What’s next for WWE?
On the afternoon of Jan. 5, Stamford-based WWE (NYSE:WWE) experienced the corporate equivalent of a coup dӪ̩tat when former Chairman and CEO Vince McMahon, who abruptly retired last July amid revelations of secret hush money payments to former female employees who accused him of sexual harassment, used his voting power through his majority ownership of Class B-stock to elect himself as the companyӪs executive chairman.
McMahon, who also forced the removal of three independent directors and the appointment of former WWE co-presidents Michelle Wilson and George Barrios to the board of directors, declared that he muscled his way back into the leadership position so he could engineer the company”™s next round of media rights negotiations and possibly set up a sale of WWE.
“WWE is entering a critical juncture in its history with the upcoming media rights negotiations coinciding with increased industry-wide demand for quality content and live events and with more companies seeking to own the intellectual property on their platforms,” said McMahon in a statement issued by the company. “The only way for WWE to fully capitalize on this opportunity is for me to return as executive chairman and support the management team in the negotiations for our media rights and to combine that with a review of strategic alternatives. My return will allow WWE, as well as any transaction counterparties, to engage in these processes knowing they will have the support of the controlling shareholder.”
McMahon added a thorny caveat to his return ”” he would use his majority stock ownership power to block any media rights deal or potential sale unless he held the executive chairman position.
Photo courtesy of WWE.
To make sense of a situation that bears no resemblance to the machinations of any other major corporation operating today, the Business Journals called on the expertise of several prominent wrestling industry-focused journalists who have tracked McMahon and WWE for years. For starters, these experts pointed out that McMahon”™s over-the-top behavior was not limited to his often-outrageous antics on the WWE broadcasts.
“It was never outside the realm of possibility,” said Patrick Mocella, content lead with The Sportster, regarding the nature of McMahon”™s resumption of power. “But I”™m surprised he”™s doing it now at this time with the with the Royal Rumble coming up soon and WrestleMania season heating up. I would have thought that he learned the product would be the center of attention right now instead of him coming in like a bull in a china shop and grabbing all this media attention, which would take it away from his events. I guess I”™m a little surprised at the timing, but I”™m not entirely surprised that he”™s doing what he”™s doing. He”™s always been the control freak.”
Yet Andrew Ravens, pro wrestling beat writer with Wrestling News, pointed to a Wall Street Journal report based on input from unnamed sources that claimed McMahon rued his departure from WWE last summer after it was revealed he paid more than $14 million to four former female employees over 16 years to gain their silence over allegations of sexual misconduct and infidelity.
“Some could say that Vince is a control freak, but I think he did not want to step away this past July,” Ravens said. “He”™s reportedly told those close to him that he felt like he was given bad advice to resign as chairman and CEO of the company. And I think after time, he decided, ”˜You know what? I want to come back.”™”
However, McMahon did not agitate for reinstatement to CEO ”” his daughter Stephanie McMahon and Nick Khan continue to hold the co-CEO positions they gained in July. Nor did he demand to have a hand in WWE”™s creative management, with Stephanie”™s husband Paul Levesque ”” a former WWE wrestler best known to fans as Triple H, has been the chief content officer position since McMahon”™s exit.
“I think the executives are going to stay in place ”” at least their titles are going to stay the same,” predicted Brandon Thurston, editor of Wrestlenomics. “As executive chairman, I think it is going to mean that he”™s going to function as de facto CEO, while co-CEOs Nick Khan and Stephanie McMahon are going to maintain their titles. He did write in his letter to the board, which was published as part of the filing, that he fully supports the management team, but that was before the board said that they wanted him to sign a letter that for a green light to come back that he will repay the expenses related to the investigation.”
The investigation that Thurston referred to was an internal probe conducted by the WWE board of directors after the hush money story broke in the Wall Street Journal ”” and that investigation cost the company nearly $20 million. Federal prosecutors and the U.S. Securities & Exchange Commission also began their own probes into the matter. McMahon has never issued any public statement on this issue, which wrestling industry experts believed could weigh against any effort to sell the company ”” especially if McMahon insists that he remains in a leadership position.
“The thought is that he is going to want to sell this to someone who”™s going to keep him in power in some capacity,” said Jason Powell, founder and owner of ProWrestling.net. “And the question is: Can you find that buyer? If you”™re Fox or if you”™re Comcast, do you want a guy with the baggage Vince has to be the face of this company that you acquire? And that”™s where maybe the Saudis make a little more sense ”” if that”™s his ultimate goal, to keep power and to take it private, so then he does what he does.”
Who Will Buy?
