The WWE takes a ‘piece’ of everything John Cena earns — even after he retires. Here’s how the action superstar really feels about that contract

This is because the firm owns the rights to the John Cena name. For context, most wrestlers have a stage name, like The Undertaker or Triple H, which serves as intellectual property created by and owned by WWE. Superstar Dwayne Johnson acquired full ownership of “The Rock” brand when he joined TKO’s board of directors earlier this year.

However, Cena is in the unusual position that his stage name is also his real name. Effectively, he’s paying a royalty fee to use his name. Despite this, the superstar doesn’t see the arrangement as unfair.

“Fair is an understatement, generous would be a better scenario,” Cena told Shannon Sharpe on a recent episode of Club Shay Shay. “WWE has been — and this since the start of my contract — they've never tried to change my name, even when they realized they made a mistake. They never tried to alter my being or character. They've always given me freedom to do what I want because we trust each other. I'm not out to try to rob them of what they've earned and, again, they're not out to try to take what's not theirs. Everybody wants to play fair and when I say fair, WWE's terms are generous.”

The story highlights how difficult it is to build valuable intellectual property and how lucrative it can be once a brand is firmly established.

The value of intellectual property

According to Morningstar, intangible assets, like intellectual property or IP, are one of the five ways businesses build moats or competitive advantages. In other words, a recognizable brand could help a company set its products or services apart from all its competitors.

Apple’s logo, Coca-Cola’s secret recipe and Disney’s ownership of Star Wars and the Marvel franchises are good examples of how lucrative intellectual property can be. In many instances, intellectual property can generate passive cash flow for the firm that owns it. For example, Warner Brothers Studios earned roughly $2 million every year from the use of the “Happy Birthday” song in various movies and TV shows until the copyright was struck down by a court in 2016.

Savvy investors like Warren Buffett understand the value of a good, durable brand. Many of his biggest holdings, including Apple, Coca-Cola, and American Express, are the most popular brands in their industry.

Regular investors should also watch companies that have either acquired or are actively building great brands. Bear in mind that this process is tricky and could take several years and intensive investments to deliver results. Dr.Pepper, for instance, is currently outspending Coca-Cola and Pepsico to take away market share in the soft drinks market.

Cena acknowledges how difficult it is to build valuable IP, and this he says, is one of the reasons why he thinks a payout to the WWE is fair.

“Without them, I don't exist,” he told Sharpe. He reiterated this view on the Howard Stern show last year: “Howard, before this, I was a kid in a small Massachusetts town mowing lawns for a golf course. I don’t mind kicking a percentage of my earnings to the person who gave me a chance and an opportunity.”