Who Is To Blame For The WWE’s Stock Price Woes?

The big news of the day—on Friday—was the stock tumble taken by the WWE. The stock fell over 43% (not the 45% that many have been reporting), meaning Vince McMahon’s net worth took a huge hit. Depending on the source, he lost anywhere from 200-700 million dollars in one day—the most accurate number appears to be $340 million [link]. While we’ll likely never know the exact number (and in reality it fluctuates each day with the stock price), it was not a good day for the WWE and it’s true principal owner (sorry Stephanie).

Lemelson Capital, a minority owner in the company, which has incorrectly been labeled a major owner, has been very vocal about the status of the company, specifically targeting leadership. Make no mistake about it, Vince McMahon still owns the WWE—about 82% according to our own report here at 411Mania [link].

The WWE Network and the company’s television deal has been blamed for the drop in stock price. For the Network, having less than one million subscribers means there isn’t enough revenue to make up for what’s being termed pay-per-view cannibalization—the amount of money lost by not selling pay-per-view events.

The television deal is a whole different story. While the company touted a potential 2-3 time increase in rights fees, the end result was less than half—a $90 million increase. The company is promoting this as a three-time increase over the last deal’s increase. But in the marketplace it’s viewed as a failure compared to the projections. We don’t know the specifics of the deal, and if the WWE took less money to gain faster access to its own programming for the WWE Network.

And yes, we live in a world where getting a $90 million dollar increase over a prior contract is considered a failure. I got an 8% raise this year and considered myself lucky!

So why did the WWE take this hit?

Was it the WWE Network, and it’s inability to draw in over a million early subscribers?

Was it the company’s loss of PPV revenue and the impact it has on the FY2014 projections?

To answer those last two questions, we turn to our good friend Dean Ambrose…

Fact is, neither of these is to blame. Each is an effect, not a cause. What, then, is the cause?

To answer that question we need to take a huge step backwards. Remove the WWE Network. Remove the WWE Studios Remove the Vince McMahon vs. Triple H power struggle rumors. Remove the creation of a Performance Center. Hell, remove Linda McMahon’s failed political campaigns, the XFL, the WBF and the social media circus during each broadcast. Take it back to basics.

Wrestling, in its purest form, is still good vs. evil. Business is better when fans care about who is good and who is evil.

And we don’t—at least not enough.

For nearly a decade, John Cena has held the top spot in the WWE, overcoming the odds time and time again. With Cena at the helm, the WWE did big business. It was John Cena’s era that saw the company grow into a multimedia giant. It was John Cena’s era that saw the company reach into movies, dominate social media, and pioneer an “over the top” digital network unlike any other.

John Cena may be the single most successful professional wrestler of all time. And with the likes of Hulk Hogan, The Rock, “Stone Cold” Steve Austin and Ric Flair in the history books, that’s saying a lot. But it’s true.

But take a look at the runs at the top of each legend I listed. Remove Flair from the list as he didn’t make his name in the WWE. None of the other talents listed dominated for a decade. None.

John Cena has.

And to further the argument, the WWE has pissed away most of what Hogan, Rock and Austin accomplished.

The most cliché complaint of the Internet Wrestling Community just might be right here—John Cena, the hero of heroes in the WWE, has grown stale.

Think about it…

Hulk Hogan got stale, left for WCW and eventually reinvented himself.

The Rock left to make movies and become a Hollywood juggernaut.

“Stone Cold” Steve Austin’s injuries piled up and caused the end of his career.

Yet after a decade, John Cena still stands tall. With John Cena standing tall, what did the WWE do?

Nothing.

The WWE rested upon its John Cena laurels for far too long. The company failed to build any stars during the John Cena era. Now I don’t mean just stars—there’s a ton of those running around these days as the company has its strongest mid-card ever. I mean top stars. Stars that can carry the company.

The WWE built Austin and Rock into stars because Hogan left. But they didn’t do it overnight. There was a down period. The company built Cena into a star because Austin and Rock left. But they didn’t do it overnight. There was a down period.

In the fast moving, feed me now, instant gratification world of today the WWE doesn’t feel like they can afford a down period. And John Cena is still there. They’ve lost Edge, they’ve lost CM Punk and they’ve lost Batista (even though he recently came back). Triple H has moved into a new role. Chris Jericho has found success outside of wrestling that mirrors his success inside of wrestling. And John Cena is still there. Daniel Bryan finally climbed the mountain, and now he’s gone (at least for the short term). And John Cena is still there.

Thus, we’ve been left with no reason to care about the lead hero anymore. And when you don’t care about the lead hero, you don’t fully buy into the product.

It pains me to admit it, but the IWC is absolutely right. Stale, never evolving John Cena is still there. But John Cena’s not to blame. You see John Cena’s still there and the WWE has done absolutely nothing to change that.

What is it that Triple H says about evolution? You either adapt…or you…perish?

Huh. I guess he’s right.

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