2021 The WWE Purge, Part 2

[RIPPA]

6 minutes ago, John from Cincinnati said:

Black with kind words about Vince, Bruce, Heyman, Roman, Orton, basically anyone you can think of. Very positive. With regards to wrestling reporters just now: "Don't waste money on it." 

 

[RIPPA]

4 minutes ago, Eoae said:

It's odd that WWE feels the need to justify why they release people.  They're just opening themselves up for criticism by citing budget cuts.  'Course, some people are going to criticize them regardless.

To be fair - in this specific case - it was the former employee stating the reason they were told which the WWE is legally required to do. They can't just fire folks and say "No Comment" to said employees unless they wanna have fun with lawsuits

And, theoretically, their shareholders are gonna ask "Hey, why did you release all those folks? (Insert Wrestler Here) was a valuable asset" and they are going to have to an explanation

Basically - the WWE has to give reasons. They just aren't giving them publicly. But the reason gets out to the public

[Ultimo Necro]

When those Alesteir Black vignettes first aired I had serious Sean O’Haire vibes from them and now it’s went full circle and he has literally become Sean O’Haire 2021. Interesting character and promos that we never get to see in a ring.

I hate that company sometimes!

[AxB]

AEW released Awesome Kong because her contract expired (and they hadn't used her for anything in like a year and a half anyway), and Shanna because... Her contract also expired, plus there was the Islamophobia thing, and that weird, stiff match she had with Leyla Hirsch. But their entire history of releases is those two, Jimmy Havoc (speaking out), Kylie Rae (no one ever said, but assumed to be mental health related unless you're Rovert), Sadie Gibbs and Bea Priestly (something about a backstage fight a year earlier).

[Eoae]

I didn’t read the article but the Tweet headline is making me laugh.

 

[RIPPA]

If we are talking about Shane then the answer is yes

[Control]

5 minutes ago, Ultimo Necro said:

When those Alesteir Black vignettes first aired I had serious Sean O’Haire vibes from them and now it’s went full circle and he has literally become Sean O’Haire 2021. Interesting character and promos that we never get to see in a ring.

I hate that company sometimes!

Oh shit he died?

[Greggulator]

I would not be so sure that the WWE is being acquired for a few different reasons.

The WWE is publicly traded. Buying a publicly traded company is really difficult to do. I haven't checked in a really long time, but the McMahon family as of a few years ago owned well over half of the stock of the company and has full control over it. There are also a company's treasury shares, which are shares of the company itself owns either by buying back at some point or never released to the public for sale. Those also have to be considered. 

It also matters if the company is being acquired by another public company (Comcast) or being bought by some private entity. If it's by another public company, WWE shares would either have to be bought via cash or exchanged for the acquiring company's stock or in a hybrid of the two. That's why a lot of times when you see a cost-cutting move a company's share price pops, since it's a tip-off that a larger deal is coming. But the WWE's stock price today is completely flat. 

I know all of these names are big ones, but we don't know how much they make. But let's say collectively they make $5 million a year (and that's a huge stretch.) The WWE just trimmed $5 million in salary. But as of the end of FY 2020, it had $593 million in cash. That's a lot of money and that $5 million is just an absolute blip on the map. If they cut a business unit (live shows or WWE media or something like that) then, yes, that would be a major cost cutting in prep for a sale. But this is really nothing at all in how corporate transactions work.

The company made over $860 million in revenue last year. And it turned a profit of $208.6 million in a year where it did not have live shows and a major core of its audience faced a lot of financial difficulties. 

I know I'm a WWE "homer" or whatever but there's no other way to state it: The WWE is a really well-run company. It consistently generates profits. It pays a dividend to investors, which is a sign that it always projects that it rightfully believes it will have enough cash on hand to move forward. And the McMahon family gets paid that dividend for each of the shares they own, which is an insane amount of cash that comes to them per year on top of whatever salary they claim. 

