News of ousted World Wrestling Entertainment’s CEO Vince McMahon returning to the company board of directors -- as well as the possibility of the company being sold -- sent the WWE’s stock soaring on Friday.
WWE’s stock was up 21% in midday trading to $87.24.
McMahon stepped down as CEO in July after an investigation found he paid $15 million to four women over 16 years to silence claims of sexual misconduct.
This follows an announcement by McMahon that he would be returning as executive chairman with the aim of trying to sell the company.
This comes as WWE starts up U.S. renewal rights for the company’s two big TV series -- “RAW” and “Smackdown”.
Michael Morris, media analyst at Guggenheim Securities, wrote in note on Friday:
“There is a tight window this year in which the industrial logic of a potential sale would make sense ahead of any renewal for the U.S. “RAW” and “SmackDown” rights. WWE at its core is a pure-play sports [content company].”
Morris adds: “We remain bullish on WWE's renewal prospects given the content is relatively cheap. Sports rights continue to escalate, [and[ there are more platforms looking for content now than last cycle,and ratings have been relatively decent.”
He estimates that the company’s top seven global TV rights contracts -- from 2024 to 2029 -- could grow from $712 million to $865 million per year, with an 11% compounded annual growth rate. This would be up from the 2024 estimated level of $511 million.
Revenue this year is projected to climb 6% to $1.36 billion, with net income up 11% to $251 million.