Who will buy WWE, when McMahon returns to the board to pursue the sale

Vince McMahon is back World wrestling entertainment board of directors to facilitate potential acquisition negotiations prior to renewing the company’s media rights.

The concept of selling WWE is not new. CNBC reports medoesn’t look like a sales target in April and that it only appears more attractive in July after the sexual harassment scandal. The reason is quite simple: WWE is valuable intellectual property.

Owning IP allows streaming services to offer exclusive content without the trouble of winning licensing rights in an auction every few years. WWE is also valuable to offer in sales businesses and amusement parks.

WWE has hired JPMorgan to help the company advise on a potential purchase, according to people familiar with the matter. JPMorgan declined to comment. A WWE spokesperson could not be immediately reached for comment.

If a deal does happen, it will likely happen within the next three to six months, the people who requested anonymity said because the discussions are private. WWE plans to talk to potential buyers before making a decision on television rights renewal deals.

The former CEO and chairman is 77 years old and a controlling shareholder of WWE. He stepped down after a investigation see that he has paid almost $15 million for four women over 16 years to quash allegations of sexual misconduct and adultery. Going back to the board gives the potential buyer confidence that he backs the details of any transaction.

“My return will allow WWE, as well as any trading partners, to participate in these processes knowing they will have the support of a controlling shareholder,” McMahon said in a statement. Dad on Thursday.

McMahon’s return does not affect the current leadership. McMahon’s daughter, Stephanie, and former CAA agent Nick Khan are co-CEOs. But it remains unclear what kind of role, if any, McMahon would want in WWE if he sold the company. WWE has told investors that McMahon’s role at the company is essential to “our ability to create popular characters and creative storylines.” Currently, McMahon has no official say in the company’s creative direction.

Whether buyers will feel comfortable with McMahon taking on a more hands-on role at the company is unknown. But WWE is McMahon’s lifelong work. It’s likely that a sale can only happen with at least some constraints attached.

WWE has a market capitalization of more than 6 billion USD after increasing by nearly 17% percent on Friday, buoyed by heightened selling speculation.

There are three types of buyers likely to buy WWE – legacy media companies, streamers, and entertainment holdings. These are people who may be interested.

Comcast, which owns NBCUniversal, has the potential to be a good fit as a WWE buyer. McMahon’s company already has an exclusive streaming deal with Comcast’s streaming service Peacock and a cable deal with NBCUniversal’s US Network. Comcast has a market capitalization of over $160 billion and can easily pay off the company — especially with a $9 billion (or more) check. coming soon after January 2024 from Disney with a 33% stake in Hulu.

Comcast can lock WWE permanently without paying upcoming rights renewals and can use the company’s IP for other theme parks, movies, and spin-offs.

However, Comcast CEO Brian Roberts said in October “highest ever for M&A” and has repeatedly said that the company is in no hurry to pursue an acquisition.

Returning CEO Bob Iger may want to make a grandiose acquisition as he reclaims the throne at Disney. WWE fits Disney the same way it fits Comcast. It will bolster Disney’s (presumably ESPN+) streaming ambitions, it will support its linear network business, and it will add strength to its theme park and merchandising business.

Comcast doesn’t want Disney to ditch Fox in 2019 and pushed the price into the tens of billions by surpassing Iger’s original bid. Can Iger see WWE as the next IP battle between Disney and rival Comcast?

Netflix has long shied away from sports and other live events, but it has recently become open to the idea of ​​outright owning a league or holding an ownership stake. Owning a sports league gives Netflix the ability to create video games and spin-offs without a hitch. Netflix has enjoyed success with its Formula 1 “Drive to Survive” documentary series, leading co-CEO Reed Hastings to believe that certain sporting properties will resonate with audiences. Netflix’s global giant. But Netflix doesn’t own Formula 1, limiting its future options.

Acquiring WWE or another sports league would be a path toward providing live entertainment without renting content — similar to Zaslav’s thinking.

Co-CEO Ted Sarandos said: “We have not seen a profitable path from the rental of major sports. last month at the UBS Global TMT Conference. “We’re not against sport; we’re just for profit.”

effortsrun by super agent Ari Emanuel, can add WWE to stable assets later agree to buy 100% of UFC shares in 2021.

Emanuel bought the UFC to expand the talent agency’s business into live events. WME-IMG, now just part of Endeavor, represents many UFC athletes — as well as WWE superstars. The deal with the UFC has brought success to Endeavor, which paid out seven times the $600 million in revenue of 2016. UFC generate over $1 billion in revenue by 2022.

Endeavor’s enterprise value is only around $11 billion making WWE a huge hit for the company. The company’s relatively small balance sheet will likely prevent Endeavor from winning a bidding war with the media giants. But McMahon’s outsized personality could be a match for Emanuel and UFC President Dana White.

The sale to a third party would also allow WWE to increase the grace period every few years. That may or may not be positive for the company’s long-term future as the media distribution ecosystem changes.

While Endeavor owns the UFC, Liberty’s Formula 1 Team owns Formula 1. John Malone, the controlling shareholder of Liberty, and CEO Greg Maffei, along with Formula 1 CEO Stefano Domenicali, figured out how to market the racing league globally, including the disruption of American culture after decades of obscurity.

Malone and Maffei have a track record of maximizing vehicle valuations and purchasing vehicle assets for less than $10 billion, including Formula 1, Sirius XM and Pandora. Formula 1’s global success could provide a roadmap for future WWE strategy.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

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