An interesting article about the state of WWE’s financials prior to the next earnings call
WWE stock has fallen more than 30% from it’s high earlier this year. I often read people talking about the money from Fox and the Saudis but that money is already baked in to the price. Investors are looking for growth and with stagnant ratings & subscriber numbers
along with new competition from AEW but more importantly from Apple and Disney, it’s no surprise investors are concerned. The price was (and is) inflated IMO if you look at the growth of the stock price during the Trump administration, it’s a bit out of whack.
I have been open about being bullish on the WWE as an investment play, and was ahead of the breakout last year thanks in part to closely following the industry. But if you’ve heard my feedback on Rewind shows, or listened to my call the night of HIAC, I ave drastically reversed positions following the debut on Smackdown. I pointed to the HIAC Network Special as an indicator to how business tone-deaf WWE seems to be.
Given the biggest new platform in decades, with almost $100mil in advertising by FOX for the launch, they opted to do nothing to drive WWE network growth and in fact caused their most hardcore audience to get #CancelWWENetwork to trend that night. They have used outside celebrity to bolster shows in a country that caused the single biggest drop in subscribers on their network in its history, and have not shown the ability to create money-generating programs or characters. Whereas we see AEW continuing to build and expand its merch business, regardless of what you think of them or the scale compared to WWE, they demonstrate growth, where WWE trends are declining.
It has been mind boggling to me that they cannot capitalize on what was seemingly a tailor made situation to be accepted by main stream media and increase viewership and with that subscribers, and other consumer metrics. In 3 short weeks they took all that good-will being given to them by the debut on FOX and squandered it.
Wai was kind enough to read my rant on feedback a few weeks ago on Rewind-A-Smackdown; 5 years is going to come and go real quick, as @BigPhilCombo notes, the stock price is already set at levels capturing both the new TV money and Saudi deal, and if they cannot show any ability to grow other consumer metrics or revenue they are going to be in for a world of hurt at the end of these deals. On top of that, with NXT and AEW hovering around 1 million viewers, you see shows doing reasonable numbers, leading key demos on major cable networks, for a fraction of the cost. I have to imagine this resets the entire landscape of TV rights for Wrestling. Think about the cost per viewers for USA Network or FOX. for 200+mil a year they get 2.4mil viewers. For 30mil a year USA is getting 800k and for even less TNT is getting 1mil. Those numbers for Smackdown and Raw look comical right now. And I recognize it is about brand recognition and network partnerships, so ratings isn’t the only thing being paid for, but still. It’s a joke.
IF the XFL succeeds and can get to Year 2 or 3 with nice growing trends, it would not shock me in the slightest to see Vince try and divest of WWE and offload to a company like Fox, or Disney.
** Not investment advise **