With its stock cratering after announcing it was looking into “strategic alternatives” for its WWE Network, World Wrestling Entertainment chairman and CEO Vince McMahon said the five-year-old streaming network has several options, including a potentially “transformative” deal with a major network over-the-top provider that could happen as early as the end of the first quarter.
WWE stock has been in the dumps since Jan. 30 when the company abruptly fired two top executives -- co-presidents George Barrios and Michelle Wilson -- and shares fell 21%. The stock fell another 18% Thursday morning after revealing lower than expected 2020 guidance and that it was evaluating strategic options for the streaming service.
Since the call, WWE stock has regained some of that ground -- it closed at $44.50 each on Feb. 6, down 9.2% ($4.50 each).
On a conference call with analysts to discuss Q4 results, McMahon said a decision for WWE Network hadn’t been made, but offered several options for its future, including a sale, keeping the service as is, or striking a licensing deal for its content with other major networks and/or OTT service providers. The WWE chief seemed to lean toward the last option, adding that if WWE Network decided to go that route it could have a deal in place by the end of March.
“We have a lot of options,” McMahon said on the call. “We can continue on as we are now with an enhancement like a free tier or an enhanced paid tier. Right now there is no better time to exercise the selling of our rights to all the majors, and quite frankly all the majors are clamoring for our content. That could be a significant increase in terms of revenue.”
Later McMahon said if WWE Network were to pursue an OTT deal, it would be done by as soon as the end of Q1.
“We’d be announcing that deal, if we go that way, in the first quarter,” McMahon said. “That’s how far along we are,” he said.
McMahon added that if WWE decided to continue with the network as is, adding commercials or some form of sponsorship is an option.
“If we continue on with the network pretty much as is, we are definitely going to consider that,” McMahon said.
McMahon also added some more color to the reasons behind Barrios’ and Wilson’s departure, adding that their differences were around focus, execution and reallocations of resources. He added that WWE is in the midst of transforming its culture.
McMahon said WWE’s new management culture will be more inclusive, adding that the company has hired an outside search firm to look for replacements for Barrios and Wilson, as well as looking internally. In the meantime, he added that he can handle the extra load.
“At the moment, I have a few more direct reports. Going forward that will not be the case in terms of allocating my time,” McMahon said. “I have pretty broad shoulders and I can handle a lot.”