WWE: A Cream of the Crop Investment

In this week's episode of Industry Focus: Consumer Goods, host Nick Sciple and Motley Fool analyst Dan Kline -- both avid wrestling fans -- dive into the business of WWE (WWE). This network dominates wrestling programming, but the space is changing. What's WWE doing to keep up? What are the biggest threats to its revenue? What about its reputation? What trends should investors track to see how this company is doing? Are TV sports rights getting a little too frothy? Will WWE get snapped up by a bigger fish? Tune in to find out. (And stick around after the credits for Nick and Dan geeking out about this year's WrestleMania and their Mount Rushmore of wrestling.)

A full transcript follows the video.

This video was recorded on April 9, 2019.

Nick Sciple: Welcome to Industry Focus, the podcast that dives into a different sector of the stock market every day. Today is Tuesday, April 9, and we're talking WWE. I'm your host, Nick Sciple, and today I'm joined in studio by Motley Fool contributor Dan Kline. Dan Kline, how are you doing? 

Dan Kline: Is now when I cut a 90-second promo about how I'm going to beat you?

Sciple: You could! Dan might be turning heel today, folks!

Kline: Listen up, brother! [laughs] 

Sciple: We're talking about wrestling. Dan, WrestleMania just happened on Sunday. What was your takeaway from that event? 

Kline: That no TV show should be five and a half hours long. There were too many emotional peaks. Usually at WrestleMania, you build to one underdog finally has his day, holding the championship up. They had like six of those. By the time they got to the main event, I was exhausted. Admittedly, I'd been watching most of it on my phone in a bar at the hotel I'm staying in, then on my laptop in my hotel room, which is not the most pleasant way to watch television. 

Sciple: Yeah, Dan, I didn't quite get the full experience of WWE. I was in Montreal, Canada, for a friend's bachelor party over the weekend. Did catch the last couple of hours of the show. I tell you what, the Triple H vs. Batista match I thought was incredible. Good job working the different body parts and things like that. I thought that was great example of good wrestling.

Dan, today we're talking about WrestleMania, a little bit about wrestling. We both like that a lot. But, we're going to talk about WWE as a business.

Kline: [laughs] Yes, as a business.

Sciple: First off the top of the show, let's talk about where they make their money. As many people will know, WWE is the premiere global wrestling brand. It's kind of the NFL of professional wrestling. Where are they making their money? Where does most of their money comes from as a business?

Kline: Television rights. This has been a huge question mark until very recently for WWE. They were always a difficult television property in that wrestling is considered a little downstream. WWE has done a good job getting mainstream advertisers to be willing to advertise, but that's a recent thing. For the last few cycles of TV rights before the current one, their deal would come up, and they would only have one bidder. So, Comcast would say, "Hey, we'll give you a little more." Now, the rights world has exploded so much that Comcast is paying them basically what they used to pay for five hours of programming for just the three-hour Monday night show. And Fox is paying them $1 billion over five years on top of that for their No. 2 show, which is actually going to be on network broadcast television.

Sciple: We'll talk a little bit later about the details around those TV deals. Just to start off, let's unpack a little bit about what rights we're selling. WWE produces five hours of weekly original content. Like you mentioned, they have two shows. 

Kline: Those are the A-list shows. WWE actually produces all sorts of, let's call it curtain programming, the main event, which is a one-hour show to get some of the talent on the card. They have NXT, which is their AAA territory. They have 205 Live, which is the lighter-weight wrestlers who fly around more. Some of that is programming that's on their network. WWE Network is a paid subscription service. It was a hedge against: "What if nobody bid for one of these properties? Well, we could take it, put it on our own network, maybe add a million subscribers, keep the revenue in the same place."

Then, they also have the TV revenue from their E! deal and their USA deal for Miz & Mrs., which is reality show, Total Divas, Total Bellas, which are reality shows. Then there's the like occasional tryout stuff. They've had cartoons, they had a Saturday morning kids show. They have different cuts of things for international. I don't know if they have a Hulu show still, but they used to have an edited version of Raw for Hulu.

Sciple: They still have that.

Kline: But the bulk of their money is made from licensing Raw and SmackDown, the two A-list shows, not just in the U.S. The U.S. is the most important deal, but there's also huge money for them to be made in some of the major markets around the world. 

Sciple: Dan, you're exactly right. The media portion of the business, as you mentioned, is about 73% of their revenue. You mentioned the network aspect of the business. That's been an interesting phenomenon over the past several years. They launched that in 2014 and have transitioned from the old pay-per-view model to this more consistent, pay $9.99 a month as a network subscriber and you get all the pay-per-views each month. 

