Another Billionaire to "RIDE" Vince McMahon

I opened a position in WWE today at $16.30

I am surprised that the action on this stock isn't a lot higher. I don't believe that people are grasping the amount of money they are going to be raking in with their own 24/7 online network. This will be the Netflix of wrestling. Granted it won't cover all current wrestling promotions, but let's face it they don't have any competition. With their massive library of their own wrestling, WCW and ECW, along with the ability to watch every prior PPV, original programming, live shows and let's say you missed this weeks RAW, no problem, fire up the network and watch it. You want attitude era, you'll have it and much more.

The gold that I see shining is this. They are firing up on Feb 24. With your $9.99 a month you will be able to watch the live PPV included with the cost. What's the first PPV in March... WrestleMania. A PPV that is $70. Now you're saying, I will just watch a pirate stream. I say go for it, you typically get a slow feed, one with lots of pixilation and many of the streams get shut down. They will be broadcasting in HD, so where do you think people are going to watch this and other PPV's

Take a conservative amount of people of 2 million paying $9.99 a month. Keep in mind there's a 6 month subscription requirement.

That's $19,980,000 coming in each month and for a year that's a staggering $239,760,000 a year. You might be sitting there going no fn way they get 2m people to purchase. You'd be right, I think it's likely going to be around 3m people. All this with a market cap of only 1.2B, I don't need to say much more do I?

Sure the 108.3 PE is staggering but just wait until their first earning report after the network goes live. That should be in the April/May time frame.

You might be thinking but they charge $59-$69 per PPV aren't they going to lose a ton of money on this. Knowing they don't get anywhere near that money once fees are paid and considering every $ that comes in from the network is coming in directly to WWE without any middlemen, do you really think they would do this price if they didn't have the rakes ready to rake it all in.

Whether you like wrestling or not, throw that out of the equation. Whether you like Vince McMahon or the McMahon family, throw that out of the equation.

Throw out ratings, throw out your pre conceived notions.

If you saw a company that conservatively was going to bring in nearly $240 million dollars a year and that was just in the USA and will be expanding into other countries in late 2014, early 2015, a company that has a passionate, loyal, and several generations of fans, wouldn't you be climbing aboard the train and making money yourself. Did I forget to mention they also have a nearly 3% dividend which I can see being raised when the money comes pouring in.

It's time for you to make your own pipe bomb and buy this stock.

WOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!

I'm gonna short it just to keep you honest.

I once owned this stock, somewhere back in 2011 . lost something like 75 cents after 2 months. Got out....

don't think it will be a slam dunk... I'll wait. GL

I like your posts (got some thoughts on this too but I'm busy at the moment so I'll post later) but wouldn't it make sense to confine them to 1 big investing thread? Just a thought

re: WWE Aren't you worried about lost PPV revenue as they are cheapening the cost of their product significantly (their will be absolutely no reason to buy a PPV over WWE network)

They are basically saying nobody is gonna give us 50-60 per PPV anymore so lets try to get $120 a year for a bunch of them. Short-term that sounds great but long-term they are cheapening a main source of revenue (granted they arent as reliant on PPV sales as say the UFC is)

Oh wait, you do address this by saying they won't have to split with the cable providers? Is that true? How won't they pay to have a channel with the providers?

I remember someone was saying once cable fizzles out (who knows when that will be) then the UFC can charge $30 per PPV instead of $60 and keep all the revenue, is this what you are saying basically?

Also wouldn't this deal be a giant F U to the cable providers that profit off the PPV revenue? Who is going to buy a PPV ever now when you can get all of them and all other content in WWE history for the cost of 2 PPVs a year?

I don't see how this wouldnt drastically alter the PPV landscape.

Also I do agree with you about it being cheap enough that even the biggest jews might say screw streaming at $10 a month.

They will still offer the PPV's through cable and satellite providers, that will still be there and it has to be there for now until they bring Canada, UK, Australia and their other big markets abroad to the new network. For now it will only be available in the USA.

In a nutshell they are saying F U and giving the middle finger to their cable and satellite providers. They are going to cut out the profits the third party is making and keeping 100% of it for themselves.

Their PPV's don't generate the "buys" that they should be doing and the main reason is pirating and of course the high cost of the PPV itself. Think of all the stream sites out there that put up the show and you have tens of thousands on a stream watching the PPV. Convert those people to a perceived cheap cost of $9.99 and you get to watch all the programming, access their massive video on demand and you get to see the monthly PPV, that will get a lot of those pirating viewers to the network. Add the fact the PPV will be in HD and let's be honest, those that pirate a show aren't getting the best of the feed as the streamer is, so now it makes sense to get on board. Not to mention they are brilliant using the 30th anniversary of WrestleMania as the first PPV.

