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Taking stock in the McMahons as performers: Is this any way to run a company?
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By Paul Herzog

Professional wrestling may be my passion, but I pay the mortgage with a company called Tellabs. Tellabs has been one of the leaders in the telecommunications boom…in fact; we were one of the top 10 performing stocks of the 90s, along with household names such as Microsoft, Dell, and Cisco Systems. As part of that role, Tellabs does a lot of accounting to our stockholders, and catering to the analysts who can make or break your short- and long-term stock performance. Regardless of what the bottom line looks like, often times it only takes one analyst downgrading your company to put you in a Wall Street hole that can be difficult to climb out from.

The World Wrestling Federation has to do the same activities that Tellabs, Microsoft, or any other publicly traded company does. However, it is unique in its product, and how it presents itself. Specifically, the product features the McMahon family, and its trials and tribulations. Vince McMahon wants a divorce on TV, and admitted to a history chasing tail and childhood abuse in Playboy. The TV storyline has Stephanie McMahon siding with her father, achieving new levels of royal bitchdom in the face of continuing harassment from Steve Austin. Her husband and daughter’s actions have pushed Linda McMahon, or so it is said, into a nervous breakdown, a condition requiring heavy sedation. All of this is hyped in front of thousands of fans in arenas every week, and a television audience numbering in the millions. It’s all well and good for professional wrestling. This kind of thing has been part of the business, in some ways, since it went from an emphasis on contests to performance.

In the business world, however, these are the same Vince, Stephanie and Linda McMahon that interact with business partners, analysts and investors on a daily basis. At the time of this writing (Ed. note: the last week of December 2000), WWF stock is down approximately $4 from its initial public offering (IPO), $9 from its post-IPO high. Live shows aren’t selling out as quickly as they used to, if at all, and TV ratings are down since the move from USA to TNN. The number of questions surrounding the XFL with one month before its debut are vast, ranging from the quality of on-field product, to sustained ticket sales, to whether the league has a chance of living up to NBC’s expected 5.0 rating. In a world where many companies’ stocks are plummeting because they aren’t sustaining 30-40% growth year after year, the WWF needs all the positives they can muster to keep people interested in them not only as fans, but also as investors.

So why on earth would they choose to keep going on national TV twice a week and tell the world that their CEO has lost her grip on reality, and that her immediate family put her there? Linda can be the brilliant businesswoman that she is during the workweek, but are the investment professionals smart enough to keep the image of her presented on Raw and Smackdown out of their heads? This is a brave new world. The lines of reality in professional wrestling have always been blurred as much as possible. That’s what makes it great, in my opinion, what makes it worth watching. If a match is performed so that you know its “fake” (for lack of a better word), or an angle is totally incoherent, it ruins the delicate balance that it takes to truly succeed. That balance has historically been between a promotion and its fans. Outsiders, especially people interested in financial rather than entertainment value, have been entered into it… until now.

In the age of Sports Entertainment, it’s easy to say “this is no different than keeping a soap opera actor’s personal life separate from what’s happening to their character.” There’s an important distinction to be made, one that keeps my wife a loyal fan of General Hospital while driving her away from Monday Night Raw. That difference is: Susan Lucci can present herself in endorsements as Susan Lucci, while Erica Kane is going through marital problems, lesbian daughters, and strife of all shapes and sizes on TV. Linda McMahon is on TV playing, well, Linda McMahon.

Wrestling fans may be able to suspend disbelief and make that separation. Is it worth the risk with the value of your company, your entire business, to force Wall Street to successfully make that same separation? Listen, I think the latest McMahon saga will turn out to be a good storyline. There’s lots of good stories that can be told without making the company figurehead look like evil incarnate, and its CEO a quivering mass of neurosis.

Paul Herzog has spent far too many hours as a columnist for various Internet sources, and the Wrestling Lariat newsletter, over the past six years. He is a systems engineer at Tellabs in Bolingbrook, Illinois, and is lucky to have a wife that likes the wrestling business, too. He can be reached at grapsfan@worldnet.att.net.

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