World Wrestling Entertainment showed surprising buoyancy in its first-quarter 2020 earnings, showing solid earnings and revenue growth despite issues early this year with executive departures and digital network subscribers, and the ongoing Covid-19 pandemic.
The company reported revenue of $291m (€269.3m), an increase of 60 per cent from the same period in 2019, and operating income of $53.3m, up from a loss of $6.8m in the first quarter last year.
While average paid subscribers for the WWE Network remained essentially flat at 1.46m, compared to 1.42m at the end of the prior quarter, subscriber losses that had been steadily happening for the digital streaming product essentially stopped, and digital video views for WWE increased 25 per cent to 9.6bn.
More broadly, WrestleMania 36 that was filmed in a controlled environment at the WWE Performance Center in Florida and aired earlier this month represented the most social event in WWE history, generating record levels of interactions on Facebook, Instagram, and Twitter.
The overall revenue bump was fueled heavily by a 90 per cent jump in media revenue from $135.4m to $256.6m with the escalation of US rights fees for its flagship properties, Raw and Smackdown.
As a result, WWE stock was up nearly 5 per cent in after-hours trading on April 23, and the results gave chairman and chief executive Vince McMahon strong levels of confidence, even amid the ongoing headwinds.
“Everybody knows what is the new normal, but we’re very, very flexible, and obviously we can adapt so quickly,” McMahon said in an earnings call with analysts. “There’s a lot of factors going into what the new normal is going to be. But our growth prospects remain strong all the way across the board.”
Still, the company has recently initiated a series of staff furloughs and pay cuts due to the public health crisis. McMahon said there will likely be future adjustments as more changes come to how the WWE business is structured.
“I don’t know that we’re going to be in the live event business as we were before,” McMahon said. “I think no one can predict what’s going to happen here…I think it’s going to take a while for consumers to want to come out.”
During the analyst call, McMahon did not see any questions regarding the recent bankruptcy filing of McMahon’s spring football league, the XFL. That bankruptcy filing revealed a previously denied minority equity holding WWE has in the league. McMahon is also being sued by former XFL commissioner Oliver Luck for wrongful dismissal.