WWE’s attempt to sell PPV rights to ESPN not happening?
As previously reported, WWE CEO and Chairman Vince McMahon made a deal where he made a variable prepaid sale that covers about 3.5 million shares of Class B common stock in WWE. Deadline.com released its own article and analysis of McMahon selling about 15% of his WWE stock for the contract, which also has comments from Alan Gould of Loop Capital from an investor call yesterday (March 25).
Previously, there were reports of McMahon was looking to sell pay-per-view events to a major streaming service. Gould believes due to this recent deal McMahon made on his stock shares, such a deal for WWE events and content is not coming anytime soon.
Gould stated on McMahon’s stock deal: “WWE last year had promised a transformative deal, presumably selling the WWE Network to a large streaming company. The expectation was that if a deal were struck, it would occur in the first quarter, prior to Wrestlemania 36, which starts April 4. We do not believe Mr. McMahon would be entering a prepaid forward contract on 15% of his shares – about 3.5 million of them – in front of such an announcement.”
As noted, McMahon’s deal on his stock shares agrees that they will be sold in March 2024. However, the cash flow to McMahon, valued at $80 million, will be given now. McMahon will not have to turn over the stocks or pay taxes on the sale until that period in four years.
Alan Gould did state that WWE is still financially strong, and while WWE is currently taking a hit from the coronavirus shutdowns, he believes the company will bounce back from its current financial struggles. He added, “Wrestlemania will not be the same spectacle it typically is out of the Orlando Performance Center as opposed to Tampa Stadium in front of 70,000+ live fans.”
WWE stock is currently valued at $34.91 per share as of now.