WWE released its second-quarter earnings report, which was delayed after the discovery of numerous unrecorded expenses by Vince McMahon.
The April through June period saw WWE post a net income of $49,099,000 off revenues of $328,135,000 and listing adjusted OIBDA at $91.5 million for the quarter.
They were sizable increases over the same quarter in 2021 that had a net income of $29.2 million off revenues of $265.5 million.
This quarter included the two-night WrestleMania 38 cards from AT&T Stadium and featured a full quarter of touring with fans in attendance compared with last year during the pandemic where WrestleMania was the only ticketed show of the quarter.
The company’s media division announced revenues of $243.1 million compared with $233.8 million one year ago. The division saw a rise within its network section from $61.5 million to $63.7 million this year and core content rise fees increased by $10 million to $151.8 million. There was a drop within its advertising and sponsorship area falling from $18.7 million to $17.9 million.
Television numbers for Raw and SmackDown were flat year-to-year with Raw averaging 1,758,000 viewers and SmackDown up one percent with an average of 2,060,000 viewers. It is worth noting that in 2021, the NBA playoffs started a month later in May compared to this season where they started in mid-April therefore, this year had stronger competition because of more playoff games to contend with than in 2021. For comparison, USA Network was down 16 percent from last year and Fox was down 10 percent.
The company doesn’t disclose viewership figures for its premium live events but did announce viewership increases year-over-year for each specific event. WrestleMania was up 60 percent from 2021, WrestleMania Backlash was up by 49 percent, Hell in a Cell increased by 45 percent (which was the show built around Cody Rhodes wrestling with a torn pec) and noted that SummerSlam increased by 20 percent, and the most-watched events in their respective histories. Previously, these increases were misleading because the airings on Peacock were being compared to the prior year’s shows on the WWE Network. Now, we have a more fair comparison with Peacock viewership for WWE programming year-over-year.
Live events generated $41,007,000, which is a giant increase over the past year due to the lack of events with fans in 2021 during the same quarter (limited to the two-night WrestleMania 37 shows at Raymond James Stadium in 2021).
For the quarter, they averaged 6,800 fans per event (4,800 if you exclude the two nights of WrestleMania 38) at an average ticket price of $91.62 over 55 events. They only ran four international shows over the past quarter with an average of 6,550 per event and $82.41 average ticket price (this will skew high in Q3 when accounting for the Clash at the Castle event in Cardiff).
Consumer products performed very well with revenues of $44,069,000, which was nearly double from one year ago based on the strength of the WWE 2K22 video game release.
Due to its success, WWE is increasing its guidance for the year with a projection of $370-385 million in adjusted OIBDA while noting the escalation of its core content rights fees and another large-scale live event (a premium live event on November 5th in Riyadh, Saudi Arabia).
In Monday’s 10-Q filing, the company reported that $1.7 million had been spent on general and administrative expenses associated with the investigation into Vince McMahon and anticipated spending “approximately $10 million during the remainder of the year related to this investigation, the related costs could exceed this estimate.”
On the call with analysts, chief financial officer Frank Riddick III stated that Vince McMahon agreed to pay the $1.7 million and “a reasonable amount” of the remaining costs of the investigation that are not covered by their insurance.
Stephanie McMahon-Levesque began the call with analysts praising her father and noting he had retired without delving into the reasons why he was stepping away. She emphasized the new team of herself with Nick Khan and husband Paul Levesque and positioned the three of them as being influenced by WWE from a young age.
Later in the call, McMahon-Levesque was asked about her leave of absence, which she noted was to spend time with her family but only lasted about three weeks. She stated she was not forced into the role of co-CEO, but rather, she offered to take the position. Regarding a potential sale, she just noted that Vince McMahon was still the largest controlling shareholder and their job is to maximize value for their shareholders.
Nick Khan remains extremely bullish on the company’s next round of negotiations for its U.S. media rights and believes the addition of tech companies adding live content to their streaming platforms will only enhance their position. Khan feels that Netflix tipped its hand by bidding on the recent Formula One rights that were retained by ESPN and expects Netflix to continue to go after live programming once they add their ad-supported tier to the service.
The company believes Clash at the Castle will be a very profitable show with the note that a subsidy was paid to WWE to host the event in Cardiff.
They trumpeted the success of the first day of ticket sales for WrestleMania 39 next April noting that over 90,000 tickets were sold within the first 24 hours and are near 80 percent capacity with both shows tracking to sell out SoFi Stadium.
During the Q&A, there were no direct questions regarding Vince McMahon nor a timetable for the conclusion of the investigation.
John Pollock & Brandon Thurston will have a show on Tuesday covering the WWE’s Q2 earnings report and call available on the free POST Wrestling feed.
