Vince McMahon Returns to WWE

[Elsalvajeloco]

6 minutes ago, worldcupfever said:

I'm not comparing them, I get the difference there.  It's simply a comment about how petty TK can be.

Petty how though? THIS IS GREAT NEWS!

[Craig H]

Here's where I'm at with all of this. There's already been a ton of discussion about the potential ramifications an SEC investigation could have and how Vince's vanity and narcissism is essentially inviting that and I'm on board with thinking that's a big Twinkie.

The other side to this is the threat that not even a new TV deal would be approved unless Vince was back. That's fucked. So ok, Vince is now back. Who is even out there to buy WWE or would want to buy WWE? Disney has been mentioned a lot, but they just brought back Bob Iger because things were getting fucked over there and I don't think they're in a position to make another multi-billion dollar purchase. If the rumors were true, they could have purchased EA and didn't and that would be cheaper than this. WBD is in no position to make any purchases as they attempt to set their existing pile of money on fire in utterly bizarre ways. Fox just went through their own ordeal and Peacock is a sieve for NBC Universal. Why would either of them want to spend the amount of money Vince is looking for and why would they want to spend it on WWE when buying the whole company just invites a whole new mountain of headaches for each company. They're both better off offering TV deals and not, raking in their cash, and letting WWE put out their own fires.

Owning a wrestling company like WWE would be completely unlike owning any other company I could think of. It's entirely unique in it's function, structure, purpose, etc. And so you say fine to all of that and suggest that whoever would purchase WWE would likely have smart people employed that could run the company, but again, there's just a whole world of a difference between what WWE looks like on paper and trying to move numbers around and running the actual company. I just don't see any media company wanting that headache and while you could sell to a group of buyers who will just continue looking for TV deals, you still have the Vince problem to deal with.

I don't have any skin in this game. I don't own WWE stock and I watch maybe 1% of what WWE is putting out there so when I say WWE was better off without Vince, it's coming from a place of that for the first time in years, decades even, there was stability with that company and they were trending up. Only someone that's a bigger narcissist than Donald Trump would want to fuck up the good thing they had going.

[Elsalvajeloco]

8 minutes ago, Craig H said:

Here's where I'm at with all of this. There's already been a ton of discussion about the potential ramifications an SEC investigation could have and how Vince's vanity and narcissism is essentially inviting that and I'm on board with thinking that's a big Twinkie.

The other side to this is the threat that not even a new TV deal would be approved unless Vince was back. That's fucked. So ok, Vince is now back. Who is even out there to buy WWE or would want to buy WWE? Disney has been mentioned a lot, but they just brought back Bob Iger because things were getting fucked over there and I don't think they're in a position to make another multi-billion dollar purchase. If the rumors were true, they could have purchased EA and didn't and that would be cheaper than this. WBD is in no position to make any purchases as they attempt to set their existing pile of money on fire in utterly bizarre ways. Fox just went through their own ordeal and Peacock is a sieve for NBC Universal. Why would either of them want to spend the amount of money Vince is looking for and why would they want to spend it on WWE when buying the whole company just invites a whole new mountain of headaches for each company. They're both better off offering TV deals and not, raking in their cash, and letting WWE put out their own fires.

Owning a wrestling company like WWE would be completely unlike owning any other company I could think of. It's entirely unique in it's function, structure, purpose, etc. And so you say fine to all of that and suggest that whoever would purchase WWE would likely have smart people employed that could run the company, but again, there's just a whole world of a difference between what WWE looks like on paper and trying to move numbers around and running the actual company. I just don't see any media company wanting that headache and while you could sell to a group of buyers who will just continue looking for TV deals, you still have the Vince problem to deal with.

I don't have any skin in this game. I don't own WWE stock and I watch maybe 1% of what WWE is putting out there so when I say WWE was better off without Vince, it's coming from a place of that for the first time in years, decades even, there was stability with that company and they were trending up. Only someone that's a bigger narcissist than Donald Trump would want to fuck up the good thing they had going.

