Can you smell what the WWE is cooking?
It may have been years since the spandex-wearing likes of Hulk Hogan and The Rock were the main event, but World Wrestling Entertainment isn't even close to tapping out. And so the $1.4 billion franchise has been and still is a hot takeover candidate for which acquirers can only watch and wait -- until chairman, CEO, controlling shareholder and wrestler himself, Vince McMahon, is ready to sell. Let's just say a deal could be no Montreal Screwjob, as any change in ownership would need the 70-year-old's blessing, and it's unclear whether he's ready to give it.
But should he ever, suitors will probably pounce. The news now is that among them may be John de Mol, the Dutch billionaire and media magnate who created the "Big Brother" reality-television show, according to a New York Post report over the weekend on what it called "a strong rumor" that de Mol made a standing offer to buy WWE. A case for an acquisition can also be made for entertainment houses Madison Square Garden, Live Nation Entertainment and Anschutz Entertainment Group, as well as perhaps Comcast or Walt Disney (with caveats).
For those who don't follow wrestling, it may be perplexing that WWE is still so popular. But the fact is, more than 1 million people pay for WWE Network, the round-the-clock subscription streaming service that launched two years ago and costs $9.99 per month (more than Netflix's basic rate). WWE says it's the most followed sports channel on YouTube and second-most followed sports brand on Facebook. The company posted record revenue last year. Its annual WrestleMania event, which took place Sunday, drew 101,763 fans, topping the previous attendance record set in 1987.
As media companies grapple with the shift in how people consume TV and entertainment, WWE is adapting with some early signs of success at WWE Network (despite a lackluster launch). Granted, it's a small fry -- WWE's profit last year was just $24 million, the amount of free cash flow a company like Disney can generate in a few days. And WWE caters to a niche audience, even if they're a very loyal crowd. But that's precisely why, as McMahon plans his succession, he might want to think about selling to a larger company that can try to extract even more value from this niche and safeguard its longevity while keeping his family on the team. McMahon's daughter Stephanie is WWE's chief brand officer and has a board seat, as does her husband, former pro-wrestler Paul "Triple H" Levesque, who is in charge of talent and live events.
Not that Disney is necessarily the best suitor for WWE, but what it's done with older Marvel comic-book superheroes and the "Star Wars" franchise shows the opportunity that exists with WWE's library of characters. Being able to take that catalog and keep the story lines going could ensure that WWE's popularity doesn't die out after baby boomers, generation X and even millennials. (WWE says that about 40 percent of its audience is under 35 years old.) The caveat with Disney specifically is that WWE may be too tiny for it, and also the wrestling world doesn't quite fit the type of family-friendly content Disney is known for.
Likewise, it may be too small for Comcast. But Comcast's NBC Universal airs WWE's "Monday Night Raw" on its USA Network, "Friday Night Smackdown" on Syfy and "Total Divas" on E! And "Raw" has consistently been one of the most-watched cable shows, often only trailing "The Walking Dead." (Given the current U.S. presidential race, some political debates have overtaken the wrestling ring -- though you could argue the content isn't much different.)
The bottom line is that while WWE's bottom line might not be large, it has created (as the legendary Ric Flair would say) a stylin', profilin' franchise that won't go unnoticed by acquirers once McMahon's ready to talk price.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
A spokesman for WWE said it isn't in any discussions about a potential sale, and a representative for de Mol declined to comment.
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