It's one of the most well-known brands in the media landscape. I know diehard wrestling fans might hate the booking and decry every move that happens... but Vince knows what he's doing. Why would he and his family sell? 

Also, there has been a recent reversal in media trends in which Internet providers (AT&T, Verizon) have started to sell off their media holdings (WarnerMedia, Yahoo) and spinning them off. Comcast acquiring a media company like the WWE is a complete reversal of what the rest of the industry is doing. That's not always a bad thing, but there "vertical integration" of companies that allow you to access media with the media itself has not really worked, although Comcast has been in the NBC game for a really long time. 

But thinking of these cuts as a cost-cutting move for a pending sale is pretty ridiculous from a big picture standpoint. More likely: They want to trim down the roster to have more breathing room to the shows and didn't think the names on that list (rightly or wrongly) were really anything special. And/or maybe there were some who were pushing to leave as well. 

[Eivion]

26 minutes ago, John from Cincinnati said:

Black with kind words about Vince, Bruce, Heyman, Roman, Orton, basically anyone you can think of. Very positive. With regards to wrestling reporters just now: "Don't waste money on it." 

Black has seemed pretty nice in the past so I'm not shocked to hear this. Like at least 3 of those names are ones I wouldn't have expected him to shit on.

[RIPPA]

5 minutes ago, Greggulator said:

It's one of the most well-known brands in the media landscape. I know diehard wrestling fans might hate the booking and decry every move that happens... but Vince knows what he's doing. Why would he and his family sell? 

Because what Vince says goes and he decided he wants to get out.

(Not saying this is happening but just throwing out a scenario - no matter how unlikely)

Vince - despite what we joke about - knows he isn't gonna live for ever/is scared of dying (possible even more so after his brother passed away).

However he doesn't have confidence in his family to continue to be profitable say in 10-20 years (or more specifically when the TV deals come up since that is the entire reason at the moment the are basically "failure proof"

So he decides to sell now for 5 Billion (since I figure they can get more than UFC) - that continues to set the family up with generational wealth AND Vince oversees it happening before he dies.

[Greggulator]

16 minutes ago, RIPPA said:

To be fair - in this specific case - it was the former employee stating the reason they were told which the WWE is legally required to do. They can't just fire folks and say "No Comment" to said employees unless they wanna have fun with lawsuits

And, theoretically, their shareholders are gonna ask "Hey, why did you release all those folks? (Insert Wrestler Here) was a valuable asset" and they are going to have to an explanation

Basically - the WWE has to give reasons. They just aren't giving them publicly. But the reason gets out to the public

I would doubt that any of their major shareholders or industry analysts know who any of the people cut are. None of these people have any sort of recognition outside of the WWE, except for maybe Lana since she has such a big social media following, and it's not like that is something that can make the WWE any money. I haven't followed any of their conference calls ever, but almost no analysts on those calls ever asked about booking or anything of the sort. 

[RIPPA]

 

Just now, Greggulator said:

I would doubt that any of their major shareholders or industry analysts know who any of the people cut are. None of these people have any sort of recognition outside of the WWE, except for maybe Lana since she has such a big social media following, and it's not like that is something that can make the WWE any money. I haven't followed any of their conference calls ever, but almost no analysts on those calls ever asked about booking or anything of the sort. 

They don't ask about booking but they frequently ask about things like major purges, etc.. More economic type things. I can't remember if it was this year's Mania purge or last year's that was a talking point for a bit during an investor call

But there is usually one or two folks who pay enough attention to ask a more pointed question... if they get through

[Just Dave]

32 minutes ago, Pete said:

Sounds like someone who was told they'll be happy to bring him back down the line if he keeps his nose clean.

Why would he? Shit, why would anyone who has options?

Edited June 2, 2021 by just drew

[Eivion]

3 minutes ago, RIPPA said:

However he doesn't have confidence in his family to continue to be profitable say in 10-20 years (or more specifically when the TV deals come up since that is the entire reason at the moment the are basically "failure proof"

Wasn't Steph one of the people cited as getting the Fox deal done?

