TorontoRaptorsFan Posted June 29, 2016 Share Posted June 29, 2016 I'm thinking of purchasing some shares in WWE. I think it's an undervalued stock: Some key advantages: - WWE Network which charges $9.99 per month and gives you access to 1-2 PPV per month, massive library of past programming and lots of original content. So far they've signed up 1.2 million subscribers. - New deal signed with a Chinese broadcaster to broadcast WWE programming - WWE Smackdown going live next month and will have a separate roster from that of Monday Night Raw. This creates 2 PPV per month and makes it more compelling for people to sign up for the WWE Network - WWE doing a good job of training new talent with their NXT program. These stars are then groomed for the Raw and Smackdown rosters. Link to comment Share on other sites More sharing options...
NBL0303 Posted June 29, 2016 Share Posted June 29, 2016 What is your estimation of its value? Link to comment Share on other sites More sharing options...
Patmo Posted June 29, 2016 Share Posted June 29, 2016 You make a good case for WWE fans to buy the network thing, it seems like a good value. Not much meat in terms of a long case though... Can you describe in greater detail your reasoning behind going long WWE? Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted June 29, 2016 Share Posted June 29, 2016 I remember looking at it around $12 after it cratered from missed expectations on their subscription deal. My only concern was that the wrestling fans I know are fanatics, but I don't seem to know that many young people into it anymore. When I was in elementary and middle school, everyone watched it. I don't see that reflected within the young people in my family and it seems that the super-mega fans might be the last real fans. That's why I never pulled the trigger despite the interesting opportunity for a niche brand. Link to comment Share on other sites More sharing options...
BG2008 Posted June 29, 2016 Share Posted June 29, 2016 Man, WWE brings back so many memories. For many recent immigrants, it is one of those programming that offers immense entertainment without understanding the verbal side of things. It's not as valuable as a "live" programming which Vince tried to push on the networks. There is a bit of a inflection that they may reach with the over the top programming where above a certain # of subscribers, it's all profit. Not a ton of value add with my comment. But, I would just warn that there's a huge potential liabilities for steroid related injuries/death. Most pro-wrestlers die when they are 40-50. Some even have dark outcomes like suicide/murders like Chris Benoit's family. What I'm trying to say is that there's a potential for a big off the balance sheet liability like the concussion settlement of the NFL. Hulk Hogan was known to pick up his steroids with his paycheck. The guys past and present are definitely on a cocktail of steroids, human growth hormone, insulin, and pain killers. When and if this liability surface is one of those meteors that could kill the dinosaur. Cage fighting has simply more appeal now due to the fact that it's "real" and "live". Link to comment Share on other sites More sharing options...
TorontoRaptorsFan Posted June 29, 2016 Author Share Posted June 29, 2016 As part of my analysis I looked into the injury factors, steroids, concussions etc. They've done a far better job of monitoring their athletes than they did in the past. Wrestlers are no longer allowed to do chair shots to the head. A wellness policy has been implemented which is strictly enforced (drug testing etc) - their former heavyweight champion Roman Reigns is currently suspended for 30 days for violating the policy. Recently another wrestler suffered a concussion during a PPV and they kept him out of action for a full month to monitor him for any symptoms. I can see the stock hitting $24 again with the growth of the subscriber base of the WWE Network. A lot of merchandise gets sold. When the Cleveland Cavaliers won their recent NBA title Lebron James and Kevin Love wore Ultimate Warrior and Stone Cold Steve Austin t-shirts. Scott Hall who is a member of this board (formerly of the Motley Fool) did an analysis of the WWE Network last year: Link to comment Share on other sites More sharing options...
BG2008 Posted June 29, 2016 Share Posted June 29, 2016 The liabilities will likely be a class action lawsuit for past infractions rather than what they do today Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted June 29, 2016 Share Posted June 29, 2016 Is management shareholder friendly? The McMahon family controls the company. When Vince (now 70) retires Stephanie McMahon, her husband, and possibly her brother Shane will have control. Whether they will be shareholder friendly is unknown. I was honestly shocked when I first learned these guys are publicly traded as the company seems much better suited for private ownership. Future liabilities stemming from CTE are a real issue. I wouldn't be shocked to see a class action lawsuit from retired wrestlers in a few years. Link to comment Share on other sites More sharing options...
NBL0303 Posted June 29, 2016 Share Posted June 29, 2016 As part of my analysis I looked into the injury factors, steroids, concussions etc. They've done a far better job of monitoring their athletes than they did in the past. Wrestlers are no longer allowed to do chair shots to the head. A wellness policy has been implemented which is strictly enforced (drug testing etc) - their former heavyweight champion Roman Reigns is currently suspended for 30 days for violating the policy. Recently another wrestler suffered a concussion during a PPV and they kept him out of action for a full month to monitor him for any symptoms. I can see the stock hitting $24 again with the growth of the subscriber base of the WWE Network. A lot of merchandise gets sold. When the Cleveland Cavaliers won their recent NBA title Lebron James and Kevin Love wore Ultimate Warrior and Stone Cold Steve Austin t-shirts. Scott Hall who is a member of this board (formerly of the Motley Fool) did an analysis of the WWE Network last year: Thank you - interesting analysis. What does $24 per share value the company at? Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted July 19, 2016 Share Posted July 19, 2016 And here's the class action lawsuit: https://sports.yahoo.com/news/dozens-wrestlers-sue-wwe-over-neurological-injuries-211253700--finance.html Link to comment Share on other sites More sharing options...
