There speculation recently that Vince McMahon was looking to sell the rights to WrestleMania and potentially other big pay-per-views to a streaming service like ESPN. It appears those talks, at least ones with that particular network, are over.
Vince McMahon announced last month that WWE was looking into a “transformative” WWE Network deal that could include selling pay-per-view rights to a large streaming provider. The move would then require fans to pay a certain fee and/or subscribe to the buyers network to see the pay-per-vies and shows like WrestleMania would no longer be available to WWE Network subscribers.
The move was discussed during the Q4 earnings call and an announcement was supposed to be made before the end of the quarter. That would have been next Wednesday. Analyst Alan Gould of Loop Capital stated that things have changed, mostly because Vince McMahon entered into a variable prepaid forward contract to pledge approximately 3.5 million shares of his Class B common stock.
The move allows Vince to collect cash without giving up any shares or voting rights. The contract is set to settle on specified dates in March 2024, at which times the number of Class A shares to be delivered by Vince will be determined based on price at the time.
“We do not believe Mr. McMahon would be entering a prepaid forward contract on 15% of his shares, about 3.5 million of them, in front of such an announcement,” Gould stated, via Deadline. So too, with the drop in stock prices and the loss in revenues from having to change WrestleMania and there being questions about how WWE will continue to produce live television during the mandate of social distancing, such a deal doesn’t make sense.