WWE’s sudden stock price drop on Wednesday have raised concern that FOX is unwilling to pay what investors expected to retain SmackDown.
Brandon Ross and Rich Greenfield of LightShed Partners discussed the incident on an industry podcast earlier on Friday.
Lightshed Partners is a media/tech research group that provides insights to investors, and Ross is a regular presence on WWE investor calls.
On the podcast (exclusive to subscribers) Brandon Ross described a meeting that took place earlier this week. He said that Endeavor representatives voiced concern that FOX was not willing to meet the 1.75x multiple in rights fees that many expected to retain SmackDown.
He added that word of the meeting got out and that it “set off a complete panic,” which is why WWE stock tumbled by almost 8% on Wednesday.
Brandon Ross said:
“This week, there was a meeting. This is what triggered everything.
“There was a meeting that we got tons of calls from investors about in which, apparently, the Endeavor team said that FOX was not a good partner and they don’t want to renew a deal with them, and that the 1.75x renewal that’s out there is too high.”
That set off a complete panic. The stock was, like, tanking the day after.”
“What’s amazing to me is that it was probably a 10-person meeting, and it took this entire stock down because of probably the game of telephone and panic, and all these things that happen in the, quote, “media mafia” hedge fund world.”
Ross and Rich Greenfield then went further into FOX’s current relationship with WWE:
Brandon Ross: “The reality is — it seems to be — we’ve heard around that FOX is definitely talking down their interest.”
Rich Greenfield: “No, no. They have interest. It’s just, there are two things that stood out.’
Brandon Ross: “Okay.”
Rich Greenfield: “One is — and this is something that I don’t think you saw a lot of reporting on — the entire FOX upfront, where WWE was a very visible part in the past, had no WWE this time.”
Brandon Ross: “Totally. Absolutely.”
Rich Greenfield: “No presence of WWE. So that’s, you know, an interesting development.”
Brandon Ross: “That signal and the word around town, so to speak, is that FOX does not want to pay an increase on this, which makes sense in the context of —”
Rich Greenfield: “And “this” means Smackdown, to be clear.”
Brandon Ross: “Which makes sense of Endeavor coming back and saying, apparently, we weren’t there, but it’s what set the stock panic off that they’re not a good partner and we don’t want to do a deal with them.”
