decision on TV rights renewal deals.
Facilitate a sale
McMahon’s return should make a sales process go smoothly, although problems can still arise.
The former CEO and Chairman is 77 years old and the controlling shareholder of WWE. He resigned after an investigation revealed he paid nearly $15 million to four women over 16 years to quell claims of alleged sexual misconduct and infidelity. Returning to the board will give potential buyers confidence that he stands behind the details of a transaction.
“My return will allow WWE, as well as all counterparties to transactions, to participate in these processes, knowing that they will have the support of the controlling shareholder,” McMahon said in a statement Thursday.
McMahon’s return will not affect the current leadership. McMahon’s daughter Stephanie and former CAA agent Nick Khan are co-CEOs. But it remains unclear what kind of role McMahon would want with WWE if he sold the company. WWE has told investors that McMahon’s role with the company is vital to “our ability to create popular characters and creative storylines.” Currently, McMahon has no formal say in the creative direction of the company.
Mansoor (below) will take on Mustafa Ali at the World Wrestling Entertainment (WWE) Crown Jewel pay-per-view in the Saudi capital of Riyadh on October 21, 2021.
Fayez Nureldine | TBEN | Getty Images
Whether a buyer would be comfortable with McMahon taking a more hands-on role with the company is unknown. But WWE is McMahon’s life’s work. It is possible that a sale only takes place with at least some conditions.
WWE has a market cap of over $6 billion after rising nearly 17% percent on Friday, buoyed by heightened sales speculation.
There are three categories of likely buyers for WWE: the legacy media companies, the streamers, and the entertainment holdings. Here’s who might be interested.
Comcast, owner of NBCUniversal, is a potential suitable buyer for WWE. McMahon’s company already has an exclusive streaming deal with Comcast’s streaming service, Peacock, and a cable television deal with NBCUniversal’s USA Network. Comcast has a market cap of over $160 billion and can easily afford the company — especially with a $9 billion (or more) check coming from Disney in January 2024 for a 33% stake in Hulu.
Comcast can lock WWE forever without having to pay upcoming rights renewal increases and can use the company’s IP address for theme parks, movies, and other spin-off series.
Still, Comcast CEO Brian Roberts said in October that “the bar has been raised in M&A” and has repeatedly said the company is in no rush to pursue an acquisition.
Recurring CEO Bob Iger may be looking to make a splashy takeover if he takes back the throne disney. WWE fits Disney in the same way it fits Comcast. It would bolster Disney’s streaming ambitions (maybe ESPN+), it would support the linear network business, and it would add some weight to merchandising and theme park businesses.
Not wanting Disney to run away with TBEN in 2019, Comcast pushed up the price by tens of billions by outselling Iger’s original offer. Could Iger see WWE as the next IP battle between Disney and rival Comcast?
Disney CEO Bob Iger attends the European Movie Premiere of ‘Star Wars: The Rise of Skywalker’ at Cineworld Leicester Square on December 18, 2019 in London, England.
Wiktor Szymanowicz | Future publication | Getty Images
Warner Bros. Discovery
Netflix has long retreated from sports and other live events, but has recently opened up to the idea of outright owning a league or taking an ownership stake. Owning a sports league would give Netflix the ability to create video games and spin-off series without friction. Netflix found success in its “Drive to Survive” documentary series about Formula 1, giving co-CEO Reed Hastings confidence that certain sports properties will resonate with Netflix’s huge global audience. But Netflix doesn’t own Formula 1, which limits future options.
Acquiring WWE or any other sports league would be a way to provide live entertainment without renting content – similar to Zaslav’s thinking.
“We haven’t seen a profit path in major sports rentals,” co-CEO Ted Sarandos said at the UBS Global TMT Conference last month. “We’re not against sports, we’re just pro-profit.”
Endeavor Group Holdings
Adventurerun by super agent Ari Emanuel, WWE could add to its asset stable after agreeing to purchase 100% of UFC in 2021.
Emanuel bought UFC to expand the scope of the talent agency’s business to live events. WME-IMG, now just part of Endeavor, represents many UFC athletes – as well as WWE superstars. The UFC deal was a success for Endeavor, which paid about seven times its $600 million in 2016 revenue in 2016. UFC generated more than $1 billion in revenue by 2022.
Ari Emanuel speaks onstage at the 2017 LACMA Art + Film Gala Honoring Mark Bradford and George Lucas presented by Gucci at LACMA on November 4, 2017 in Los Angeles, California.
Stephanie Keenan | Getty Images Entertainment | Getty Images
Endeavor’s enterprise value of only about $11 billion makes WWE a huge breakthrough for the company. The company’s relatively small balance sheet would likely prevent Endeavor from winning a bidding war against media giants. But McMahon’s outsized personality might suit the brash Emanuel and UFC president Dana White.
Selling to a third party would also allow WWE to renew more rights every few years. That may or may not be positive for the long-term future of the company as the media distribution ecosystem changes.
While Endeavor owns UFC, Liberty’s Formula 1 group owns Formula 1. John Malone, the controlling shareholder of Liberty, and CEO Greg Maffei, along with Stefano Domenicali, CEO of Formula 1, have figured out how to bring motorsport competition to the global market, including cracking the U.S. culture after decades of obscurity.
Malone and Maffei have an extensive track record of maximizing media valuations and acquiring media assets under $10 billion, including Formula 1, Sirius XM and Pandora. The global success of Formula 1 could be a roadmap for a future WWE strategy.
Disclosure: Comcast owns NBCUniversal, the parent company of TBEN.
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