WWE Bringing Drama From Ring To Reality With Newest Developments

Did anybody really think Vince McMahon was going to go gently into that good night?

I mean really? Was that ever a possibility?

As I mentioned back in the summer when he “retired,” everyone still expected McMahon to be active behind-the-scenes. While the WWE (NYSE:WWE) team swore up and down he was out…you just knew he’d find a way back in.

Over the last week the roller-coaster ride, that’s being a WWE shareholder, got rockier when McMahon (who through it all remained the largest shareholder) not only stated his desire to return to the board, but he was bringing two allies with him AND he was looking at potentially selling the company.

How’s that for a swerve?

So what does this mean? And what could McMahon actually be planning?

First, as always, some background.

Last year, McMahon resigned following a scandal where it was revealed he allegedly paid hush money to various women that he apparently was involved with in extramarital affairs.

While everyone pretended to be shocked and appalled, WWE fans had a different reaction.

Apathy.

Vince McMahon is someone who once put himself in a tag-team match against God – and booked himself to win.

So if you think fans couldn’t envision a situation where in reality he was allegedly paying to cover up personal issues – you don’t know the world of professional wrestling very well.

McMahon has made himself a character on WWE programming for decades. The “Mr. McMahon” persona has been very good for business as he is the rare heel (i.e., villain) that fans simultaneously cheer and boo at the same time.

He could be the bad guy one week and then come out to a thunderous applause the next.

In short, fans love him.

They may not always agree with his creative choices, but when his music hits and he struts down the ramp to the ring – you know “business is about to pick up.”

As a result, fans really can’t – and in most cases don’t want to – separate the man from the myth. So to them, his scandal was nothing more than a storyline they’ve seen before.

Now, investors on the other hand lost their collective minds.

Which I find funny because WWE is known for pushing the limits (sometimes to far) so “safe” is not how I’d define an investment in that company period… so this degree of risk really should have come with the territory.

There are a lot of companies you can invest in and not understand their core business… wrestling is not one of them. The idea of McMahon cheating on his wife and paying to cover it up may seem like a giant problem to some, but for WWE fans, it is just another day.

Where the story takes a turn is McMahon’s reasoning for returning.

He has said his goal is to help WWE re-negotiate its next round of TV deals and aid in potentially selling off the company.

Selling WWE has always been a rumor that you take with a grain of salt.

Like Apple (AAPL) buying Disney (DIS)… or Netflix (NFLX) being acquired by anyone. These are things that theoretically could happen but you’d put something like “the sky falling” as a more likely scenario.

Well, it looks like the sky may actually be falling this time.

Here’s the thing, though – this was avoidable. The sky is only falling because McMahon got pushed into a corner and now that he’s had some time to regroup, he’s ready to claw his way out of it.

To reference a famous movie line – “nobody puts Vince McMahon in a corner.”

To be blunt, McMahon is probably very angry, and you can see where his thinking is on the matter.

While there are investigations ongoing into McMahon’s hush-money deals, so far it looks like the money he used was his own. While it could be revealed later McMahon used company money (which changes everything), right now this is more of a breach of ethics and morals than anything else.

So for him to be ousted over it likely didn’t sit well, and now he’s back with a vengeance.

Vince McMahon is not someone who does things “half-measure,” he’s full-tilt, all-in, go-for-broke. In other words, instead of looking to sell to a partner like Comcast (CMCSA) or a similar top-tier company like Endeavor (EDR), a report broke this week that he was looking to go in a different direction.

And a different country.

The report stated McMahon had agreed to sell WWE to Saudi Arabia’s Public Investment Fund.

Which if true… now investors have the right to lose their collective minds.

As expected, the stock dropped upon the news coming out.

Yes, the report was eventually refuted and as it stands now no deal is imminent, but it’s hard to not imagine that potentially happening down the road.

If you want proof, look no further than McMahon’s daughter Stephanie. She stepped down just days after her father returned to the board. And she didn’t just step down, she resigned from the company. You could make the argument the two pieces of news are potentially connected.

Stephanie McMahon has a long history of promoting and advocating for women’s rights, and a lot of credit for the re-birth of the WWE women’s division goes to her. On top of that, she has three daughters – so you can imagine the idea of selling her family’s business and her life’s work to the Saudis probably didn’t sit well.

So why would Vince do that?

Selling to Saudi Arabia also would likely mean a situation where WWE could go back to being a private company, and if that was the case, McMahon could easily return to in his prior role as if nothing happened and be there for eternity.

It’s a more controlled environment for McMahon, and it would mean not having to answer to a board or shareholders.

Again, that’s just a working theory, and while the idea of a sale has been debunked for the moment, if a Saudi Arabia deal ultimately happens, there could be an exodus from the ranks that could be very harmful to the company.

Remember, WWE also already has ties to Saudi Arabia and routinely puts on live events in the country. When that deal was initially signed, there was a lot of backlash given the human rights record of their government. Yet nothing ever came of it, and some of the performers who took issue with the deal eventually went on with business as usual.

That said, doing one or two dates a year in a country where you have different political or cultural views is one thing… but having your checks signed by that country changes the narrative a bit.

The whole situation is less than ideal because the truth is since McMahon stepped down there have been multiple reports things were positive in the company. Morale had been up, and the storylines were fresher and getting better responses.

That’s not meant to be a dig at McMahon either – it’s just natural that over time when new blood comes in, some elements are always updated and refreshed. For a business like WWE, that is vital to its continued success.

Yet Vince McMahon is the reason for that success in the first place, and that’s not something he seemingly wants people to ever forget.