Kline: The premise of the network makes sense, but in some ways, there's a disconnect. So, they looked at me and you, and they said: "OK, you guys are wrestling fans, but you're only buying WrestleMania, and once a year, there's a pay-per-view that you really want to see. So, you're spending $59.99 twice a year. That's $120. That's $9.99 a month." So, the proposition was, "I bet for $9.99 a month, Dan and Nick would want all the pay-per-views, all this archival content, some original shows we produce, some highlights and documentaries, all sorts of cool stuff." Actually, the answer has mostly been, somehow that math doesn't compute to people. They thought they would have 2 million subscribers a year ago, and they have about 1.5, and that number goes down after WrestleMania season. It hasn't been the global success they thought it would be. 

But there's a caveat to that. The second they signed these television deals, they for five years decided that the network would be downplayed. They're not going to produce as much original programming there. They almost never mention the network on the television shows. There used to be an endless refrain of "$9.99 a month!" They don't need the network as much as they used to, and they have to make sure people watch their key shows, or else those deals are going to go away. 

Sciple: Yeah. It's an interesting phenomenon, how that fits into part of their business. Something to watch going forward. As you said, it hasn't quite grown as much as the business would have liked. But when you've got an audience of 1.5 million subscribers you can depend on month over month, interesting part of the business. As we mentioned, Dan, the media is the biggest part of the business, over 70% of their revenue. That's been growing over time as sports and sports-related media rights have been moving up over time. 

The rest of their revenue comes from producing live events as well as selling merchandise. Those haven't seen quite as much growth over the past few years. It's declined as a portion of revenue over the past several years. Live attendance over the past several quarters has been down in the mid-single-digit range. How should we think about those aspects of WWE's business and how it fits into the investment thesis for the company?

Kline: Wrestling tends to be cyclical. You have a breakout character like The Rock or Hulk Hogan, Stone Cold Steve Austin. That drives merchandise sales, drives the business. It makes it cool. A fifth-grader is not going to buy a wrestling T-shirt if it's not cool. Certainly, an adult male is not a wrestling T-shirt unless wrestling is very in vogue or we're very out of touch. Right now, the hot wrestling tends to be the smaller independent scene. I don't know if you've seen Bullet Club T-shirts out there. They're a new Japanese wrestling faction. Chris Jericho, a very famous longtime WWE wrestler is on his own and working with a new group, has done really well selling shirts at Hot Topic. Some of the people wearing Chris Jericho shirts or Young Buck shirts bought at Hot Topic have no idea that they're wrestlers. They might think they're bands or just logos or who knows what. But, the cool factor isn't there. WWE is going to be hurt by that. 

They're also hurt by their No. 1 star in terms of mainstream appeal is John Cena. He sells an enormous amount of merchandise to kids. Well, he's barely active. He's a Hollywood movie star who comes back for big shows. When there's an arena show, he's not on the show, so the kids aren't buying his hat and his sign and his T-shirt and his headband and probably his bobblehead doll and his ice cream and who the hell knows what else. That's going to hurt merchandise sales. 

Maybe this pops back up because some of the women wrestlers are having a creative peak. Maybe it becomes more cool for girls to wear Charlotte Flair, Becky Lynch, or Ronda Rousey shirts. But that hasn't in any way been the case yet. 

Sciple: Since we mentioned it, let's talk about that a little bit. WWE has really tried to change their image when it comes to how they treat women on the brand and how they're shown on the content. You mentioned the reality shows on E!, which is targeted toward that audience as well as WrestleMania on Sunday night, you had the all-women's headliner between Charlotte Flair, Becky Lynch, and Ronda Rousey. How has that strategy worked for WWE over time? What does that mean for the business? 

Kline: WWE decided to go PG for advertising reasons. There were two things that they got rid of to make that happen. Blood. If you're watching on Monday night and a wrestler has his head split open, it's live, they'll stop the match, have a doctor come out and either stop the match and call it a no-contest like a real sport, or they will tape it up. They do not have the old days like in the '70s and '80s, where you'd see Ric Flair with a crimson face. 

The second thing they did is, female wrestling in the '80s and '90s was eye candy. They weren't trained wrestlers. They were in skimpy outfits. They would have bikini contests. Now, it is presented very much like the males. And certainly, there are male wrestlers wearing skimpy outfits. I'm not going to wear trunks to do this show anytime soon, or even a singlet, frankly. There's still a little bit of that, but they are shown as real competitors. The WrestleMania main event was a brutal, hard-fought contest between people who are every bit as trained and talented as the top men. That is a huge change. That might not bring in a huge women audience, but it does make it so your girlfriend or my wife is going to be less like: "Oh, you're watching wrestling? Is it for the bikini contest?" No, it's because it's a pseudo-sport that I like the drama of.

