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FutureStarrVince McMahon Wants at Least $9 Billion For Sale of WWE
After months of speculation, WWE CEO Vince McMahon is now believed to be asking at least $9 billion for his company. This price point represents an astounding increase from the previously reported $8.5 billion.
WWE is now widely reported to be for sale, with multiple companies interested in buying it - such as Netflix, Comcast, Disney, UFC parent Endeavor Group Holdings and foreign entities like Public Investment Fund of Saudi Arabia.
According to a recent report, WWE founder and former CEO Vince McMahon is seeking at least $9 billion for the sale of his entertainment empire. Since his return to the board in January, McMahon has been actively searching for a buyer.
Bloomberg reports that several bids have been submitted to purchase UFC. McMahon wants to sell for an increased premium of around 37% over its current value on public markets, including bidders such as Endeavor Group Holdings - owner of UFC; middle eastern investors; and business-to-business firms like Netflix, Disney, and Comcast.
Endeavor's MMA division is one of their most profitable divisions, contributing approximately $1 billion annually in EBITDA (earnings before interest, taxes, depreciation and amortization) margin. Plus it's relatively pandemic-proof as well as being an important contributor to sports and entertainment industry overall.
In 2016, the Fertitta brothers, who own most of the UFC, sold their interest to Endeavor for $4 billion. To finance this deal, KKR and Silver Lake joined forces with private equity firms to raise the capital.
Dana White has been the CEO of UFC for two decades and is highly-regarded within the MMA community. During his tenure, he transformed the promotion from a struggling sideshow into an influential force within the sport.
After paying hush money to multiple women and having numerous others come forward with sexual harassment allegations against White, the organization was led by co-CEO Nick Khan in January after McMahon returned.
On the heels of reports that UFC's owners are exploring strategic alternatives as they consider renewing their media rights, this report suggests potential buyers may be hesitant to make a major investment in WWE due to its disgraced former CEO's past.
However, as UFC profits continue to soar and they gain more control of the MMA promotion, it makes sense that they would want a stake in it. Doing so would allow them to preserve their public offering opportunities in the future as well as take a bigger cut of fighter revenue.
Last year, Vince McMahon retired as CEO of WWE and is believed to be considering selling the company to Saudi Arabia's Public Investment Fund. As reported by Bloomberg, McMahon wants at least $9 billion for the sale of WWE.
The Public Investment Fund is Saudi Arabia's national investment fund that manages their national wealth and invests in various businesses and projects around the world. It is one of the leading foreign investors in green energy projects as part of Saudi Arabia's Vision 2030 plan to reduce dependence on oil and diversify the economy through investments in renewable energy, telecoms, and other technology firms.
Over the past few years, Saudi Arabia has invested heavily in sports and entertainment events. It invested in soccer clubs, esports and gaming tournaments, Formula One Grand Prixs, Saudi Cup horse races, LIV Golf championships, among other competitions. These investments are part of Saudi Arabia's efforts to bolster their soft power while diverting attention away from its poor human rights record and ongoing war in Yemen.
Some experts argue that Saudi Arabia's strategy could prove counterproductive. They are investing in high-profile sports and entertainment events as part of their Vision 2030 plan, but these events also serve to distract attention away from a human rights crisis that is impacting the kingdom.
According to people familiar with the matter who asked not to be named because they are discussing private matters, a sale could likely take place within the next few months. It's possible that Endeavor Group Holdings, which owns the UFC and represents NHL and NFL franchises, might consider buying the WWE.
That would be a significant development for the company. It would enable it to further pursue its streaming ambitions (perhaps ESPN+), support its linear network business, and add some momentum to merchandising and theme park operations.
Though it seems unlikely that a company with such an immense balance sheet could ever close such a deal, the opportunity is intriguing. Grabging a media giant during an industry that is going through significant transformations is certainly worth exploring.
Though it may appear as though there's always a new TV, film or video game company emerging in today's startup-centric world, most media we consume is owned by just six major media companies known collectively as The Big 6.
With 232 media executives overseeing 90% of what Americans read, watch, and listen to, this group has quadrupled in size since 1973. They control everything from 24-hour news stations and newspapers to Internet utilities and video game developers.
According to a recent Bloomberg report, former WWE CEO Vince McMahon is asking for at least $9 billion for the company. This price point is higher than its current worth and reports indicate several bids have been submitted.
Comcast and Amazon are believed to be interested in purchasing WWE. McMahon, 77 years old, is its controlling shareholder and was reinstated as executive chairman last January to oversee a strategic review of the business. He left last year following investigations into sexual misconduct allegations and millions tied to nondisclosure agreements.
Fox and Comcast's Peacock streaming services have both expressed an interest in buying WWE outright, suggesting that any media company looking to expand its sports and live events offerings might want to consider investing. With WWE in the early stages of negotiating new television deals, now could be the ideal time for a media company to acquire this iconic wrestling empire.
Another potential buyer for the company could be UFC owner Endeavor Group Holdings, with a market capitalization of $10.4 billion. However, they would need financial assistance in order to purchase out WWE at such a high price.
Even the most successful media companies can face challenges related to ownership, and there's no assurance that a sale of WWE will go smoothly. There's an increased likelihood that it could be sold by someone with hostile intentions, and there are several reasons why.
WWE's business model is not ideal for a larger company. With such an expansive and diverse cast of characters, integration with other businesses may prove more challenging than usual. Furthermore, its polarizing founder may not be friendly towards other media firms either. These issues are further compounded by multiple upcoming rights renewals in an ever-evolving media ecosystem.
Vince McMahon is believed to be seeking at least $9 billion for the sale of WWE, his longtime media company that he returned to this year after years away due to sexual misconduct allegations. Last January, McMahon rejoined its board following his return due to sexual misconduct claims.
Bloomberg reports that WWE has received several offers for its shares and may be sold soon. Potential buyers include UFC owner Endeavor Group Holdings, Middle Eastern investors, and others.
Even though WWE is a huge media company with plenty of assets, Vince McMahon does not believe the price he is asking for it. As a publicly-traded company with net debt of less than $112 million, there is no cash on hand that can be invested back into shareholders' returns.
WWE is a global phenomenon that can only be acquired by someone with the ambition to expand it exponentially. It will generate endless news coverage from both sides of the fence, and wrestling fans around the globe eagerly await what transpires when its new owner takes control.
Still, a $9 billion valuation seems a bit high for a company currently valued at only $6.5 billion. If McMahon truly wants to sell his business, he needs to ensure the price is sufficiently high enough to attract an interested buyer.
McMahon could also be trying to inflate the valuation beyond its actual worth in order to exact revenge against Nick Khan for allegedly going to The Wall Street Journal with sexual misconduct allegations against him. If so, McMahon could fire Khan and then take the company private before finding a new CEO to lead it.
In any event, a valuation of $9 billion for WWE is an absurdly high number to ask anyone to pay. That amount could only be achieved through either selling it off to one of its current partners or merging it with another media company; however, given the uncertain global economy and rising interest rates, it appears unlikely anyone would shell out that much money for a company with so little cash on hand.