WWF Stock Gets Sacked Amid Pro Football League Plans

World Wrestling Federation Entertainment Inc. shares got drop-kicked Thursday as the producers of the most-watched programs on cable TV unveiled plans to start a professional football league.

Do investors fear pro football might taint wrestling’s integrity?

WWF stock (ticker symbol: WWFE) skidded $4.19, or 25%, to $12.31 on Nasdaq, its lowest close since the company went public at $17 in October.

The company announced that it’s starting an eight-team league, to be called the XFL, that will kick off in February 2001. NFL-reject Los Angeles is expected to get one of the clubs. The WWF is negotiating a television deal with its long-time cable partner USA Networks Inc.

While Chairman and chief promoter Vince McMahon has captured viewers around the U.S. with his violent, scripted wrestling shows, building a football league--presumably with real games--could be tougher. Other leagues have failed in the last 30 years, and General Electric Co.’s NBC and Time Warner Inc.’s Turner Sports late last year scrapped plans for a similar made-for-TV effort.

“The concern is they’re getting into something they don’t have a lot of experience with,” said analyst Seth Weber of Merrill Lynch & Co., which assisted on the company’s IPO. “Some people feel the money could have been better spent elsewhere, like developing wrestling more.” Weber downgraded the stock to “long-term accumulate” from “long-term buy.”

But not everyone was so skeptical. “If there’s anyone that can pull this off, it’s the WWF,” said Jordan Rohan of Wit Capital Group Inc. “I’d say it’s like a new studio releasing a big-budget film like ‘Titanic.’ Either it’s going to be huge, or it’s going to be a total write-off.”