Vince McMahon no longer a billionaire; Loses $350M; WWE Stock plummets after NBC Deal

[shadyfozzie]

Personally, I think that the WWE is involved with TOO much non-wrestling stuff.. Total Divas, WWE films, etc.. Maybe cut some of the fat and re-invest their money into their product.

How much have they gained/lost on all those WWE movies?? I don't think any of them were slightly successful (or even broke even) in terms of revenue..

And what's the viewership on Total Divas?? do people even watch it?? I think they are branching out too far and wasting money the don't really have to..

 

[SoulTrain4]

WWE films is a bastard. They could save money just by getting rid of it but I guess they enjoy the diversity of interests.

Total Divas was a surprise hit show and while I'll never watch a single episode, it gave them something for the women they already have signed to do and thus I support it.

 

[scomvp316]

For someone asking what is "Special Situation" investment:
They are like troubleshooters for the boardroom They come in to companies that are struggling that they think are worth a suitable investment They usually stay for a couple of years and if things work out they keep one member of their own on the board During the Eisner fiasco with Disney their were some "Special Situation" investment employees on the Disney Board There is about close to 100 investment companies that just deal with dire situations I don't believe VKM would ever allow one of these companies to be on the board unless they buy significant %'s of stock like around 40%

 

[Slyfox696]

Bottom line is this – unless WWE catches on with the general public like it did in the 80’s or late 90’s it is very likely it goes back to the dark ages.

Just not true. The WWE has done a fantastic job leveraging itself into the mainstream media.

I know this will offend many here but I say this as a lifelong wrestling fan, the last 10 years of WWE has been unwatchable (actually even longer) Now if it’s unwatchable to a lifelong fan like myself it’s easy to see why ratings are so low.

But ratings are not low, that's the thing. Monday Night Raw is consistently one of the top shows on cable. It's never a surprise for it to be the #1 show on cable for the week.

Ratings are not low and live entertainment which is less susceptible to DVR is highly sought after right now.

I’m sorry but NBCU is not going to give WWE a 100% increase for the product it’s put out the last ten years.

NBCU isn't going to care about perceived quality of the wrestling, they are going to care about how much money they can make from it. NBC isn't going to watch the show and say "I don't like how they are using Dolph Ziggler", they are going to say "How do they fare in the 18-49 male demographic?"

Never mind the ratings continue to fall year after year.

But they don't really. And any minor decline can usually be directly linked to DVR, internet streaming and the addition of more and more cable TV channels.

The thing is you just don’t hear about wrestling anymore unless you look for it.

This is just not true either. Wrestlers are on talk shows all the time, they are in movies, they get articles written on ESPN/Grantland. They do ceremonial first pitches, their slogans and gestures are repeated throughout the sports world (You Can't See Me and the Yes! chants are very popular) and wrestling in general is more positively regarded in the mainstream than ever before.

I’m a social person with extended family, friends, etc and haven’t heard a peep from anyone about wrestling since the late 90’s.

You're also much older than you were in the late 90s and tend to associate with older people. Pro wrestling does not usually do well with people after the age of 30.

Bottom line - there are no more household names – ask 100 people on the street and I guarantee no more than 2 people would know who John Cena, CM Punk, Triple H, Shawn Michaels, etc is.

John Cena and Brock Lesnar would be fairly well known.

Bottom Line – No household name = 2nd rate entertainment that will be frowned upon.

But entertainment which consistently finishes in the Top 5 every week of cable ratings. Entertainment which regularly pulls in tens of millions of dollars in profit.

While I appreciate the intelligent post (and it was, even if I don't think it's anywhere close to accurate), the fact is it appears you don't really follow the business side close enough.

 

[JoeyJoeJoe]

The issue is not whether the WWE makes money or not -- it does.

The issue is whether the WWE is a good investment. It's not. The WWE's growth has been flat for years. The only time any investor has made money on the stock is by timing their entrance into the stock just right. The WWE HAD to provide a return to investors: Hence their dividend...without it, they'd be providing most investors with no return or a negative return. I don't think the SEC is going to find much in the WWE to say they misled people. They made forward looking statements and projections that didn't pan out; that's a far different thing than deliberately misleading people.

 

[Planet_Velvet]

jmt225, the same can be said about stocks. For the most part, WWE stock tends to drop around this time of year anyway. It usually tanks to its lowest point around the end of summer, beginning of fall. However, this is gonna be tough for WWE. Anyone who thinks WWE makes their money solely on in-ringwrestling is crazy. Theme songs, merchandising, and a bunch of other stuff play a role in WWE's business deals and investments paying off. I agree with yu saying that things are built for long term success. The potential turnaround will be interesting to see if it ever comes to pass.

