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Can someone give me a clear answer to WWE's financial state?

2K views 24 replies 18 participants last post by  Irish Dude 
#1 · (Edited)
what is the current financial state of wwe?

I see people say they are doing very well with good merch sales etc while others say business is right down, low ticket sales cost cutting etc and they heading down TNA roads so vince should step down etc etc.

so what is it?
 
#5 ·
Cue the "HURR DURRR" Record Revenues Business is better than ever

and the WWE is Dying Tomorrow Doomsday Comments

the truth lies somewhere in between. Right now its not a company I would invest (buy stock) in. They do generate good revenue #s , but their actual profit margins are not real great, and the metrics for their biggest source of revenue (their TV Deal) seem to get worse by the month currently.

A good thing going for them that could turn things around in the future is the WWE Network I still think was a good idea, in theory, and still can be a great thing in practice if the current entertainment product improves, but right now subscriber # growth has seemed to stagnate.

Overall I would say its closer to the not-so-good end than the things are great end but no where near as bad as some want to make it out to be. I would be shocked if Vince and Co are truly happy with their financial position currently.
 
#8 ·
This is a great post on the issue.

Their revenue is up, which is good signs for a new or expanding company, but golden goose is in the profit and how much you can afford to pay in dividends to potential investors. At some point, they want these expenditures to pay off. What scares some people (with a small "s") is that WWE makes so much off their television deals, but the television ratings are going down. Actually, worse than the ratings are the shares -- because that implies a drop-off in the percentage of people with cable interesting in the product. While they were #1 on cable, ratings decreases aside, they are likely going to be able to call their own shots, because advertisers are going to want to reach the largest audience possible. But the WWE are actually dropping in that leader-board, dipping below first Love & Hip Hop and now to #6 or something. That positioning is scarier than he actual number of viewers watching, because advertisers are going to see it and want to pay less for the spots, and the USA Network itself is going to see it and won't be able to justify offering the WWE more money to keep floating their expenditures.

That being said, the silver-lining out of this is that if RAW isn't #1 or #2 when it's time to renegotiate contracts, it might give the WWE an out to tightening up RAW, making the case that viewers are turned away by such an extensive product, with the promise that they can climb that board again with a shorter show. Or maybe not. That third hour still performers better than most things (maybe even all things?) at that period of time, so it's more likely that they cut the first hour to me.
 
#12 · (Edited)
A lot of people on these forums really don't understand the complexities involved in the finances of a publicly traded company, or how wrestling is not this tiny little kayfabe world stuck in a vacuum and that it actually operates within the confines of consumer culture and the health of the open market.

The WWE is in straights very similar to Sears/K-Mart at the moment. The WWE has a lot of assets, but it has an astronomical amount of debt which has ballooned in an extremely short amount of time. Revenue is great, but if your net profits are bad and your asset-to-LTD (long-term debt & liabilities) even worse, the company is in bad shape.

SEARS



Shows Sears selling off its equity to stay afloat and eventually its total liabilities exceeding its total equity/assets.


WWE



The WWE really has no assets insofar as there probably aren't many bidders on intellectual wrestling copyrights. It's not as though they have a huge portfolio of real estate as Sears Holdings liquidated to get some extra cash flow. Thus, you can see WWE's ballooning debt load in 2016/2017 assumably used to invest and maintain their current products.


Interesting to note is that it is not as though the WWE is not raking in cash between the WWE Network, ticket gates, merchandise sales etc., even by comparison to UFC, but their associated costs could not be more different.



Despite both companies raking in massive revenue, in the 2015 fiscal year WWE recorded only $24 million in profit compared to UFC's $157 million.

From my perspective, a lot of this poor financial news is linked to the initial cost of investment for the WWE Network and finding its niche as a company within a post-cable, subscription service era of entertainment. It was also particularly trying for an episodic sports entertainment program that originally relied on PPV buys and cable ratings (i.e. advertising revenue) to transition into a subscription service without cannibalizing its own original revenue source.



