Wrestlers pin investors for $170 mil.

Tuesday, Oct. 19, 1999 | 11:30 a.m.

SUN STAFF AND WIRE REPORTS

Martha Stewart vs. wrestlers

Martha Stewart got a warm welcome today as shares in her company nearly tripled in value in debut trading on the New York Stock Exchange.

Shares in Martha Stewart Living Omnimedia Inc., which specializes in how-to information for consumers, opened at $37.25. They quickly shot to $52 a share before dropping back to the mid-$40 range by late morning.

Stewart, a paragon of genteel living, was competing for investor attention with World Wrestling Federation Entertainment Inc., which began selling stock today.

The initial public offerings of stock, or IPOs, were eagerly awaited because both companies have heavy media involvement and have been making inroads in online marketing.

World Wrestling Federation Entertainment Inc., whose performers include stars such as Stone Cold Steve Austin, on Monday raised $170 million in an initial stock sale, $20 million more than it originally planned.

The Stamford, Conn.-based company sold 10 million Class A shares at $17 each. The sale of the 15 percent stake gave the company a market value of $1.13 billion.

WWF chairman Vince McMahon, a third-generation wrestling promoter, controls directly or as trustee for his children almost all of the 56.7 million Class B shares -- which carry 10 votes each -- that are outstanding following the sale. That stake is worth about $963.9 million.

WWF is the owner of the Debbie Reynolds hotel-casino in Las Vegas, which it bought out of bankruptcy court in August 1998 for $10.65 million. The company considered building a 1,000-room wrestling-themed resort on the property, but decided this summer to sell the property, saying it was not "consistent with our business objectives."

As of Friday, the company said it had yet to sell the property, but said it planned to close on a sale in fiscal 2000.

"I currently have an offer in on the property that is being closely considered for resale," said David Atwell, the hotel-casino broker who handled the sale of the property to the WWF last year. He declined further comment.

In Securities and Exchange Commission documents, WWF said it was still interested in developing "location-based entertainment businesses directly or through joint ventures or other arrangements." The company did not specify if it planned further ventures in Las Vegas after the sale of the Debbie Reynolds.

WWF officials could not be reached for comment.

WWF's weekly television shows are some of the most popular on cable television. Its main show, "Raw is War," was the top-rated regularly scheduled cable-TV program for 19 consecutive weeks through June 30, according to Nielsen Media Research data quoted in WWF's IPO filing with the U.S. Securities and Exchange Commission. The company's programming is shown on Viacom Inc.'s USA Network as well as the United Paramount Network.

The live matches are closer to theatrical productions than to sports events, with background music, props and story lines, according to the SEC filing. They use the same techniques as some TV series: "Each week we advance our story lines, develop our characters and create the drama and excitement that drive our business and attract customers," WWF said in the document.

The programming is attractive to advertisers because it reaches men aged 18 to 34. In 1998, "Raw is War," doubled its number of viewers in that group, while ratings for mainstay sports shows, including Monday Night Footbal, were stagnant.

The company's revenue for the three months ended July 30 jumped to $76.2 million from $39 million for the same period a year ago. Profit rose to $20.3 million from $5.1 million for these periods.

WWF's sponsors and advertisers include AT&T Corp., Coca-Cola Co., and the U.S Air Force, Army, and Navy. Jesse "The Body" Ventura, the governor of Minnesota, is a former WWF star.

WWF will use the proceeds from the sale for general purposes, including $12 million to upgrade its television facility.

WWF will trade under the symbol 'WWFE' on the Nasdaq Stock Market.