WWE Owner McMahon Falls Out of the Billionaire Ranks Overnight

Saturday, 17 May 2014 04:00 PM

By Sandy Fitzgerald

  Comment  |
   Contact  |
|  A   A  
  Copy Shortlink
World Wrestling Entertainment owner Vince McMahon was a billionaire when he woke up Friday morning, but after shares in his empire were bodyslammed in the stock market, he ended the day knocked out of the billionaire's club.

Shares in WWE went down by more than 40 percent Friday, reports Forbes, but in fact took its hardest hit overnight. On Thursday, the stock closed at $20 a share, but by Friday morning, it opened at below $11. Overall, McMahon lost $350 million by the market's close.

McMahon remains an extremely wealthy man, with a net worth estimated at about $750 million. But his fortune fell after stock in WWE plummeted when the company signed a new television deal with NBCUniversal for less than investors had hoped for.

WWE netted a 50 percent increase over its last television agreement, but investors had hoped the new deal would more than double or even triple its prior contract.

George Barrios, chief strategy and financial officer for WWE, said the company has never
commented publicly on expectations, and that it was "undervalued by the math that we had done.”

McMahon's personal net worth hit an all time high in mid-March, when it reached $1.6 billion after the company's shares soared 89 percent in the first three months of this year, Forbes reports.

But after WWE announced that the WWE Network, its new online streaming service, had just 667,000 subscribers, far fewer than projected, shares took a 29 percent freefall, and McMahon lost $325 million.

Adding to WWE's woes, Intrepid Capital Management, which was once WWE's largest outside investor, sold its 10 percent stake in the company. Intrepid Portfolio Manager Jayme Wiggins told Forbes that he believes McMahon was betting too much on his new network.

The streaming service costs $9.99 a month — with a six-month commitment — and includes pay-per-view matches, a savings for fans who would normally have to pay $55 and more to watch the events legally.

Nonetheless, the WWE Network needs 1.5 million subscribers to break even, said Wiggins. Two million subscribers would bring an estimated $50 million in profits, and at three million subscribers, the network would gain $150 million.

"The question is why their numbers are so low given this renewal," said Wiggins. "With the information that they put out there, it seems to imply that their core business isn’t making money."

But McMahon, who owns 52 percent of WWE, built his fortune on TV deals, which enabled him to buy out his father's regional wrestling company and take it nationwide. But his new streaming network could cut into those deals and into his pay-per-view audience, which attracted people to pay large fees for events such as Wrestlemania that they otherwise would not get to see unless they attended a live show.

And as WWE's TV numbers grew, McMahon's empire grew even more through live performances, making him a star as well and a billionaire for the first time in 2000.
Related Stories:

© 2014 Newsmax. All rights reserved.

  Comment  |
   Contact  |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Man Dies After Shooting at Mexican Consulate, Other Sites in Texas Capital

Friday, 28 Nov 2014 16:06 PM

A man apparently upset about U.S. immigration policy was fatally shot early on Friday after firing more than 100 rounds  . . .

Players' Union: Ray Rice Wins Appeal of His Indefinite Suspension

Friday, 28 Nov 2014 15:36 PM

Former Baltimore Ravens running back Ray Rice is eligible for reinstatement by the National Football League after winnin . . .

Legal Immigrants Being Blocked in Latest Obamacare Glitch

Friday, 28 Nov 2014 14:27 PM

Legal immigrants, eligible for Obamacare, are running into problems when they try to sign up for coverage on HealthCare. . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved