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Not long into a recent World Wrestling Entertainment extravaganza, Becky Lynch, the reigning women’s champion, was lying on her stomach inside a ring in Ontario, Calif., when the scowling Shayna Baszler removed her signature black mouth guard, bent down and appeared to sink her teeth into the back of Lynch’s neck. Lynch screeched while a comically large fountain of red liquid gushed everywhere. It was like watching Dracula strike oil.
Moments later, the audience watching at home on USA Network followed the cameras backstage as medics tried to persuade Lynch to leave the Toyota Arena in an ambulance.
“I don’t need to go to the hospital,” Lynch said. “It’s just a flesh wound.”
That also appears to be the attitude of WWE’s longtime chief executive officer, Vince McMahon, despite some deep cuts to the wrestling empire’s viewership. After flying high in 2019, the company’sstock is down by one-third this year. Ticket sales from live events are slumping. A new wrestling rival that airs on WarnerMedia’s TNT cable network, All Elite Wrestling, is poaching talent. WWE’s long-running plan to conquer such overseas markets as India and the Middle East appears to have stalled. And the company’s subscription streaming service, the WWE Network, lost roughly 160,000 subscribers, about a 10% decline, in the past year.
Dave Meltzer, publisher and editor of the Wrestling Observer Newsletter, said that WWE has become a victim of its own TV success. WWE produces three live shows: Raw and NXT, which air on USA, and SmackDown, on Fox. That’s seven hours of weekly programming, a lucrative arrangement for WWE, but one that might be overtaxing WWE’s writer room—yes, the mayhem is scripted—and flooding the market.
“The product is decreasing in popularity, due to television oversaturation,” Meltzer says.
Investors are now watching for clues as to how McMahon will stop the bleeding. So far, the results have not been reassuring.
On Jan. 30, WWEannounced it had dismissed co-presidents George Barrios and Michelle Wilson, despite having no immediate plan to replace them. The move touched off another bout of teeth-gnashing on Wall Street—particularly among analysts who believe McMahon, 74, would benefit from more seasoned help running the company, not less.
During the company’s Feb. 6 quarterly earnings call, McMahon told analysts that, in spite of the diving share price, WWE is thriving. Thanks to the recently signed TV contracts with Fox and USA, the company’s revenue and profits are at all-time highs. The recent executive shakeup, McMahon said, was “execution-related,” not in any way an indictment of WWE’s recent business strategy or an admission that WWE might need to change direction.
McMahon didn’t sound like an executive ready to listen to the medics and seek help. No ambulance, thanks. Just a flesh wound.
Company executives didn’t respond to requests for comment.
Not everyone is convinced of a full recovery. Brandon Ross, an analyst with LightShed Partners, said in a recent report that “WWE’s creative process required significant overhaul” and that to do so might require McMahon to loosen “his creative grip” on WWE. Ross urged McMahon to consider relinquishing creative control to Paul “Triple H” Levesque, a former WWE wrestler who’s married to McMahon’s daughter, Stephanie. In recent years, Levesque has overhauled WWE’s talent-development program.
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The company could certainly benefit from the ascent of a fresh megastar. Every memorable WWE epoch has been defined by a single wrestler, from Hulk Hogan to the Undertaker to Dwayne “the Rock” Johnson to John Cena. The Cena Era appears to be over, as the brawler with the big biceps has gone Hollywood. He hasn’t appeared in a WWE match since early 2019, and, so far, WWE’s attempts to promote a replacement have fizzled.
Another Wall Street worry, according to LightShed’s Ross, is theXFL, the pro football league McMahon controls through closely held Alpha Entertainment. The idea of taking on the National Football League has proven over the years to be a great way to burn money—as McMahon knows all too well. In 2001, he teamed with NBC to launch the original XFL, in part using proceeds from his wrestling business. The original XFL lost tens of millions of dollars and folded after one season. In early February 2020, the rebooted XFL 2.0 made its debut with TV viewership that rivaled the Alliance of American Football, which was shuttered last spring in the middle of its inaugural season.
McMahon has said that the XFL is separate from WWE and will remain so. But questions persist about how much of McMahon’s attention will be devoted to football. LightShed’s Ross said that for WWE to get back on track, it must fix its storylines—a prospect that could be more difficult if McMahon is splitting his time between the ring and the gridiron.
While McMahon has shown little inclination to cede control, he’s signaled that he might be willing to alter WWE’s distribution strategy to take advantage of the explosion in streaming video. Six years ago, the company made a risky move, shifting high-priced pay-per-view events such as WrestleMania from cable and satellite TV to its subscription streaming-video service, the WWE Network, which costs fans $9.99 a month for full access.
Now, with the WWE Network losing subscribers, and the streaming world increasingly crowded with new services willing to pay for attention-grabbing entertainment franchises, McMahon appears to be reconsidering the setup. On the recent earnings call, he mentioned the possibility of cutting a deal with one of the “majors” in streaming. He didn’t elaborate.
Selling off a package of big WWE events to a streaming service would make a certain kind of logic in the McMahon universe. Even at a time when the market appears oversaturated with televised wrestling, the solution remains the same as it always was: more wrestling.
“Vince McMahon may encapsulate a thuggish old-school CEO, but professional wrestling is coursing through his veins, and WWE offers an investment opportunity with significant upside,” says Mike Hickey, a Benchmark Co. analyst. “There’s no drama like wrestling.”
Back at the Toyota Arena, champion Becky Lynch, her hands and shoulders generously smeared in blood sauce, finally agreed to accept medical attention. But in the spirit of her boss McMahon, Lynch would be damned if she was going to let somebody else take the wheel. Lynch pushed aside the medics, dragged a guy out of the driver’s seat, and got in. “I’m driving this thing,” she said, ignoring the protestations of the crowd of onlookers. Off she went, with the lights flashing and the sirens screaming.
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