Following Vince McMahon’s retirement it has been suggested that WWE could be sold, but could it actually happen?
On July 22nd Vince McMahon announced his retirement from WWE. The news caught the wrestling world by surprise and sparked speculation that the company could be sold.
Now that McMahon has stepped down, he has been replaced by co-CEO’s Nick Khan and Stephanie McMahon. Stephanie will also serve as Chairwoman.
Interestingly, in WWE’s annual report in 2021 the company listed McMahon’s potential departure as a risk factor and warned against the consequences of him leaving.
“The unexpected loss of the services of Vincent K. McMahon could adversely affect our ability to create popular characters and creative storylines or could otherwise adversely affect our operating results,”
“The loss of Mr. McMahon due to unexpected retirement, disability, death or other unexpected termination for any reason could have a material adverse effect on our ability to create popular characters and creative storylines or could otherwise adversely affect our operating results.”
This led many to believe that McMahon’s exit could be bad for shareholders. However, on Monday, July 25th, WWE’s stock price closed at it’s highest price since September 2019.
A report from CNBC noted that the rise was “driven by heightened investor sentiment that a sale is coming.”
WWE’s Nick Khan has previously stated that with regard to a hypothetical sale, that NBCUniversal could be the front runner. After all, the company owns the rights to Monday Night Raw, and Peacock which also comes under the same banner, owns exclusive streaming rights for the company.
The report from CNBC adds:
“There aren’t many entertainment companies with global scale that come up for sale with an easily digestible price tag for many potential suitors. WWE isn’t engaged in sale talks, according to a person familiar with the matter. But McMahon’s retirement may open the flood gates on offers that could be too good for the company to turn down. WWE, whose shares have climbed about 40% this year contrary to broader stock declines, has a market valuation of about $5 billion.”
While Citi analyst Jason Bazinet said in a note to clients, “We suspect the Street will interpret Mr. McMahon’s retirement as a precursor to an eventual sale of WWE. We’re not sure that is a reasonable conclusion since WWE will still be a controlled company with 100% of the Class B shares held by the McMahon family.”
WWE disclosed via a SEC filing on July 25th that they’ve made “a preliminary determination” regarding payments made by McMahon. The payments made between 2006 and 2022 totalling $14.6, should have been recorded as business expenses.
As a result, WWE will be reissuing financial statements for 2019, 2020, and 2021, as well as Q1 of 2022. They aim to republish these statements by Tuesday, 9 August, though “there is no assurance that it will be able to meet this deadline”.
McMahon is already under investigation regarding allegations that he paid a former employee $3 million in “hush money” after the pair had an affair. More allegations have since been made public, including claims that McMahon paid four women more than $12 million across 16 years as part of similar agreements.