Power play: Deep-pocketed Saudis rumored to be eyeing WWE purchase

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It would be a stunning turn of events worthy of pro-wrestling television, complete with major geopolitical implications.

Just days after longtime World Wrestling Entertainment (WWE) Chairman and CEO Vince McMahon made a dramatic and unexpected return to the company, rumors began swirling this week of a blockbuster sale to Saudi Arabia’s deep-pocketed Public Investment Fund.

Sources inside WWE initially denied reports that a deal was imminent, pro-wrestling journalists said, but the Saudi fund is believed to be among the most likely buyers if the company moves ahead with a sale.

It would be a remarkable development for WWE, a company that over the past half-century has made an indelible mark on American pop culture, boasts some of the highest-rated cable TV programs, has produced international icons such as Hulk Hogan and John Cena, and counts A-list Hollywood actors such as Dwayne “The Rock” Johnson among its alumni.

For the Saudis, it would be the latest in a series of moves to deepen their footprint in the Western sports and entertainment marketplace and, as critics contend, to use that footprint to shift attention away from the country’s human rights record and treatment of women.

The Saudi fund’s reported $620 billion in assets makes it one of the richest sovereign wealth funds on the planet.

The fund already has made a presence in the sports arena with, among other things, last year’s purchase of Premier League soccer club Newcastle United and the launch of its high-profile LIV Golf tour.

In many ways, the road toward a WWE acquisition has already been paved. Since 2018, WWE has held its annual Crown Jewel live event in Riyadh, the clearest example of the burgeoning business partnership between the pro wrestling leader and the Saudi royal family.

The Saudi government has reportedly paid as much as $50 million per event to bring the WWE product to its shores.

By holding those profitable cards on Saudi soil, WWE has mostly brushed aside criticism of its decision to do business with a government accused of rampant human rights abuses.

The company also has appeared to take steps to make its product more palatable to a Saudi audience, including having its female athletes wear more conservative attire when wrestling in Riyadh.

Some analysts say the move makes sense for the Saudis from a purely financial perspective. It would give Saudi investors the ability to cash in on WWE’s lucrative live-event business and rake in billions of dollars in profits from television rights fees from U.S. and European cable companies and streaming services.

The WWE has only recently brought live events to Saudi Arabia, but the Western pro-wrestling product has been popular in the country for years. That means Saudi citizens would likely cheer an outright purchase of the world’s leading sports entertainment company.

“Wrestling is and has been for many, many years enormously popular in Saudi Arabia, particularly with young people. And from that perspective, making WWE part of the Saudi [portfolio] would appeal to many young Saudis,” said Gerald M. Feierstein, director of Arabian peninsula affairs at the Middle East Institute and a former U.S. diplomat who served tours in Saudi Arabia.

“From the 30,000-foot level, I think it fits into the broader effort of [Saudi Crown Prince] Mohammed bin Salman to project an image of Saudi Arabia that’s different from the past and a more modern, cooler, more cosmopolitan kind of image,” Mr. Feierstein said in an interview. “And to get away from Saudi Arabia’s image as just a place where oil gets pumped. I think there would be a number of reasons why this would be appealing.

“I served in Saudi Arabia in the mid-1980s, and wrestling was popular on television even then,” Mr. Feierstein said. “This is something that goes back a long, long way. Why the appeal? What exactly is it that attracts a Saudi audience? I can’t necessarily tell you the answer to that, but it’s not a new phenomenon.”

Mr. Feierstein pointed to the growing regional sports and economic competition among Saudi Arabia and its neighbors, perhaps best exemplified by Qatar’s hosting of the 2022 World Cup.

Acquiring an international sports entertainment powerhouse such as WWE, Mr. Feierstein said, would put Riyadh in a different league from its peers. “There’s an awful lot of competition within the Gulf states for investment in these very popular international sporting activities,” he said.

Best for business?

WWE did not respond to a request for comment this week seeking clarification on whether a sale to the Saudi fund was imminent or even under consideration.

Pro-wrestling journalist Dave Meltzer indicated late Wednesday that the deal is a high possibility.

“They’re not sold. Saudi Arabia is in the hunt. They’re one of the companies, one of the places that are looking for it. … Several media companies, the names that are out there are all in the hunt,” he reportedly said on his podcast.

“There’s definitely smoke about the Saudi Arabia story. It’s early. It’s too early for the deal to the finalized, but that one can happen too.”

As further evidence, wrestling insiders have pointed to the WWE’s reported retainer of financial giant JPMorgan Chase & Co. to help explore its sale options.

On its website, JPMorgan says it is “the only U.S.-headquartered financial institution with two operating licenses in Saudi Arabia, providing access to a comprehensive range of products and global banking capabilities for clients in the country.”

Whether a deal comes to fruition anytime soon, the whirlwind events of the past week inside WWE’s Stamford, Connecticut, headquarters suggest that such options are under consideration. The return of the company’s longtime leader offered hints of major changes.

Mr. McMahon, who bought the company from his father in 1982, transformed it from a regional Northeast promotion into a global powerhouse. Mr. McMahon became a megastar in his own right by portraying a villainous boss on WWE television through the late 1990s and well into the 2000s.

His most memorable on-screen moments include face-to-face confrontations with Donald Trump, who appeared on WWE programming in 2007 in the run-up to the company’s flagship WrestleMania event.

After decades at the top, Mr. McMahon, 77, stepped down last summer after The Wall Street Journal reported that he had paid millions of dollars to suppress charges of sexual misconduct and infidelity. WWE announced an investigation into the matter, which was reportedly completed in November.

Mr. McMahon’s self-declared retirement lasted all of six months. Last week, he announced plans to return to the company and appeared to be using his status as WWE’s largest shareholder as leverage.

In a press release last week announcing his return, WWE indicated that a sale is on the table.

“In connection with the change in the composition of the board of directors and in cooperation with Vince McMahon as majority shareholder, the company intends to undertake a review of its strategic alternatives with the goal being to maximize value for all WWE shareholders,” the company said in a statement. “There is no assurance that this process will result in a transaction.”

Earlier this week, Mr. McMahon was unanimously elected executive chairman of the board, the company said. His daughter, Stephanie, resigned from her position as the company’s co-CEO the same day. WWE executive Nick Khan is now the company’s sole CEO.

By Wednesday morning, pro-wrestling news sites were abuzz with rumors that WWE had agreed in principle to a deal with the Saudi investment fund. Later in the day, however, news outlets reported that no agreement had been reached.

Yahoo Finance cited sources “familiar with the matter” who said the company had not been sold. WWE stock jumped after the initial reports of a sale but quickly fell after news that a final deal hadn’t been struck.

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