WWE: Do They Need to Abandon the WWE Network Concept to Save the Stock Price?

Vince McMahon has a problem. A big one.

The WWE owner continues to push ahead with the WWE Network, a wrestling-oriented cable channel due to be launched at some point in the near future, in the face of widespread criticism and derision, with most onlookers considering the entire endeavour a disaster waiting to happen.   

Now it is one thing for Vince to take criticism. After all, the hugely controversial billionaire has been taking flack for one thing or another for the vast majority of his career as a wrestler promoter.

No doubt in McMahon’s mind, WWE will emphatically prove the naysayers wrong when they launch the network later in the year and it is a huge success. Knowing the tenacious McMahon, he may even be feeding off the negative feelings and using it to motivate himself.

Alas, these feelings of impending doom do more than just personally affect Vince; they now actively appear to be damaging the company on Wall Street, with WWE’s stock prices plummeting to all-time lows in recent weeks. McMahon even acknowledged as much himself at the most recent stockholders meeting, saying the low stock price was likely due to uncertainty over the network.

Considering Vince’s abysmal track record at everything outside of wrestling (WWE Studios, XFL, WBF) it should come as no surprise that Wall Street is nervous about what is arguably Vince’s biggest, most ambitious outside project to date.

The struggling state of Oprah Winfrey’s new network—OWN—probably hasn’t helped matters either. In fact, Vince has frequently been asked about the OWN and its woes in stockholders meetings, with the chairman speedily dismissing the comparisons (the WWE owner has claimed Oprah tried to move too far away from her core programming for her network; a mistake WWE does not intend to make with their channel, he assures us) .

So, what now? Is it time for Vince to discard the idea of network and save the stock price?

Well, on paper, as we examine the situation, we should recognize that things don’t look too too good for the proposed channel as it is, and it may just be time for Vince to cut his losses with the project and move on.

The network was, of course, due to start on April 1 to capitalize on the WrestleMania 28 publicity, but was then pushed back until later in the year, as the company reportedly realized how woefully under-prepared they were for the early launch.

While they’ve given themselves some much-needed time—the network is apparently now due to launch in November—it remains to be seen whether the company can overcome the huge hurdlers placed in front of it.   

Staffing issues and clearance problems (finding enough TV distributors, like Comcast and Time Warner, to be willing to carry the channel) look to be the two main issues.

Nobody in the TV world seems to have much faith in the WWE Network to even launch, let alone last a decent amount of time, to the point WWE have problems finding even unemployed people to work for on the channel.

As of this writing, a network head has not been announced, either; nor do any of the other high-ranking positions appear to be filled.

The clearance issues are an even bigger problem. In early March a damning article from The New York Post—which undoubtedly caused some unhappiness at Titan Towers when it came out—reported that WWE have failed to secure one distribution deal for the WWE Network.

Alarmingly, WWE have claimed in the past the network aims to start out being available in 40 million homes; at this point, they won't even be getting a fraction of that.

So, why is the company facing such an uphill struggle in securing TV deals? 

Well, in the article, it was suggested by Gerry Donini, a high-ranking executive with media agency RJ Palmer, that a network dedicated to pro wrestling was simply too “limited” in who it could reach. 

An unnamed TV executive was also noted in the piece as saying that WWE lacked proper executive experience in dealing with cable companies, something that had greatly hindered them in negotiations.

That’s not to suggest that simply dropping the network doesn’t have any setbacks either. Indeed, Vince’s already-thin credibility would disintegrate completely if WWE announced that the network wasn’t happening after all.

Regrettably for the company, such a development would serve to make WWE look like a complete laughingstock, to both the television world and in the eyes of their fans. 

Not to mention the money the company has already sank into the project (roughly $4 million), which will just be written off if the network idea is shelved.    

Despite this, though, abandoning the proposed channel might be the only course of action.

It would be one thing if there was positive buzz surrounding the network and they had several distribution deals lined up. In this instance, the plummeting stock numbers could be tolerated.

But, looking at all the evidence, it appears as if WWE are greatly damaging their standing in Wall Street for a project that is doomed to fail anyway.

Summarily, it truly is time for Vince to move away from the idea of a network. It will not be easy for the notoriously stubborn WWE owner to accept—and will no doubt damage the company’s credibility in the eyes of many—but it may be the only acceptable course of action at this point.

Not only will it save the company a tremendous amount of money in the future and allow Vince to place his focus back on the WWE product, but it will undoubtedly help the stock bounce back, as the market breathes a huge sigh of relief.