WWE News WWE News: WWE reports company downturn in fourth quarter 2008 earnings results, including major weakness
Feb 24, 2009 - 8:43:27 AM
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By James Caldwell, PWTorch.com assistant editor
WWE reported fourth quarter 2008 earnings results today and the results came in reflecting a downturn in the company's business due to a tough economic period.
Revenue from October to December 2008 was $125.4 million compared to $132.6 million in the similar 2007 period. Profit was $13.6 million compared to $21.5 million in the fourth quarter 2007.
WWE already addressed the majority of the issue by cutting 10 percent of office staff in January, which CEO Linda McMahon discussed in the company's earnings press release. Additionally, WWE is delaying its long-term objective to expand the TV facility.
"While understanding the strategic importance of expanding and upgrading our Media Center, we have decided to delay spending on this initiative until economic conditions become more favorable," McMahon said. "By exercising fiscal prudence we believe we can improve the company's earnings and cash flow as well as strengthen our financial position in anticipation of the ultimate economic recovery."
We'll crunch the numbers today and post more detailed financial break downs of where the company is strong and weak, but the stand-out weakness from the company's earnings press release is in the PPV department.
No Mercy drew 261,000 buys compared to 271,000 in 2007. Cyber Sunday drew 153,000 compared to 194,000 the prior year. Survivor Series was down to 319,000 compared to 341,000 last year. Armageddon, despite featuring Jeff Hardy's WWE Title victory, only drew 193,000 compared to 237,000 in 2007.
As a result, PPV revenue was down $4.0 million.
One of the standout positives from a first look at the financials is TV rights revenue. WWE debuted on MyNetworkTV in the beginning of the fourth quarter 2008 and they were obviously picking up plenty more money compared to being on CW the prior year fourth quarter.
According to WWE's financial report, TV Fees revenue was $27.6 million compared to $23.8 million in the prior year quarter. WWE said it's reflective of "the expansion of programming time due to certain specials and the impact of a new agreement to broadcast Smackdown on MyNetworkTV."
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