Powell”™s Saudi Arabian reference was to the kingdom”™s Public Investment Fund (PIF), which has $620 billion in assets and has been cited in some media reports as possibly seeking to buy WWE. The company and the kingdom have been doing business together since 2018 when WWE signed a 10-year agreement to produce two live events in Saudi Arabia annually. And the PIF has made itself known in the global sporting world ”” it has a majority ownership in Newcastle United of the English Premier League and is financing LIV Golf as a challenger to the PGA Tour; it also has stakes in several video game companies including Activision Blizzard, Electronic Arts, Embracer, Nintendo and Take-Two Interactive.
“I don”™t know how realistic that is,” said Powell of a PIF takeover. “But that certainly been a topic of conversation.”
On Jan. 10, Cassidy Haynes, owner and editor of BodySlam.net, filed a news story that used unnamed sources to insist WWE was sold to PIF and would become a private company. But neither WWE nor PIF acknowledged that story and other journalists who cover wrestling rejected it as inaccurate.
For Wrestlenomics”™ Thurston, more likely buyers for WWE would be Comcast, Fox Sports and Endeavor Group Holdings ”” the latter owns Ultimate Fight Championship. Yet he also wondered aloud if having ownership of WWE is something that these companies could manage successfully.
“The question is: Do any of these companies want to acquire a wrestling company and whatever stigma comes with that?” Thurston said. “Wrestling is a strange business and you need people who have the expertise to know how to manage it. There are a lot of examples throughout history of wrestling companies being overseen by larger parent companies that didn”™t have a great idea of how to manage them. A great example of that is WCW, when it was overseen by Ted Turner”™s company, and that went out of business.”
Advantage, AEW?
Up until relatively recently WWE mostly had the U.S. pro wrestling sector ”” other national promotions including Impact Wrestling and Game Changer Wrestling are much smaller and have less visibility via television and streaming.
The only major rival to WWE in terms of the production values and visibility is All Elite Wrestling (AEW), which was started in 2019 by Pakistani-American sports tycoon Shafid Khan and his son Tony Khan; the younger Khan also owns the Ring of Honor wrestling promotion.
AEW has grown in popularity by attracting several major stars who previously worked with WWE, most notably Chris Jericho, Billy Gunn, Jon Moxley (formerly known in WWE as Dean Ambrose), Saraya (formerly known in WWE as Paige) and CM Punk. AEW has also generated its own stars who have begun to show up in mainstream media and pop culture, including MJF, Orange Cassidy and The Acclaimed tag team of Max Caster and Anthony Bowens.
After McMahon left WWE last July, Paul Levesque used his role as chief content officer to bring back several popular wrestlers who had been fired by McMahon ”” who, according to the wrestling journalists, was not the most beloved presence with either his musclebound workforce or their fans.
“I think Vince has shown he”™s out of touch,” said ProWrestling.net”™s Powell. “I think he has shown that he can still produce some of the bigger events ”” it”™s the week-to-week television where he really struggles with a lot of rematches, storyline gaps, and just not having his finger on the pulse of what people want. I think Paul Levesque is a much better booker at this point.”
“A lot of talent is concerned, especially those who were rehired,” said Thurston regarding WWE”™s wrestlers. “From employees who I talked to, there”™s a lot of anxiety and nervousness about what”™s going to happen next.”
Thurston speculated that AEW could potentially capitalize on McMahon”™s return “because it means as he”™s coming back that may hurt the morale of talent.”
Yet The Sportster”™s Mocella believed AEW would not benefit from whatever internal turmoil McMahon inflicts on his company.
“I don”™t think it really affects them any way at all,” he said. “They might get a little more of a bump because if fans are opposed to Vince returning, which a lot of fans are. But they probably have already left for AEW. I feel any fans that have had enough of Vince would have already left.”
Is There a Plan B?
Although WWE has reportedly retained JPMorgan as its advisor on a sale, there is guarantee that a sale will be transacted. And that raises another question: What becomes of WWE if there is no sale?
“With the sale of the company, I think that”™s just simply a way in for him,” said Wrestling News”™ Ravens. “Because he”™s essentially forced his way in. I think everything and anything is on the table, but I don”™t know if a sale is that likely. Whoever”™s going to buy the company, will they want Vince in charge and would Vince make it a stipulation of the contract that he remains in charge? There”™s a lot of questions regarding a sale.”
The Sportster”™s Mocella believed McMahon”™s desire to stay in control of the company that he has run for four decades will ultimately make or break any deal.
“It all depends on to me how much Vince wants to extend his influence and his power again,” he said. “He said there will be as a great management team and he won”™t get involved with that ”” now, of course, that”™s what he says. Will he really follow through on that? That”™s tough to say ”” probably not, given he has a history of being a power-hungry egomaniac. And I”™m sure he would accept that as a compliment if someone told that to him.”
The Business Journals reached out to WWE for input on this article but received no acknowledgment of its messaging.