[Greggulator]

1 minute ago, RIPPA said:

Because what Vince says goes and he decided he wants to get out.

(Not saying this is happening but just throwing out a scenario - no matter how unlikely)

Vince - despite what we joke about - knows he isn't gonna live for ever/is scared of dying (possible even more so after his brother passed away).

However he doesn't have confidence in his family to continue to be profitable say in 10-20 years (or more specifically when the TV deals come up since that is the entire reason at the moment the are basically "failure proof"

So he decides to sell now for 5 Billion (since I figure they can get more than UFC) - that continues to set the family up with generational wealth AND Vince oversees it happening before he dies.

Right now, the WWE's valued at $4.2 billion. That's the current share price multiplied against all of the shares that can be bought (outstanding shares) and sold by the general public (also known as market cap.) 

Just clicking around real quick -- Vince reportedly owns about 37% of the outstanding shares right now, which equates to $1.6 billion. That doesn't include the dividend, which is 12 cents per share that he gets every year. Just doing the quick math based on those estimates, that's another $$16.7 million in cash he gets annually. Also, Vince and a few others own what are called Class B shares. Class A shares are what the general public owns. Vince's Class B shares give him incredible voting power -- each of this shares is worth 10 votes compared to everyone else, so that's something like 80% of all voting power.

If the WWE were to be bought by another company - the acquiring company would have to provide a value based on what it think the company is worth now and also going forward. Share prices are about $55/share. Acquiring companies almost pay a premium to convince shareholders to sell since they have to vote to approve the deal, or investors will react accordingly and want to buy the stock in anticipation of a stock buy, although in this case Vince's vote is the only one that counts. It's only a few cents upwards for the WWE to be a $5 billion company. I have no idea what a company would pay for their stock, but $65/share would not be out of the question right now. I'm not able to do the math right now, but that's probably at least $6-$6.5 billion in valuation. Vince's share of that would be 37% of that total.

 

[RIPPA]

12 minutes ago, Eivion said:

Wasn't Steph one of the people cited as getting the Fox deal done?

There was definite talk at the time about her and Hunter being driving forces to getting the FOX deal done. Though I could have sworn I read pushback against that over the years.

But even still - that was awhile ago, and both have clearly been repositioned in the company with Steph basically just there now to be the public face of their PR/Charity stuff.

I share this tweet from Dave

As there is A LOT of talk about how, under Khan, the WWE wants to be a media/content company and not a wrestling company.

Including some folks saying the goal is to be like Marvel

[RIPPA]

2 minutes ago, Greggulator said:

If the WWE were to be bought by another company - the acquiring company would have to provide a value based on what it think the company is worth now and also going forward. Share prices are about $55/share. Acquiring companies almost pay a premium to convince shareholders to sell since they have to vote to approve the deal, or investors will react accordingly and want to buy the stock in anticipation of a stock buy, although in this case Vince's vote is the only one that counts. It's only a few cents upwards for the WWE to be a $5 billion company. I have no idea what a company would pay for their stock, but $65/share would not be out of the question right now. I'm not able to do the math right now, but that's probably at least $6-$6.5 billion in valuation. Vince's share of that would be 37% of that total.

This is why I believe Meltzer is implying that the UFC sale made the WWE sale much more palatable to Vince since - like your back of the envelope math shows - he can make more than the $4 Billion they got.

Dave has also hinted about folks being worried about the live sports bubble bursting but it has been unclear if he meant that just for AEW, for all wrestling or all of sports. (And what exactly he was basing that on since this is Dave after all)

[Greggulator]

16 minutes ago, RIPPA said:

 

They don't ask about booking but they frequently ask about things like major purges, etc.. More economic type things. I can't remember if it was this year's Mania purge or last year's that was a talking point for a bit during an investor call

But there is usually one or two folks who pay enough attention to ask a more pointed question... if they get through

