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World Wrestling Entertainment Inc. body-slammed another financial quarter Thursday, validation of its top-rope standing in the industry and a relentless austerity program.
The wrestling industry’s heavyweight
WWE,
reported net income of $66.1 million, or 77 cents a share, compared with net income of $43.8 million, or 51 cents a share, in the same quarter a year ago.
WWE’s net revenue improved 27% to $333.4 million from $263.5 million last year. The company’s three major revenue sources — media ($278.1 million), consumer products ($32.2 million) and live events ($23.1 million) — all were up significantly year over year.
Analysts polled by FactSet expected net earnings of 65 cents a share on revenue of $325 million.
WWE’s stock rose 4.7% in after-hours trading Thursday.
The last fiscal year was a body slam for WWE. The preeminent name in the industry racked up its biggest revenue year ever ($1 billion) and most profitable ($180 million), but it came at a price: More than 100 wrestlers were let go in a steady drumbeat of job cuts during 2021 that made the year such a money-making success for Chief Executive Vince McMahon.
The quarter included a two-night version of its WrestleMania extravaganza that drew 156,352 fans at AT&T Stadium in Arlington, Texas, and the most-viewed WWE premium live event ever. “We believe WWE offers a compelling reopening trade and that business momentum will stay elevated,” Benchmark analyst Mike Hickey said in a note late Thursday.
Read more: Pile Driver: At age 76, Vince McMahon’s finishing wrestling move is simple financial engineering
“We are off to a strong start in 2022, highlighted by record quarterly revenue and Adjusted OIBDA,” McMahon said, announcing the results.
In a webcast with analysts late Thursday, WWE President Nick Khan noted the enduring appeal, and potential future growth, of live sporting events on streaming services such as Comcast Corp.’s
CMCSA,
Peacock, a key licensing partner of WWE. He pointed to MLB games on Apple Inc.’s
AAPL,
Apple TV+ and the NFL on Amazon.com Inc.’s
AMZN,
Prime Video. He also indicated WWE will ramp up live events at larger venues in the U.S. and abroad.
Still, the past year’s cost-cutting and aftereffects of COVID have contributed to reduced TV ratings, smaller live crowds and a general malaise toward the product, argue critics of WWE and McMahon.
“It is hard to teach an old dog [McMahon] new tricks,” Bryan Alvarez, a former wrester and a radio host on Wrestling Observer Live, told MarketWatch. “Vince trusts [longtime wrestlers] Randy Orton and New Day. He needs to let younger talent learn and fail. He does not have patience.”
At the same time, WWE faces its first real competition in 20 years with the emergence of Tony Khan’s All Elite Wrestling, which has become a fixture on AT&T Inc.’s
T,
cable networks TNT and TBS.
Nonetheless, WWE’s stock is up 20.6% so far in 2022, while the broader S&P 500 index
SPX,
is down 13%.
