Think you had a bad day? Well Vince Mcmahon lost $350 million last Friday.
WWE Chairman Vince Mcmahon lost an estimated $357million on Friday, yes that’s million. The loss, which came due to the share price of WWE stocks taking a massive tumble, meant that Vince is no longer a billionaire, but he’s still a very wealthy man. Though his wallet might have suffered a huge dent, does it really spell trouble for the WWE, or is it a blow the company can easily shake off?
WWE Chairman Vince McMahon
How do you lose over $350 million in one day? Well for Vince McMahon it happened after the WWE announced their new network television deal, which was less than impressive to Wall Street. The new deal which sees WWE programming stay with NBCUniversal is estimated to be worth around $150million, which, while impressive, was around a third less than what they were expecting. Shareholders had been early awaiting the new TV deal announcement, after they were left underwhelmed at the performance of the WWE Network so far.
The online streaming service has gained around 700,000 subscribers so far, which is less than shareholders might have wanted. When the new TV deal was announced WWE stock price fell from $19.93 to $11.27 on Friday. The drop in price meant that McMahon, who was recognised as a billionaire in March, now saw his fortune drop to an estimate $750 million.
Bad news? Of course, when is losing $350 million ever not going to be? But it’s all not really as bad for WWE as it might appear from the outside. The company had been expecting to make loses this year due to the expense of creating the Network. While the subscriber numbers might not be impressing Wall Street so far, it is by no means yet a failure. The Network is currently in its infancy as is the technology, so the subscriber number should only be expected to grow over the next few years. The Network is something the company is in for the long haul and its inception has meant the company will have to go through many changes in the future in regards to its programming.
WWE Champion Daniel Bryan
In a conference call held on Monday, McMahon said that he felt the launch of the network meant that the company did get a lower television deal than expected. Not only that, the network has meant that in the US, the WWE’s pay per view programming has been dropped by Direct TV and the Dish Network because they felt they were being undercut by the company who now offer the shows on the Network for the low price of $9.99 a month.
The real failure by McMahon was overhyping both the expected success of the Network and the television deal. The hype created earlier in the year caused the stock price to rise to a high, making McMahon a billionaire again, but since things haven’t been as immediately successful as first hoped, the crash of Friday was inevitable.
The WWE Network launched in February
Still billionaire or not, McMahon and the WWE have gained two things this year, their new TV deal and the Network. Although neither has gone exactly to plan, they are both enough to almost ensure continuing company growth, even if profits have to take a hit while the Network finds its footing. Friday was a bad day for Vince McMahon certainly, but for the WWE it was far from a knockout blow, because if McMahon’s learnt anything in his 30 plus years on top, it’s how to roll with the punches.