Vince McMahon is back at WWE to ensure a smooth sale process. Here’s who might want to buy it

Vince McMahon has returned to the World Wrestling Entertainment board of administrators to facilitate potential sale talks forward of the corporate’s media rights renewal.

The notion of WWE promoting is not new. CNBC reported it appeared like a sale goal in April and that it appeared solely extra engaging in July after a sexual misconduct scandal. The rationale is pretty simple: WWE is efficacious mental property.

Owning IP permits streaming companies to solely provide content material with out the annoyance of profitable licensing rights in an public sale each few years. WWE additionally has worth to supply in merchandising and theme park companies.

WWE has employed JPMorgan to assist the corporate advise on a possible sale, based on individuals aware of the matter. JPMorgan declined to remark. A WWE spokesman could not instantly be reached for remark.

If a deal happens, it might possible happen within the subsequent three to 6 months, stated the individuals, who requested to not be named as a result of the discussions are non-public. WWE plans to speak to potential consumers earlier than it comes to a decision on TV rights renewal agreements.

The former CEO and chair is 77 years previous and the controlling shareholder of WWE. He stepped down after an investigation discovered that he had paid practically $15 million to 4 ladies over 16 years to quell claims of alleged sexual misconduct and infidelity. Returning to the board will give potential consumers confidence he is supportive of the main points of any transaction.

“My return will allow WWE, as well as any transaction counterparties, to engage in these processes knowing they will have the support of the controlling shareholder,” McMahon stated in an announcement Thursday.

McMahon’s return does not have an effect on present management. McMahon’s daughter, Stephanie, and former CAA agent Nick Khan are co-CEOs. But it stays unclear what sort of position, if any, McMahon would need at WWE if he offered the corporate. WWE has advised buyers that McMahon’s position on the firm is crucial in “our ability to create popular characters and creative storylines.” Currently, McMahon does not have a proper say within the firm’s inventive route.

Whether a purchaser could be snug with McMahon taking a extra hands-on position on the firm is unknown. But WWE is McMahon’s life work. It’s potential a sale might solely occur with at the least some strings connected.

WWE has a market capitalization of greater than $6 billion after rising practically 17% p.c on Friday, buoyed by heightened sale hypothesis.

There are three classes of possible consumers for WWE — the legacy media firms, the streamers and the leisure holding firms. Here’s who may be .

Comcast, which owns NBCUniversal, is a possible match as a purchaser for WWE. McMahon’s firm already has an unique streaming cope with Comcast’s streaming service, Peacock, and a cable TV cope with NBCUniversal’s USA Network. Comcast has a market capitalization of greater than $160 billion and might simply afford the corporate — particularly with a $9 billion (or extra) verify coming as quickly as January 2024 from Disney for a 33% stake in Hulu.

Comcast can lock up WWE in perpetuity with out having to pay upcoming rights renewal will increase and might use the corporate’s IP for theme parks, films and different spinoff sequence.

Still, Comcast CEO Brian Roberts stated in October “the bar is the highest it’s been in terms of M&A” and has repeatedly stated the corporate is not in a rush to pursue an acquisition.

Returning CEO Bob Iger might wish to make a splashy acquisition as he retakes the throne at Disney. WWE matches Disney in the identical ways in which it matches Comcast. It would bolster Disney’s streaming ambitions (maybe ESPN+), it might help the linear community business, and it might add some heft to merchandizing and theme park companies.

Comcast did not need Disney strolling away with Fox in 2019 and drove up the worth by tens of billions by topping Iger’s preliminary bid. Could Iger see WWE as the subsequent IP battle between Disney and his rival Comcast?

Netflix has lengthy shied away from sports activities and different stay occasions, however it is not too long ago develop into open to the thought of proudly owning a league outright or taking an possession stake. Owning a sports activities league would give Netflix the flexibility to create video video games and spinoff sequence with out friction. Netflix discovered success in its Formula 1 “Drive to Survive” documentary sequence, giving co-CEO Reed Hastings religion that sure sports activities properties will resonate with Netflix’s large world viewers. But Netflix does not personal Formula 1, limiting its future choices.

Acquiring WWE or one other sports activities league could be a path towards providing stay leisure with out renting content material — just like Zaslav’s considering.

“We’ve not seen a profit path to renting big sports,” stated co-CEO Ted Sarandos final month on the UBS Global TMT Conference. “We’re not anti-sports; we’re just pro-profit.”

Endeavor, run by superagent Ari Emanuel, might add WWE to its secure of property after agreeing to purchase 100% of UFC in 2021.

Emanuel purchased UFC to extend the scope of the expertise company’s business to stay occasions. WME-IMG, now simply part of Endeavor, represents many UFC athletes — in addition to WWE superstars. The UFC deal has been a hit for Endeavor, which paid about seven occasions 2016’s $600 million income in 2016. UFC generated greater than $1 billion in income in 2022.

Endeavor’s enterprise worth of nearly $11 billion makes WWE an enormous swing for the corporate. The firm’s comparatively small stability sheet would possible stop Endeavor from profitable a bidding conflict in opposition to media giants. But McMahon’s outsized character might match with the brash Emanuel and UFC President Dana White.

Selling to a 3rd celebration would additionally enable WWE to extend rights renewals each few years. That might or will not be a optimistic for the long-term way forward for the corporate because the media distribution ecosystem modifications.

While Endeavor owns UFC, Liberty’s Formula One Group owns Formula 1. John Malone, Liberty’s controlling shareholder, and CEO Greg Maffei, together with Formula 1 CEO Stefano Domenicali, have discovered find out how to globally market the automotive racing league, together with cracking American tradition after a long time of obscurity.

Malone and Maffei have intensive observe data at maximizing media valuations and buying media property for lower than $10 billion, together with Formula 1, Sirius XM and Pandora. The world success of Formula 1 might present a roadmap for a future WWE technique.

Disclosure: Comcast owns NBCUniversal, the guardian firm of CNBC.

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