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

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.”