Vince McMahon returned to WWE to ensure a smooth sale. Here’s who might want to buy it

Vince McMahon is back World Wrestling Entertainment The Board of Directors to facilitate potential sale talks prior to renewing the company’s media rights.

The idea of ​​selling WWE is not new. CNBC reported that she looked like a selling target in April, and that she looked even more attractive in July after a sexual misconduct scandal. The rationale is fairly clear: WWE is valuable intellectual property.

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

WWE has hired JPMorgan to help the company advise on a potential sale, according to people familiar with the matter. JPMorgan declined to comment. A WWE spokesperson could not immediately be reached for comment.

If a deal does happen, it will likely happen in the next three to six months, said the people, who asked not to be named because the discussions are private. WWE plans to speak with potential buyers before deciding on TV rights renewal agreements.

McMahon’s return should help the sale process go smoothly, though there could still be hurdles.

The 77-year-old former CEO and Chairman and controlling shareholder of WWE. He resigned after an investigation found he paid nearly $15 million to four women over a 16-year period to suppress allegations of sexual misconduct and infidelity. Returning to the board will give potential buyers confidence that he supports the details of any transaction.

“My return will allow WWE, as well as any other parties to the transactions, to participate in these operations knowing that they will have the support of the controlling shareholder,” McMahon said in a statement on Thursday.

McMahon’s return does not affect the current leadership. McMahon’s daughter, Stephanie, and former CAA agent Nick Khan are co-CEOs. But it remains unclear what kind of role, if any, McMahon would want in WWE if he sold the company. WWE told investors that McMahon’s role in the company is essential to “our ability to create iconic characters and creative storylines.” Currently, McMahon has no official say in the company’s creative direction.

Whether the buyer would be comfortable with McMahon taking a more hands-on role in the company is unknown. But WWE is McMahon’s life’s work. The sale can only take place with at least some chains attached.

WWE has a market capitalization of more than $6 billion, having risen by nearly 17% percent on Friday, supported by speculation of increased sales.

There are three categories of potential buyers for WWE – legacy media companies, broadcast companies and entertainment holding companies. Here who might be interested.

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

Comcast can book WWE in perpetuity without having to pay increments for upcoming rights renewals and can use the company’s IP address for theme parks, movies, and other series.

However, Comcast CEO Brian Roberts said in October that “the cap is the highest in terms of mergers and acquisitions,” and he has said repeatedly that the company is in no rush to pursue an acquisition.

Returning CEO Bob Iger might want to make a cool acquisition as he takes back the throne Disney. WWE fits in with Disney the same way it fits in with Comcast. It would boost Disney’s streaming ambitions (possibly ESPN+), bolster the network’s linear business, and add some heft to its merchandising and theme parks business.

Comcast didn’t want Disney to dump Fox in 2019 and raised the price by tens of billions by bypassing Iger’s initial bid. Could Iger see WWE as the next IP battle between Disney and rival Comcast?

Netflix She has long shied away from sports and other live events, but has recently become open to the idea of ​​owning a league or taking an ownership stake. Having a sports league would give Netflix the ability to create separate video games and series without friction. Netflix has had success with the Formula 1 documentary series “Drive to Survive,” giving co-CEO Reed Hastings faith that certain sports properties will resonate with Netflix’s huge global audience. But Netflix does not own Formula 1, which limits its future options.

Acquiring WWE or another sports league would be a way to offer live entertainment without renting content — similar to Zaslav’s thinking.

“We haven’t seen a profitable path to big sports hire,” co-CEO Ted Sarandos said last month at the UBS Global TMT conference. “We’re not anti-sports; we’re just for-profit.”

questmanaged by super agent Ari Emanuel, WWE could add to the steadiness of its assets after agreeing to buy 100% of the UFC in 2021.

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

Endeavor’s enterprise value of just $11 billion makes WWE a huge turnaround for the company. The company’s small balance sheet will likely prevent Endeavor from winning the bidding war against the media giants. But McMahon’s inflated personality may suit Emmanuel’s brashness and UFC President Dana White’s.

The sale to a third party would also allow WWE to further renew the rights every few years. This may or may not be positive for the company’s long-term future as the media distribution ecosystem changes.

While Endeavor owns the UFC, Liberty Formula One Collection Formula 1 is owned by John Malone, controlling shareholder of Liberty, and CEO Greg Maffei, along with Formula 1 CEO Stefano Domenicali, figure out how to market the motor racing league globally, including breaking with American culture after decades of obscurity.

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

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

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