Talk about WWE potentially being sold has come and gone in waves. At one point, it was believed there was real potential Vince McMahon was gearing up to sell the company, emphasized by the fact big contracts were cut from the talent payroll. In other weeks, the talk has quieted. What’s really going on?
According to one financial expert, all signs point to WWE gearing up for a sale, eventually. Laura Martin of Needham says that, yes, the extremely popular sports entertainment brand looks like it is going to be sold and Vince is making shrewd business moves to prepare for that sale.
Martin insists that WWE is lining their ducks up in a row, citing the WWE licensing deal of the WWE Network to Peacock as the biggest indicator a sale is coming. Martin explains: “The US OTT rights fees alone generated over 100% of 2020’s total OTT Network’s revs, so international fees are just gravy, and cutting out all OTT Network costs implies that this new strategy has much higher ROICs than running a direct-to-consumer business.”
For those that don’t understand what that means, the fact WWE got out of the business of running the business of streaming it’s product to consumers, then let another company have the rights to do so was a smart financial move — if the objective is to be sold. US OTT refers to over-the-top media service. (WWE Network). “ROICs”, refers to Return on Invested Capital. Essentially, WWE has cut out the costs of running the network and made a huge chunk of money by selling the rights to the content. The decision looks good to outside potential buyers.
The article goes on to say that three-quarters of WWE’s revenue will come from their Peacock deal for WWE’s OTT Network rights. It makes them a much lower risk for whomever buys the company because those deals are in place and guaranteed.
When WWE might sell was not part of the article, but it sure sounds like WWE might be thinking about doing something sooner than later. As of now, it seems to more of a “some day” situation than an “imminent” one.
For fans, it probably won’t change all that much, at least not right away. It would be hard to imagine whoever bought the company moving out the people in charge as their first order of business.
Source: The Sportster