March 5, 2014
Welcome to another edition of The Wrestling Post. In this post we look at WWE stock, the net worth of Vince McMahon and a move in programming for the WWE Network.
WWE Stock at all-time high
Despite the rocky start to its network launch, WWE stock is trading at an all-time high. The stock price went up as high as $27.43 on Wednesday and was at $27.10 in after-hours trading.
Payout Take: The buzz around the WWE Network and the anticipated media rights deal has investors seeing value in the company. There are some that have been displeased with the network due to the many glitches during the first week but the WWE has done a good job in quelling the uprising of negative reviews and for the most part the tech issues have been addressed. This spring will be the biggest in the company’s history as its rights fee deal will likely occur sometime in April and it will reveal the first set of subscriptions numbers for the network. Both will be key indicators for the stock in 2014.
Vince McMahon is a billionaire
Forbes.com came out with a list of “notable newcomers” of billionaires based on net worth for 2014. WWE CEO Vince McMahon made the list with a net worth of $1.2 billion. Forbes.com describes McMahon’s source of wealth as the WWE and states, “…transformed the World Wrestling Federation from a regional operation into an international phenomenon. WWE went public in 1999 and today its programs are broadcast in nearly 150 countries and more than 30 languages.” McMahon returns to the list as his net worth had dipped in 2012-2013.
Other newcomers to the billionaire club include Michael Kors, Drew Houston (Dropbox founder) and Brian Acton (WhatsApp founder who was turned down by Facebook for a job. Four years later Facebook paid him $3 billion for his company).
Payout Take: With the WWE’s stock at all-time highs, the hopes of the potential Network revenues and an anticipated rights fee deal this spring that should double (if not more), McMahon’s wealth will only go up in the near future.
February 26, 2014
On Monday the WWE launched its much heralded Network which it advertised to be available on almost every platform imaginable. The good news is that number of those signing up exceeded expectations. The bad news is that it is experiencing technical difficulties across most platforms.
The WWE’s technological partner in the venture, MLB Advanced Media, indicated that it had not expected the demand it has received from people signing up. The WWE released a statement Monday regarding the issues upon signing up and the subsequent technical issues subscribers found once they were able to attain access.
MLBAM, WWE’s tech partner, was overwhelmed and its systems have been unable to process most orders since 9 am due to demand for WWE Network.
— WWE Network (@WWENetwork) February 24, 2014
The WWE also stated that MLBAM was aggressively working to resolve the matter on Monday morning. Although not directly, the WWE inferred that the fault lay with MLBAM for the tech issues. At least, that’s how it is being interpreted in the press. One would think that a part of this has to do with the one week free trial. Even as of Wednesday, there are still problems with logging in.
We are working to fix log-in issues on the @WWENetwork application that are effecting viewers with accounts created in the last 24 hours.
— WWE Network (@WWENetwork) February 26, 2014
In my own experience, I was able to sign up at 6:01 a.m. on Monday via PC, one minute after the promoted launch, but was only able to watch last year’s Wrestlemania in the first hour. I was not able to go through the library until mid-morning. Later that day, the stream was fine for me on the PC but I experienced issues on my iPad. Notably, I have experienced more buffering issues on the PC on Tuesday night and today.
Certainly, these issues are being worked on but the technical issues are a concern for the WWE going forward since its heavy investment in the product. The WWE and MLB Advanced Media must make the fixes soon. If the free trial ends with the problems persisting, its likely that the WWE will lose a lot of potential customers.
Tech issues were a given as to challenges facing this network. The question is how fast can the WWE and ML BAM fix them. If we are to spin this in a positive light, the overwhelming demand for the Network reflects the fact that its promotion of its product created a swell of interest. But, the tech issues could make folks concerned and they may decide not to subscribe if they feel that these issues will be an inherent part of being a subscriber.
February 20, 2014
The WWE announced its fourth quarter earnings on Thursday and despite not beating loss per share estimates, its stock reached a 52 week high during the day. In addition, Vince McMahon spoke about the CM Punk situation.
As it relates to Punk, when asked about his abrupt departure from the WWE, McMahon indicated that he was on a “sabbatical” and left it at that without further follow up. Without going further and/or causing a SEC investigation on the matter, McMahon left the door open for future work with Phil Brooks. Regardless of the rumors of Punk released from the company, McMahon believes that its likely Brooks will return. Certainly, how professional wrestling is, returning to the ring is always a possibility.
As for the financials, the WWE loss per share was at $0.10 per share. Analyst estimates had the company’s losses per share for the fourth quarter of 2013 at $0.05 per share.
WWE’s total revenue for Q4 2013 was $118.4 million and it had a net lost $7.9 million. In comparison, Q4 2012 saw it take in $115.1 million in total revenue which earned a $0.6 million profit. The much-anticipated WWE Network costs, weak DVD sales (likely due indirectly by the Network) and “compressed television production margins” as stated in the WWE press release were the reasons for the losses this year.
