Pro Wrestler Stephanie McMahon Power Slams WWE Stock
The WWE heiress’s sale of significant share holdings has drawn scrutiny of the wrestling entertainment giant’s inner workings.
A professional wrestler and a businesswoman, Stephanie McMahon Levesque leaves no doubt who’s boss. McMahon and her husband Paul (Triple H) Levesque head The Authority, a group of smack-talking villains that currently includes reigning WWE world heavyweight champion Seth Rollins. She’s also chief brand officer of World Wrestling Entertainment, which was founded by her parents, Vince and Linda McMahon.
McMahon, who uses her maiden name as a stage moniker, has worked in pro wrestling her whole life, both in the ring and out. As a teenager growing up in Greenwich, Connecticut, she modeled WWE merchandise. After graduating from Boston University in 1998 with a communications degree, McMahon rose through the ranks of the family business, working as an account executive and a writer before taking her current post in 2013. WWE is a close-knit operation: When husband Levesque isn’t scissor kicking the likes of Dwayne (The Rock) Johnson and Stone Cold Steve Austin, he serves as executive vice president of talent, live events and creative.
Outside of the ring, McMahon has been doing some power slamming on her personal finances. On September 1 and 2 she sold nearly 140,000 shares in Stamford, Connecticut–based WWE, on top of another 174,069 she unloaded in August.
McMahon, 39, isn’t the only WWE insider to toss some company stock recently. Five other top-level executives have sold significant holdings during the third quarter of 2015, including Michael Luisi, president of feature film subsidiary WWE Studios, who trimmed his stake by about 40 percent.
At least some of this activity can be chalked up to higher-than-average share valuations. On August 5, WWE stock hit a 52-week high of $23.63, breaking the $20-per-share threshold for the first time since May 2014 and more than doubling its $10.05 low in January. Typically, WWE trades in the $15 to $20 range; it closed at $17.60 on September 23.
The insider share dump might be a sign of fundamental problems, though. On the back of last year’s launch of WWE Network, a wrestling content-streaming service, the company’s share price swelled to a peak of $31.14 in March 2014. But the new service failed to catch fire with fans of the testosterone-charged plot lines that are WWE’s bread and butter; subscriptions missed the 2014 target of 1 million, though they have begun to pick up.
Other WWE pursuits are also falling flat. In the company’s earnings report for the second quarter of 2015, revenue was down 4 percent year-over-year, including a 34 percent drop in its live-events division. (Some of the decrease reflected the earlier date of the annual WrestleMania event, which fell in the first quarter of 2015 [March 29] as opposed to Q2 in 2014 [April 6]).
Revenue slumped despite the fact that WWE added 12 more live events to its lineup from April to June 2015. Attendance at these spectacles has been weak compared with previous years, perhaps because pro wrestling doesn’t pack the punch it once did. Cable television viewership for the company’s flagship program on USA Network, Monday Night Raw — on which McMahon has been stage-married four times, including twice to her real-life husband — has plummeted. This July, 3.67 million people tuned in, versus 4.91 million in July 2012. The September 21 airing of Raw had the lowest nonholiday number of viewers since 1997. Another major WWE show, Thursday Night SmackDown, which airs on cable network Syfy, has seen a similar fall-off in viewers. Its pay-per-view content has shown a slump as well. Now that it’s autumn, Raw, targeted at the 18-to-34-year-old male demographic, goes head-to-head with NFL Monday Night Football. WWE is also losing some of its audience to the popular Ultimate Fighting Championship.
Until recently, WWE’s prospects looked brighter. This past summer Wells Fargo & Co. gave its stock an outperform rating with a target of $22 to $24. According to website Insider Monkey, which tracks hedge fund transactions, the value of WWE holdings by hedge fund firms as well as the number of such firms owning the stock rose 27 percent in the first quarter of this year. Mario Gabelli’s GAMCO Investors and Gabelli Funds held 358,400 shares as of June 30, before the insider stock sales and weak viewership numbers came to light.
WWE is busy looking for new revenue streams. Among them: the Gulf market in the Middle East. It’s planning to hold three events in Jeddah, Saudi Arabia, on the heels of tag-team-loaded gatherings earlier this year in Abu Dhabi in the United Arab Emirates. The wrestling giant has also inked a five-year agreement with Orbit Showtime Network, a Dubai, UAE–based satellite broadcaster. Other international deals include a ten-year broadcast and multimedia agreement with Rogers Communications, making the Toronto-based conglomerate the exclusive distributor of WWE content in Canada. WW-eh, anyone?
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Follow Anne Szustek on Twitter at @the59thStBridge.