If they do try to sell, it's going to be:

1) NBC Universal

2) An ownership group made up of parties that couldn't buy majority interest of their own

3) They will fall flat on their face and won't be able to give away anywhere close to their asking price.

We can rule out WBD and Disney just for all the reasons that have been stated the last few weeks. Plus, WWE wouldn't be that hot of a property. If WWE was doing I dunno.... early 2000s pre brand extension PPV business and in the same ballpark TV ratings for both Raw & SD (minus XFL and the WWF New York), they would be in a much better position.

[Craig H]

Holy shit, I'm just catching up on all of this because I took the day off to sleep in and do some of my own house reorganizing. Two more board members resigned today, one of which was the guy leading the investigation of Vince.

The other thing I keep going back to is thinking about how there were a bunch of us who believed Vince would find a way back because he's Vince and he's insane. I think what bugs me are the people who thought we were being ridiculous and insisting that Vince was gone for good. Like, how could anyone think that?

And no matter how this plays out, Vince is never, EVER, going to be gone for good until he's dead. Even if the company is sold, his shadow will always be cast over that company and you can't think he'll just go quietly into the night.

[Cobra Commander]

probably should have distracted Vince by getting him to found a slap fighting league to compete with Dana White's league

[dragonzombie]

The tv renewal negotiations for WWE can proceed. They couldn't without Vince, so they needed him.

Time for Austin Theory to get all the belts.

Edited January 6, 2023 by Red King

[Elsalvajeloco]

Just now, Cobra Commander said:

probably should have distracted Vince by getting him to found a slap fighting league to compete with Dana White's league

This isn't even an halfway original idea, which makes it even more hilarious. Besides like the WSHH clips floating of some folks doing a contest in some nightclub that predate it, I think Dana got the idea from some sports league in Poland (because Poland) with some I'm guessing former female fitness models and strongmen slapping the absolute shit out of each other. This is something Vince probably would have done in 1992 when the steroid scandal was happening.

[Greggulator]

There is some really interesting stuff in a lot of the SEC filings and press releases that came out today. For disclosure, I am a financial journalist so going through these types of documents is my line of work. But a lot of this is more legalese/disclosure stuff and I could easily be interpreting this wrong since this is more for a corporate attorney.

1) Vince ousted three board members, and two more of the independent directors (people who don't work for the company) also resigned. Before the news, there were 11 board seats. Right now, there are 9. There's nothing in the press release indicating whether or not they'll be replaced or when. There's also no explanation why.

Vince included some correspondence between him and the board in the SEC filing that came out today - (the SC 13D/A "Amended Statement of Beneficial Ownership" document, I can't link to it for some reason.) One of the correspondence was from the WWE board of directors essentially telling Vince "yeah, you can help us with the media rights/merger but we absolutely do not think it is a good idea for you to be on the board because the SEC is investigating you/us." 

So, I'm guessing the two board members who stepped down today don't want to be on a board of directors with VInce and what the hell it might mean with the SEC sniffing around. Not a good look. 

2) The SC 13D/A is something called a consent action. Vince essentially rewrote a bunch of the governing bylaws of the company this way. I don't have the time to compare what the by-laws said before today. But here is some of what happened In the legalese:

A) "memorialize in the A&R By-laws the stockholders’ existing right to take action by written consent pursuant to the procedures set forth in Section 228 of the General Corporation Law of the State of Delaware and prohibit the Board from taking any action that would require any stockholder seeking to take action by written consent to comply with any procedures or other requirements except those expressly set forth in Section 228 of the General Corporation Law of the State of Delaware or in specified provisions in the A&R By-Laws"

What this means: The Delaware Court system handles a lot (if not most) of the corporate law decisions in our country. Don't ask why. But Section 228 of the rules about corporations based in Delaware (every corporation is technically based in Delaware pretty much) outlines how consent actions work.
 
Traditionally, shareholders vote on the types of things they can vote on -- new board members, or how the CEO gets compensated, or things like "hey, GE, stop making weapons of war" -- at an annual meeting set in advance by the board of directors.