 

[Breaks Silence]

Thanks for your responses Slyfox696

While I don’t agree WWE is a solid as you believe I respect your passion around the company.

I see it this way:

WWE finally had a chance to renew their television rights after years of saying they were gonna double them. Everyone bought stock. Turns out WWE’s new deal with NBCUniversal only increased their percentage by a quarter — half of what they were asking/bragging for — and whoops, folks didn’t like that.

On top of the underwhelming TV deal, WWE needs 1.3-1.4 million subscribers to the WWE Network and so far has only brought in about 670,000. Hardcore fans signed up the second it was available, yeah, but how do you get average, non-wrestling-obsessive people interested in old Great American Bash pay-per-views? So far the Network’s big plays have been “a reality show about old wrestlers” and “recommend this to your friends and we’ll give you gift cards.”

I see these two collapses as a huge warning sign about what it to come. Now I’m not one of those crazies that think WWE is going out of business but I do think WWE running status quo year after year for the last 15 years is closer to the truth than the Hollywood studio sized entertainment juggernaut WWE wants you to believe they are. Heck, I think even THEY believe they are much bigger than they actually are.

Thing is wrestling goes in cycles but 15 years is way too long for WWE not to have a boom period. I harp on the household name because everything today is quantified and judged based on the latest trending. WWE has not created a household name to pull addition fans to the product since Rock & Austin. All these ‘big names’ argued about on boards like this in last 10+ years haven’t made a dent in the general public’s world, they just keep the status quo wheels turning.

WWE needs a superstar to break this 15 year drought with a superstar that catches the general public’s eye. Someone that will bring in new viewers and their friends too. If not, WWE continues to lose viwers / sales each year slowly until the product drys up. It won’t go bankrupt but will be a far cry from mainstream entertainment.

 

[endless]

On top of the underwhelming TV deal, WWE needs 1.3-1.4 million subscribers to the WWE Network and so far has only brought in about 670,000. Hardcore fans signed up the second it was available, yeah, but how do you get average, non-wrestling-obsessive people interested in old Great American Bash pay-per-views? So far the Network’s big plays have been “a reality show about old wrestlers” and “recommend this to your friends and we’ll give you gift cards.”

The network's big play is all ppvs for $10 a month.

Interesting ppvs = more subscribers and customer retention.

WWE can put on interesting ppvs.

 

[Slyfox696]

WWE finally had a chance to renew their television rights after years of saying they were gonna double them.

I'm not sure how true this is. In fact, as little as five years ago, the reports were the WWE was expecting far less on TV contracts than ever before.

Everyone bought stock. Turns out WWE’s new deal with NBCUniversal only increased their percentage by a quarter — half of what they were asking/bragging for — and whoops, folks didn’t like that.

As I said earlier in the thread, using 2014 WWE stock as an indicator of anything is pointless. The stock price was driven up by speculation, not by anything else. And like what usually happens, unless news is overwhelming awesome, the speculators sold to the suckers and made off like bandits.

On top of the underwhelming TV deal

I guess I don't understand how making 25% more money than you were making is underwhelming. I would consider making 25% LESS money than you were making to be underwhelming.

WWE needs 1.3-1.4 million subscribers to the WWE Network and so far has only brought in about 670,000.

But we're not even halfway through the year.

Hardcore fans signed up the second it was available, yeah, but how do you get average, non-wrestling-obsessive people interested in old Great American Bash pay-per-views?

With original programming, just like HBO (and Netflix, sort of) did. You create your own shows, make your network the place to watch them and you get subscribers.

So far the Network’s big plays have been “a reality show about old wrestlers” and “recommend this to your friends and we’ll give you gift cards.”

And they still have three quarter of a million subscribers in less than 6 months. I'd say that's impressive.

I see these two collapses as a huge warning sign about what it to come. Now I’m not one of those crazies that think WWE is going out of business but I do think WWE running status quo year after year for the last 15 years is closer to the truth than the Hollywood studio sized entertainment juggernaut WWE wants you to believe they are. Heck, I think even THEY believe they are much bigger than they actually are.

I think they are bigger than what you realize. If you remove WWE Films from the equation (as well as startup costs for the Network) the WWE regularly profits roughly $50 million every year. Making $50 million a year for what is essentially a televised carnival act is incredible.

Thing is wrestling goes in cycles but 15 years is way too long for WWE not to have a boom period.

Not really. You simply cannot measure modern day standards to standards even 15 years ago. The world is just so much different now.

 

[THTRobtaylor]

The cycle is true of all entertainment, but many have struggled since the digital age as they didn't protect their content early enough and the genie is out of the bottle. For every subscriber there will be someone who streams, for every live attendee of a RAW there will be far more viewers on TV and for every viewer there will now be people who DVR or not watch live/stream later and skip all the ads... so the ad revenue can't be high just like the record company can't charge 20-30 dollars for a CD anymore...

