WWE shares leapt 21% Friday to a three-year high as founder Vince McMahon jumped back into the ring. But it’s not just the presence of McMahon that has Wall Street excited; it’s also the possibility WWE will be sold as part of McMahon’s vow to maximize shareholder value.
McMahon rejoined the board of directors of WWE on Friday, using his position as controlling shareholder to elect himself to the board some six months after he retired, amid an investigation into allegations that he made payments to women over alleged sexual misconduct.
The goal of McMahon’s return is to “maximize shareholder value,” WWE chairwoman and co-CEO Stephanie McMahon said in a press release from the company announcing the move Friday. On Thursday, the elder McMahon, 77, issued a press release saying he wished to return to the WWE to help guide the business through an upcoming round of media rights negotiations and possibly explore a sale of the business.
“The only way for WWE to fully capitalize on this opportunity is for me to return as Executive Chairman and support the management team in the negotiations for our media rights and to combine that with a review of strategic alternatives,” McMahon said in Thursday’s announcement. “My return will allow WWE, as well as any transaction counterparties, to engage in these processes knowing they will have the support of the controlling shareholder.”
With WWE’s SmackDown and Raw rights up for bid later this year—and the company’s ratings up across the board for its content—investors believe a company may prefer to buy WWE outright and gain the intellectual property instead of simply leasing the content for a few years.
“Would Comcast, for instance, rather just buy WWE than pay a few billion for Raw, the PPVs and other content over the next several years?” tech and media equity research firm Lightshed speculated in a Jan. 3 note.
In the Friday WWE release, the company said McMahon also appointed Michelle Wilson and George Barrios, who were co-presidents of WWE until 2020, to the board. At the same time, McMahon removed three directors: 3-D printing executive JoEllen Lyons Dillon, GM executive Alan M. Wexler and Jeffrey R. Speed, a 14-year WWE veteran. Both Dillon and Wexler had been on the board for less than a year. Cinema-chain executive Ignace Lahoud and Sony Pictures’ Man Jit Singh resigned the board effective today as well, according to the company. No reason was given for the departure of the latter two executives.
In trading on the New York Stock Exchange Friday, WWE shares were up as high as $89.43 on the largest trading volume in two years.