Sciple: Right, as well as, it makes the brand much more palatable to advertisers. 

Kline: That was the impetus for it. 

Sciple: Right. Dan, let's talk a little about the TV deals that we've got over the past year. The big news is, Fox has bid and received the rights to SmackDown Live, which will air on the Fox network on Friday nights, which is moving WWE wrestling from its traditional home on USA on basic cable to now a Friday night location on network TV. What's the significance of this deal for the company? What insights can we gain from that deal as we look forward in the future of the business?

Kline: In the next five years, as an investor, it guarantees the company's going to make more money every year. It's an escalating deal. It's worth a little bit more every year. On the surface, it should be better exposure. Ratings have been slowly going in the wrong direction for both of the major shows. There's still huge draws for cable. SmackDown, which is the show moving to Fox on Friday nights, it's on Tuesday nights now. Tuesday is a better night than Friday. Fox is a much better home than USA. USA is a top cable channel vs. an actual broadcast network that is in pretty much every home that has TV. In theory, that show should do a slightly bigger audience than it does now because of the better home, but also the worst night, because young men are out on Friday nights. So, if it's doing 2.1 million viewers, they're probably expecting 2.3, 2.4 million. If it settles in at 1.7 million, they're in real trouble. It will get moved to FS1. The reason this is taking up primetime real estate is, it's 51 weeks of live programming a year vs. the four sitcoms that aired in that block that were each producing 18, 22, 23, whatever it is, episodes. So, you're running a lot of reruns, a lot of ridiculous filler programming. This should give you a loyal marketable audience, a platform to promote NFL games. 

But, anytime a wrestling show move channels, it is a challenge. We're going to have to see how Fox promotes this. We're going to have to see how many wrestling fans are DVR-ing it and don't change their DVR. I'm fairly confident that the bigger platform and Fox putting its weight behind this as a sports property will work. Even Raw on USA, at twice the licensing fee or whatever the exact number is, that's going to have to maintain its 3.4 or 3.6 million people a week, consistently be one of the top cable shows, because it's already a loss leader. They're not making money on that deal. They're using it to maintain their status as a top five cable channel. That's good for selling ads elsewhere. It's like paying for NFL programming. It's not so much about whether you make money on those shows. But when you take a lot of money for something, you'd better deliver, or you're taking a big risk.

Sciple: Yeah, I think that's really significant. USA having the rights to Raw has driven a dependable audience to them on Monday nights for a long period of time. It's helped that channel remain significant. You talked about the deepening relationship with Fox. There's been some rumblings that there may be a new FS1 show led by WWE, which would indicate even more deeper relationships, more cross-promotion --

Kline: I'm fairly sure that's been confirmed, at least that they're going to do some sort of, call it a news desk show. Now, the challenge with WWE -- we both have the WWE Network. For a while, they did after-shows. You could watch Talking Smack after SmackDown. They tried to do a talk show format, where they were still the wrestling characters, but it was a little more real. It's a very tough line. When it worked, Daniel Bryan and The Ms., it was awesome. It felt like real life. It was really exciting. When it doesn't work, it feels like a guy playing a goofy wrestling character who doesn't realize he's on a talk show and shouldn't be playing a goofy wrestling character. 

ESPN had a big challenge. Do you remember their SportsCenter segments?

Sciple: Yeah, they had Jonathan Coachman, and he would have all the folks on there.

Kline: And sometimes they'd be themselves, and sometimes they'd be their wrestling character. From a reporting point of view, ESPN had the trouble of, do you report this as sport? Or do you report this as, this is a real grudge between these two people, the way a UFC fight would be portrayed? That's going to be a challenge for FS1. I thought they would have been better off with a highlights show or something like the WWE Network does like Countdown, where it's like, "The 10 best wacky gimmicks of the '90s!" 

That's the first. I think you're probably also going to see 205 Live, maybe NXT, maybe a third hour of SmackDown. Part of the goal of this is to eat up hours on FS1 because they lost UFC. 

Sciple: Yeah, exactly. The new Fox, their strategy appears to be focused more on sports and news content, and its WWE offering would fit right in with what seems to be the focus of the business post the Disney transaction. 

Dan, one other TV rights thing I want to get your thoughts on before we move on is India. From the numbers you gave me, rights in India are expected to jump from $24 million a year to around $125 million. Obviously, a significant bump up. When you look at the population in India, and what opportunity that might give WWE to expand its audience, what are your thoughts on the potential for that? 