Royal Rumble (1/27): 579,000 worldwide (364,000 domestic)
Elimination Chamber (2/17): 241,000 worldwide (181,000 domestic)
Wrestlemania 29 (4/1): 1,104,000 worldwide (662,000 domestic)
Extreme Rules (5/19): 245,000 worldwide (137,000 domestic)
Payback (6/16): 198,000 worldwide (108,000 domestic)
Money in the Bank (7/14): 199,000 worldwide (151,000 domestic)
Summerslam (8/18): 296,000 worldwide (185,000 domestic)
Night of Champions (9/15): 175,000 worldwide (92,000 domestic)

In looking at the chart they did 662,000 buys domestically of the PPV and 442,000 elsewhere. 40% outside of the US is huge and that market hasn't been fully engaged. Sure you get a few dates in Canada and the UK, but what about China, Australia etc. I can see that coming to help push sales abroad as well. Don't let this get by you because the WWE knows how to market and target demographics unlike no other. They are a hit with kids, if you watched wrestling, didn't you likely start watching with your dad or a brother/sister. Those same kids are still watching today and watching with their kids and grandkids. That's why their business is such a success.

Do you think they will do 662,000 buys at $9.99 compared to $69.95 for HD? They are going to smash that number. Because in reality 1.1m people didn't watch WM29 last year. More than likely it was 5m due to the pirate streams and the bars that showed the event. Don't underestimate pirate streaming, it is huge, why do you think so many sites are out there doing it.

Here is another reason they are smart, Feb 24th you sign up, you have to sign up minimum 6 months. A lot of people that miss out, will sign in August for Summer Slam, then again for Survivor Series and rotate back into the new year for Rumble Rumble. This will be a constant turnstile of new memberships that are going to be paying at least $59.94 not to mention those that are paying every month after the 6 month commitment.

I can see a lot of Christmas presents in December being subscriptions.

Once this income starts rolling in, their profits are going to grow and at the end of the day the company will have a nice fat balance sheet that will allow them to improve the product, add more to the network and hopefully increase the dividend as well. All of this will translate into a higher stock price and if you buy in now, stay patient and let the process play out, I believe you are going to be handsomely rewarded. Near term I think the stock will go to $19-$20 and after we start to see the results of their efforts, if this blows up like I believe it will, who knows where the stock price will be.

I think one day, we will look back and say Vince McMahon was a visionary, because when this works, not if it works but when it works, other entertainment companies are going to take note and do what Vince is doing today. There's just no doubt in my mind about it.

Vince's motto, is to have the fan leave happy. As an investor, you'll be happy as well.

Final note, nothing is guaranteed here, however, this has been a long time coming, a lot of delays and disappointments. For it to be rolled out now and using WrestleMania XXX as the first PPV is just brilliant and there is going to be a ton of interest. I've gone to numerous wrestling forums, sites, blogs and there is a huge buzz, the IWC is chomping on this and to read that people that have never thought of paying for a PPV due to watching on pirate streams are ready to pay and to read take my money now please. This has HUGE potential and should not be overlooked. If you want to take risk out of your stock purchase then buy some long term out of the money PUTS. But in my view, that would be like a kick in the groin when the ref isn't looking.

VERY nice write up and analysis! Kudos and a BIG thank you. I'm not a WWE fan really but I may just jump in on this. Don't have much to invest at the moment but might have more in the very near future.

Thanks again for an OUTSTANDING write up. I really appreciate people who do this. Back in mid 2007 I did the same thing for a bunch of people on a different forum. I told them all to short all the Real Estate builder stocks (specifically the one my wife was employed at). I knew it was gonna go south. I really should have begged borrowed and stolen all I could to do it because I KNEW it was going south. I didn't have much at all to invest myself but bought what put options I could. Cleaned up. Not many listened to me. They would have made a KILLING had they done so.

I will do what I can with this, but THANK YOU again for a great write up! Best of luck to you, man!

^!:

PatsFan1283 said:

Also wouldn't this deal be a giant F U to the cable providers that profit off the PPV revenue? Who is going to buy a PPV ever now when you can get all of them and all other content in WWE history for the cost of 2 PPVs a year?

I don't see how this wouldnt drastically alter the PPV landscape.

Also I do agree with you about it being cheap enough that even the biggest jews might say screw streaming at $10 a month.

Click to expand...

Jews watching wrestling :missingte:missingte

Good analysis. I think the next 2 years may be rocky, as they are gonna lose massive amounts of PPV $$$. But if the Network catches on, in a couple of years they'll more than make up for it. One big note of caution though. Stephanie McMahon has systematically been selling off shares for months. Supposedly to get money to build her "dream house". http://pwtorch.com/artman2/publish/WWE_News_3/article_75513.shtml#.Us-eME5DTz8

PatsFan1283 said:

Also wouldn't this deal be a giant F U to the cable providers that profit off the PPV revenue? Who is going to buy a PPV ever now when you can get all of them and all other content in WWE history for the cost of 2 PPVs a year?