While $50m is a large number, compared to what Marvel are making or sports teamsl clubs it is peanuts... $50m is what Rock makes in a year for NOT doing WWE... so that being WWE's profit isn't great... They're never going to truly compete and that is why it's not a great investment. People will go for a football team or a movie studio rather than WWE.

Take WWE for what it is, a wrestling company with some other production and it's not really great at any of it right now... in the Attitude era, when it went public it was an AMAZING wrestling company... that's the difference. Diversification is the WWE's kryptonite... Vince is ashamed to "just be a wrestling promoter" and he is quickly becoming Ahab chasing the whale of being an "empire". He's not the first... find and read a book called Kiss and Sell... it happened to the band in the 70's and their manager Bill Aucoin is VERY much like Vince right now...

 

[JoeyJoeJoe]

Vince is ashamed to "just be a wrestling promoter" and he is quickly becoming Ahab chasing the whale of being an "empire".

Bingo.

I've thought this ever since McMahon had an interview years ago in which in talked about a phone call he got from Ted Turner, who told him he got into the wrasslin' business. His puffed up for the camera response: "That's great, Ted! I'm in the entertainment business. Big difference".

This is a guy who has always been trying to change the way his business is viewed, but he can't get away from the fact that it is still professional wrestling in the end. The WWE is not the media empire that he has envisioned.

 

[George Steele's Barber]

Bingo.

I've thought this ever since McMahon had an interview years ago in which in talked about a phone call he got from Ted Turner, who told him he got into the wrasslin' business. His puffed up for the camera response: "That's great, Ted! I'm in the entertainment business. Big difference".

This is a guy who has always been trying to change the way his business is viewed, but he can't get away from the fact that it is still professional wrestling in the end. The WWE is not the media empire that he has envisioned.

So what is wrong with trying to change or grow his business? Vince has never abandoned the business. Its not like bodybuilding, XFL, or WWE were meant to replace professional wrestling. He grew up in it and purchased it from his father. He made himself a featured announcer on camera. He brought his wife in to the business and raised his kids to become a part of it. He put himself in dangerous, humuliating, and over the top situations for years on camera and had his family do the same. I'm guessing the CEO of Kraft Foods doesn't even eat his crap products. Vince has eaten his crap in the homes of millions of people for a multitude of years.

Does the guy want more for his legacy? Sure. Does it mean he is embarrassed by his legacy? Considering what he has done in his life, I doubt it. If Vince wanting things to be as they were he'd probably be struggling to cut guys checks right now in the parking lot of some Connecticut high school gymnasium.

 

[beckyh]

Well a few responses to comments.

The Total Divas is one of the top shows on E!. It's the WWE version of the "Real Housewives of...". Reality TV + Hot Men/Women + Drama = Ratings.

Another firm is investigating the WWE for Securities fraud http://www.ademilaw.com/case/world-wrestling-entertainment-inc. We'll see where it goes.

WWE Films is very likely not making its money back but merchandising, live events and the Network are supposed to shore up the profits. The Network was very underpriced and that was a costly mistake. While they may have a third of a million subscribers now, it will be telling to see how many keep their subscription after the six months are up. It is one thing to get a customer and quite another to keep one.

 

[Slyfox696]

While $50m is a large number, compared to what Marvel are making or sports teamsl clubs it is peanuts

But the WWE isn't Marvel or a sports team.

By the way, Marvel isn't making that much more in profit each year. Just saying. And several sports franchises claim they LOSE money each year.

So basically you've been wrong every step of the way. As endless said, you're clueless and you keep exposing yourself as such with each post.

$50m is what Rock makes in a year for NOT doing WWE... so that being WWE's profit isn't great...

You're talking about Rock's GROSS income, before expenses. The WWE brought in over $500 million in revenue last year, before expenses.

It's not even comparable. You don't know what you're talking about.

People will go for a football team or a movie studio rather than WWE.

And yet, the WWE generates more revenue and roughly the same amount of profit (from the wrestling business) as the Green Bay Packers did in their record setting 2012-2013 season.

http://espn.go.com/nfl/story/_/id/9483276/green-bay-packers-enjoyed-record-revenue-profits-2012-13

Take WWE for what it is, a wrestling company with some other production and it's not really great at any of it right now

Revenues over $500 million say otherwise. You're ignorant. Give up.

... in the Attitude era, when it went public it was an AMAZING wrestling company... that's the difference.

But it generated less in revenue and fiscal year 2003 showed a loss of money instead of profit.

There's no doubt the Attitude era was very successful financially. You just don't seem to understand the WWE is very successful financially today as well.

