Wrestling For Dollars

In the heat of battle, "Stone Cold" Steve Austin, the antihero of the wildly popular World Wrestling Federation, often bellows, "you're a-- is mine!" Soon, fans of professional wrestling can claim a share of his bulky hide. The WWF is leaping from the ring into the arms of the investing public, unveiling plans last week for a stock offering. The WWF hopes to put the squeeze on investors for $172 million, cashing in on the mass appeal of its controversial brand of mayhem. If the issue is priced cheaply, a lot of fans "will be quick to snap it up," says Dave Meltzer, publisher of Wrestling Observer Newsletter. "They will feel like it's an opportunity to get in on the boom."

Wrestling, of course, has been a runaway success in recent years. But until now, with the WWF revealing its finances as part of its stock offering, few outsiders would have imagined the company's stunning profits. Since 1997, WWF revenues have swelled to $251.5 million from $81.9 million. Its bottom line has ballooned from a loss of $6.5 million to profits of $56 million. Film and music execs would endure "the Claw" for those kind of profit margins. Then again, maybe they'd generate similar windfalls if Hollywood stars got the modest paychecks that all but the top wrestlers get. Much of the WWF's ancillary income--licensing deals for T-shirt sales, videogames and Internet offerings--also falls straight to the bottom line.

If most wrestlers aren't getting rich, where does all the money go? Much of the profits flow to chairman Vince K. McMahon, 53, whose grandfather started the family in the wrestling business. Last year, WWF gave McMahon a payment of $25 million from the company's bulging profits, plus they loaned him another $32 million to cover taxes. The money could come in handy for more ominous reasons. McMahon and the company are facing a multimillion-dollar wrongful-death lawsuit stemming from a fatal stunt by a WWF wrestler in May. And other suits pit him and the company against WWF wrestlers in disputes over, among other things, who owns the wrestler's ring personas. In one case, a former wrestler is seeking $15 million. The WWF says it will vigorously defend itself, but notes that a defeat in the death case could undermine the company's finances. In coming months, the courtroom body slams may prove just as exciting as the in-ring matches.

The WWF faces another potential pitfall--a backlash against its increasingly over-the-top antics, which feature heavy sexual innuendo and profanity. So far, the federation has prospered by following a tried-and-true entertainment industry approach--pile on the sex and violence. Only a few years ago, the king of the ring was the rival World Championship Wrestling. Then the WWF turned up the heat with sultry women wrestlers, crotch grabbing and other calculated crudeness, helping it shoot ahead of the more PG WCW. Now, however, the risque makeover has turned off some fans. "The WWF has gone wild in terms of the moral content and the language," says Peter Bogert, a Pennsylvania minister and a one-time WWF fan. Buried in its stock filing, the WWF grimly acknowledges the times might be changing. In the dry language of a securities lawyer, the company concedes that a shift in public tastes could have a "material adverse effect" on the business. Investors will have to decide whether sex and violence is good for their portfolios.