Ethan Miller
With professional wrestling – you either get it or you don’t.
While it’s a brand of entertainment that has so many nuances to it, most can’t get past the short-sighted view that it’s “fake.”
It’s not.
Yes, the outcomes are predetermined and yes, the superstars and divas are playing a role, but what they do in the ring is very real and can be very dangerous.
Most real fans understand that aspect and the respect they have for the performers is immense. To many there’s a real emotional connection that is built.
That also connects to its notorious first family – The McMahons.
Recently the family’s patriarch Vince McMahon retired amidst a number of investigations around his personal conduct… but if anyone thinks that’s going to pin WWE (NYSE:WWE) to the mat, force a radical change in the product, or kick off a massive merger, then you aren’t really paying attention.
First as always, some background.
What many fail to grasp about WWE is the role Vince McMahon has had in its creation.
He’s not just the architect and (now former) chairman of the board.
He’s also an in-ring performer – as is his wife, son and daughter.
Vince’s son Shane has actually taken part in some of the most insane over-the-top matches in the company’s history, endearing him to fans in a way you likely would not expect.
Vince’s daughter Stephanie is married to Paul “Triple H” Levesque, one of the most decorated and respected performers in WWE history. Like Shane, the fans cheer hard whenever either make an appearance – whether they’re playing a face (hero) or a heel (villain).
Vince’s wife Linda also has gotten involved from time to time and to great applause like the rest of her family.
They get that sort of pop from the audience because they are “all-in” and leave nothing on the table. When they walk through the curtain, down the ramp and into the ring they are for all intents and purposes different people, but that line gets blurred.
So when it came to light that Vince McMahon may have paid off a number of women to hide affairs with them, the general reaction from the WWE community was in a way apathetic.
The idea that Vince McMahon the person would cheat on his wife and then pay to cover it up is exactly the type of thing Vince McMahon the character would do… so it’s not surprising the fans don’t seem to be shocked.
This is a man who once booked himself into a match against God… and won.
That’s who we are talking about here.
Shortly after the news broke McMahon made a live appearance on one of his shows and basically took a curtain call and the fans loved it. After he “retired” Stephanie appeared on their other top live show to (somewhat) address the change and the fans broke out in a “thank you Vince” chant – something only reserved for performers they genuinely have affection for.
And I use retire in quotes but the idea the Vince McMahon will simply walk away is absurd.
As long as Vince McMahon is breathing, he will be pulling the strings at WWE in some capacity as he’s not so indirectly reminded everyone in his retirement announcement.
“As the majority shareholder, I will continue to support WWE in any way I can.”
McMahon owns upwards of 80% of WWE stock and yes even though he’s no longer the chairman and CEO, that doesn’t mean he’s going to walk into that good night and never be heard from again.
There’s literally no “quit” in him.
WWE’s biggest event of the year – WrestleMania – will be turning 40 in two years. Do not be surprised if by then Vince is back on TV, being inducted into the WWE Hall of Fame or some combination of the two.
In either case, Vince has not stepped into the ring for the final time.
The only thing that would likely change that or negatively color McMahon to fans or investors is if it was revealed the hush money came from WWE accounts vs. his own personal ones. At present the working theory is that he used his own money, but because of his outspoken personality and the fact WWE is a publicly-traded company, it was likely in the best interest of all involved if he stepped down.
Yes, it also could be because WWE was bracing for news that the calls were indeed coming from inside the building (so to speak), but for now this is what we publicly know.
Now to be clear I’m not condoning McMahon’s actions. I’m just trying to provide some background on consumer sentiment because WWE has always been a business that relies on fan support to survive and thrive.
That said, it’s a fine line.
McMahon has over the years made some controversial choices that have riled up the fans to the point they threatened to walk. #CancelWWENetwork has been a popular hashtag off and on, but here’s the thing – few do.
At the end of the day, bad decisions or not, the fans – the real fans that buy the tickets and buy the merchandise that drive the business – return.
They also know that the line of succession is strong.
Stephanie McMahon will assume control of the company (along with influential executive Nick Kahn) and Triple H will take on an elevated role in both storylines and performer development. Internally it already been reported the moves were met with cautious optimism from the roster and investors.
And when I say nothing will change, I’m not talking about storylines and who gets what title, that will (hopefully) evolve and take on fresher approaches, but the idea of WWE as a brand will not change. This is still a sports entertainment business and still one that has the favor of a loyal audience.
The other “change” that keeps coming up is the idea that WWE will put itself up for sale. Again, just because McMahon is no longer chairman, don’t forget he still has the vast majority of stock, so he’s going to have a say in the matter and selling what may see as his “third child” has really never been fully on the table.
And even though it’s reported he reduced his stock since stepping down, what he sold/gave back amounts to a very small level in the big picture.
But let’s play what if?
What if WWE was to be bought?
Well the obvious targets would be the usual suspects such as Netflix (NFLX) or Apple (AAPL), which are both looking to ramp up their rosters. However, the only real contender is Comcast (CMCSA) and to an extent the company and WWE are already so intertwined a merger wouldn’t really be anything “new.”
Comcast already owns the broadcast rights to flagship series Monday Night RAW and its farm-league brand NXT – two of WWE’s three big TV brands. It also made a deal the other year to essentially acquire the WWE Network streaming service for its Peacock brand. Along with the library, that also includes all of the live events that used to be pay-per-view only.
All in that’s a massive amount of WWE’s content right there in one place.
Until those deals run out, WWE would be selling a shell of itself which would sizably reduce interest from other buyers.
On top of that Comcast has a long history with the McMahons, specifically Bonnie Hammer, who has done more to boost WWE’s presence than any other TV executive in history.
A merger would just cement something that has largely been in place for years. It’s also not something that would radically change the face of the company.
And again this is a hypothetical – there are many analysts who also believe nothing will happen. With Vince’s daughter and son-in-law taking two of the top three leadership positions it shows the McMahon family desire to keep this in the family.
Overall, though, I do expect WWE to undergo some changes in the post-Mr. McMahon era, but I don’t think many of them will be something the investing community will ever notice. Those changes are likely going to be very centered on its series and performers… things that the average shareholder would not pick up on, but fans would.
As I said earlier, WWE has always been a business that relies on fan support to survive and thrive – something that’s not lost on the McMahons, no matter which one is technically in charge.
Be the first to comment