The WWE released their results for the first quarter with the company hit with declines in several key areas.
The company lost $8,396,000 off revenues of $182,448,000 for the quarter as compared to a profit of $14,835,000 off revenues of $187,721,000 in 2018.
When the company factors out stock compensation for their calculation of Adjusted OIBDA, it shows a profit of $12.4 million, which is still down from $35.2 million in 2018.
For the WWE Network, they did release the total number of subscribers on the day after WrestleMania 35 earlier this month. On April 8, there were 2 million total subscribers, which is down 6% from the day after WrestleMania 2018, which hit an all-time high of 2,124,000 subs.
Of the 2 million subscribers worldwide this year, 1,767,000 were paid and 233,000 were on a free trial. The paid number is down 2% year-over-year, but the free number dropped 26% when it had 316,000 free subs last year. The free number being down isn’t inherently a negative if free subscribers were converting over but in this case, the paid number was also down and would indicate there are less interest in this year’s show.
For the entire quarter, they averaged 1,584,000 paid subscribers, which is up slightly from 1,558,000 in the first quarter last year.
They are projecting an average of 1.7 paid subs for the second quarter, which includes WrestleMania.
The media division rose to $135.4 million, up from $133.4 million due to the escalators built into several of their core content deals.
Live events dropped dramatically with revenue of $26.2 million, which is down from $30.8 million.
In the quarter, the company ran 90 events compared to 99 in 2018 but average attendance fell 11% from 5,400 per show to 4,800. It is a steeper decline because this year’s quarter featured the Royal Rumble at Chase Field compared to the Rumble in 2018 that ran a traditional arena at the Wells Fargo Arena in Philadelphia. In 2017, they averaged 6,000 per show and that includes the Royal Rumble at the Alamodome in San Antonio as a better comparison to this year’s quarter.
NXT was not figured into the average, but for the quarter they drew 36,200 paid fans to 51 events compared to 34,100 at 51 events in 2018. The average ticket price for an NXT live event dropped from $39.96 to $35.11 this year. Both quarters featured a TakeOver event
Television ratings were down 14% for Raw and 13% for SmackDown this quarter with the USA Network down 12% and the top 25 cable outlets down 5%. Co-president George Barrios acknowledged they are down more than their comparison points but added that it fluctuates in different years and other years hold up better than others.
The explanation the company kept going back to what the number of performers that missed time and citing this as reasons for television viewership and live events being down. That reason only holds so much water because this decline came at their peak time of the year leading into WrestleMania and it’s not like we don’t write about the enormous declines each week, which have continued, specifically for Raw.
When assessing viewership being down due to cord cutting, the USA Network was in 91 million homes in 2018 and this year they are in 90 million homes.
The company still believes they will hit $1 billion in revenue for 2019 and Adjusted OIBDA of $200 million with at least $100 million of that total coming in the fourth quarter when the new television deals with Fox and USA Network go into effect. They listed the key areas of investment as strengthening the talent base, delivering more localized content, the next version of the WWE Network (which will be launched later this year in partnership with Endeavor Streaming and Massive), and leveraging fan data to improve their business performance.
On the investor’s call, they would not speak about any events in Saudi Arabia with the next show rumored for June and the company’s internal schedule listing another for November in Riyadh, which came out in a court filing. Neither has been publicly announced.
There was no update provided on the pending television renewals in the U.K. and India.
Vince McMahon touted a “whole new beginning” at the end of September once they enter their new television contracts and noted the unprecedented promotional opportunities with Fox Sports and NBC Universal.
The stock took a big drop after the release of the earnings report and was down approximately 11%.