Some other notes:
The company also released information for the full year 2013. Last year, WWE made a $2.8 million profit with revenues at $508 million. 2012 saw $31.4 million in profits with $484 million in revenue.
PPV revenue increased during the Q4 due to having one more PPV in the quarter. It earned $15.7 million for the quarter.
The WWE’s consumer products business decreased 31% to $14.1 million due to “declines in the Company’s home entertainment business and toy licensing.” Although licensing revenues declined, domestic retail toy sales increased in 2013. It also indicated that “construction toys” have demonstrated strong growth. We may see more of this with its recent renewed agreement with Mattel.
The WWE’s movie division showed a $5 million revenue increase over 2012 but this was mainly due to timing of the release of the movies in 2012.
WWE stock was up 7.5% to $24.74 at the close of trading on Thursday.
The overall takeaway from the numbers is that the WWE has spent a lot of money on the WWE Network. One need only compare the revenues vs. profits in 2012 versus 2013 to know a bulk of the revenues is being reinvested into the Network. The WWE has already projected a $12M to $15M loss for this year’s first quarter due to the costs to launch the Network. The good news is that most of its key areas are experiencing growth and while there may be some concern with its consumer products division, the recent Mattel deal should help with sluggish sales. But of course, the big news is the bullish feeling analysts have about the potential rights fees deal the WWE is set to sign.
February 17, 2014
Welcome to another edition of The Wrestling Post. In this post we talk about the looming WWE TV rights fee deal and a new toy deal for the company.
Exclusive rights period ends between WWE-NBC Universal
Friday was the last day for the exclusive negotiating period between the WWE and NBC Universal to come up with a deal for the WWE’s television rights. The WWE’s existing contract with NBCU ends this fall and the organization hopes to improve upon its current $139.5 million television licensing fees for its stable of WWE shows.
Although it identifies itself as a sports entertainment company, it hopes to score a television deal that mirrors some of the recent sports television rights fees contracts. The most recent sports rights fee deal had CBS earning the right to 8 NFL Thursday night games throughout the regular season for $250 million according to the NY Times. Notably, the NFL did not give up exclusivity as the games aired on CBS will also be available on the NFL Network. Many believe that the rights fee deal could rival the NASCAR deal which drew a total of $820 million over 10 years from Fox and NBC. Others believe that it may be able to double its current fees whish would still be a great improvement. WWE stock has gone up in the past month as it is trading in the $20 dollar range – a benchmark never seen by the company since it went public. This is due in part to the hedging that the rights deal will break the bank.
Payout Take: Losing exclusivity to deal with the WWE was a likely scenario as the WWE wants to field offers from others. We should see by the end of February where the WWE may land. It still could end up with NBCU but for a bigger price tag.
WWE-Mattel ink new deal
Variety reports that the WWE and Mattel have entered into 5 year agreement for Mattel to be the primary toymaker for the company. The agreement will go through 2019 and will encompass toys and video games.
Notably, the WWE obtained the trademark for CM Punk late last year for use in toys, action figures, dolls, etc. The WWE has had the use of the CM Punk mark for wrestling since 2009 and for use of clothing since 2011. It filed for the Daniel Bryan trademark for use with toys last week.
Payout Take: The deal is an example of how the WWE’s choice to more PG content has aided its business outside of the wrestling ring. Without the move to more family friendly content, it would not have landed Mattel. If you were wondering, if the rumors are true that CM Punk is gone from the WWE and Phil Brooks decides to wrestle again somewhere, he’d have to use his own name or else be subject to a lawsuit from the WWE.
February 8, 2014
Welcome to another edition of The Wrestling Post. In this post, we take a look at the WWE’s decision to release the Over The Edge PPV which included the accidental death of Owen Hart.
Many wrestling fans are anxiously anticipating the launch of the WWE Network which will occur on February 24th. This past week, the WWE released a list of the PPVs that will be made available to subscribers. Among the more than 400 PPV events from the past is the 1999 Over the Edge PPV which will live in infamy as the event where Owen Hart, dressed as his character at the time, The Blue Blazer, fell 70 feet to his death in the ring as a result of a harness malfunction. The accident, which did not occur on camera, caused controversy for how the WWE handled the situation. Rather than stop the event, it continued on despite not knowing of Hart’s condition.
The event has never been released on home video and there have never been any official showings and/or replays of the event. There is YouTube, but the WWE has never released the PPV via On Demand or DVD/Blu Ray release.
The WWE confirmed the release of the event on the network to a CBS affiliate in Pittsburgh (via Cageside Seats): “WWE Network will be airing the 1999 Over The Edge pay-per-view. However, portions of the event will be edited out of respect for Owen Hart.”
