By James Caldwell, PWTorch.com assistant editor

WWE's Live Event business took a significant hit in the fourth quarter 2008 (October - December). Live Event revenues were down to $76.2 million compared to $82.3 million in the prior year fourth quarter.

The decrease can be attributed to a $1.6 million decline in revenue from North American live events, which include TV tapings, live PPV, and house shows.

Also, there was a $3.8 million decrease from international live events. WWE attributed this to a poor exchange rate with the U.S. dollar weakened against foreign currency. In addition, average revenue per ticket sold internationally decreased by 16 percent compared to the prior year quarter.

Another key factor was a $1.1 million decrease in Venue Merchandise, which means fewer items were sold at the live event merchandise table. What's interesting is that Venue Merchandise decreased from $4.6 million to $3.5 million in the quarter, but spending per person in the building increased from $8.60 to $9.06.

The key is that average domestic attendance was down and there were two fewer events in the fourth quarter, meaning fewer people in the arena spending money on merchandise.

Looking at PPV business, it's pretty ugly. Revenues were down $4.0 million compared to the prior year quarter, as each PPV decreased in PPV buys. The overall decline was 11 percent.

Over the long-haul, this key business segment has slowly decreased in contributing to the financial position of the company. Looking at the year-end numbers, there is a very surprising trend.

The "Live & TV" segment represented 63 percent of total revenue for the year. This followed 65 percent in 2007, 70 percent in the transfer period of 2006, and 73 percent in Fiscal 2006.

The business model is changing away from live events to more merchandise and licensing revenue, which I'll look at later in the week.

In an economic environment where there is a marginal decrease in wrestling fans ordering PPVs and attending live events, WWE is adjusting to sell more t-shirts and DVDs at cheaper prices.

LIVE AND TELEVISED ENTERTAINMENT BREAKDOWN

- LIVE EVENT REVENUES were $25.5 million compared to $30.9 million in the prior year fourth quarter. The key was an obvious decrease in international revenue, which has been a key component for WWE's live event business.

Total revenue from international markets was $13.1 million in the fourth quarter, which was a significant decrease from $17.1 million in the similar 2007 quarter. There were the same number of shows in the comparable periods, but WWE's buy-out deals where WWE is paid "x" amount of dollars no matter how many people show up to the event were not favorable. It didn't help that WWE was hurt significantly by foreign currency exchange rates.

- PPV REVENUES were $15.9 million compared to $19.9 million in the prior year quarter. What's very alarming is that domestic PPV buys decreased significantly.

In the fourth quarter 2007, international buys comprised 37 percent of PPV buys. In the latest fourth quarter, internationally buys were 40 percent. Fewer people are ordering PPVs domestically, which was tied to the very tough financial situation from October to December and a decline in TV ratings compared to the prior year fourth quarter.

Profit in the fourth quarter was $9.9 million, which sounds nice, but WWE realized $12.9 million profit in the 2007 fourth quarter.

WWE's PPV business has slowly lost significance as well. Follow this trend of how much PPV business contributes to WWE's overall company revenue.

2007 Q1 - 15 percent of total WWE revenue
2007 Q2 - 29 percent (WrestleMania quarter)
2007 Q3 - 17 percent
2007 Q4 - 15 percent
2008 Q1 - 25 percent (WrestleMania quarter)
2008 Q2 - 14 percent
2008 Q3 - 15 percent
2008 Q4 - 13 percent

- TELEVISION RIGHTS REVENUE was the saving grace for WWE's fourth quarter 2008, as the deal with MyNetworkTV led to a significant increase from $23.8 million to $27.6 million. WWE secured a pretty sweet deal that helped boost the Live & TV segment for the quarter.

TV Rights was the only profitable segment in the Live & TV business. Live Event profitability slipped by 21 percent. PPV decreased by 23 percent. TV Rights increased by 40 percent.

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