I don't see how this wouldnt drastically alter the PPV landscape.

Also I do agree with you about it being cheap enough that even the biggest jews might say screw streaming at $10 a month.

Click to expand...

Yes this would be a big F U to the cable providers .... and direcTV is already balking.

DirecTV may cancel future WWE PPV events

In WWE's release sent out earlier today, it noted that they would continue to offer PPVs via traditional televised means, but said that it is possible companies may not continue to carry them.

The contracts that inDemand and DirecTV have with wrestling companies, boxing companies and UFC are that the PPVs can't be put on the Internet for a lower price than is being charged by the cable companies, so they aren't undercut.

Obviously, putting PPV's as part of the new WWE network package would significantly undercut the price, and if they allowed WWE, a third place competitor in the pay-per-view market to violate that longstanding agreement, they would be powerless against the big two, the major boxing events and UFC.

DirecTV released a statement today to the Los Angeles Times which stated:
"Clearly, we need to quickly re-evaluate the economics and viability of their business with us, as it now appaers the WWE feels they do not need their PPV distributors."

DirecTV claimed in the release that the WWE has been in a steady decline on PPV (actually the first half of this year was far stronger than in past years, but the last few months have been down).

They noted the network "will only accelerate this trend."
Vince McMahon claimed it would be foolish for cable companies to no longer carry WWE events, saying it is "found money for them."

http://www.f4wonline.com/more/more-top-stories/96-wwe/34839-directv-may-cancel-future-wwe-ppv-events

Agree with you 100% Hotpizza.HaHa at directv.They would be doing wwe a huge favor by not showing their PPV.I have not watched wrestling in at least 6 years or more.But will probably purchase this channel for the archived footage and maybe start getting into it again.Way to go Vince!Stick it to the man! Every time I read about these fights between cable companies and networks,i marvel at the sometimes pennies these networks are paid per sub.For a network like A&E that probably gets paid less than a dollar per sub I would be more than happy to pay them 3.00 or so to just watch their website.Hopefully this will open all the floodgates when WWE IS SUCCESSFUL in this venture.I have not had cable in over 6 years and have not missed it even one bit.

Ty Bounce said:

Yes this would be a big F U to the cable providers .... and direcTV is already balking.

DirecTV may cancel future WWE PPV events

In WWE's release sent out earlier today, it noted that they would continue to offer PPVs via traditional televised means, but said that it is possible companies may not continue to carry them.

The contracts that inDemand and DirecTV have with wrestling companies, boxing companies and UFC are that the PPVs can't be put on the Internet for a lower price than is being charged by the cable companies, so they aren't undercut.

Obviously, putting PPV's as part of the new WWE network package would significantly undercut the price, and if they allowed WWE, a third place competitor in the pay-per-view market to violate that longstanding agreement, they would be powerless against the big two, the major boxing events and UFC.

DirecTV released a statement today to the Los Angeles Times which stated:
"Clearly, we need to quickly re-evaluate the economics and viability of their business with us, as it now appaers the WWE feels they do not need their PPV distributors."

DirecTV claimed in the release that the WWE has been in a steady decline on PPV (actually the first half of this year was far stronger than in past years, but the last few months have been down).

They noted the network "will only accelerate this trend."
Vince McMahon claimed it would be foolish for cable companies to no longer carry WWE events, saying it is "found money for them."

http://www.f4wonline.com/more/more-top-stories/96-wwe/34839-directv-may-cancel-future-wwe-ppv-events

Click to expand...

Sounds like Vince knew this going in and is just gonna call their bluff. He is right, they aren't gonna stop carrying WrestleMania, etc (if they did it would only accelerate people getting the WWE network to get this content if they can't get it from their local cable provider)

@hotpizza I mostly agree with you but I do think the # estimates you comeup with for piracy/streaming are pretty tough to quantify. There really isn't much hard data on that so tough to say. I do think at $120 a year a lot would forgo streaming and just watch all the content on the site.

This isn't really a channel though, it is more similar to an online app/subscription program. A key question I have is how they will handle people sharing accounts. For instance my NBA league pass online I can pretty much let anyone use and nobody with the NBA will care at all because they're probably just happy to have the $175 a year or whatever it is. However, the NFL knows that Sunday Ticket is an in demand product and they can dictate terms and I don't think you can have multiple people on 1 account at once. I wonder how WWE will handle that, I would assume they would go the NFL route. This will impact subscriptions pretty drastically.