Payout Take: One of the reasons that this event, which was eerily ironically entitled, “Over the Edge,” has been sheltered away from public viewing was due to the lawsuit filed by the Hart family over the fall. I find the inclusion of this event an interesting decision by the WWE for the reason that it reminds people that despite the tragic accident that occurred, the company decided to continue on with the event. Even with the editing, it leaves the question of why put this on the network? Certainly, from a historic standpoint, it’s a part of the company’s history. Yet, why remind people of this terrible incident at the onset of its biggest venture?
February 1, 2014
Welcome to another edition of The Wrestling Post. This week we take a look at one of the WWE’s stars leaving the company at a time that the stock’s price is at an all-time high.
CM Punk leaves WWE
Big news in the WWE as one of its top stars, CM Punk, has left the company. Apparently, this is not a part of the script as Punk has been written out of the WWE for now. In a recent interview with Ariel Helwani Punk revealed that his contract with the WWE ended in July. Speculation grew about whether he’d re-up with the company or just walk away. Recent storylines were not going his way and he did not want to appear at Wrestlemania XXX unless he would be in one of the main events. This became one of the factors why Punk decided to leave.
Punk is a BJJ practitioner and left open the idea of competing in MMA. According to The Wrestling Observer, Bellator expressed interest in the 35 year old pro wrestler. When asked about Punk during the UFC 169 media scrum, White indicated that the two had talked…just not about fighting. White stated he was a “nice guy” and did not outright dismiss Punk from competing in the UFC. Of course, seen another way, one might infer that White was politely deferring comment on someone that is 35 years old, who he has no knowledge of his fighting ability and a guy he thinks is nice.
Payout Take: Realistically, if Bellator were interested in Punk it would only be as a publicity stunt perhaps on a PPV as there’s no way that Punk gets involved in any tournament held by Bellator. Brock Lesnar has a better possibility of fighting in the UFC that does Punk and the question about him at yesterday’s scrum was gratuitous albeit proper for the forum. What’s more likely is that Punk, like many wrestlers that have retired/stepped away in the past, comes back after a hiatus.
WWE Stock Continues to Soar
After reporting a 52 week high just a week ago, the WWE has surpassed last week’s stock price as it reached a high of $24.19 per share. The stock is up thanks in part to a television rights deal with BSkyB in the UK and Ireland according to Variety.
Payout Take: It’s a great time to be a holder of WWE stock as the stock price continues to rise. It will likely sustain if not surpass the current 52 week high as new will come down of its new rights deal in North America is announced in the coming weeks.
January 25, 2014
Welcome to another edition of The Wrestling Post. In this edition we talk about WWE stock and an actual WWE Hall of Fame.
WWE stock hits 52 week high
On a day in which the Dow Jones U.S. Media Index fell nearly 2 %, the WWE stock hit a 52 week high and was up slightly at the close of trading on Friday. WWE stock was as high as $21.05 and fell off slightly to $20.84. Even at a company high, it is still listed as “Buy” by several research firms. Its current market cap is at 1.57B.
Payout Take: Remember when you could have bought WWE stock for $12? The positive press from the WWE’s upcoming network has helped raise the company profile. But the stock gains may be attributed to the upcoming rights fee deal that will likely happen by the end of February.
NBCU sweetens deal with WWE Hall of Fame
Speaking of the WWE rights fee deal, NBCUniversal, seeking to retain the WWE is offering the company a Hall of Fame at its Universal Studios theme park in Orlando, Florida. According to the New York Post, the Hall of Fame is part of a “final pitch” to Vince McMahon as its exclusive negotiating period ends February 1.
Payout Take: The WWE rights fee deal will be something to watch next month. While a Hall of Fame is nice, it will not substitute for the monetary value the WWE seeks for its signature franchises (i.e., Raw and Smackdown).
January 3, 2014
Welcome to the first edition of The Wrestling Post for 2014. But before we dive into this year, there are a couple issues to follow up from 2013.
WWE shopping rights fees
Last month, Variety wrote an in-depth article on the WWE’s mission to seek out a rights fees deal for its product this year. Its existing deal with NBC Universal (the owners of the USA and SyFy Networks) is set to expire and WWE hopes to improve on its $139.5 million it receives in TV licensing fees and align itself with the deals from the NBA, NHL and NASCAR. Notably, NASCAR’s deal with NBC and Fox is worth $820 million a year. The NBA’s deal is not up for a year although it is prospecting this year for a new deal with Adam Silver taking over as Commissioner on February 1st.
