WWE announced its results for the fourth quarter of 2019 on Thursday. It also noted that it may sell the rights to its WWE Network as subscribers have decreased.
WWE Chairman and CEO Vince McMahon stated its close to selling its PPV event rights to a “major streaming service.” An announcement could happen as soon as the first quarter of this year. In the WWE’s press release, interim Chief Financial Officer Frank Riddick remarked that the company is looking at “strategic alternatives for our direct-to-consumer service.”
Revenues rose 18% to $322.8 million and operating income jumped to 87% to $99.8 million but it came in on the low end of the expectations as Wall Street predicted $333.3 million, and media, live events, and consumer products feel short of analyst expectations.
The lack of Middle East and India distribution deals seemed to be on the horizon although there appeared to be some questions from analysts as what is taking so long.
But the biggest concern seems to be live event revenue as it fell 20% in
December. Its net revenues were $34.4M
in 2018 as compared to $27.4M in 2019.
The WWE seemed to address its financial concerns by letting go two long-term Vice Presidents last week. It also is restructuring the way it handles its live events.
According to its SEC filings, WWE Network’s average paid subscribers decreased 10% to approximately 1.42 million “primarily due to the impact of lower subscriber additions earlier in t he year.” However, WWE predicts that average paid subscribers will increase on a sequential basis to approximately 1.47 million.
Payout Perspective:
Prospects for the WWE Network to continue on its own seem slim as its clear that some sort of licensing deal is being brokered by the company in an effort to become more profitable. Also, we shall see how the company expects to turn around its losses in most of its sectors. Without known replacements for its two ousted VPs, WWE is searching for people with a vision and that can facilitate a quick turnaround.
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