Why the WWE is a Valuable Asset
It’s time to examine why a WWE sale is huge. In part one, we’ll look at why people believe it’s up for sale, what makes it such a valuable asset, and possible obstacles to a sale. In part two we’ll look at potential purchasers.
Why People Believe the WWE is Going Up for Sale
Is the WWE going up for sale? We’ve heard the rumors, including Vince McMahon’s statement that he’s back in the WWE because he wants to preside over any possible sale.
There’s another reason why people are talking about the WWE being put up for sale. CNBC’s Alex Sherman recently reported:
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 spokesman couldn’t immediately be reached for comment.
H/T CNBC
Sherman also discussed when the sale could happen:
If a deal occurs, it would likely occur in the next three to six months, said the people, who asked not to be named because the discussions are private. WWE plans to talk to potential buyers before it makes a decision on TV rights renewal agreements.
H/T CNBC
There have been discussions about the WWE being sold before. However, these rumors seem stronger than any fans have heard before.
Why the WWE is Such a Valuable Asset
If you follow traditional network TV, cable TV, and streaming services, you’ve probably heard the mantra that content is king. While there have been some concerns that the industry is going to see the collapse of some services, so far, there seems to be an increased demand for content.
The WWE has a deep library of content for wrestling fans. In addition, the WWE produces hours of new content every week. The content is in demand as Peacock paid for the rights to the WWE Network while NBC and FOX have paid billions for the right to air RAW and SmackDown respectively.
In addition to content, the WWE has a wealth of intellectual property (IP). As CNBC’s Alex Sherman discussed in his article on the WWE’s potential buyers:
Owning IP allows streaming services to exclusively offer content without the annoyance of winning licensing rights in an auction every few years. WWE also has value to offer in merchandising and theme park businesses.
H/T CNBC
The WWE has a wide selection of IP to monetize through merchandising including clothing, video games, music, home video, collectible items, and possibly many more that have not been thought of by the WWE’s current marketing team. WWE IP could be used in bold new ways such as theme park attractions, virtual reality, and who knows what.
Some Downsides to Buying the WWE
While the WWE may seem to be in the proverbial catbird seat when it comes to its purchase price, there are mitigating factors. These include a potential decline in streaming revenue and the risks of buying a wrestling company.
Streaming Services’ Slowdown
There is some concern on Wall Street that streaming services are reaching a breaking point in terms of revenue. The proliferation of streaming services has led to decreased profits in some cases, leading to questions about how much new content can and should be purchased.
Is Buying the WWE a Sound Long-Term Investment?
Another concern is the risks of buying the WWE outright. Will wrestling maintain its popularity (and profitability) in the long run? If not, a company could save money in the short run by avoiding bidding wars for broadcast rights only to find a diminished asset with declining gains.
There is also the challenge of a new owner running a wrestling company with the same success as the WWE. While a new owner might keep some or all of the same creative time, what if they don’t? Also, what if WWE fans decide the new owner doesn’t know how to run a wrestling company?
Finally, is a prospective owner ready to take on the potential employment landmine of the WWE? Would an acquisition by a company such as COMCAST lead to renewed scrutiny of the WWE’s current employment practices? Would there be renewed demands for wrestlers to be classified as employees rather than independent contractors?
Why a WWE Sale is Huge
A WWE sale could be a game-changer for the wrestling industry. Next time around, we’ll look at the WWE’s prospective suitors.
What do you think of the WWE being sold? Let us know in the comments below.
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