Kline: They've been trying for years. They've had an India office. It's interesting that they're viable as a television property, but they've never been viable as a touring property. They've done a show or two, but it's a sold show where they're getting a set amount of money. It doesn't make sense to transport wrestlers all over the world for one show, no matter how -- well, the Saudi Arabia shows being the exception because the money is so high. But, they don't sell a lot of merchandise. They're not part of the culture. So it's an uphill battle. 

When you look at a market like Mexico or Japan, that have their own wrestling traditions, there's a curiosity factor of the big American wrestling company. So, when WWE does two shows in Japan every eight months or whatever it is, those shows are going to sell really well just because it's the big version of something we already know. In India, this is not a known thing. 

It's a very long project. The fact that they're getting this kind of TV money is a very strong sign.

Sciple: Yeah. Something to follow. Obviously, when you're a brand like WWE, as you can grow your audience, you really grow the potential to grow your network and interest in your brand over time. 

You talked about the events they've done in Saudi Arabia over the past year. That gets us to, WWE has faced some criticism, both for those events in Saudi Arabia as well as the most recent criticism we've seen on a widespread public basis -- John Oliver, on his show Last Week Tonight, profiled WWE. The day after his show, shares dipped almost 3% on the news. What can you tell our listeners about John Oliver's WWE profile?

Kline: Let me explain the John Oliver piece. WWE considers its wrestlers independent contractors. But, not only does it completely control their schedule and their bookings and where they can wrestle -- if I'm a WWE wrestler, I cannot wrestle for another company. Well, that makes sense. I'm a Motley Fool contractor; my contract says I cannot write without permission for other competing entities. Now, if a local newspaper wanted me to write a story, I'd probably get permission. If a direct competitor wanted to, they'd probably say no. That part, WWE is probably OK. 

The secondary part is that WWE, if you say, "Hey, after the Monday Night Raw show, I'm doing stand-up comedy." WWE can say no to that. "Hey, I got an offer to be on TV." "Hmm, we don't want you to do that." So, they are straddling the line. They don't have the ability to say, "You want me to work Monday night, but I'm taking Monday off." You can't even tell me what story to write. You can ask me if I want to write a story, but it's totally my decision, because I am truly an independent contractor. The WWE can say: "Nick, you are a wrestler, you have to be there Wednesday night. You're going to work this schedule. You're going to pay for your own travel."

It's a gray area. They don't cover health insurance for the wrestlers. They do cover if you get hurt in the ring, they pay for that stuff. It is a traditionally giant expense, is why wrestlers have not been salaried employees. At the top of the pay structure, that's irrelevant. If you're making $5 million a year, who cares how that check is coming in? But if you're a contracted guy in NXT making $35,000 a year, or you're a low-level WWE guy who makes $100,000 but has to pay his road expenses? These are big issues. And the company is flush with cash. John Oliver has every right to say that maybe they should make these people employees. 

The Saudi Arabia issue is a secondary one. They have a giant paid deal to stage major spectacle shows, two a year, in Saudi Arabia. It's a $40 million or $50 million deal -- they don't quite break it out, but there's been some backwards math that gets to those numbers. They throw all the stops at these shows. They bring out-of-retirement wrestlers. You'll see The Undertaker, you'll see Hulk Hogan. The last one, they paid Chris Jericho, when he was a free agent, to go. 

But, Saudi Arabia -- as many of you know -- has been in the news for humanitarian issues. There has been, I'd call it minor brushback. I don't think the average WWE fans care. And they've straddled the line. They still do the shows, but they don't promote them over the broadcast airwaves as much. 

Sciple: I'll tell you, I'm a WWE Network subscriber, I like the product. I did watch one of the Saudi Arabian events, and there was some stuff that felt very much like propaganda for --

Kline: No, no, it is propaganda. They're running videos about how progressive the nation is on a show where their female wrestlers aren't allowed to wrestle; where they inadvertently showed a video that had some of the female personalities in it, and they got a lot of blowback on that. At least at the last show, Renee Young, the female commentator, was allowed to be at the desk. It is a little hypocritical to be showing videos about -- and maybe in that world, this is a very progressive country. I'm not super up on the politics. But, it's definitely a dicey proposition. 

Sciple: Right. And it's been controversial. You had some wrestlers who chose to opt out of that event --

Kline: And some who couldn't. Sami Zayn, because of his descent, wasn't welcome in Saudi Arabia. When you have a country that's dictating, "We don't want wrestlers who were born here," that is not how the American investor looks at things. 