Diversification is the WWE's kryptonite

No, it's not. You just don't seem to understand the concept of time.

... Vince is ashamed to "just be a wrestling promoter"

This is a common Internet refrain and I think it's just stupid.

Vince isn't ashamed to be a wrestling promoter, Vince is intelligent enough to know if you put all your eggs in one basket, you're asking for trouble. What happened in the mid 90s showed him that if your only source of income comes from one place, it can quickly be put in danger. However, if you find various other revenue streams, places which are insulated from your original business, then you're far less likely to have to shut your doors.

Diversification is a common word in stocks and for good reason. And that's all the WWE is trying to do...they are trying to protect their investment.

 

[ilapierre]

Not sure when this thread was posted (and not sure I know all the specifics as I'm only a casual IWC commentator) but I read a really informative article from the Miami Herald posted on this site earlier.


http://www.miamiherald.com/2014/05/23/4133082/wwe-in-trouble-financially-hardly.html

It doesn't go into Vince being investigated and the so-called chance (no chance in hell) he'll lose WWE. But it does go into WWE not being in any real long term financial trouble whatsoever because of their TV deal. As a 10 year investor myself and with a good handle on economics, I can't relate with 75 percent of the bull I'm reading on this thread. Am I missing something huge? Perhaps, but I don't believe so. I have read a few intelligent posts here that make me believe like I have all the specifics (courtesy of Slyfox, endless etc). So I have to thank those C+ trolls for their 'trolling' aka disagreeing with Mr. Know-it-all-Rob-Taylor. If arguing him and thinking a little bit deeper is by definition trolling, then I guess that makes me a troll too.

 

[MayorMcCheese]

he shoulda kept his mouth shut, if he had never said anything i think most investors would have been happy with a 50% increase. what's worse, is stephanie sells a bunch of stock after vince says these things, and it plummets soon after

 

[JoeyJoeJoe]

So what is wrong with trying to change or grow his business? Vince has never abandoned the business. Its not like bodybuilding, XFL, or WWE were meant to replace professional wrestling. He grew up in it and purchased it from his father. He made himself a featured announcer on camera. He brought his wife in to the business and raised his kids to become a part of it. He put himself in dangerous, humuliating, and over the top situations for years on camera and had his family do the same. I'm guessing the CEO of Kraft Foods doesn't even eat his crap products. Vince has eaten his crap in the homes of millions of people for a multitude of years.

Does the guy want more for his legacy? Sure. Does it mean he is embarrassed by his legacy? Considering what he has done in his life, I doubt it. If Vince wanting things to be as they were he'd probably be struggling to cut guys checks right now in the parking lot of some Connecticut high school gymnasium.

I disagree...I think he's run from the word "wrestling" in most instances over the past decade, with really only WrestleMania being the exception due to brand recognition. But wrestling is now sports entertainment, wrestlers are now superstars, and the only way to work a match in the WWE is by doing things the WWE way - i.e. have a certain look, work a particular pace to the match, etc.

I think that he would like nothing more than to move past the WWE and "diversify" his way out of just being wrestling, such as the move into movies. The movie business alone, had it actually worked, could've easily outpaced the wrestling side of things. It just bombed.

 

[George Steele's Barber]

I disagree...I think he's run from the word "wrestling" in most instances over the past decade, with really only WrestleMania being the exception due to brand recognition. But wrestling is now sports entertainment, wrestlers are now superstars, and the only way to work a match in the WWE is by doing things the WWE way - i.e. have a certain look, work a particular pace to the match, etc.

But that's business and proper branding, not embarrassment or a lack of pride decision. "Wrestling" already has a preconception, two guys in singlets trying to score points or get shoulders clearly pressed to the mat. Plus it is legitimate competition. WWE is far from that. You have to understand why you would want to separate yourself from that. Throw in the fact that his top sports entertainers left him for Hollywood and you can kind of see why he wants to sell his main product as more than just "wrestling". Imagine how much more stroke Vince would have over The Rock and Hogan if he could have given them movie roles.

I think that he would like nothing more than to move past the WWE and "diversify" his way out of just being wrestling, such as the move into movies. The movie business alone, had it actually worked, could've easily outpaced the wrestling side of things. It just bombed.

As many things that he has tried, successful or not, he's never steered away from the business. He is still the guy that works obsessively and always has the final say. That is not the reputation of someone who is embarrassed.

 

[kentwhite30]

That's a sad thought for sure! Well, everybody want to follow the footstep of our favorite celebrity however being a celebrity doesn't shield you from making a bad investment.While the magic of celeb may elevate the status related to specific individuals, this does not mean that everything celebs touch turns to gold. Here are a few bad celeb investments that may cause you to feel better during the night.