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Doubts over WWE’s India and Mena rights deals hit share price

Shares in World Wrestling Entertainment fell by over 15 per cent yesterday amid doubts over the timing of new broadcast rights agreements in India and the Middle East and North Africa.

WWE’s share price finished trading at $56.04 (€50.17) after it announced third-quarter sales that missed forecasts and as it lowered its profit outlook.

As the wrestling series’ five-year rights deal with Sony Ten, the Sony Pictures Networks-owned pay-TV broadcaster, nears an end, WWE executives are hopeful of securing a new agreement in India by the end of this year.

Rights in the Mena region are held by OSN, but the pay-TV broadcaster has not yet renewed its agreement. Rival beIN Sports is sure to take a tough stance on the property given WWE’s ten-year agreement announced in 2018 with the Saudi Arabian government to bring high-profile events to the country.

Speaking on a conference call with analysts, WWE co-president George Barrios said: “We think we’ll have our distribution plan [in India] set by the end of the year – by the end of this year.

“And then we’ve never really talked about a timeline on the Mena region so I’ll stay away from that.”

On the Mena rights negotiations, he remarked: “I think it’s like any other discussion you’re having with a partner, you’re trying to find a common ground that works for you. Three months ago, we expected that deal to be finalised. I characterised it now as discussions are ongoing.”

Doubts over the next rights deal in the region come as Riyadh, the Saudi capital, last night hosted the country’s first women’s wrestling match as it continues to introduce measures to loosen strict legislation around entertainment. WWE stars Natalya and Lacey Evans fought in body suits with T-shirts on top in order to adhere to requirements for visitors to “dress modestly”.

Given its ongoing battle against the long-running piracy operation undertaken by Saudi-based beoutQ, beIN has encouraged rights-holders not to hold events in Saudi Arabia.

Brandon Ross, an analyst at LightShed Partners, told the New York Post: “There is a lot of uncertainty surrounding the results of several international renewals for [weekly WWE programmes] Raw and SmackDown.

“A delay in closing one of the major deals has unsettled investors, especially since clarity will not be given until a February investor day.”

In its third-quarter results, WWE reported media revenues of $146.1m, a figure that was $700,000 short of forecasts. Live events and consumer products generated $23.2m and $17m, respectively. There was a 9-per-cent fall in paying subscribers to WWE Network, the service that costs $9.99 per month and averaged 1.51 million paid subscribers during the third quarter.

Media revenues for the nine months ending on September 30 were $478.5m.

Offering its outlook, WWE said: “The Company has modified its full-year 2019 guidance to an Adjusted OIBDA [operating income before depreciation and amortisation] range of $180 million to $190 million, which would be an all-time record. The change is attributable to the delay in completing a previously contemplated agreement in the Mena region and the impact of accelerated investment to support content creation.

“While the Company continues to work toward the completion of a Mena agreement, no assurances can be given in this regard. The Company expects to have clarity on this point in advance of providing guidance for 2020.”