McMahon has long been opposed to selling the company, wanting it to stay in the familyGETTY IMAGES
WWE shares have "plunged more than 40% since December," and now Chair & CEO Vince McMahon is "looking to free up funds without relinquishing his control over the wrestling empire," according to Tara Lachapelle of BLOOMBERG NEWS. The coronavirus pandemic has "temporarily taken down the business of live sports" -- both real and scripted. That has left WWE to "hold matches in empty arenas, making the spectacle feel even more theatrical than sports-like." WWE on Tuesday "disclosed that McMahon entered into a prepaid variable forward [PVF] contract, which essentially functions as a cash advance from a bank." As part of the contract, McMahon "agrees to eventually sell some of his shares at some future date" -- March '24, in this case -- receiving the money "now, but without having to actually turn over the stock or pay taxes on the sale yet." The bank was Morgan Stanley and the deal priced 2.26 million shares at $38 apiece, representing more than $80M in "freed-up liquidity." In the meantime, McMahon "gets to collect the usual dividends on those shares, and he can keep the holdings by settling the contract for cash." McMahon has "long been opposed to selling the company, wanting it to stay in the family," and the PVF contract "helps protect that ownership." That said, with "money tight, the outlook for traditional cable networks souring and McMahon's XFL passion project meeting an untimely finish once again, now may be the time for any interested buyers to take their shot" (BLOOMBERG NEWS, 3/25).