Boards can also call a special meeting for any emergencies or to do something like approve a merger/acquisition, but they have to let shareholders know about this in a few days in advance. 

If at the annual meetings and special meetings a majority of shareholders decide on certain bylaws or new board directors or etc., then those policies and rules or merger agreements are put in place.

Section 228 allows for a majority of shareholders to get together to simply write a letter (the "consent action") to make the board take action on something that would usually happen at an annual or special event at anytime they want. From my understanding, a lot of companies have rules in place to limit what shareholders can do via a consent letter. But the WWE is really unique in that even though it is a publicly held company, Vince has 80% of the voting power.

So he wrote a letter dismissing the three board members and replacing them with himself, George Barrios and Michelle Wilson. And even though I do not think it matters, there are now two more open seats where he can put in whoever he handpicks.  And he can also replace anyone else he wants if he really wants to stack the board.

They made have made some changes to the bylaws to prevent the rest of the board from being able to overturn whatever Vince says via a letter. There are nine board members. There's Vince and two cronies. So a majority of board directors could outvote whatever Vince says on the board, but he can just wag his finger and make it happen this way, I believe. 

B) provide that special meetings of the Board be called by or at the request of the Chairman, the President or at least two directors (rather than the Chairman, the President or a majority of the Board)

This reads as if now Vince can call a special meeting to approve a merger with only two other board members saying yes, as opposed to the majority of the board. He has two loyalists joining the board with him, of course. The "rather than the Chairman..." part of the phrase leads me to believe that this was changed. 

C) prohibit the Board from amending, altering, repealing or re-adopting any bylaw adopted, amended, altered or repealed by the stockholders of the Issuer;

This reads that even if there are a majority of board members who hate the corporate by-law Vince proposes, they cannot get rid of it or change it in any way.

D)  require approval of the stockholders of the Issuer prior to the Issuer (i) entering into, materially modifying or taking certain other actions with respect to certain media rights contracts or transactions, (ii) issuing stock or other voting securities (subject to certain exemptions) or (iii) entering into, modifying or taking certain other actions with respect to any contract or transaction that includes a “change of control” or similar provision related to the composition of the Board

Even if somehow other people in the company (Nick Kahn/Stephanie/etc.) manage to find a deal involving media rights or somebody wanting to buy the company, or if they want to try and game the system by issuing new shares with voting powers to dilute Vince's grip on the company... Vince gets final word. Again: how I am interpreting it and not sure if this is a change from the previous language.

This is really fucking wild. 

[Greggulator]

1 hour ago, Cobra Commander said:

Anyways, I suspect there won’t be a deal to just buy out Vince’s shares here.

It doesn't work like that. If a board of directors approves an acquisition, then all of the stock gets acquired. You can't just buy specific shares of publicly traded companies. There might be some technical ways to make that happen but it's not usually the case. 

[Elsalvajeloco]

6 minutes ago, Greggulator said:

This reads as if now Vince can call a special meeting to approve a merger with only two other board members saying yes, as opposed to the majority of the board. He has two loyalists joining the board with him, of course. The "rather than the Chairman..." part of the phrase leads me to believe that this was changed. 
 

"So yeah, Tony Khan is your new boss. Buh bye!"

I want all the chaos. If you thought he was petty now.....fuckkkkkkkkkkkkkkkk.

Serious question though, @Greggulator. Maybe I missed it, but would Vince be able to negotiate a deal to sale to another buyer while the other parties are doing the same with someone else? Or does he not have that power?

[Krone]

This shits more interesting than the product they've produced in the last ten years. I for one am stunned that Vince was able to pull all of this off while he's currently under investigation. I won't pretend to know corporate laws, etc. but damn, this guy just won't go away

[Cobra Commander]

2 minutes ago, Greggulator said:

It doesn't work like that. If a board of directors approves an acquisition, then all of the stock gets acquired. You can't just buy specific shares of publicly traded companies. There might be some technical ways to make that happen but it's not usually the case. 

anyways, I suspect the concept of "go the fuck away" money is sorta what got Vince into this situation so, it might not be a solution to this problem

[Peck]

1 hour ago, Dolfan in NYC said:

2) This sounds fine:

Sapp did say it was NOT a talent meeting. 

