WWE has been going through a terrible time recently with the company suffering from all kinds of financial problems. These complications have led to several different consequences that have included the firing of wrestlers after a decision to cut the company's 2014 budget by $20 million.
The cuts were announced last month, and the reports certainly had a huge impact on WWE's passionate wrestling fan base.
More than one problem
Major issues surround WWE's subscription-based video streaming service, WWE Network, which was launched on February 24th, 2014, are at the heart of the company's problems. As are the issues regarding a new TV deal for WWE which some say is a lot lower than they were led to believe it would be.
The move to providing their own subscription service was heralded by Chairman Vince McMahon at the time, as was the quality of the new TV deal that McMahon signed. But now it is alleged that WWE and McMahon issued false material and statements to get stock holders on board.
Angry stock holders
According to reports, Vince McMahon is being accused of misleading WWE stock holders about the true potential of WWE's ability to negotiate. In a huge blow to WWE and McMahon's ailing credibility, valuable stock holders of the wrestling company have taken the brave decision to challenge Vince McMahon in court.
"[The WWE lawsuit is] representing people who purchased stock between October 31, 2013, and May 16, 2014. The complaint, like the other few similar ones, allege the company issued materially false and misleading statements regarding the company’s ability to negotiate a television contract price," Dave Meltzer of Wrestling Observer reported this week.
"During the period, the company issued releases showing its ratings being similar to NASCAR, with the idea that would be a barometer of what WWE could get for rights fees. However, WWE’s new deal ended up being worth less than one-sixth of what NASCAR’s television deal was."
It gets worse
You think that sounds bad? It gets worse. It is understood that the company is also being accused of "violating securities law by failing to disclose the company's true market value in television negotiations."
Pretty heavy stuff if you love WWE, like we do. So what do think WWE fans? What should Vince McMahon do next to save his company from more bad press? Leave your thoughts in the comment box below.
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