Who would buy WWE when McMahon returns on board to drive sales?

World Wrestling Entertainment Inc. Chairman Vince McMahon is introduced during the WWE Monday Night Raw show at the Thomas & Mack Center August 24, 2009 in Las Vegas, Nevada.

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Vince McMahon has returned World Wrestling Entertainment Board of Directors to facilitate potential sales discussions prior to the renewal of the company’s media rights.

The idea of ​​selling WWE isn’t new. CNBC reported that it looked like a sell target in April and only looked more appealing in July following a sexual misconduct scandal. The rationale is pretty simple: WWE is valuable intellectual property.

Owning IP allows streaming services to offer content exclusively without the hassle of winning licensing rights in an auction every few years. WWE also has value to offer in the areas of merch and theme parks.

According to people familiar with the matter, WWE has hired JPMorgan to advise the company on a potential sale. JPMorgan declined to comment. A WWE spokesman was not immediately available for comment.

If a deal does come about, it would likely happen in the next three to six months, said the people, who asked not to be named because the talks are private. WWE plans to talk to potential buyers before making a decision on TV rights renewal deals.

facilitating a sale

McMahon’s return should help ensure a smooth sales process, though there could still be hiccups.

The former CEO and Chairman is 77 years old and the majority shareholder of WWE. He resigned after an investigation found he paid nearly $15 million to four women over 16 years to quash allegations of alleged sexual misconduct and infidelity. Returning to the board gives potential buyers the confidence that he will support the details of a transaction.

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

McMahon’s return does not affect the current lead. McMahon’s daughter Stephanie and former CAA agent Nick Khan are co-CEOs. However, it remains unclear what kind of role McMahon wants in WWE if he sells the company. WWE has told investors that McMahon’s role with the company is critical to “our ability to create beloved characters and creative storylines.” Currently, McMahon has no formal say over the company’s creative direction.

Mansoor (below) competes with Mustafa Ali during the World Wrestling Entertainment (WWE) Crown Jewel pay-per-view in the Saudi capital of Riyadh on October 21, 2021.

Fayez Nureldine | AFP | Getty Images

Whether a buyer would be ok with McMahon taking a more hands-on role at the company is unknown. But WWE is McMahon’s life’s work. It is possible that a sale will only take place under conditions to which at least some conditions are attached.

WWE has a market cap of more than $6 billion after rising nearly 17% percent on Friday, boosted by heightened speculative selling.

There are three categories of potential buyers for WWE – the legacy media companies, the streamers, and the entertainment holdings. Here’s who might be interested.

Komcast

Komcast, which owns NBCUniversal, is a potential buyer for WWE. McMahon’s company already has an exclusive streaming deal with Comcast’s streaming service Peacock and a cable TV deal with NBCUniversals USA Network. Comcast has a market cap of more than $160 billion and can easily afford the company — especially with a $9 billion (or more) check from Disney for a 33% stake in Hulu back in January 2024 comes.

Comcast can permanently ban WWE without paying for upcoming rights renewals and can use the company’s intellectual property for theme parks, movies and other spin-off series.

Still, Comcast CEO Brian Roberts said in October “the bar has never been higher when it comes to mergers and acquisitions,” and has repeatedly said the company is in no rush to pursue an acquisition.

Fox

Disney

Returning CEO Bob Iger may want to make a splashy acquisition when he reclaims the throne Disney. WWE suits Disney as well as Comcast. It would bolster Disney’s streaming ambitions (maybe ESPN+), it would bolster its linear network business, and it would add some weight to its merch and theme park businesses.

Not wanting Disney to walk away with Fox in 2019, Comcast drove the price up tens of billions by beating Iger’s original bid. Could Iger see WWE as the next IP match between Disney and its rival Comcast?

Disney CEO Bob Iger attends the European film premiere of ‘Star Wars: The Rise of Skywalker’ at Cineworld Leicester Square on December 18, 2019 in London, England.

Viktor Szymanowicz Future Publishing | Getty Images

Warner Bros. Discovery

Netflix

Netflix has long shied away from sports and other live events, but has recently been open to the idea of ​​fully owning or taking a stake in a league. Owning a sports league would give Netflix the ability to smoothly create video games and spinoff series. Netflix’s success with its Formula 1 documentary series, Drive to Survive, gave co-CEO Reed Hastings confidence that certain sports offerings would resonate with Netflix’s massive global audience. But Netflix doesn’t own Formula 1, which limits its future options.

Acquiring WWE or any other sports league would be a way to offer live entertainment without renting content – much like Zaslav thinks.

“We haven’t seen a profit path to rent big sports,” co-CEO Ted Sarandos said at the UBS Global TMT Conference last month. “We’re not anti-sport, we’re just pro-profit.”

Amazon

Endeavor Group holdings

Make an efforthelmed by super agent Ari Emanuel could add WWE to its assets after agreeing to buy 100% of UFC in 2021.

Emanuel bought UFC to expand the talent agency’s business scope into live events. WME-IMG, now just part of Endeavour, represents many UFC athletes – as well as WWE Superstars. The UFC deal was a success for Endeavor, which paid out roughly seven times the $600 million in 2016 earnings in 2016. UFC generated more than $1 billion in revenue in 2022.

Ari Emanuel speaks onstage during the 2017 LACMA Art + Film Gala Honoring Mark Bradford and George Lucas Presented By Gucci at LACMA on November 4, 2017 in Los Angeles, California.

Stefanie Keenan | Getty Images Entertainment | Getty Images

Endeavor’s enterprise value of just about $11 billion makes WWE a big move for the company. The company’s relatively small balance sheet would likely prevent Endeavor from winning a bidding war against media giants. But McMahon’s oversized persona might suit brash Emanuel and UFC President Dana White.

Selling it to a third party would also allow WWE to increase the renewal of the rights every few years. That may or may not bode well for the company’s long-term future as the media distribution ecosystem changes.

freedom media

While Endeavor owns the UFC, Liberty’s Formula 1 group owns Formula 1. John Malone, Liberty’s majority shareholder, and CEO Greg Maffei, along with Formula 1 CEO Stefano Domenicali, have figured out how to market the auto racing league globally, including breaking through American culture after decades of darkness.

Malone and Maffei have extensive track records of maximizing media ratings and acquiring media assets for less than $10 billion including Formula 1, Sirius XM and Pandora. The global success of Formula 1 could provide a roadmap for future WWE strategy.

Disclosure: Comcast owns NBCUniversal, CNBC’s parent company.

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