Vince McMahon became a billionaire by growing the WWE into a global powerhouse over the last few decades, but the company’s chairman and CEO reportedly lost much of that fortune in the span of 24 hours.
Now he may be losing much more.
The giant hit to McMahon’s net worth came this week as fears over WWE’s new online streaming network combined with a lackluster new television deal sent the company’s stock plummeting.
The television deal with NBCUniversal to keep hit shows Raw and Smackdown is worth a reported $150 million, short of the close to $500 million some thought the deal could garner. The WWE’s streaming network is also off to a slow start, gaining only 700,000 subscribers.
The WWE will lose between $45 million and $52 million this year, analysts believe, leading to a mutiny among investors.
“In general, WWE investors remain highly skeptical of management,” said analyst Brad Safalow of PAA Research. “Over the past 5-6 weeks the company’s initial Network subscriber numbers and the mark to market on the domestic TV rights fees both fell short of expectations.”
The bad news led the WWE to lose big with investors. The company’s stock dropped 40 percent on Friday, falling to $11 from $20. The big loss meant that Vince McMahon personally lost about $350 million, dropping his net worth to an estimated $750 million.
“The company’s valuation could take a heavy beating this morning, as the new domestic TV deal with NBCUniversal likely disappointed investors,” wrote Benchmark analyst Mike Hickey in a report downgrading the price target for the company’s stock.
The WWE news is devastating for Vince McMahon, whose net worth peaked at $1.6 billion just a few months ago.
There could be more bad WWE news on the way. While Vince McMahon has tried to placate investors in a recent conference call, there are rumors that management changes could be on the way.
There have been signs of trouble for months. Lemelson Capital Management in April recommended that investors short-sell WWE stock and recently announced they had invested in WWE and were calling on the company’s board of directors to replace the executive management team.
After already losing $350 million, WWE CEO Vince McMahon may soon lose his job and possibly his freedom. There is reportedly an investigation being launched to see if WWE executives broke the law when they promised investors they would double domestic television rights fees, but then failed to deliver.