Investors smacked down shares of World Wrestling Entertainment on Thursday after the company revealed a surprise drop in quarterly revenue, hurt by weaker attendance and television ratings.
WWE said domestic TV ratings for Raw and SmackDown fell 14 percent and 13 percent, respectively, while average attendance at North American events slipped 11 percent. Executives cited the absence of top talent that negatively impacted engagement metrics.
The quarter also didn’t include WWE’s WrestleMania event, which attracted a sellout crowd at MetLife Stadium in New Jersey on April 7. The company noted that WWE Network surpassed 2m subscribers the following day.
The streaming video network saw its average paid subscriber count rise 2 percent in the March quarter, and digital video consumption was up 23 percent.
“While engagement metrics over the past two quarters were impacted by Superstar absences, we believe they will improve as our talent return and we launch our new season following a successful WrestleMania,” chairman and chief executive Vince McMahon said in a statement. “We remain excited about the future, particularly with our debut on Fox in October.”
Connecticut-based WWE, the wrestling juggernaut whose events have starred John Cena, Dwayne “The Rock” Johnson and Ronda Rousey, has sought to drive revenue growth through streaming video subscriptions and a new TV rights deal with Fox, which will broadcast SmackDown Live on Friday nights.
The company has also expanded its footprint in Asia, the Middle East and Europe, holding tryouts for new talent and operating events in Saudi Arabia and China, among other markets.
Total revenue in the first quarter fell 2.8 per cent year-over-year to $182.4m, missing analysts’ average forecast of $199m, amid weaker ticket and merchandise sales.
WWE booked a net loss of $8.4m, or 11 cents a share, compared to a $14.8m profit, or 18 cents a share, in the same period a year earlier. Analysts were looking for a loss of 2 cents a share.
WWE maintained its outlook for full-year revenue of $1bn, slightly below analysts’ $1.03bn estimate.
Shares tumbled 11 per cent to $87.75 by midday Thursday in New York, putting the stock on track for its worst single-day drop since October 2015.
They've had injuries and people missing before. What's the excuse this time?