Sciple: Yeah. Definitely a problematic thing. I will say one thing before we move on to the independent contractor side. A little bit of that is, the company probably doesn't want to pay more expenses than they have to. But, part of it traces back to the history of wrestling. If you look at the legacy of wrestling before the WWE emerged, it was a regional product. You had different regions that had different wrestling promotions. Folks like Ric Flair and Andre the Giant would move from promotion to promotion to promotion, barnstorming across the country. With the rise of WWE in the late '80s, into the '90s, all those regions were consolidated into what is WWE today. So, the dynamics of the industry from the perspective of the wrestlers and who they can work for has really changed; but the relationship between the business when it comes to their employment status has not.

Kline: It's changing back. We're not going to talk a lot about competition to WWE, but it's worth noting that there are now a handful of companies where wrestlers can make a legitimate living. 10 years ago, it was high school Jim making $25 a night for WWE. Now, there's AEW, a company being started by Tony and Shad Khan, who own the Jacksonville Jaguars. They've spent seven figures to sign Chris Jericho and some of the biggest independent stars and Japanese stars. They're taking an interesting approach. A lot of their top talent are employees, but they're also performing office jobs. Some of their... I don't want to say lower-level talent, but, less high-up on the card, they have contracts that don't forbid them from working elsewhere. There's a young wrestler, Maxwell Jacob Friedman, MJF, who is under AEW contract, but he also works on the indie scene. They have first priority on his dates. He might have rules about which TV he can work. So, some of the younger companies -- Ring of Honor takes that approach. New Japan, which is a Japanese program that has TV in the U.S. on Access TV, a lot of them are taking more the "we're going to let you do whatever makes sense for you as long as it doesn't impact us." But there's no reason for WWE to do that. 

Sciple: Right. We're seeing these new folks emerging. I think AEW's probably the most exciting competitor to WWE now. They have big names that folks would be familiar with, like Chris Jericho, some big folks from the independent circuit. But, for at least the past couple of decades, since WCW fell back, it's been WWE and then everybody else. You've seen a lot of these smaller organizations have a remora strategy. "When WrestleMania is in town, we're going to have our biggest event of the year in the same town."

Kline: Even that is very recent. When I was a kid in the mid-'80s, all these regional territories existed, but they were struggling. What used to sell out two nights a week in Dallas, and then play one night in Houston, was now doing one night in Dallas to 300 people. That all completely went away. There were the two major companies and the occasional upshot third company. But now, we're seeing an explosion. There's probably 30 wrestling promotions in the United States where you can make a fair amount for a night's work and there's one or two contracted guys that are making a decent living, and they're not working the very difficult schedule. That's good for the business. Imagine if television had to produce all these hours of dramas and sitcoms, but there were no acting schools. Now, if you decide you want to be a wrestler, sure, if you're a big-time prospect, WWE signs you and puts you into their training system and you make it. But if you're not, you can take the hardscrabble approach and go to a wrestling school and work for $20 a night and barnstorm around the country and make a name for yourself. 

Sciple: Yeah. We'll have to see how this competition plays out. It's interesting to have the changing dynamics. The wrestling fan base is robust enough to support these many promotions. 

Dan, I want to transition now. As we wrap up the show, let's talk a little bit about WWE's stock and where it's going to be going forward from today. Over the past three years, the shares are up more than 5 times. It has $900 million in total revenue, up 60% in the last five years. But if you look at their valuation metrics, they're trading at 80 times trailing earnings. What's the future for this company? They're in the small wrestling niche, but they're deepening this relationship with Fox. How should investors think about this and where this company fits in?

Kline: I think the valuation's a little high right now. I think it has priced in all the best things that are going to happen, which is the five years of the U.S. contract, the upside in some of the global contracts that are coming up. I think there are two things that can offset that. The commitment to women maybe creates a generation of younger girl fans that grow up as fans. I do think we don't have a character, as we talked about earlier, that's breaking through to mainstream that's a full-time wrestler. If that happens, if somebody comes out of nowhere and becomes the next Stone Cold or The Rock and is there for five or six years, there's a lot of room. They're going to run a full house show schedule whether they're selling 8,000 tickets or selling out. So there is room for a hot act to drive the business.

But -- and we've talked about this before personally -- a huge thing hanging out there is that it makes a lot of sense for Fox to buy the WWE. They are taking a test run. But if you look, Vince McMahon -- the creative guru behind all of this -- is 73 years old. He has a wonderful wrestling management group behind him. Triple H, the famous wrestler who was married to his daughter, Stephanie McMahon, has proven himself with NXT the developmental territory that he understands how to book and put together wrestling programs. He's built a staff under him that could take over the wrestling side. If Fox could take over the business side, you could take a lot of expense away. 

