From the Mouth of the Shark
With Sean Williams
WWE Stock has been on a downward spiral. WWE’s Stock went down by 40% this week. It was also reported that Vince McMahon was no longer in billionaire status after losing $340 million in one day. That’s about a third of his own fortune that is now up in smoke. This is all following the announcement of WWE’s new deal with NBC Universal. Bottom line is that the WWE’s investors are not happy. In fact, it may be a safe bet to go as far as to say that the WWE’s investors are pissed.
Lemelson Capital is calling for the removal of WWE’s Executive Team or even the selling of the WWE itself and it all ties in with the Network. Lemelson has asked the board of directors for the removal of their executive team following what they called a period of consistent losses as well as WWE’s inability of explaining or promoting of the WWE network and the feeling that the company can lose between $45 to $52 million this year. Lemelson has gone as far as to refer to what’s been going on with WWE as ““material misrepresentations by the company about both performance and operating profit model of its WWE Network, which the company has wrongly labeled a ‘home run.’”
In other words, the WWE lied to the investors. Vince McMahon lied to the investors or at the very least, tip-toed around telling the investors the complete truth. I’m not going to be one of those people that are saying this is the downfall of the WWE or the demise of the WWE because it isn’t. It does go without saying that this is a very bad situation. Vince McMahon may see himself as invincible after beating the steroid allegations and even toppling WCW, but the fact is that this is not scripted wrestling and this is not some storyline he cooked up. It’s the financial world, it’s Wall Street and that is a world that is “Kill or be killed” and “Survival of the Fittest” and it will eat you alive if you’re not careful. In that world, no matter how rich or poor you are, all are accountable in it and that includes somebody like Vince McMahon.
WWE is trying to think of the long term for the WWE Network and they have a set plan in mind for the long term but only if the set number of subscribers are met. The key word being “If” because right now, the WWE Network’s subscribers has not even surpassed a million. It hasn’t even broken 700,000 and it needs that number and 700,000 more because WWE is without PPV revenue now and that’s a good amount of cash that WWE has relied on for some time and they no longer have the ability to rely on.
So, to sum it all up with the WWE’s situation right now. They promised to have a million subscribers after the launch of the WWE Network, they don’t have it. They promised to have a new and bigger TV deal, they don’t because their new deal is just the same old song and dance they had before. What they do have is empty promises that they couldn’t fulfill and goals that they failed to meet. It’s no wonder why the investors feel lied to and are pissed off. It would be one thing if this was just Vince McMahon’s money alone, but now you have investors involved in this and it’s their money that is being gambled with here.
A lot of people said that the WWE was in over their heads with the WWE Network and I was one of those people and what’s going on right now is exactly one of those reasons why. The Network is designed for the hardcore fans and die-hard fans, but with wrestling the way it is these days and facing an uncertain future, who knows how many of those are really left anymore. The future of pro wrestling is hard to predict right now. Extreme Rising pulled the plug and TNA with Dixie Carter’s bad decisions, stiffing her staff of their paycheck, and an continuously shrinking roster, are just delaying the inevitable. Ring Of Honor is on stable ground due to the amount of baby steps that they take and their new deal with New Japan which seems to be working out for them.
WWE and even Vince McMahon himself have simply bitten off more than they can chew. It’s hard to imagine that they took into consideration the costs of the network and what it would take for it to be successful. I’m not calling the WWE Network a failure, but it’s definitely failing. Vince may have been able to overcome a lot over the years, but at age 68 and investors that are pissed off because they feel he’s treating their money as if it were Monopoly money, there is a lot of damage control to be done come the meeting with the investors. When the smoke clears, it’s gonna come down to how this is gonna effect the current product itself, much like we all pondered the when the network was announced.