All-in-all, the WWE is in a pretty poor financial state, but as far as economies of scale go, it has a great chance to recover. It has a virtual stranglehold on the marketplace, and a lot of the cost-cutting measures we see taking place have to do with increasing their margins of profit. The WWE honestly does a lot of work for very little payout. Think about any other type of touring promotion (e.g. bands, artists, orchestras/symphonies, UFC, Disney on Ice): expecting $100 million in revenue and upwards of $50 million profit for 100 shows is not even ambitious anymore.

Vince & co., like in 1983 or 1995 are evolving with the changing consumer landscape, and I think they are trying to orient their product towards a subscription service-based revenue model. And, like buying up cable time, debuting Wrestlemania, or abandoning their family-family roots in the Attitude Era, changing so drastically how the entire industry has run for over 3 decades is a massive gamble. Think about WCW's televised approach: they leased a studio for several years and did most of their production on set. They frequently gave away tickets, didn't care much about live gates for their PPV's and basically created a "television-first" model which was just about as revolutionary as Vince's Wrestlemania or cable TV ideas. It took the known model for the entire business--touring around small, dimly-lit arenas at great cost to performers and the company, with little profit to be shown--and virtually turned it on its head. It proved to be amazing at creating the pop culture buzz around wrestling that was lacking for over a decade. Who knows how this latest evolution will turn out.
 
#23 · (Edited)
Exactly. Here's a few quick callouts:

1) They made less than 1M in profit three of the last six quarters

2) The Network is making more revenue for them than PPVs were after you subtract the take that the cable companies were receiving

3) They are going to face hard times if they cannot get an increase on the next TV deal. Hard times as in having to cancel Smackdown and make RAW a once every three weeks taping (essentially an all-day taping at a venue) to maintain the same level of profitability. Each RAW or Smackdown costs $700K - $1M to air (Bruce Prichard)
 
#6 · (Edited)
There are plenty of people online who breakdown wwes business in detail like Dave Meltzer, Chris Harrington and a few others.

Business is about average if you are comparing last 27 years. Anyone comparing wwe and tna are trolling.

As far as attendance goes the following are the North American numbers over the past few years

2016...280 shows averaged 5,800 paid @ $58.19 per ticket
2015...273 shows averaged 6,000 paid @ $53.22
2014...264 shows averaged 6,000 paid @ $48.86
2013...256 shows averaged 6,000 paid @ $48.63
2012...248 shows averaged 5,900 paid @ $45.39
2011...241 shows averaged 6,000 paid @ $42.11
2010...253 shows averaged 6,300 paid @ $39.46
2009...268 shows averaged 6,500 paid @ $37.64
 
#4 · (Edited)
for what? inflated fake numbers on their twitter followers and arena attendance? wwe.com is about as reliable as wikipedia and less because they can lie through their teeth with no source required.

unless this is part of the gimmick thing that HHH gives good numbers.
 
#7 ·
thanks for the replies guys, much appreciated.
 
#17 · (Edited)
then don't reply to the thread, I didnt ask you in particular so therefore you dont need to put yourself out.

some people here have been diamonds in their response and I thank them for answering the question asked.

amazing that I ask a question, am only decent about it and still get a load of attitude, chill your shoes guys, theres bigger problems in the world than me asking a dopey question.

least I dont sit here pretending like Im some know it all, I openly admit that wrestling is more of a sideline hobby of mine. Im not going to go digging around in financial records because Ive got better stuff to be doing so therefore I open it out to the people who are clued up and can give me the clear answer required, if they dont want to give me the information because im being lazy or they are too busy acting out a gimmick to try and make theirselves more interesting then they dont have to tell me, I dont mind, have at it, Im not going to be offended.

 
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#20 ·
Most analysts rate them at a "buy" right now. Somewhere around a B to B- ranking. They wouldn't tell you do that if it the company was doing horribly. Of course, its not an "OMG buy it now!!" rating either.

Whoever said its not doing as great as some would say, but not doing as others would say was pretty much right. Right now its a "B" player.

Some analysis to back up the above..

https://stockinvest.us/technical-analysis/WWE
http://www.nasdaq.com/symbol/wwe/analyst-research
https://www.thestreet.com/quote/WWE.html

Live event tickets are only a part of the WWE's revenue these days.
 
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