After nearly a year-long saga that started with Vince McMahon being forced out of his own company in disgrace by the SEC in light of McMahon using undocumented company funds for hush money payments, the WWE has officially sold the company to Ariel Manuel’s Endeavor group.
WWE has been in the McMahon family since its inception in 1963, dating back even farther to its Capitol Wrestling Corporation roots in 1952. McMahon, who bought the promotion from his father in 1982 for only $1MM, turned Titan Sports into a global sensation on the backs of talent such as Hulk Hogan, The Undertaker, Bret Hart, Steve Austin, and Dave Bautista.
This past weekend, WWE celebrated its 39th WrestleMania extravaganza, promoting only the second WrestleMania event to not feature at least an appearance by one of the five aforementioned pop cultural icons. As the professional wrestling landscape has continued to change in ways that would have seemed unfathomable even five years ago, it seems as though WWE is embarking on a new era with the sale announced just a day after its flagship premium live event highlighted Rhea Ripley, Kevin Owens, Sami Zayn, Gunther and Austin Theory in marquee spots. As new ownership takes over, WrestleMania weekend seemed to be a swan song for the past era of John Cena, while establishing incumbent WWE Champion Roman Reigns as the undisputed main staple and eyeing new NXT Champion Carmelo Hayes as the future.
As WWE took over the greater Los Angeles area, Inglewood, California was buzzing throughout the weekend as not only WWE, but Tony Khan’s Ring of Honor presented its supercard, GCW’s Collective changed the game once again and a plethora of other wrestling entities entertained thousands of wrestling fans that travel for WrestleMania festivities on an annual basis, providing a huge economical boost to the city that hosts the spectacle ever year. Yet, on WrestleMania Sunday, it wasn’t the roaring success of another week of exceptional professional wrestling, rather the CNBC report that the WWE has been sold to the parent company of UFC, a company that Shane McMahon had pressured his father to purchase almost 25 years ago.
McMahon has a reputation in financial circles as a revolutionary and ruthless businessman who wouldn’t surrender. It was McMahon that launched the initial pay-per-view model in sports and three decades later McMahon launched sports into the streaming medium ahead of the bottom falling out of the pay-per-view model. However, over the last ten years it has become evident that McMahon isn’t nearly as sharp and his personal affairs becoming more public have done little to help his reputation, to say the least. With his company slipping away from him, McMahon was essentially forced into putting his business on the market to maintain any say, something he will reportedly receive as part of the deal with Manuel. That’s not to say that the deal hasn’t been a success for McMahon, whose company was estimated at a market cap of just under $7B: the Endeavor deal that merges WWE with UFC will give the promotion an astonishing $21B market valuation.
While the report of UFC’s parent company buying out 51% of WWE’s shares dropped hours before former UFC Heavyweight Champion Brock Lesnar opened the second night of WrestleMania, WWE CEO Nick Khan confirmed today that the deal was reached after the success of the first night, headlined by Owens and Zayn defeating the Usos to become Tag Team Champions. Khan noted that there were quite a few bidders that came close. It’s rumored that Liberty Media, who owns the Atlanta Braves, SiriusXM and Formula One, as well as NBCUniversal were both heavily interested in the product. Khan noted that the proxemics of everything made the deal come together fast, with Endeavor based out of the Hollywood area.
UFC and WWE are no strangers to crossover. Names such as six-time WWE World Champion CM Punk, UFC Hall of Famers Ken Shamrock and Ronda Rousey, as well as two-time UFC Heavyweight Champion Cain Velasquez have competed in both the squared circle and the octagon. Now, under the terms of the agreement to buy a controlling stake in WWE, the two entities will comprise as one in a fascinating turn of events. The new company does not have a name, as McMahon and Manuel will reveal a new name soon, but it does have a new board of directors. Khan will remain president, while Triple H reportedly remains head of creative. Meanwhile, Vince McMahon will assume an executive role over both WWE and UFC as opposed to a direct creative role. Dana White remains president of UFC, while Mark Shapiro and Ari Manuel remain in their roles at Endeavor.
Triple H will open tonight’s edition of Monday Night Raw to address the WWE Universe with a special announcement, believed to be regarding the sale. The sale still has to go through a regulatory process and is expected to close later this year. WWE is hosting a talent meeting at 4 PM EST that could relay more news regarding the sale.
The sale comes at just the right time for all the parties involved as WWE’s television contracts are coming to a close imminently. Later this year, WWE’s deals with USA Network and FOX expire for Raw, NXT and SmackDown. It’s said that WWE and UFC will continue to negotiate media rights separately for linear television. However, Khan had expressed on Wednesday that he’d be interested in pursuing a UFC model for streaming. That has become likelier since time has passed, but WWE still has three years remaining on their deal with NBCUniversal for exclusive streaming rights on Peacock. Peacock’s subscription service still includes live sports such as Premier League, as well as fan-favorite television shows such as The Office, Married With Children, Suits and Law and Order: SVU. Yet, their streaming service has seen substantial growth with the addition of the WWE Network more than anything else. WWE’s content library on the Network features programming that snapped Randy Savage into Slim Jim, launched Dwayne Johnson into the stratosphere of fame, and witnessed the rise of The Man, Becky Lynch. It’s one of the biggest selling points to streaming providers such as Peacock, giving Endeavor a huge poker chip in future negotiations. It remains to be seen whether or a not deal voids the contractual obligations, but it’s a significant hurdle in following the UFC model. Another significant hurdle is the WWE consumer base being accustomed to paying $120 per year for access to every premium live event as it airs. Charging even $50 per month would be a massive increase for a base that has paid $480 less per year since February of 2014. Re-establishing a market could be proven ineffective quickly should Manuel, Khan and McMahon decide that is the avenue they’d like to explore.
WWE is in a major business boom with Triple H at the helm as Chief Content Officer. WrestleMania alone garnered the largest gate in the history of the event, a 20% increase year-over-year in merchandise sales, among other exceptional numbers. WWE has touted record-revenues in each quarter since Triple H took over the creative aspect of the business under tumultuous circumstances.
The impact of the deal in both the industries of Mixed Martial Arts and Professional Wrestling have yet to be felt, but should be felt sooner rather than later. WWE, of course, comes from the more entertainment based industry of Professional Wrestling that puts focus on storytelling within the art of fighting, whereas Mixed Martial Arts focuses almost-exclusively in the idea of real, physical combat. The two share similarities, but are inherently different in nature, targeting two very different demographics. The merger between WWE and UFC is currently operated under the stock ‘TKO’ in the New York Stock Exchange. The ramifications of what this, in theory, could mean for WWE are endless: Will the pay-per-view model change? Could they go back to TV-14 television? Will Manuel be more hands-on than we’re currently led to believe, causing similar issues WCW faced after the AOL-Time Warner merger? Does this change the perception for either current free agents or impending free agents such as Jay White and Kenny Omega that impacts their decision? To think broader: does WWE’s booking philosophy change? Do they take less of an entertainment approach and a more reality-rooted approach in the wake of merging with UFC? Is Tony Khan’s All Elite Wrestling the leader in the professional wrestling industry due to the implications of the WWE merger? The questions are endless, and I’m going to stop posing them before I’m 20,000 words into an article just posing questions. Though it’s suffice to say that the professional wrestling industry will likely never be the same again.
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