[John from Cincinnati]

So the move is definitely for MJF to be elated that Vince is back and he can't wait to work with him. 

[Krone]

Kind of ironic all of this happens on January 6th none the less too... Vince really does wanna be the Don.

[Greggulator]

Now from a stock price perspective -

The difference in opinion that wrestling fans have of Vince and the creative end of WWE and how the world of investors view Vince could not possibly be more different. Investors (and I mean major investors who buy/sell hundreds of thousand shares, not people with Robinhood accounts) think Vince is going to be able to get a good acquisition done. 

For those of us who think nobody is going to watch Raw because Vince is back and booking the show... maybe it will impact ratings. Maybe it won't. But none of that changes the fact that the WWE has an incredible amount of intellectual property and a very strong track record of turning that intellectual property into cash because it's a profitable. Through September of 2022, the company made over $156 million in profit. The year before, they made $116 million in profit.

The WWE is not like Netflix or any number of companies where they are growing revenue but rarely, if ever, turn that into positive cash flow by having its revenue outpace its expenses. (Revenue is not profit.) The WWE is not saddled with any significant amount of debt. There is an absolutely huge value right now in any company with a track record of profitability and a business model that works. 

I know a lot better than to try and predict the valuation of a company. But I write about this shit every day, and I can absolutely buy the argument that many different entities want to buy the WWE. Cash is king, and the WWE makes cash. Through the end of September, it made over $202 million in cash through its operations -- through its television, live shows, merchandise, licensing and etc. 

The people who make decisions on how much things are worth do not give one shit about how we as wrestling fans care about Finn Balor. 

Now, I see a major downside with having Vince on the board with the whole looming SEC look into the company. The company had to go back to federal regulators and tell the public: "Hey, we didn't make as much money as we thought we did because the CEO and controlling shareholder used company funds to keep women he creeped on quiet." That's a major fucking no-no and is usually really bad news for a company's share price. Like "send the company into a death spiral" level bad. 

The amount of money the WWE had to restate was not a lot as a percentage of the company's revenues. And there have been way bigger cases of restatements over the years. Enron's restatements were billions. But it's still a big deal. Vince would not go to jail for this. He would pay a  fine. Or, more accurately, his insurance company would pay a fine. 

I have no idea how investors could have confidence that this will all work out. 

[matt925]

Can we just imagine I’m posting a meme with all the employees on the zoom call with crazy wide smiles like all the townsfolk in the twilight zone episode with the boy who can read minds? “Yes, it’s glorious news that Vince is back to save us!”

[Greggulator]

22 minutes ago, Elsalvajeloco said:

"So yeah, Tony Khan is your new boss. Buh bye!"

I want all the chaos. If you thought he was petty now.....fuckkkkkkkkkkkkkkkk.

Serious question though, @Greggulator. Maybe I missed it, but would Vince be able to negotiate a deal to sale to another buyer while the other parties are doing the same with someone else? Or does he not have that power?

It's all moot now. He and he alone will make the decision. 

He more or less had that power already. He stepped down from the board. But if Disney came to the board and said "Hey, we want to buy your company for $100 a share" and they agreed, they still need to ask the shareholders how they feel about this. In a normal company, there are more (a lot more) independent and institutional shareholders (hedge funds and people like that) than one or two people with an overwhelming amount of voting power. 

I cannot stress enough how singular the WWE's set-up is with one person having 80% of the voting power of a company. Facebook is set up similarly because Mark Zuckerberg has 55% of the voting shares from what I just looked up. But this type of ownership is really rare. It's probably easier for a person who started a company that was privately held and decided to go public and have shares of the company able to be bought/sold (that process is an IPO for those not familiar) to own an outsized and controlling size of the company. And I am sure there are other examples. But the WWE is like really fucking crazy with how it is set up. 