During investor calls -- it's almost always the same 10-15 analysts (https://corporate.wwe.com/investors/stock-information/analyst-coverage) that work for investment bank type of companies and follow the company and make recommendations on where the stock price is going and if you should buy/sell/hold who can ask questions. They definitely will track things like ratings trends or any customer research they can get their hands on. But I highly doubt any of them are watching Raw every week and asking themselves why Drew McIntyre beat Kofi this week or even tracking what people are saying about the company on social media. They care more about whether or not the company is generating revenue and/or cash, how it is generating revenue and/or cash, and its plans going forward to generate revenue and/or cash. We'd like to think that depends solely on whether or not they make new stars and have good booking, but it really doesn't at all. It completely depends on what TV networks are willing to pay to air its content, how many people are willing to pay for its content, and more. 

[Dog]

The Fox deal and the Network on Peacock are patches. In a world that rewards perpetual growth, you're not going to have an endless run of monumental deals. Eventually the lack of actual engagement with consumers will catch up with them, and I think rather than getting down in the late '90s trenches again to repeat history and claw back viewer interest, Vince has finally decided he's too old for this shit and is cutting out while the cutting's good.

Edited June 2, 2021 by Dog

[Dolfan in NYC]

https://www.instagram.com/p/CPoJ3QIBtsR/?utm_medium=copy_link

Braun's IG post.  (Thinking about it...  it does legit sound like he's retiring.)

 

I do appreciate that PAC is the only one wearing a shirt, because, weirdness.

 

 

[Greggulator]

7 minutes ago, RIPPA said:

There was definite talk at the time about her and Hunter being driving forces to getting the FOX deal done. Though I could have sworn I read pushback against that over the years.

But even still - that was awhile ago, and both have clearly been repositioned in the company with Steph basically just there now to be the public face of their PR/Charity stuff.

I share this tweet from Dave

As there is A LOT of talk about how, under Khan, the WWE wants to be a media/content company and not a wrestling company.

Including some folks saying the goal is to be like Marvel

 

I would say that the WWE has been a media/content company for decades now. To the eyes of investors and analysts, it competes with Disney and Netflix and every other company of that ilk. It has a niche product that will make it nowhere near as big as those companies. But there's not really too much difference between the business plans save for amusement parks and that the WWE doesn't make blockbuster movies (although it wants to). No one cares about AEW as a competitor. UFC is a big company but it doesn't offer a way to pay for 24/7 streaming content. 

For all the criticisms about the WWE turning its back on being a wrestling company -- it's worth $4.4 billion and is absolutely flush with fucking cash.

 

 

 

 

[RIPPA]

4 minutes ago, Dolfan in NYC said:

I do appreciate that PAC is the only one wearing a shirt, because, weirdness.

Weirdly - if I had a body like PAC, I would never wear a shirt

[Dog]

If AEW is still around in, say, three years, it will seem inconceivable to the average person that it and WWE could be called the same thing. Everyone's right that WWE is finishing its transition to an entertainment company/IP farm, and you don't need "good" "wrestling matches" for that. Vince always wanted out of rasslin', but he was so entrenched in it from the jump that it would always be a part of whatever he did. These outsiders don't have those hangups.

I imagine the hiring strategy in WWE will snap back 180 degrees and 35 years, and they'll be sniping bodybuilders (and maybe buff actors, now), without even glancing at indy darlings. What place does NXT have in WWE: The IP Brand?

Edited June 2, 2021 by Dog

[Greggulator]

13 minutes ago, Dog said:

The Fox deal and the Network on Peacock are patches. In a world that rewards perpetual growth, you're not going to have an endless run of monumental deals. Eventually the lack of actual engagement with consumers will catch up with them, and I think rather than getting down in the late '90s trenches again to repeat history and claw back viewer interest, Vince has finally decided he's too old for this shit and is cutting out while the cutting's good.

Everyone was completely shocked when the WWE got that deal from Fox. I wasn't paying attention but I'm guessing they got insane money for Peacock as well. 

If Vince is still around and with it when those deals expire -- why would anyone in their right minds bet against him?

[RIPPA]