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When Vince McMahon returned to WWE’s Board of Directors last month, he did so under the stated premise of exploring a company sale in order to maximize shareholder value.
The problem with that claim, of course, is that McMahon’s return introduces risk to the WWE brand as a result of last year’s hush money scandal and multiple allegations of sexual misconduct made against him. This negative risk to shareholders is why The Board denied his original request to return in December.
Given the nature of Vince’s power grab that ended with him back as the Executive Chairman of The Board, a lot of wrestling fans are wondering if Vince will ever agree to a sale if he isn’t guaranteed a position of power as part of the deal. In other words, would Vince be okay with selling the company and then vanishing again?
WWE CEO Nick Khan was asked a variation of this question on an investors call today. And according to Khan, there is a condition under which McMahon will step down from WWE again if a sale is made.
Khan was asked the following question: “Can you tell investors with certainty that Vince will be willing to end his involvement with WWE following a transaction, if that gives shareholders the most value?”
Here is his response:
“Yes, without question. He’s declared it to The Board. He’s declared it to us in management. It’s all about shareholder value. Obviously he is a shareholder, so it’s not about what role he’ll have, it’s about maximizing that value opportunity.”
I don’t believe for a second that Vince jumped through all these hoops to return to WWE just to go away again in a matter of months. It’s important to note that Khan isn’t suggesting that’s what will happen if a sale is made.
The question specifically includes a conditional statement about maximizing shareholder value. Vince’s return to WWE is heavily focused on that phrasing. That’s why it’s easy for Khan to say that Vince will end his involvement with WWE if it gives shareholders the most value. There is likely no scenario where Vince McMahon would ever determine that his absence from the company is best for shareholder value, so the condition in the question will never be met.
Moving on, Khan said finding the right partner for a sale of WWE is about more than just which company makes the biggest money offer. Here is what WWE is looking for in a buyer:
“A partner that has more than simply deep pockets. So a partner that understands the media business, that’s in the media business, that understands how to further monetize the media business, that certainly understands our product, our intellectual property, what we’re doing with it, what can be done with it, media rights both domestically and internationally. We see the international growth opportunity is huge. So in terms of choosing the right partner, these are all things that we’re gonna be looking at, in terms of who can accelerate our business, and again, what’s the best value for our shareholders.”
How well do you think Saudi Arabia fits that description, Cagesiders?
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