So…let’s talk about what happened on Friday in the best way that a guy with barely any knowledge of the stock market can do.
The WWE’s much hyped announcement of a television deal with NBCUniversal fails to impress the market. While the WWE did receive a nice $160 million for US television rights, the deal doesn’t look so well considering the last deal was for $95 million (Adjusted for inactive programming) for US television rights. This does sound great until you realize that those numbers pale in comparison to some of numbers that sports leagues are getting. Major League Soccer’s new television deal went from netting them $27.9 million dollars per year to $90 million dollars a year. Last year, NASCAR landed a 10 year deal with NBC and Fox that netted them $8.2 billion dollar deal (Going from $560 million a year to $820 million). Many in the company believe that the WWE was going to get a large NASCAR like deal. Not exactly a billion dollar deal but still somewhere in the high hundred millions, but that obviously did not happen.
[adinserter block=”1″]Along with the less than stellar Network numbers (670,000 subscribers) which caused a stock tumble (Twenty percent), things were not looking good. According to Forbes the company needs about 1.3-1.5 million subscribers to justify breaking away from PPV. The network still has to launch overseas, so they may be able to hit that number in the end. The biggest problem is that the WWE is going to take a big hit this year, with an OIBDA loss of $35-$45 million and a net loss of anywhere from $45-$25 million.
Today, all this resulted in the WWE’s stock plunging a resound 43.45 percent down to $11.27, down from $19.96 the previous day. At one point, the WWE’s stock was up to $31 so this is a massive purge for the company. You know that scene in Cabin in the Woods, the Purge scene specifically? I’m just going to presume that it was something similar to this. We all know that Eric Garguilo, our deathmatch commentary overlord is a holder of WWE stock and I actually considered investing at one point. This is what happens when you put Kane in a main event people.
The biggest news was the fact that Vince McMahon himself, the company’s biggest shareholder lost $357 million today, a third of his fortune. The biggest problem in all of this was Vince and others talking up how he was expecting to double the previous numbers; Vince even referenced a NASCAR like deal for the company. So, one could presume that the company knew that NASCAR money was a no go but they didn’t do anything to calm any expectations of a super deal. It should be noted that the company has set up a conference call for 11:00 AM to try and sort out the current mess they’re in.
Well, the mess has gotten messier, and the biggest heel in company history has now arrived on the scene.
Wrestling Inc. reported today that Lemelson Capital, a private investment management firm has bought a major stake of shares in the company. The group first received notice in the wrestling world when they declared the value of the WWE’s stock was actually between eight to eleven dollars. This of course was at the point when WWE stock was higher than it has been in a long while. The company cited the numbers that I cited from Forbes and has also decreed that the company misled people in the hype for the network, and that drastic changes are needed based off the current financial losses among other aspects cited by the group. What are those changes you may ask?
Well…they want the company to sell or the replacement of executive management. Which would mean that the group is pretty much calling for the head (and grapefruits) of Vince McMahon. Now, before you laugh at the thought of this, the group made a rather cunning move waiting for the stock to bottom out. Vince owns 87 percent of the shares so while I highly doubt any type of hostile takeover are in the plans.
[adinserter block=”2″]Monday will be an interesting day for the WWE, maybe the stock stabilizes and we all have a good laugh over this. Heck, it gave me a reason to write something like this up. Maybe the company announces that it’s going back to a private company, but this is a rather muddled situation that may involve possibly having to put the company up for sale. We really don’t know, but I presume many people in the industry are going to be watching the webcast and calling in. This could be the start of the darkest timeline for all we know.
So I pretty much did a substandard Chris Harrington impersonation (Follow him at @mookieghana) on short notice. See you next time.
Robert Goeman has been writing for CamelClutchBlog since 2014 and has written for FiveOuncesofPain and What Culture. Follow him on twitter at https://twitter.com/RobertGoeman. After every article, Robert usually does “Talking Points” on twitter, bringin up points that didn’t make the article.
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