WWE Chairman Vince McMahon lost more than $350 million in a single day earlier this month after the company signed a TV deal with NBCUniversal that shareholders thought was stinky. This caused share values to drop from $29.12 a piece to $19.96, and McMahon’s net worth to fall from a high of $1.6 billion in mid-March to $750 million.
But McMahon’s relative poverty probably won’t last long. For one, the TV deal wasn’t all that bad. The deal earned the WWE a 50 percent raise over its last agreement, Forbes reports, but unfortunately, shareholders and analysts expected the new deal to double or even triple the amount of the previous one.
There’s also the matter of the WWE Network, an online programming option that launched earlier this year, but has yet to attract over a million subscribers it needs to break even. On April 7, the company announced it had attracted just 667,000 of its initial million subscriber goal, which led to a $325 million loss for McMahon then. But wider societal trends are in the WWE’s favor, as people increasingly forego typical bundle cable television packages and opt for more cherry-picked content. (Netflix is doing pretty well, for example.)
Indeed, it seems these losses in the short term seem more devastating now than they will be in the long term. That said, though, there’s no telling how long one might need to wait for the WWE to bounce back and for McMahon to regain his membership to the billionaires club. According to the Wrestling Observer Newsletter (via Wrestlezone.com), the WWE is projected to lose $46 to $52 million this year, which is the second most any wrestling company has ever lost in a single year. (The WCW lost $62 million in 2000.)
But there’s one constant in this who scenario — Vince McMahon. This dude knows what he’s doing. Jim Varsallone of The Miami Herald writes:
“Mr. McMahon knows the pro wrestling/sports entertainment business. He has not only survived but succeeded over the long haul — even longer than cable television mogul Ted Turner [who owns WCW]. If something doesn’t work, Mr. McMahon will pull the plug. He did it with the XFL and bodybuilding.”
Thus, until McMahon pulls the plug, the WWE will exist. And more likely than not, if one judges from past experience, this brand will continue to flourish. All you have to do is Bo-Lieve.