WWE Shares Tumble 43 Percent After TV Deal With NBCUniversal
Vince McMahon, the wrestling company's CEO, reportedly loses $350 million in a single day, enough to knock him off of the Forbes list of American billionaires.
Shares of World Wrestling Entertainment plunged 43 percent Friday on massive volume after the company said a day prior that it struck a deal to keep several shows on networks owned by NBCUniversal, though at a price analysts figure was well below what CEO Vince McMahon had been angling for.
WWE also released earnings guidance that disappointed Wall Street, and investors are still nervous about the WWE Network, an on-demand streaming service launched this year that has more than 600,000 subscribers and should hit 1 million by year's end, which could lead to a $52 million loss for the venture. The WWE, though, takes a long-term view of its fledgling online network, and McMahon has said many times he expects that, ultimately, it will be very profitable.
Meanwhile, the WWE's new deal with NBCU will keep Raw on USA, SmackDown on Syfy and Total Divas on E! for several years. While terms of the deal weren't disclosed, The Wall Street Journal reported that WWE had been getting close to $100 million for those TV rights but was looking to double that figure. Instead, it had to settle for roughly a 50 percent bump.
Shares of WWE dropped $8.66 on Friday to $11.27 with 41 million shares trading hands, significantly more than the average of 1.7 million shares traded each day. The stock's swoon cost McMahon $350 million personally and knocked him from the ranks of American billionaires, with a new net worth estimated at $750 million, according to Forbes.
The WWE also said that when it is through selling TV rights in the U.S., U.K., Thailand and India, they should be worth about $200 million annually, less than what many analysts had modeled.