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Vince McMahon hopes to earn as much as $9 billion from the sale of World Wrestling Entertainment Inc., which he took back to the helm this year, according to people familiar with the matter. (AP Photo/Jessica Hill, File)
Lucas Shaw | Bloomberg
Vince McMahon hopes to earn as much as $9 billion from the sale of World Wrestling Entertainment Inc., which he took back to the helm this year, according to people familiar with the matter.
The company has received offers, said the people, who asked not to be identified because the discussions are private. WWE declined to comment.
Shares of WWE rose 4.9 percent to $91.48 in New York on Friday. As of Thursday’s close, the asking price was 37% above the company’s market capitalization of $6.5 billion. The stock is up 30% this year, in part on takeover speculation.
McMahon, 77, is WWE’s controlling shareholder and was reinstated as executive chairman in January to oversee a strategic review of the company. McMahon left the company last year after it was revealed that he paid millions of dollars to settle sexual misconduct allegations.
WWE’s list of potential buyers includes Ultimate Fighting Championship owner Endeavor Group Holdings Inc., as well as Middle Eastern investors who have already made major investments in golf and soccer. Endeavor needs third-party financial help because its $10.4 billion market cap is just a little more than McMahon would like, but the company has shown it can integrate and grow a sports media business with the UFC’s divisive founders.
Saudi Arabia has embarked on a major investment in media and entertainment and has expressed interest in buying Liberty Media Corp.’s Formula One racing car. WWE CEO Nick Khan last month dismissed a report that Saudi Arabia had reached a deal to buy the company, saying it was “completely false.”
Larger strategic buyers, such as Netflix and the Walt Disney Company, may be less willing to take over a business controlled by McMahon, which involves the sometimes messy personal lives of its wrestlers. McMahon learned the business from his father, an event promoter on the East Coast. He built WWE into an international entertainment powerhouse, offering regular arena and broadcast shows on Fox Corp. and Comcast Corp.’s US Networks.
WWE is in the early stages of negotiating its next TV deal and may renew its current deal with Fox and Comcast. Any media company interested in airing these shows could also take advantage of the opportunity to acquire the entire business. WWE has been one of the most popular sweepstakes on Comcast’s Peacock streaming service.
However, given the turmoil in the global economy and rising interest rates, McMahon may not find many buyers willing to pay for him. The $9 billion valuation is about seven times the company’s $1.29 billion in sales last year and 23 times its adjusted operating income before depreciation and amortization, both at the high end of the entertainment industry.
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