From a Fox point of view, would you rather pay a billion every five years or $6 billion now? Or, whatever the number would be to purchase it and just own it. We saw it with Viacom and Bellator. These second-tier sports leagues that are somewhat affordable should be purchased. You should just control your costs going forward and own it. I think that will be a nice premium, should it happen. Not that anyone has said it will, but I'm fairly confident that it's at least being thought about. 

Sciple: Sure. All this, at the end of the day, is going to depend on Vince McMahon, the man who built the company over time, has been the creative genius behind the company, has created these folks from Hulk Hogan to Stone Cold to The Rock to John Cena. He controls 80% of voting power of the company, so he's going to decide where we're going. 

Kline: He's also cashed out $400 million worth of stock to invest in the XFL, a football league that looks a lot more viable given that its chief competition went out of business. Now, you could say, a spring league without a business, that's not good. But that spring league demonstrated that there was an audience. It set more of an ability to charge for television rights. And Vince McMahon is saying, "I'm willing to put $500 million in," we don't know exactly what the losses were for the AAF, but we know they weren't $500 million or even $250 million in the first year. So he's set up to maybe transition himself into a new business. It might make sense to have Fox in that role. 

Sciple: Right. It's to be determined how robust that move into the XFL will be. Just for context, Vince McMahon still owns over $2 billion in stock. But, as you mentioned, when you have the visionary leader of the company for its entire history selling off shares of his stock, aging, as well as maybe having his attention distracted with other projects, that does raise a little bit of a smell. 

Kline: I'm not telling him to use the word 'aging' in association -- [laughs] 

Sciple: [laughs] Yeah, Vince McMahon is 73 years old, he could probably still beat me up.

Kline: Without question!

Sciple: Alright, Dan. Last thing I wanted to talk about, we've seen over the past several years, and I think WWE can lump into that, sports rights really move up over time. WWE's been riding that wave with this most recent sports deal. WWE as an investment, do you have to believe that the broader arena of sports rights are going to continue moving up over time? NFL, NBA, MLB? Or, do you think WWE can be successful in moving up its media rights without -- 

Kline: It's funny, Chris Hill and I talked about this on MarketFoolery yesterday. I believe fully that there is not a bubble. The looming presence of dumb money in the streaming space -- DAZN might decide, "Hey, baseball isn't getting a big enough offer. Fine, we'll triple their money." I think you might see Sunday Ticket with the NFL move to a different platform, maybe staying with DirecTV, but also being on ESPN+ or someplace else. I think as long as you have one extra bidder, the rights will keep going up. Amazon, Facebook, DAZN, ESPN+, maybe Netflix someday. Maybe some billionaire that we haven't even thought of yet, or some of these fledgling services. Maybe when Time Warner launches its series, it decides it needs a top-tier sports property. I am not at all worried about sports rights.

Sciple: It's going to be interesting to see how things play out. You had the UFC deal with ESPN, it seems like WWE could fit in a similar role there. Something we're going to continue to watch over time. Dan, I'll be happy to have you on as we get more information. Thanks for coming on once again!

Kline: Looking forward to it!

Sciple: As always, people on the program may own companies discussed on the show, and The Motley Fool may have for recommendations for or against the stocks discussed, so don't buy or sell anything based solely on what you hear. Thanks to Austin Morgan for his work behind the glass! For Dan Klein, I'm Nick Sciple. Thanks for listening and Fool on!

[...]

Sciple: Alright, folks, we figured, since me and Dan Kline -- do I have to use your last name, Dan? Am I too formal there? Since me and Dan are above-average wrestling fans and like to watch the product, we figured we'd have a little bit of banter here after the end of the show, talking a little bit about that. 

First thing I wanted to talk about, Dan, WrestleMania was Sunday night. What was your highlight of the show?

Kline: I think I'm going to go the very pedestrian route and say Kofi Kingston. Watching a wrestler who's been, as they call it in the industry, a good hand. He was always a reliable guy. He'd get his big acrobatic spot in the Royal Rumble every year. Was never particularly a fan favorite, was always just sort of a guy. But he inadvertently fell into this underdog, when it just randomly turned out that he'd been there 11 years and he'd never had a one-on-one singles match for the WWE Championship. When you have to fill 52 nights a week of programming on Raw, I think I've had a singles match for the WWE Championship! [laughs] 

So, they played him as this veteran. They had Vince McMahon put every roadblock in his way, and he found his way into the match. It was very similar to what they did with Daniel Bryan a couple of years ago. But it pulled every emotional lever because you actually went into the night thinking he wasn't going to win. There were a number of similar stories on the card that this would be the one where he'd put up a valiant effort and his leg would break, or who knows. So, to actually see him have his hand raised, that was pretty exciting to me. 

