WWE’s stock surged Monday after its latest SEC filing, one that detailed around $14.6 million of unrecorded expenses that will be paid back by longtime CEO and chairman Vince McMahon.
McMahon stepped down Friday amid allegations he paid more than $12 million to four women to suppress sexual misconduct and infidelity allegations over the last 16 years.
Despite the scandal and no longer holding an official role at the company he led since 1982, McMahon will likely have a say on whether the WWE goes on the market.
Front Office Sports reported Friday that Endeavor, Comcast’s NBCUniversal Media, and Liberty Media are potential suitors if the company’s board — now led by Vince McMahon’s daughter, Stephanie — decides to explore one.
“I think it’s a very digestible asset,” LightShed Partners analyst Brandon Ross told Front Office Sports. “The big question is whether or not the family wants to sell? At the end of the day, they still have voting control. So, essentially, you need to be in the inner circle of the McMahon family to understand whether Steph and [WWE executive] Paul [Levesque] want to run this for the long term and to keep the legacy going, perhaps with Vince a little bit in the background. If they don’t, now is definitely a good time to sell.”
WWE’s stock closed up 8% Monday as it eclipsed $71.84 per share, near a 52-week high. The wrestling company’s stock is up more than 40% over the last 12 months.
McMahon remains the largest WWE shareholder with more than 28 million shares (about 38%) and about 80% of the company’s voting power, according to a 2020 filing.
With the company’s $5.3 billion market cap as of Monday, McMahon’s chunk of WWE works out to about $2 billion.
Most companies get a premium in an acquisition, although the uncertainty of investigations — outside the ongoing internal review of McMahon’s conduct — could give buyers pause if WWE decides to sell.
The quarterly report stated WWE “has received, and may receive in the future, regulatory, investigative and enforcement inquiries, subpoenas or demands” related to McMahon’s leadership of the company.
Endeavor purchased a controlling stake in UFC for $4 billion in 2016 and has since bought the rest of the leading MMA promotion.
“We think Endeavor would be a great acquirer and we believe they would be interested,” Ross said. “There would be tons of synergies with the assets they already own. You could see some of the things that [CEO] Ari Emanuel was able to unlock for UFC. Whether it’s on the sponsorship or live event side, there are things that could really help WWE.”
Formula One was acquired by Liberty for $4.4 billion in 2016, a series that has since gained a stronger foothold in the U.S., adding a second race stateside this season in Miami with a third slated to debut in Las Vegas next year.
NBCUniversal, through its Peacock streaming service and the USA Network, already has deals with WWE. Fox’s deal to broadcast WWE Friday Night SmackDown and NBCU’s deal for Monday Night Raw expire in 2024.
More than the turmoil WWE has experienced and the potential investigations hinted in Monday’s filing, there could be hesitancy about the promotion’s dealings with Saudi Arabia akin to the uproar over Liv Golf. WWE reportedly receives $50 million per event as part of a 10-year deal that runs through 2027.
