WWE CEO Nick Khan said an exploration of strategic alternatives is in early stages but well underway and the company will “consider a broad range of possibilities.”
Speaking on a call after quarterly earnings, Khan addressed the sale process intiated in the midst of some major corporate drama. Majority shareholder and former longtime CEO Vince McMahon, who stepped back last summer, returned as executive chairman in early January. When he did, he brought two allies and former directors with him to the board, and ejected three sitting members.
“There is more interest than ever in owning content and intellectual property. With the expiration of our domestic media rights in 2024, and the upcoming negotiations for those rights, we have a unique opportunity to explore a wide range of value-enhancing alternatives both with parties that recognize the value of content and IP like ours, and with parties that value owning the content that they host on their own platforms,” Khan said.
WWE has hired a financial and legal advisor to explore a transaction. Khan is now sole CEO. His co-CEO Stephanie McMahon,the daughter of Vince McMahon, stepped down last month.
Vince McMahon exited in July amid an investigation into allegations of sexual relationships with employees and subsequent payments. An internal probe by a board committee ended in November. with the company restating some earnings and McMahon agreeing to repay “reasonable” costs to the company of the investigation that aren’t covered by insurance. Last quarter, those costs amounted to $2.3 million, WWE CFO Frank Riddick said, and more are expected.
He said the results also included $7.4 milion of expenses “reflecting payments that Mr. McMahon has agreed to make related to addiitonal claims that have recently been settled. These payment were, or will be, paid by Mr. McMahon.”
Asked if McMahon would definitively committ to stepping away from WWE after a sale if that was necessary to faciliate a deal or get the best price, Khan said, “Yes, without question.”
WWE weekly shows Monday Night Raw and NXT that air on NBCUniversal’s USA Network, and Friday Night SmackDown on Fox, have five-year deals ending in 2024. Peacock retains streaming rights through 2026. Khan said the potential array of rights holders for WWE content has expanded over the past few years, along with the possible pool of bidders for the company as a whole. Aiming for a sale before or concurrent with renewals makes sense, he said. “If we did new, five-year deals, it would take a number of potential buyers off the table.”
He said “WWE is looking for a partner that has more than deep pockets, but understands the media business, is in the media business, understands our product and IP. And, “We will be looking at getting the best value for our shareholders.”
WWE’s quarterly sales nosed up 5% to $325 million on higher network revenues related to the timing of premium live events, partly offset by a decline in consumer products licensing and e-commerce revenue.
Net profit dipped to $38.8 million, or 45 cents a share, from $60.9 million, or 73 cents.
Khan said 2023 will see a focus “on continuing to execute on our key operational initiatives, such as the domestic licensing of our flagship programs, Raw and SmackDown, as well as the international licensing of our content in key markets. At the same time, we’re focused on the review of strategic alternatives that we announced earlier this year, with the goal of maximizing value for all shareholders.”
Recent highlights the company noted include:
“Crown Jewel was the most viewed international event in WWE’s history. Domestic unique viewership on Peacock increased 70% over the prior year event.
Each WWE domestic premium live event (Extreme Rules and Survivor Series) was the most viewed event in its history with year-over-year increases of 36% and 46%, respectively, in domestic unique viewership
WWE announced a multi-year extension of its partnership with MultiChoice to expand the distribution of the Company’s content in Sub-Saharan Africa In January 2023, WWE held Royal Rumble at the Alamodome in San Antonio, TX. The event was the most viewed Royal Rumble in WWE’s history, with a 52% year-over-year increase in domestic unique viewership, and generated the highest gate in the event’s history.”
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.