Sciple: I tell you, I said during that the main part of the show I really liked the Triple H vs. Batista match, not just because both of those guys are folks that I watched when I was a little kid first watching wrestling. Also, it was a no-holds-barred match. They had all the weapons you could possibly ever use. The whole use of those to really tell a story, I think, was incredible. 

Dan, who's your favorite current wrestler and why? 

Kline: My favorite current wrestler is probably A.J. Styles. I would have said Chris Jericho, but let's consider him on hiatus until AEW starts up. What I love about A.J. Styles is, he is a guy that throughout his career, everyone has tried to get rid of. He was in a ridiculous tag team in WCW back in the beginning of his career. He came to IMPACT and was the biggest star, and they were very reluctant to make him to the champion. Then he walked away to go to New Japan, where he was considered to be an interesting American who'd be at the middle of the card, and he worked his way very quickly to being the main American and the champion. 

When he came to WWE, he surprised appearance a few years ago at the Royal Rumble. Everyone went crazy. And they didn't realize the level of credibility he'd built up with the audience. They were actually supposed to have him in that match, and then send them down to NXT for a while. Instead, he was instantly in the championship picture and has been a mainstay. I'm a huge fan of when a guy can defy expectations. 

Sciple: Yeah, Dan, I'm not going to add anything else to that. I'm the same way. I think A.J. Styles is one of the best performers when it comes to acrobatics and stuff in the ring. He's a Georgia guy. I like the Southern boys. I can relate to those guys. So, definitely liked him a lot. 

Last little chit chat I'm going to do. To borrow an idea from one my favorite podcast, Pardon My Take has this idea of doing a Mount Rushmore of your favorite folks. We're do that going back and forth, our top four wrestlers of all time. We're going to go snake draft style. Dan, I'll let you go first. Who do you have and why?

Kline: I think you have to go Ric Flair. There can't be a Mount Rushmore of wrestling without him. Ric Flair spanned generations. He was the last touring NWA champion, meaning as the champion, he worked for the organization. He would go and highlight the show in St. Louis, and then Texas, and then Charlotte. Every place he was, he was the main event. He was working 60-minute matches against the beloved local babyface, and he had to win. So, he had to deal with the pure hatred of the crowd. Then he managed to seg into WCW, which was more of a corporate organization, where he just worked for one company. He was too old to be champion for 20 years, where they kept having to come back to him as champion, because he was who the fans believed in. 

Sciple: And Ric Flair is one of those guys that folks still know today. You've got the whole two claps and a Ric Flair meme going around, you see all the kids doing that. 

Who I'd pick off the top, for me, I'd say I have to go Stone Cold Steve Austin for the No. 1 pick. As a kid who was born in the 90s, you grew up with him. And, it was maybe one of the first storylines where they made the whole company the bad guy. Vince McMahon made the whole company the bad guy, and it just was gangbusters. That was the peak of wrestling, and Stone Cold was the epitome of that.

I've listened to his podcast a little bit, he's an entertaining guy. I always love seeing Stone Cold. And honestly, that glass-breaking entrance music has got to be one of the top entrance themes of all time. Dan, who do you have for No. 2?

Kline: My heart wants to say Kerry Von Erich because as a kid, I grew up and I loved it. The whole babyface, can't quite win the title. His brother dies, he finally gets over to the top. Now I realize how incredibly exploitative that was. [laughs] But, if we're going to go, you have to say The Rock. There are few people who, just hearing the beginning of their entrance music, gives you chills, and who, even though you know he's not going to wrestle, he's just going to do his catchphrases, it's still unbelievably exciting.

Sciple: Yeah. And he's probably the biggest star to ever come out of WWE, the biggest action star today. For my No. 2, I have a soft spot for Macho Man Randy Savage. Best voice in wrestling, the "Oh, yeah!" and "cream of the crop" and all that stuff. Love the elbow drop off the corner of the ring. Have to love Macho Man. Even when he was in movies, the guy just being himself was a character. I love him!

Kline: He wasn't fair to Spider Man!

Sciple: Yes, exactly! Alright, Dan, No. 3, who do you have?

Kline: Chris Jericho. Jericho is an interesting story. He was a pretty boy, mid-card, babyface. They didn't do a lot with him in WCW. And if you remember, he comes to WWE with a countdown clock. You didn't know who he was going to be. He comes out as a play on the whole Y2K countdown. The first night, he's the biggest star in the company. And then he fizzles out. Very quickly after that, he's wrestling on Sunday Night Heat, the old MTV show, against Hardcore Holly and wrestlers you don't remember anymore. And he reinvented himself back into the main event picture. Then he left to go do other things. And every time he came back, it would be stunning, and he'd be a totally new character. 