The WWE has been waiting for this moment for some time having aligned all of its properties to be sold as a package. And while it sees itself as an “entertainment-based” company, it hopes that its rights fees are comparable to sports properties. The WWE’s contention is that its television shows, “RAW” on USA and “Smackdown” on SyFy are as attractive as sports properties that have been driven up due in part to the access to a target male demo and its “DVR-proof.” In addition to its male demos, 44% of fans are under 34 which appeal to advertisers.
According to the Variety article, negotiations and bids can take place until Feb. 15. At the time, NBCU can accept or reject WWE’s final offer with other bids by the 28th of February. The WWE will be selecting by March 4th.
Payout Take: Will the UFC be taking notes from the WWE? It may be too early to determine whether the UFC will command value when its deal is up with Fox but the WWE’s rights will be a unique acquisition. Coupled that with the upcoming WWE Network, we will see what 2014 will hold for the company. At the end of 2013, investors seem to think, that the company is going in the right direction.
Total Divas ends second half of first season
One of the surprises of 2013 was how well WWE’s Total Divas was received by audiences. The season finale on December 15th received an average viewership of 1.29 million viewers.
Episode 9: 1.25
Episode 10: 1.41
Episode 11: 0.92
Episode 12: 1.44
Episode 13: 1.20
Episode 14: 1.29
Payout Take: The second half of the first season came to an average of 1.25 million viewers. Total Divas will have a second season and its likely this will be an ongoing franchise for some time to come.
December 10, 2013
Welcome to another edition of The Wrestling Post. This week we take a look at the location of the next two Wrestlemanias as well as the latest ratings from Total Divas.
Wrestlemania 31 in Bay Area
The WWE announced that Wrestlemania 31 will take place at Levi’s Stadium in Santa Clara, California in March 2015. Levi’s Stadium is still under construction and is estimated to open August 2014. It will be the permanent home of the San Francisco 49ers. The stadium’s capacity is set for 68,500 but could be expandable to 75,000.
The NFL has committed Super Bowl L in 2016 (L is the Roman Numeral for 50) to the site.
Wrestlemania has been an economic boon for the cities that host it. Aside from the event itself, there are week-long activities which bring in thousands of WWE fans to the city. The WWE announced that New Jersey received an economic impact of $101.2 million received from non-locals spending that were visiting specifically from Wrestlemania 29.
For those wondering, Wrestlemania 30 is in New Orleans this year and Wrestlemania 32 will be held at Cowboys Stadium although no official announcement has been made.
Payout Take: Cities clamor to host the WWE’s biggest event of the year. Certainly the hospitality industry does well during Wrestlemania week and the reported economic impact is something that every city desires. The WWE’s announcement makes sense as Levi’s Stadium will be less than a year old with enough capacity and a healthy surrounding region to support the event.
Total Divas drop to 1.2 million viewers this week
This week’s Total Divas episode this past Sunday was down as it received only 1.2 million viewers according to The Wrestling Observer (subscription recommended). The ratings may have taken a slide due to the lack of lead-in since “Keeping up with the Kardashians” season ended.
Payout Take: The ratings for the second half of the first season are as follows via TV By the Numbers:
Episode 9: 1.25
Episode 10: 1.41
Episode 11: 0.92
Episode 12: 1.44
Episode 13: 1.20
Even though last week’s ratings have dipped, its overall ratings have been pleasing and a second season is on its way. The season finale airs December 15th.
November 28, 2013
Welcome to another edition of The Wrestling Post. In this edition we talk Total Divas renewal and TNA’s new television deals.
Total Divas renewed for second season
With the ratings success of Total Divas, it was given an extended first season and now comes news that it will be given a second season.
“Total Divas” has averaged 1.4 million total viewers since its summer debut, making it one of E!’s most promising new entries and a strong performer on Sunday nights in the 18-34 demo. From WWE and Bunim-Murray Prods., series centers on the lives of femme WWE stars both inside and outside of the ring.
Total Divas ratings took a step back this week with the first rating under 1 million viewers this past week but this may be due in part to the NFL (Broncos-Patriots) and the company’s own PPV, Survivor Series.
Payout Take: The reality show was one of three new reality shows the network announced as returning for another season. It received an optimum amount of push by the WWE (with promotion during its programming) and by E! as its primary lead-in was the network’s highest rated show, “Keeping Up With the Kardashians.”
TNA Wrestling forges TV agreement in Japan and Australia
TNA Wrestling announced an agreement with the Nippon Television Network Corporation. TNA Impact Wrestling will be seen every Saturday and PPVs will be shown monthly. In addition, it has signed a two-year deal with Fuel TV Australia. In addition to the weekly program in Australia, TNA will introduce shoulder programming to complement TNA in Australia.
Payout Take: The agreements abroad appear to be ways to expand the TNA brand and maybe keep the company afloat amidst rumors of its financial trouble. On another note, Sports Illustrated featured TNA’s head Dixie Carter in an interesting read about how her family decided to purchase a majority interest in the company.