WWE reports Q3 earnings

October 31, 2019

The WWE announced its 3rd quarter earnings for 2019 on Thursday.  The company beat analyst estimates on its projected earnings, but they are still down compared to last year.

The company announced revenues of $186.3 million in comparison to $188.4 million in 2018.  The operating income was $6.4 million with the adjusted OIBDA (Operating Income Before Depreciation and Amortization) being $25.4 million which exceeded expectations.

The WWE Network averaged 1.51 million paid subscribers in accordance with its guidance.

According to its summary, it appears that the increased revenue in its Media segment was offset by a decrease in sales of live event tickets and merchandise. Media net revenues are up in the three-month period for Q3 ending September 30th to $146.1M in comparison to $142.1M last year at the same time.  Conversely, live events are down from $26.7M last year to $23.2 this year.  This was attributed to lower ticket sales and weaker performance and fewer events in North America.  But International ticket sales have remained flat in comparison to this time last year staying at $2.3M.

Also, down this quarter is the Consumer Products section which was at $19.6M in 2018 but is now at $17M in 2019.

Operating Income declined to $33M from $39.3M in the prior year due to the “impact of increased content-related expenses, which were partially offset by a reduction in accrued management incentive compensation.”

The WWE Network revenue are down this year in comparison to 2018. For the third quarter in 2019, the WWE revealed revenues of $44.2M for the network versus $49.5M in 2018.

The WWE stated that in anticipation of SmackDown move to Fox, it launched a new advertising campaign.  It also highlighted the launch of NXT on the USA Network on Wednesday nights.  The WWE also announced the launching of a new weekly podcast series and a new animated feature film due out in July 2020.

As noted, the revenues for live events declined due in part to a decrease in attendance and staging 19 fewer events.  While attendance declined, the average ticket price increased by 6%$ to $56.64.

Payout Perspective:

The above rundown is a fairly broad view of the finances of the promotion.  What stood out for me is the decrease in attendance in house shows. While the late summer-early fall may not be the opportune time for live WWE events, the ticket price average is still going up. As a result of the lower attendance, venue merchandise was also down from $4.3M in 2018 to $3.5M this year.  Also, of note, consumer products were down the prior 3 months.  The WWE did announce a collaboration of action figures with Mattel to celebrate the 35th anniversary of Wrestlemania and the Ghostbusters franchise.

The WWE Network is still going strong and the licensing of its content continues to grow in revenue while other areas are not.

Today is a big day for the company as most of the talent is in Saudi Arabia for one of its big shows in the region.  Despite the politics concerning the region, the monetary value of the partnership positively impacts the WWE finances.  The company has not confirmed a media rights deal with the Middle East region or a dedicated annual (or semi-annual) event in the region which would probably aid the company’s balance sheets.

 

 

 

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