President of World Wrestling Entertainment Inc. Vince McMahon 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’s paintings
Vince McMahon is back in the game Worldwide wrestling entertainment board of directors to facilitate talks a few potential sale before renewing the company’s media rights.
The concept of selling WWE shouldn’t be latest. CNBC reported that it looked like a sales goal in April and that it only became more appealing in July after the sexual misconduct scandal. The explanation is sort of easy: WWE is helpful mental property.
Owning the IP allows streaming services to offer exclusive content without the annoying licensing auction every few years. WWE also has value to offer by way of merchandising and theme parks.
According to people acquainted with the matter, WWE hired JPMorgan to help the company advise on a possible sale. JPMorgan declined to comment. A WWE spokesperson couldn’t immediately be reached for comment.
If a deal is reached, it is probably going to occur in the next three to six months, said individuals who asked to remain anonymous as discussions are private. WWE plans to talk to potential buyers before making a choice on TV rights renewals.
Making sales easier
McMahon’s return should help the sales process go easily, although there should still be problems.
The previous CEO and chairman is 77 years old and is the majority shareholder of WWE. went down after the investigation found that he paid nearly $15 million to 4 women over 16 years to quell claims of alleged sexual misconduct and infidelity. Going back to the board will give potential buyers the confidence to support the details of every transaction.
“My return will allow WWE, as well as all counterparties to the deal, to engage in these processes knowing that they’ll have the support of a controlling shareholder,” McMahon said in a Thursday statement.
McMahon’s return has no effect on the current leadership. McMahon’s daughter Stephanie and former CAA agent Nick Khan are co-CEOs. However it stays unclear what form of role, if any, McMahon would want in WWE if he sold the company. WWE told investors that McMahon’s role inside the company is critical to “our ability to create popular characters and inventive stories.” Currently, McMahon has no formal say in the company’s creative direction.
Mansoor (bottom) competes with Mustafa Ali at the World Wrestling Entertainment (WWE) Crown Jewel pay-per-view in the Saudi Arabian capital of Riyadh on October 21, 2021.
Fayez Nureldine | AFP | Getty’s paintings
It’s unclear if the buyer would be blissful if McMahon took on a more hands-on role in the company. But WWE is McMahon’s life’s work. It is feasible that the sale can only happen with no less than certain conditions.
WWE has a market capitalization of over $6 billion after growing nearly 17 percent% percent on Friday, supported by heightened speculation about sales.
There are three categories of potential WWE buyers – legacy media firms, streamers and entertainment holdings. Here’s who may be interested.
Comcast
Comcast, which owns NBCUniversal, is a possible buyer for WWE. McMahon’s company already has an exclusive streaming cope with Comcast’s streaming service, Peacock, and a cable TV cope with USA Network NBCUniversal. Comcast has a market capitalization of over $160 billion and might easily afford the company – especially with a $9 billion (or more) check coming as early as January 2024 from Disney for a 33% stake in Hulu.
Comcast can ban WWE without end without having to pay upcoming rights hikes and might use the company’s mental property for theme parks, movies and other spin-off series.
Still, Comcast CEO Brian Roberts said in October “The bar is the highest by way of mergers and acquisitions” and has repeatedly stated that the company is in no rush to take over.
fox
Disney
Returning CEO Bob Iger could also be looking to make a glamorous takeover when he takes the throne again Disney. WWE suits Disney the same way it suits Comcast. It would bolster Disney’s streaming ambitions (perhaps ESPN+), support the linear network business, and add a bit to the merchandising and theme park business.
Comcast didn’t want Disney to leave with Fox in 2019 and increased the price by tens of billions, topping Iger’s initial offer. Could Iger see WWE as the next IP battle between Disney and its rival Comcast?
Disney CEO Bob Iger attends the European premiere of Star Wars: The Rise of Skywalker. Rebirth” at Cineworld Leicester Square on December 18, 2019 in London, England.
Wiktor Szymanowicz | Future publications | Getty’s paintings
Discovery Warner Bros
Netflix
Netflix has long shunned sports and other live events, but recently it has turn out to be receptive to the idea of owning the league directly or taking an ownership stake. Having a sports league would give Netflix the ability to create frictionless video games and spin-off series. Netflix has been successful with its Formula 1 documentary series Drive to Survive, giving co-CEO Reed Hastings confidence that certain sports venues will resonate with Netflix’s huge global audience. But Netflix doesn’t own Formula 1, which limits its future options.
Acquiring WWE or one other sports league would be a way to offer live entertainment without renting content – identical to Zaslav thought.
“We have not seen a profit path from the rental of enormous sports venues,” said co-CEO Ted Sarandos last month at the UBS Global TMT Conference. “We’re not anti-sport, we’re just pro-profit.”
Amazon
Endeavor group holdings
Endeavorrun by super agent Ari Emanuel, he may later add WWE to his stable of assets agreeing to purchase 100% of the UFC in 2021.
Emanuel bought the UFC to expand the scope of his talent agency to live events. WME-IMG, now just a part of Endeavor, represents many UFC athletes — as well as WWE superstars. The cope with the UFC has been a hit for Endeavor, which in 2016 paid roughly seven times its $600 million in 2016 revenue. generated over $1 billion in revenue in 2022.
Ari Emanuel speaks on stage at the 2017 LACMA Art + Film Gala in honor of Mark Bradford and George Lucas presented by Gucci at LACMA on November 4, 2017 in Los Angeles, California.
Stefanie Keenan | Getty Images Entertainment | Getty’s paintings
Endeavor’s enterprise value of only about $11 billion makes WWE an enormous change for the company. The corporate’s relatively small balance sheet would likely prevent Endeavor from winning a bidding war with the media giants. But McMahon’s oversized personality might match the brash Emanuel and UFC president Dana White.
The sale to a 3rd party would also allow WWE to increase the rights renewals every few years. This will or will not be positive for the company’s long-term future as the media distribution ecosystem changes.
Liberty Media
While Endeavor owns the UFC, Formula 1 Liberty Group owns Formula 1. Liberty’s controlling shareholder John Malone and CEO Greg Maffei, together with Formula 1 CEO Stefano Domenicali, found out how to sell the motor racing league globally, including smashing American culture after many years of oblivion.
Malone and Maffei have extensive experience in maximizing media valuations and acquiring media assets for lower than $10 billion, including Formula 1, Sirius XM and Pandora. Formula 1’s global success could provide a roadmap for WWE’s future strategy.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
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