The buy rate data is interesting, can't believe they get 600k people to buy the Royal Rumble when you can probably find it on YouTube the next day or whatever (not trying to throw stones either but WWEs audience isn't the most affluent crowd, which is why I like the $10 per month pricepoint)

Also fwiw, all that Attitude Era stuff is on Youtube and so is every major PPV match. However, that content is mostly icing on the cake with being able to watch the PPVs in HD in real time as the main seller.

http://ir.corporate.wwe.com/Cache/c21580879.html

Also there will be a conference call that you can call into on the 14th specifically about the network at 11AM Eastern. 1-800-697-5978 or 1-630-691-2750 from outside the U.S. (conference ID for both lines: 6775847).

A quick comment on You Tube, the WWE has already started to remove some of it's own content from You Tube. At the same time they are now going after "other" unauthorized WWE material and having it taken down for violation of copyright and intellectual property.

I don't believe Cable and Satellite providers are going to "terminate" the showing of the PPV's. They would only end the stream of profits coming to them and it's not chump change. Vince doesn't care if they do or not, because if they do, he will get all of that business and keep all the profit.

Re "pirating" don't underestimate the number.

As for the UK their PPV's through Sky typically translate to $24.95-$29.95 US, they get a super deal on the PPV, but keep in mind 8PM Eastern in the USA is currently 1AM London Time. Another reason you'll likely never see a PPV held abroad due to the time difference.

The stock hit a 52 week high today.

Stephanie is selling shares out of a 2004 Trust account, Vince opened a new trust account in December it's now the 2013 trust and imagine 9 million shares of company B shares put into it. You can see all of the paperwork by looking at the insider buy/sell.

Nice presentation put forth this morning with a lot of pertinent information. If you missed the call you can go here and listen: http://event.onlineseminarsolutions...991DE7A151296B7FA372A50D&eventuserid=92493442

Click launch presentation to start. At the bottom you'll see a menu click on the link to the very left titled resource list. A box will pop up, click on the slide presentation. You'll be able to follow along the information provided. At the end of the call is some question from analysts.

I am quite pleased with the information and how they are rolling this out. Stock is up near the 52 week high today.

Stock is on a tear today, as of this post up 6% and smashed through the 52 week high. Currently trading at $18.60. Up over 14% just 4 trading days from my post.

I hope you listened and you are making some $$$$

nice call

more the market digests how they are monetizing their content and the more excitement builds, it seems to be gaining momentum.

Another underrated aspect is think of all the free marketing for the network they get on their own shows each week which are watched by millions. Announcer guy says WWE network, get every PPV for $120 every 20 mins on every show every week.

And now for the bad news..These cable companies will now be able to charge streamers more.Of course this will passed down to subscribers.Netflix alone faces a 75 to 100 million surcharge,which by my calculations would be an increase of 3 bucks per month.First the cable companies get to pick fights with networks and now they are going after streamers.

On Tuesday, the U.S. Court of Appeals for the DC Circuit struck down FCC rules requiring Internet Service Providers, or ISPs, to be neutral in their restrictions on bandwidth. The move means ISPs will be allowed to charge content providers based on how much bandwidth they use, according to Michael Pachter, an analyst at Wedbush Securities.
"This ruling will impact those websites that transmit the most data, so sites that stream video content (particularly in high definition) will potentially feel the most significant impact," he added in a note to investors.

http://www.usatoday.com/story/tech/2014/01/15/netflix-net-neutrality-costs/4491117/

Buster said:

And now for the bad news..These cable companies will now be able to charge streamers more.Of course this will passed down to subscribers.Netflix alone faces a 75 to 100 million surcharge,which by my calculations would be an increase of 3 bucks per month.First the cable companies get to pick fights with networks and now they are going after streamers.

On Tuesday, the U.S. Court of Appeals for the DC Circuit struck down FCC rules requiring Internet Service Providers, or ISPs, to be neutral in their restrictions on bandwidth. The move means ISPs will be allowed to charge content providers based on how much bandwidth they use, according to Michael Pachter, an analyst at Wedbush Securities.
"This ruling will impact those websites that transmit the most data, so sites that stream video content (particularly in high definition) will potentially feel the most significant impact," he added in a note to investors.

http://www.usatoday.com/story/tech/2014/01/15/netflix-net-neutrality-costs/4491117/

Click to expand...

That wouldn't impact a company like WWE that is trying to get 1-3mill subscribers though, a little too small on the scale for that.

It could definitely impact netflix with all their customers in the 10s of millions though.

PatsFan1283 said:

That wouldn't impact a company like WWE that is trying to get 1-3mill subscribers though, a little too small on the scale for that.

It could definitely impact netflix with all their customers in the 10s of millions though.

Click to expand...

I agree in part.However remember he has pissed them off by offering this and costing them buys on their side of the PPV.

fwiw I do agree with the court ruling. Netflix uses something like 20% of the available bandwidth on the internet on a nightly basis, of course they should be charged for this....