World Wrestling Federation floats $173 mil IPO
NEW YORK — Vince McMahon’s World Wrestling Federation Entertainment Inc. is jumping into the ring with Wall Street, filing Tuesday for an initial public offering to raise $173 million.
The Stamford, Conn.-based producer of top-rated cable show “Raw Is War” is likely to launch its IPO in September or October. Proceeds will be used for general corporate purposes, and could go toward expanding the company’s Internet operations, developing new genres of television programming and upgrading its TV and post-production facilities.
WWF turns out nine hours of programming a week, produces 200 live events each year and publishes two monthly magazines. It also markets its own branded merchandise and licenses the WWF brand to 85 other companies.
Going to the mat
Fund managers who buy media stocks expressed some interest in locking up with the stock.
“I believe that this is one of the great brand franchises in the country,” one investor said. “Of course, it depends on the numbers.”
WWF, which is owned by McMahon and his family, didn’t say how much of the company is for sale or give an estimated price range for the shares — details that will be provided in subsequent filings. It did reveal that revenue nearly doubled in fiscal 1999 to $251 million and net income soared to $56 million from $8.5 million.
As the numbers attest, professional wrestling is hot. “Raw Is War,” which airs on USA Network, had 26 of the top 30 hourly ratings on Nielsen’s list of most watched shows on all basic cable networks for the second quarter of 1999.
The activity can also be dangerous. In late May, wrestler Owen Hart plunged to his death in a stunt gone wrong at the Kemper Arena in Kansas City, Mo. Although the Kansas City District Attorney’s Office said last week it will not be issuing criminal indictments, WWF still faces a suit filed by Hart’s family.
The company said it hasn’t responded to the suit yet but intends to deny all liability. Still, WWF said in its Securities and Exchange Commission filing that it believes “an unfavorable outcome of this suit may have a material adverse effect on our financial condition.”
The company, and investors, also noted that WWF has a major competitor in World Champion Wrestling Inc., owned by deep-pocketed Time Warner. However, WCW programs, shown on Turner networks TNT and TBS, have failed to pin down the stellar ratings of the more outrageous WWF fare.