NEW YORK (TheStreet) -- World Wrestling Entertainment (WWE) - Get Report CEO Vince McMahon lost $357 million in one day last week when his company's stock plummeted after it announced a new television deal with NBCUniversal that was not as lucrative as he had led investors to believe.
Despite the company's recent stumbles, McMahon has proven himself to be a shrewd businessman, and WWE stands as the undisputed king of professional wrestling because of it. He was able to purchase his main competition, WCW, in 2001 and also acquired ECW to effectively become the only game in town.
Throughout his decades as the chairman and CEO of WWE, McMahon has made some highly-publicized financial maneuvers. Most were calculated choices that changed the landscape of his company and of pro wrestling for the better, while others...not so much. Here are five of Vince McMahon's most famous money moves...
Vince McMahon truly bet it all on the first WrestleMania in 1985. He purchased then-WWF from his father, Vince McMahon Sr., and had ambitions for a nationwide promotion, something his father never wanted. This required a massive capital commitment, which put the company in danger of financial collapse.
As McMahon faced increasing competition from Jim Crockett Promotions, which became World Championship Wrestling (WCW) after a few twists and turns, he led the company into prosperity in the mid-1980s. It began with the "Rock 'n' Wrestling Connection," a period of cross-promotion between WWF and different players in the music industry. Hulk Hogan's return to WWF after McMahon Sr. fired him for appearing in Rocky III also helped spark the boom. Ironically, McMahon used Hogan's appearance in that movie to push his mainstream celebrity status.
But the true focal point was WrestleMania, a "supercard" event to counteract Crockett's Starrcade in the NWA. The WWF, as well as the rest of the pro wrestling business at the time, hinged on the success or failure of WrestleMania, and McMahon marketed the event as the Super Bowl of professional wrestling. He invited celebrities Mr. T and Cyndi Lauper to take part in the event as he tried to garner mainstream attention. Hulk Hogan and Mr. T defeated "Rowdy" Roddy Piper and Paul Orndorff in the main event, with Muhammad Ali as one of the special guest referees.
The event was a huge success, and Hogan would go on to appear on the cover of Sports Illustrated. It also marked a shift in the delivery and execution of pro wrestling, and McMahon would go on to become a pioneer in the pay-per-view business.
2) Mike Tyson at WrestleMania 14
In the mid-1990s, WCW had begun to dominate WWF in the ratings. Talent such as Hulk Hogan, "Macho Man" Randy Savage, Kevin Nash, Scott Hall and more jumped ship from WWF to join the rival promotion. The groundbreaking New World Order, or nWo, stable propelled WCW to the top of the wrestling world, and WWF needed to do something to turn the tide.
Enter Mike Tyson, "The Baddest Man on the Planet." In early 1998, Tyson was fresh off his two famous championship bouts with Evander Holyfield inside the boxing ring. WWF brought him to add some major star power to the buildup to WrestleMania 14in late March. Tyson appeared at Royal Rumble in January in the director's box to watch "Stone Cold" Steve Austin win the Rumble match and Shawn Michaels retain the WWF Championship.
McMahon then announced Tyson would be the special guest referee (later changed to outside enforcer) in the title match between Austin and Michaels at WrestleMania 14. Tyson and Austin would brawl with each other in the ring, and Tyson became an unofficial member of Michaels' group, D-Generation X. But the whole thing turned out to be misdirection, as Tyson counted the three for Austin and knocked out Michaels with a swift right hand after the bell.
As commentator Jim Ross put it, "The Austin Era has begun!" Tyson's appearance and Austin's win eventually propelled WWF ahead of WCW, as Austin's subsequent on-screen feud with McMahon became one of the high points in the company's history. Kevin Nash, one of WCW's stars at the time, and Eric Bischoff, the company's creative genius, have each said in interviews that they knew WCW was a goner once Tyson appeared on WWF TV.
And Tyson's price tag was approximately $3 million to $3.5 million for the appearance. Money well spent.
3) The XFL
Everyone is entitled to one major blunder, and the XFL was McMahon's. With WWF enjoying unprecedented popularity in 2000, NBC and WWF started a joint venture known as XFL. The league was an odd blend of NFL scoring and the dramatic elements of wrestling, such as public address announcers talking trash and scantily-clad cheerleaders. The league did not have as many rules for roughness (or rules in general) as the NFL did, and it held a scramble for the football to determine possession in lieu of a coin toss.
The XFL also had peculiar team names. The eight teams, which did not operate as individual franchises but as one entity under the league's umbrella, were the Orlando Rage, the Chicago Enforcers, the New York/New Jersey Hitmen, the Birmingham Thunderbolts, the Los Angeles Xtreme, the San Francisco Demons, the Memphis Maniax and the Las Vegas Outlaws. The Xtreme defeated the Demons, 38-6, in the "Million Dollar Game," the XFL's championship game.
The league completed just one season before it folded due to low television ratings. It did, however, produce quarterback Tommy Maddox, who signed with and started for the Pittsburgh Steelers after the XFL's collapse. And we'll always have Rod Smart, aka "He Hate Me," who also joined the NFL.
4) Corporate Jet
Vince McMahon's daughter and WWE Chief Brand Officer Stephanie McMahon tweeted on Feb. 3 that the WWE's new corporate jet went on its maiden voyage to an episode of Monday Night Raw in Omaha. WWE said in 2013 the jet cost $27.5 million, but taxes and other improvements to the aircraft increased the price into the range of $31 million to $32 million. The new jet is a 2006 Bombardier Bombardier Global 5000 and takes the place of a 1998 Canadair Challenger that WWE had owned since 2001 (pictured above).
5) The WWE Network
It's still too early to tell whether the WWE Network, the company's own over-the-top streaming service, will be a success or a failure in the long term. At the moment, the Network is at the center of the WWE's financial issues and stock plummet as it moves from the old pay-per-view model (pioneered by McMahon, no less) to the new delivery method.
The company said last week it would need 1.3 million to 1.4 million subscribers for the network to compensate for pay-per-view and on-demand declines. It had previously set a goal of 1 million subscribers for the end of the 2014, but this would still lead to a net loss of $45 million to $52 million.
Furthermore, McMahon had told investors that WWE's new television deal could potentially double or even triple domestic TV rights fees, but the actual deal signed with NBCUniversal only increased the fees by 50%.
Still, the company could reach and even surpass its targets for the WWE Network in 2015, which would help WWE turn a profit. The Network has also yet to launch outside the U.S., so an international audience could also help boost subscriber numbers.
At this time next year, we could be looking at the WWE Network as another in McMahon's long line of fruitful ventures.