WWF Invites Investors to Step Into Ring

Stone Cold Steve Austin, The Rock and a cast of other professional wrestlers are heading to Wall Street via an initial public stock offering that could raise about $173 million for their backer, World Wrestling Federation Entertainment Inc.

But the way the IPO market has been going lately, Austin and crew may have to body slam investors to get them to pay up for the shares.

The 110 WWF wrestlers and other performers have helped turn WWF into a media and entertainment juggernaut. The company doubled its revenue during the last fiscal year by using live matches as the cornerstone for TV shows, magazines and a Web site.

WWF’s revenue totaled $251 million for the year ended April 30, up from $126 million the year before. Net income rose to $56 million from $8.5 million.

By selling stock to the public in a deal expected in coming months, WWF would get funds to expand and capitalize on wrestling’s raging popularity.

What investors will have to decide is whether that trend will endure. “My experience with pro wrestling is that it has its peaks and then it levels off,” said Rick Burton, director of the Warsaw Sports Marketing Center at the University of Oregon’s College of Business. “We’re at one of the higher points.”

WWF’s weekly TV shows are some of the most popular on cable. Its main show, “Raw Is War,” was the top-rated regular cable program for 19 consecutive weeks through June 30, according to Nielsen Media data quoted in WWF’s Securities and Exchange Commission filing.

The programming is attractive to advertisers because it reaches men aged 18 to 34. In 1998, “Raw Is War” doubled its viewers in that group, while ratings for mainstay sports shows were stagnant.

That fan base has helped WWF, which gets some of the ad revenue generated by its TV programs, to recruit big-name sponsors and advertisers, including AT&T; Corp. and Coca-Cola Co.

The company, which competes with Ted Turner’s World Championship Wrestling Inc., also licenses its brand names for retail products and runs an Internet site that provides information on the wrestlers and matches. Taken together, the different businesses have proved very profitable.

Live and televised entertainment generated $170 million of last fiscal year’s revenue, up from $92.6 million a year earlier. Revenue from branded products more than doubled to $81 million.

WWF Chairman Vince McMahon now controls all WWF stock. WWF did not disclose how many shares will be sold in the IPO, what percentage of the company’s stock they will represent, or give an estimated price range.

McMahon will retain enough Class B shares--which carry 10 votes, compared to one vote for each Class A share--to maintain control of the company.

Underwriters for the stock sale will include Bear, Stearns & Co., CS First Boston, Merrill Lynch & Co. and Wit Capital Corp.