World Wrestling Entertainment to get a makeover

Vince McMahon is taking the wrestling out of World Wrestling Entertainment Inc.

No, this isn’t an outrageous plot the colorful impresario has cooked up for his wrestlers to act out in front of thousands of screaming fans. McMahon, the chairman and chief executive of WWE, wants to give the company a makeover, starting with the name. From now on WWE will no longer stand for World Wrestling Entertainment. It will just be WWE, plain and simple.

“I think every brand has to re-create itself,” he said. “I want everyone to look at us in a vastly different way than they have.”

To do that, McMahon plans to go on a spending spree to acquire media assets that could expand WWE’s business beyond the ring. In particular, he said, WWE is targeting companies involved in production, live entertainment and branding.

“It is a logical broadening of what we already do,” McMahon said in an interview.

Neither McMahon nor Chief Financial Officer George Barrios would say how big of an investment WWE intends to make on acquisitions. The company, which made $53.5 million in 2010 on revenue of $477.7 million and has cash flow of $94 million, has very little debt on its books and about $69.8 million in cash.

“To me, it is anything that is out there,” McMahon said, adding, “We can take on a ton of debt.”

Besides hunting for acquisitions, WWE is moving ahead with long-talked-about plans to create its own cable network for its vast library of wrestling fare. The company has been meeting with distributors including Verizon and hopes to get a channel launched in 2012.

McMahon also wants to start marketing WWE’s expertise in producing live events.

“No one does television production better than we do, it’s damn near the Olympics,” McMahon said in his customary rasp after an afternoon rehearsing for a taping of one of WWE’s shows. “We know more about live event touring than anyone in the United States.” The company puts on about 300 shows annually.

The moves come as WWE looks to rebound from a tough end to 2010 that saw attendance at its events and pay-per-view revenue both drop 15% in the fourth quarter. The declines were blamed on the economy, although WWE probably didn’t help matters by raising prices at a time when its core audience was feeling the pinch.

While ratings for its shows including “Raw” and “SmackDown” are still strong, WWE is also trying to restock its roaster with A-list talent to replace some key performers who have retired or are phasing out their ring activity including Shawn Michaels, Dave Batista, Chris Jericho, Mark “The Undertaker” Calaway and McMahon’s son-in-law Paul “Triple H” Levesque. WWE recently coaxed former star Dwayne “The Rock” Johnson to come back next year to take on John Cena.

“I think it is very obvious that they need to do something,” Hudson Square Research managing director Marla Backer said of the company’s plans. “Clearly, their prospects in terms of growth are limited if they stick to their knitting.”

Not everyone embraces WWE’s desire to move beyond the wrestling mat.

“I think that the most important thing right now is the return of the health of the core business,” said Jay Kaplan, portfolio manager for Royce & Associates, which holds about 9% of WWE stock. “One of the market’s big concerns is are they losing market share to real fighting,” Kaplan added, referring to mixed martial arts and ultimate fighting.

This is not the first time WWE has tried to expand beyond its core. Several years ago it partnered with NBC to launch the XFL, a springtime football league that died after just one season. A restaurant in Times Square also flopped. McMahon said he’s learned his lesson from those follies and will stick to the entertainment business.

More recently, WWE embarked on the movie business, financing low-budget genre films that often feature its own talent and quickly wind up on DVD.

None have been smash hits, but the film unit is eking out a small profit. It has made money for the last three years, although last year’s take was a mere $400,000. Initially, WWE’s movies were more action-oriented, but the company is attempting to broaden its slate to include family fare. It’s next release, “That’s What I Am,” starring Ed Harris and Amy Madigan in a coming-of-age story about a student and teacher battling prejudice in the 1960s, premieres in theaters April 29.

Some analysts wonder whether WWE wants to grow to position itself for an eventual sale. There are very few independent programmers left, and with its healthy balance sheet WWE might be attractive to one of the bigger media companies. Also, McMahon is 65, and although he’s still going strong, there hasn’t been a clear heir apparent since his wife, Linda, resigned as chief executive in 2009 to pursue a political career.

At the moment, McMahon, who with his family is controlling shareholder, doesn’t sound like a seller.

“We’re very independent-minded,” he said. “I don’t see that happening.”

joe.flint@latimes.com