For the past year, he's been working for New Japan wrestling, playing this villainous playboy character. And it's totally believable. Now that he's signed with AEW and he's the cornerstone of that promotion -- this is a guy who's in his mid-50s. Sorry, Chris, if you're a little younger than that. But, he's around that. And not only has he transcended the business -- he's a star, a podcast host, he sold out a cruise --

Sciple: He's a rock star! 

Kline: Yeah! And, a band that's not a novelty. I mean, Fozzy is not the biggest band in the world, but they're a mid-level band on a heavy metal music festival. He could viably make a living as a musician, which no one ever pulls off. But as a wrestler, his accomplishments are just incredible because he's figured out -- like, every appearance, you just can't take your eyes off him.

Sciple: Yeah. The list, the light-up jacket, all of that... yeah, one of my favorites as well. OK, I'll go for my No. 3. I can't believe you fell this far, has to be The Undertaker. The Undertaker's kind of semi-retired at this point. Still hanging on. Actually showed up on Monday Night Raw on Monday to give the tombstone piledriver to Elias. 

He's just a legacy of a forgotten time. If you introduced a wrestling character to me today and said, "It's an undead mortician with magical fire powers, that doesn't talk, and wears this outfit, and walks as slow as you possibly can out to the ring," it would never work. And it has worked the entire way through for him. 

Kline: [laughs] See, I can test you on this one. I've always found this character stupid. OK, he dresses like an undertaker. That's kind of menacing. But they always gave him magic powers. You lost me at magic powers. Like, make him unbelievably tough, and you think he's down and does the pop-up. That's kind of awesome! His agility in walking the rope was really great. But the whole, he could summon fire, come back from the dead... that lost me in 80s silliness in the 80s. So, then, bring it to 2010, and it was really dumb, in my opinion. 

Sciple: Yeah, you're probably right. But they found a way to make it work. This WrestleMania on Sunday had to be the first one without The Undertaker in recent memory. For him not to be in WrestleMania on Sunday, kind of the turning of a page on the history of the business. But I think he has to be on any list.

OK, Dan, your last one. Who do you have for me?

Kline: Eddie Guerrero. Sadly, life cut short. Somewhat his own excesses eventually caught up to him, though he was supposedly well beyond that at the end. But, just as a personality, could be the smarmiest bad guy. Could also be the most charming babyface. Was a believable underdog character. Was one of those guys -- the U.S. wrestling business has always been a little bit racist. It's always been a little bit hard for an African American, for a Hispanic personality, to get to those top spots. And Eddie Guerrero absolutely willed himself into being a top-tier character, a world champion, someone who was totally credible and believable in that role.

Sciple: Yeah. And there really hasn't been an heir apparent to Eddie Guerrero. 

Kline: They've been trying. They tried with Alberto Del Rio, with Sin Cara, that Andreotti now. It's just, there's a level of charisma you can't teach. 

Sciple: Yep. Alright, Dan. My last one -- I can't believe he didn't get on your list, that he's fallen this far -- it has to be Shawn Michaels, HBK. Talk about a guy that can be smarmy, who can do the most incredible acrobatic stunts in the arena, has a great, gimmick, the whole D-Generation X. He retired and then came back and was just as good as he ever was. I think he's one of the icons of the sport, and one of the people I'm really happy to see. He made that return earlier this year. I don't know if that was the best idea, but I think he's one of those folks that, whenever you see him out there, you have to get a little bit excited. 

Kline: It's funny, I have mixed feelings. His first run, he famously was a bad guy. He sabotaged people behind the scenes. He abused substances. This is all in his books, so I'm not speaking out of school here. Then he becomes this upstanding -- now he works in developmental and he doesn't need the money, teaching young kids the business and giving back. So he's really a redemption story. But there's a part of me that's still like, "Ugh, this is the guy that conspired and screwed over Bret Hart." How Bret Hart didn't make this list, I'm not sure. 

Sciple: Yeah. Bret Hart, I might have been a little young to get the full brunt of his greatness. But, yeah, he's another guy. Honorable mention for us, for sure. 

Dan, thanks so much for coming on the show! For our listeners. If you have a Mount Rushmore of your favorite wrestlers, love for you to tweet them at us @MFIndustryFocus. If you like this discussion, please let us know. We might do more of them in the future. Dan, thanks again for coming on! Always love having you!

Kline: Thanks, Nick!

Sciple: Fool on!