Vince McMahon’s WWE boardroom coup seems like a storyline from the golden age of professional wrestling in the late ‘90s.
Back then, WWE’s “Monday Night Raw” and rival WCW’s “Monday Nitro” would frequently feature dramatic issues that would seem unrealistic, to say the least.
But after exiting in disgrace six months ago, McMahon’s announced return to the WWE board this week along with two executives he fired three years ago — pushing out three board members and prompting another two to resign — is proof that truth is stranger than fiction.
McMahon’s intentions are to try to initiate a sale of WWE, likely to a current media partner, before the current TV deals expire in 2024 for USA’s “Raw” and Fox’s “Smackdown.” In a press release McMahon put out independently, it notes there is a small window of opportunity for the WWE to maximize its value — selling to a media company — and that is why he is returning to the board, presumably because he believes no one else is capable of negotiating a sale or a rights deal.
The issue here is that the window of opportunity has passed. The time to try and sell the company was over the summer, when McMahon was first embroiled in the series of hush-money scandals that forced his resignation.
What is motivating McMahon to seek a sale now are the exorbitant increases in rights sports content has had in recent years, with many, including WWE’s last renewals, seeing triple-digit increases. The thinking is that rather than pay for these increases each renewal, it would be more economical in the long term to own WWE outright and then simply not have to pay for any increases as it's all in house.
But as Q3 earnings and subsequent market reactions testified, there is a new focus on reducing spending amidst a consumer slowdown, possible recession and focus on profitability at media companies. Now is not the time to announce a shiny new toy that typically yields between 1.5 million and 2 million weekly viewers on cable (“Raw”) and 2 million to 2.2 million network viewers (“Smackdown”).
TV programming spend is slowing down: Ampere Analysis estimated that in 2023, total spend will only grow by 2% on the prior year.
It’s possible this is a move motivated by spite. VIP+ has long detailed how the last few years of McMahon’s charge of creative was full of flimsy excuses for poor performance and lost audience that withered under any type of examination.
The hush-money scandal was the only way McMahon was going to leave WWE, and it must have been a bitter pill to swallow to see the stock price constantly improve once he was gone. In 2022, the period when McMahon was at WWE saw an opening price average $59.07, which improved to an average of $72.81 (+24%) following his resignation.
A lot of credit for that had been laid at the feet of Paul “Triple H” Levesque, erstwhile world champion and head of WWE’s developmental brand, NXT. He succeeded McMahon as head of creative and was lauded for injecting logic back into storylines and making a more compelling product to watch.
But it could have been that investors smelled blood in the water. Knowing McMahon’s proud nature, it could be time that a sale would be at least explored. Rumors around this have swirled for years, ever since Nick Khan was hired as WWE president in 2020.
The fact that the stock price spiked to $80.05 once markets opened following McMahon’s announcement — levels not seen since the end of November — shows investors think this is a possibility. And it may well happen, but with market conditions considerably different than the summer of 2022, it will likely not be for as much as it could have been. And for that, McMahon must blame himself.