BG2008 Posted July 20, 2016 Share Posted July 20, 2016 Wow, that was quick. Honestly, this risk has kept me away from owning the shares. I think that the lawsuit is real and legitimate. WWE may have made changes, but it doesn't mean that it wasn't wrong in the past to allow chair shots to the head and promoted the use of steroids and HGH etc. For people to really understand the damage's to athlete's body, you should watch the documentary on Mankind. While a feel good story, it talks about onset of memory loss and all the crazy abuse that Mick Foley took over the course of his career. While the head trauma may not be a problem in the future, there is still a huge issue with steroids, HGH, and Insulin use. Brock Lesnar recently tested positive for an one-off fight against Mark Hunt in the UFC. It's really catch-22, people who watch wrestling want to be awed by comic book like physiques doing acrobatic moves. But such physiques are not possible without "enhancements". Link to comment Share on other sites More sharing options...
Jurgis Posted July 20, 2016 Share Posted July 20, 2016 OK, anyone want to make BILLIONS? 8) ;D We start RSWE - Robo Suit Wrestling Entertainment. People wear these robo suits and dish out stage breaking damage. Like KPOOOOOWWW! We get Scott Hall as promoter, Picasso as asset manager, BG2008 as Chief Compliance Officer. Whatcha y'all think? 8) Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted July 20, 2016 Share Posted July 20, 2016 OK, anyone want to make BILLIONS? 8) ;D We start RSWE - Robo Suit Wrestling Entertainment. People wear these robo suits and dish out stage breaking damage. Like KPOOOOOWWW! We get Scott Hall as promoter, Picasso as asset manager, BG2008 as Chief Compliance Officer. Whatcha y'all think? 8) Scott can definitely write some great copy and is familiar with the wrestling business. Merkhet would make a great chief counsel. Gio could get some events booked in Italy. Link to comment Share on other sites More sharing options...
TorontoRaptorsFan Posted May 22, 2018 Author Share Posted May 22, 2018 I'm thinking of purchasing some shares in WWE. I think it's an undervalued stock: Some key advantages: - WWE Network which charges $9.99 per month and gives you access to 1-2 PPV per month, massive library of past programming and lots of original content. So far they've signed up 1.2 million subscribers. - New deal signed with a Chinese broadcaster to broadcast WWE programming - WWE Smackdown going live next month and will have a separate roster from that of Monday Night Raw. This creates 2 PPV per month and makes it more compelling for people to sign up for the WWE Network - WWE doing a good job of training new talent with their NXT program. These stars are then groomed for the Raw and Smackdown rosters. I guess I should have taken my own advice and bought some WWE stock :'( http://variety.com/2018/tv/news/wwe-smackdown-fox-new-channel-1202817799/ Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted March 11, 2020 Share Posted March 11, 2020 Wrestlemania (by far WWE's largest event of the year) is scheduled for April 5th in Tampa. There is a good chance that it will be canceled or postponed. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted April 13, 2020 Share Posted April 13, 2020 In honor the second iteration of the XFL filing for bankruptcy today, here are the WWE's greatest capital allocation hits: Burning lots of cash on the World Bodybuilding Federation and ICOPRO supplements in the early 90s Briefly owning a defunct casino (“Debbie Reynolds Hollywood Hotel”) in 1998 - 1999 Opening a restaurant in Times Square in 1999 that closed ~3 years later Burning millions on the XFL in 2001 ($31.3 million write off in FY 2001) Opening a retail store / theme park attraction near Niagara Falls in 2002 that lasted less than a decade Founding WWE Studios in 2002. It did negative $46.5M in OIBDA between 2007 and 2015 Reviving the XFL in a move fraught with related party transactions, only to see it almost immediately fail Plans to spend a prodigious amount of money fitting out its new HQ Bonus round: The company paid a fat dividend for years when the stock was in the teens, but spend over $83 million last year buying back stock at an average price of nearly $60 per share Link to comment Share on other sites More sharing options...
BG2008 Posted April 13, 2020 Share Posted April 13, 2020 They should turn this into a theme of some sort for Wrestlemania Triple H and Stephanie will create a co-op and force out Vince due to the rogue capital allocation and The Rock will come out and literally lay a smackdown on his candy ass. Trump will tell Vince that he's fired. This is going to be Huuuge Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted April 13, 2020 Share Posted April 13, 2020 They should turn this into a theme of some sort for Wrestlemania Triple H and Stephanie will create a co-op and force out Vince due to the rogue capital allocation and The Rock will come out and literally lay a smackdown on his candy ass. Trump will tell Vince that he's fired. This is going to be Huuuge Ha ha ha. It burns me up when I see long write ups for WWE that don't grapple (pun intended) with the long and consistent history of poor capital allocation decisions. WWE was hugely popular in the late 90s and early 2000s. I don't think it's a coincidence that those are the same years that it most aggressively spent money on all sorts of hare brained schemes. If excess cash is available, Vince McMahon just can't help but to spend it on (1) things he is interested in (bodybuilding, football) and/or (2) things he views as being glamorous (movies, Times Square, Las Vegas casinos). Link to comment Share on other sites More sharing options...