[Eivion]

Now I'm curious how all of this works once Vince dies, especially the voting power.

[Elsalvajeloco]

18 minutes ago, Greggulator said:

I know a lot better than to try and predict the valuation of a company. But I write about this shit every day, and I can absolutely buy the argument that many different entities want to buy the WWE. Cash is king, and the WWE makes cash. Through the end of September, it made over $202 million in cash through its operations -- through its television, live shows, merchandise, licensing and etc. 

The issue I see though is I think the entities that would buy the WWE probably would have preferred to do it five or six years before other major events occurred (the aforementioned Warner Bros/Discovery merger, Disney acquiring 21st Century Fox, streaming bubble about to burst, the whole goddamn pandemic). I think that's taken a lot of the big time players out of the ballgame even if WWE is sitting pretty.

[worldcupfever]

6 minutes ago, Eivion said:

Now I'm curious how all of this works once Vince dies, especially the voting power.

Don't bother trying to figure it out since he'll outlive all of us.

[Greggulator]

Also, I know everyone dreads Vince "getting the book" or whatever. But I seriously doubt that will happen.

I know I might be delusional but I think he really wants to sell the company and fast, and he was worried that the convoluted structure of co-CEOs and without his expertise in negotiating big deals (and, yes, he has that expertise) was not going to result in a deal getting done.

My theory with this: Vince is 77-years-old. Who knows how much time he has left. As of yesterday, the WWE was valued at $6.3 billion dollars. (That's called market cap - you multiply the price of each share by the number of shares.)

When someone or a company goes to buy another company, it has to pay a premium to entire shareholders to agree to the sale. This is what happened with Elon Musk and Twitter.  Elon Musk and his cohorts bought Twitter for $54.20 a share.  It was selling around $40. 

WWE shares are at about $85 right now. And as I said earlier - this is a company with a lot of intellectual property it turns into profitability. It generates cash. Companies like that are really valuable right now. 

And like I said - I know enough about this to understand that any guess I have on valuating a company is outside of anything I can do. But if you were to tell me that Disney or Fox is going to buy the WWE for $100 a share - again, somebody is going to have to pay Vince a lot of money to sell the company - I would not bat an eye.

So Vince could go to the grave knowing he turned a wrestling promotion into an $8 billion corporation bought by one of the legendary media enterprises in history. The dude of course has an insanely big ego. That's a lot more gratifying to an ego then booking WrestleMania.

[Eivion]

3 minutes ago, worldcupfever said:

Don't bother trying to figure it out since he'll outlive all of us.

I'm less than half his age and its sad how true this feels.

[John from Cincinnati]

9 minutes ago, Eivion said:

Now I'm curious how all of this works once Vince dies, especially the voting power.

Is this something I'm misremembering, or do the Class B stocks become Class A if they change hands? 

[Greggulator]

11 minutes ago, Eivion said:

Now I'm curious how all of this works once Vince dies, especially the voting power.

That's a good question. It might be in some SEC documentation from way back but nothing is popping up about it quickly.

There's something in today's SEC filing that is interesting. The WWE (and other companies dome things similar) has two classes of stock. They have a Class A stock, which is the WWE share that anyone not named Vince McMahon can go out and buy. Vince owns Class B stock, which are the ones that give him the voting power. Linda McMahon has a tiny amount still.

But the document (and I doubt this has changed at all) says the Vince and Linda can convert the Class B stock into Class A stock, which loses the voting power. 

What I am guessing (and could really be wrong) is that whenever Vince sells shares, he technically converts the Class B stock into Class A stock. He's not selling the voting power to anyone. 

When someone dies, the investments they own go into their estate. Wealthy people almost always put together estate planning documents. Even regular people do this - that's a will. So I'm guessing Vince has set up some kind of estate planning thing to decide who the shares go to, and there's also a chance that they will turn into Class A shares like a normal company where whoever has the shares just owns a large chunk of the company but without the voting power.