ECONOMIC BODYSLAM: Stock notes, WWE without Vince analysis, and more
Submitted by Mr. Tito on Friday, December 28, 2007 at 11:52 PM EST





WWE stock closing history through December 28th:

12/24/07: $15.25
12/25/07: Markets were closed for Christmas holiday.
12/26/07: $15.31
12/27/07: $14.68
12/28/07: $14.90

52 Week High: $18.60
52 Week Low: $13.49

IMPLICATIONS: Despite the rest of the market fluctuating, this week showed that the WWE stock wants to get above $15. The WWE stock has significant competitive advantages heading into early 2008... The Royal Rumble to Wrestlemania stretch is coming up and it's by far, the highest revenue driving time for the WWE. The writer's strike will definitely help boost the WWE, for WWE writers appear to not be in the guild or it doesn't matter when the McMahons write/approve much of the storylines anyway. This stock should show good gains even in spite of what the rest of the stock market does in the upcoming months.

The 4th quarter should be an interesting one... This time around, the WWE won't have a poorly grossing film (Steve Austin's Condemned) to eat on their earnings. However, the WWE may see a merchandising and house show hit with John Cena out with an injury. Say what you will about Cena, but he's been a major hit with merchandise moved and a drawing point with children at house shows. 4th quarter earnings numbers should be released around February and the 2007 overall earnings should be released by March or April (or at least we'll hear the annual WWE conference call by then, a great source of news!).

2007 has appeared to be a good financial year for the WWE. WWE 24/7 has been a major hit, DVD sales continue to grow, internet revenues have increased, and business with USA Network has been a plus. WWE has done well on accounting measures, cutting costs when necessary (multiple wrestlers were cut this year) and the merging of the rosters for the Pay Per Views also helps save on costs. The WWE was flooding the market with their Pay Per Views and were beginning to lose out on costs. The WWE remains to have a virtual monopoly in the wrestling world with TNA failing to increase their footprint despite their Spike TV show. Lost WWE talent to TNA has not mattered one bit.

But in 2007, the WWE had a severe reputational hit with Chris Benoit's death and ongoing online HGH drug busts with multiple WWE stars on the lists. The WWE stock took multiple hits over this and one could argue that it could stunt the stock's growth for the future. Benoit's death put the WWE in a bad light and they received very negative mainstream media coverage for weeks. Benoit's killing of his own family was one of the most brutal stories to ever hit pro wrestling and the attempts to place blame on both the business's weak drug program or their tough schedule was not good for the WWE in 2007. Add to that, the HGH busts that made the WWE "Wellness Policy" a laughing stock. Another incident involving illegal performance enhancers or another wrestler dying young could definitely hurt the WWE in the equity markets, not to mention the federation as a whole.

--------------------------

Economic Bodyslam Question of the Week: What will happen to the WWE, financially, when Vince McMahon passes away?

Great question, especially when you have to consider that the WWE has been completely ran by Vince McMahon. One could argue that there's never been a more influencial board chairman than Vince. He's involved in personnel, storyline, marketing, acquisition, and other decisions. The whole company's image was built on his back and his hard work. WWE is defined by Vince McMahon who took his daddy's company to a whole new level. He's taken the whole industry by storm by his moves with cable television and the way he competes against competitors.

What would happen to the WWE if Vince passes away? Let's face it, Vince is no young-pup and he has years of steroid abuse under his belt in addition to high amounts of stress from competing with other feds and almost getting indicted in 1994. The WWE must Business Continuity Planning in the form of organizational charts within the company. If Vince goes, who will run the WWE?

Linda has been acting as CEO and would probably continue to act as that figurehead. I believe that Stephanie McMahon would take over. She's been dominant as a writer backstage and is an Executive Vice President of the company. Shane is involved with the media end of things and is considered a lightweight. I figure that Stephanie would act in Vince's role as hands-on with the talent and writing, but I figure that Kevin Dunn would continue to his role as the producer of television and Johnny Ace (I hate spelling out his last name) could continue to be the talent evaluator (though I suspect he could get nailed by politics). Don't doubt that Jim Ross would step in, too...

But one needs to consider the case of Vince Russo. When he went to WCW, he was without a Vince McMahon leash to filter out his bad ideas. Ditto with Stephanie. Who knows how many bad ideas get shot down by Vince that are from Stephanie.

HOWEVER, from an accounting side, the WWE could be better off... Vince is a very controversial individual and can tend to receive bad press on his own. Additionally, he has produced some severe financial disasters. XFL anyone? After a huge financial success seen in 2000, it was followed up by 2001's disasterous attempt to create a pro football league. WWE, Universal/NBC, and Viacom took major losses from this league's failure. Also, consider the WWE's failure of a bodybuilding federation. Plus, Vince was very stubborn to change in 1995-1996 when WCW began to seriously compete with them on Monday nights. Oh yeah, how about those Kevin Nash, Scott Hall, Scott Steiner, and Bill Goldberg failure signings of late? Vader in 1996? Mark Henry, Big Show, and other financial blunders...

At first, investors could be scared because business without Vince McMahon could create severe uncertainty with the WWE. But Vince historically rolls the dice and without him, the WWE might not take the absurd financial risks that it has done for the past 25 years. Plus, absent of any real competition, the WWE could remain profitable and keep the revenues coming in.

-------------------------------

The WWE NEWSWIRE

- Smackdown Your Vote!(R) And Rock The Vote Tag Team In 'Rock The Caucus' Effort - The WWE public relations machine continues...

- Analyst gives WWE stock an "outperform" rating

- WWE and THQ Legal War Continues - Despite the copyright issues with THQ/Jakks getting dismissed in U.S. District Court, the WWE will attempt to get retried in state courts.

Just chill till the next Economic Bodyslam: WrathofTito@yahoo.com

LoPforums.com - It's FANTASTIC









*NEW GALLERY* Photos of HULK HOGAN and His Hot New, MUCH YOUNGER Girlfriend!

• Quick Links -
  [Back to LOP] [News Archives] [Results] [Columns] [Forums]