Spekulatius Posted April 14, 2020 Share Posted April 14, 2020 They should turn this into a theme of some sort for Wrestlemania Triple H and Stephanie will create a co-op and force out Vince due to the rogue capital allocation and The Rock will come out and literally lay a smackdown on his candy ass. Trump will tell Vince that he's fired. This is going to be Huuuge Ha ha ha. It burns me up when I see long write ups for WWE that don't grapple (pun intended) with the long and consistent history of poor capital allocation decisions. WWE was hugely popular in the late 90s and early 2000s. I don't think it's a coincidence that those are the same years that it most aggressively spent money on all sorts of hare brained schemes. If excess cash is available, Vince McMahon just can't help but to spend it on (1) things he is interested in (bodybuilding, football) and/or (2) things he views as being glamorous (movies, Times Square, Las Vegas casinos). Money isn’t everything. ;D Link to comment Share on other sites More sharing options...
Gregmal Posted April 14, 2020 Share Posted April 14, 2020 https://www.espn.com/wwe/story/_/id/29031903/wwe-deemed-essential-business-florida-mayor-says Who cares. Its an essential business! Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted January 25, 2021 Share Posted January 25, 2021 Today's deal with Peacock/NBC looks to be a continuation of gradual WWE's loss of pricing power and general relevance. * Prior to the launch of WWE Network in 2014, pay per view (PPV) events cost $45, with the exception of the flagship Wrestlemania event that was priced at $60. To quote ElCid's VIC article "Total PPV buys have declined at a -6.7% CAGR from ’06 to ’13." * WWE Network launched in early 2014 for $9.99 a month. Almost seven years later it still costs $9.99 a month. WWE Network includes all PPV events along with other content. Note that WWE did 12 PPV events in 2013. Compare that to no less than 27 in 2019. * Now WWE Network (at least in the US) is being folded into Peacock. So for $9.99 a month you get the WWE Network and all of Peacock's other content, ad-free. WWE has greatly benefitted from still having a diehard cadre of fans in a fragmenting media environment, but this humble respondent thinks that the continuing erosion of the product's popularity is going to be the deciding factor at some point. The popularity of the WWE itself probably peaked in the early 2000s. Link to comment Share on other sites More sharing options...
StevieV Posted January 25, 2021 Share Posted January 25, 2021 * WWE Network launched in early 2014 for $9.99 a month. Almost seven years later it still costs $9.99 a month. WWE Network includes all PPV events along with other content. Note that WWE did 12 PPV events in 2013. Compare that to no less than 27 in 2019. 27 "PPV" events. I don't see how that makes any sense. You can't have a special attraction every other week. They weren't getting significant actual PPV revenue, right? So the frequency of the events is to sustain the network subscriptions? Link to comment Share on other sites More sharing options...
BG2008 Posted January 25, 2021 Share Posted January 25, 2021 Today's deal with Peacock/NBC looks to be a continuation of gradual WWE's loss of pricing power and general relevance. * Prior to the launch of WWE Network in 2014, pay per view (PPV) events cost $45, with the exception of the flagship Wrestlemania event that was priced at $60. To quote ElCid's VIC article "Total PPV buys have declined at a -6.7% CAGR from ’06 to ’13." * WWE Network launched in early 2014 for $9.99 a month. Almost seven years later it still costs $9.99 a month. WWE Network includes all PPV events along with other content. Note that WWE did 12 PPV events in 2013. Compare that to no less than 27 in 2019. * Now WWE Network (at least in the US) is being folded into Peacock. So for $9.99 a month you get the WWE Network and all of Peacock's other content, ad-free. WWE has greatly benefitted from still having a diehard cadre of fans in a fragmenting media environment, but this humble respondent thinks that the continuing erosion of the product's popularity is going to be the deciding factor at some point. The popularity of the WWE itself probably peaked in the early 2000s. I think the UFC and cage fighting stole a lot of the traditional fans of WWE. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted January 25, 2021 Share Posted January 25, 2021 * WWE Network launched in early 2014 for $9.99 a month. Almost seven years later it still costs $9.99 a month. WWE Network includes all PPV events along with other content. Note that WWE did 12 PPV events in 2013. Compare that to no less than 27 in 2019. 27 "PPV" events. I don't see how that makes any sense. You can't have a special attraction every other week. They weren't getting significant actual PPV revenue, right? So the frequency of the events is to sustain the network subscriptions? Yeah, that would be my thought. One way to make the network more attractive is to have more content that is exclusive to it Edit: I also agree with BG2008 that the rise of mixed martial arts has been decidedly negative for WWE Link to comment Share on other sites More sharing options...
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