In tag team competitions, a wrestler jumps into the ring after his fellow wrestler has left him – sometimes forcefully and upside down. Stephanie McMahon has taken over as co-general manager of the American WWE wrestling franchise after father Vincent’s own unexpected exit. This week, she denied rumors that she was an unwitting fighter, but let talk of a lucrative sale.
WWE stages theatrical battles of a kind that made Hulk Hogan and Dwayne “The Rock” Johnson, now a Hollywood star, famous. Major family shareholder Vincent McMahon also mixed traces of sports with showbiz lashes: Donald Trump shaved his head once in the ring for a forfeit.
He abruptly retired last month following allegations of secret payments to female employees. According to filings, WWE discovered that Vincent McMahon made $19.6 million in payments, including $5 million to a Trump charity, which should have been disclosed as business expenses.
The company said the payments were “not material” but would revise its financial statements. WWE concluded that there were “material weaknesses” in the company’s internal controls.
Scandals aside, WWE is thriving. Over the past two years, its shares have risen 65%. The post-pandemic reopening boosted attendance at live shows. A media division generates strong ratings that should yield a windfall when broadcast rights expire. The company recently raised its EBITDA forecast for the year to nearly $400 million.
WWE’s enterprise value is now $5.5 billion. The company is a rare bright spot in a volatile media and entertainment market.
The McMahons have been synonymous with WWE for decades. The family owns about 40% of the company’s shares, exercising 80% voting control through supervised shares.
Stephanie McMahon recently said the company would consider anything to maximize shareholder value. Rivals would pay dearly for this grunt-and-groan affair.
A new owner would almost certainly lack the theatrics of WWE’s first family. But recent events show that drama is best when staged in advance and confined to the ring.
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