It appears that a WWE transaction is around the corner. If I were a prospective buyer I would want to see what kind of numbers WWE does this weekend when it hosts its largest annual pay-per-view event -Wrestlemania – from Los Angeles. WWE shares sit at $89.32 as they have climbed from $84.08 on Friday March 24th. The current share price is interesting as $90 is the rumored sale price that WWE Chairman Vince McMahon is seeking from prospective acquirers. McMahon’s beneficially owned shares of WWE’s Class A and Class B common stock represent approximately 81.0% of WWE’s total voting power.
- A $90 share price implies an Enterprise Value of $8.1 billion, which implies a 23x EV/Adjusted EBITDA multiple as applied to CY’22 Adjusted EBITDA of $356 million (my number, EBITDA adjusted for stock-based compensation). See our calculations in the table below (reach us at email@example.com if you wish to receive a copy of our Excel worksheet). Prospective acquirers will want to see what Q1 Adjusted EBITDA looks like before submitting final bids.
- I continue to give Comcast (CMCSA) the edge in this process given the Company’s formal partnership with WWE. Does Comcast want an events business? It certainly could afford to permanently lock in more content for its streaming service – Peacock. Comcast will know what Wrestlemania’s total content impact will be across pay-per-view, social media and other media outlets before other bidders given the nature of its relationship with WWE.
- Endeavor (EDR) with its PE backer (Silver Lake) could be the dark horse as Endeavor founder Ari Emanuel is bold and could create a sports entertainment powerhouse by combining WWE with the UFC – both are event-driven businesses.
- Former WWE roster talent and XFL owner Dwayne Johnson could partner with PE and submit a bid. Johnson purchased the XFL from McMahon. Johnson could also throw in with Endeavor as he partners with Endeavor/UFC on his Under Armour Project Rock line.
- Dr. John Malone’s Liberty Media could get involved through the parent company or Warner Bros Discovery (WBD). Malone would likely be a fan of such a deal if his team can figure out a tax efficient way to execute the deal. Malone is probably the smartest strategic acquirer I have ever come across and nobody does tax efficient deals better than John Malone.
- Amazon (AMZN) has been active on the media front with its recent acquisition of MGM Studios and its James Bond franchise along with its rumored acquisition of AMC Entertainment (AMC).
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