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World Wrestling Entertainment, Inc. CEO Vince McMahon had hoped to raise the profile of his company and sport with a huge new TV deal. But the deal he eventually signed with NBCUniversal was far less than what investors were expecting, leading to WWE’s stock crashing last week. That resulted in McMahon losing $350 million in one day and his status as a billionaire.
McMahon had hoped that the new deal with NBCUniversal would be a cause for celebration, as it was a 50 percent increase from the prior deal, notes Business Insider. However, that only equals $150 million a year, far less than investors hoped. He had previously convinced them that any new deal would bring the WWE to the level of a second-tier sports league like Major League Soccer.
Then, the stock took a huge nosedive on Thursday, notes Forbes. McMahon, a victim of his own overhyping, ended up losing $350 million that day, dropping his net worth to $750 million. On Thursday, the stock closed below $20 and opened Friday morning at $11. Forbes later reported that stock closed on Monday at $10.96.
This disaster for the company comes as it was finally starting to rebound from losses prior to January, with Pay-Per-View special events still making up a significant chunk of its revenue. But then the WWE Network was launched in January as a streaming service rather than as a traditional cable channel. That cost $70 million just to get to work and needed 1 million subscribers to break even.
Essentially, McMahon was hoping that every single one of WWE’s cable event viewers would spend the $9.99 monthly subscription fee to join, but that didn’t happen.
McMahon owns 53 percent of WWE and he became a billionaire in 2000.