Vince McMahon and WWE have had a tough year to say the least. The wrestling company, albeit still extremely popular, has lost its value on the stock market and its reputation amongst its fans.
The fans will always remain because there is nothing that quite matches the buzz of WWE for the diehards, but that doesn't mean that the WWE Universe has remained quiet during one of the most turbulent years in WWE's history.
Popular wrestler CM Punk's acrimonious exit from WWE back in January the day after Royal Rumble wasn't the catalyst for WWE's troubles, but it was certainly the beginning of things to come. And everything may have just got worse this week following one business analysts brutal take on the wrestling company's current financial plight.
Vince McMahon launched the WWE Network at WrestleMania 30 in April with the hope of getting over a million subscribers for the online streaming service. But McMahon has failed to hit his desired target with WWE well short of a million subscribers, and founder of the hedge fund Mangrove Partners, Nathaniel August, claims that McMahon will never achieve his WWE Network goal.
"The company has roughly a billion dollar market cap and they've launched an over the top network and pretty much all their profitability going forward is dependent on the OTT network and right now based on the number of subscribers that they have, they'll earn nothing at a corporate level and they need to double the number of subscribers just to justify their current valuation and we think that that's never going to happen," August told CNBC this week.
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Unhappy WWE Network subscribers
The situation is pretty bleak for McMahon and WWE. Although the company's turnover remains strong, there is a real fear that the company will lose further value on the stock market as a result of not gaining the number of subscribers they desire.
Just to make things even worse, August says that the existing WWE Network subscribers are unhappy with the product at present.
"So they launched it in April at WrestleMania and at the time they launched with 670,000 subs and at the end of the second quarter they only managed to add an additional 30,000 subs and as we've done scuttlebutt based research in how people are reacting to the network, we think people are really unhappy and that the number of additions is going to prove very disappointing."
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