WWE News: WWE In Financial Trouble? Hardly, Says Reports
With WWE Stock going down and a call to get rid of the Executive Management Team from some investors, one would imagine that WWE is suffering from a major money loss. However, that does not seem to be the case.
WWE for the most part is still a major business worth millions of dollars. Vince McMahon may have lost $350 million in one day, meaning he is no longer a billionaire any longer. But he is still worth $750 million. So you could say he is suffering, right? Someone please, call the bankruptcy courts now — we’re all seeing the rise and fall of WWE right before us!
Reports show that while WWE has lost money, they actually gained compared to their last runs. WWE claimed that they were worth a lot of money for their TV deal. WWE wanted to stay with NBC Universal, but they also knew that they were worth far more than what they were getting per year. WWE was getting around $100 million per year, while WWE RAW alone drew around a billion for USA Network.
WWE was obviously worth more than they were getting, and while they did not get the amount they wanted, they got around $60 million per year more for their TV deal annually. So WWE profited despite the idea that they somehow lost something here.
WWE Network did not get to one million subscribers either, another issue that WWE stockholders claimed to be a problem. Yet the WWE did sign up 700,000 people. And 700,000 multiplied by 10 is $7 million a month. Keep in mind, the WWE charges $10 a month with a 6-month commitment. If the WWE keeps everyone on they currently have, over a year they will have grossed $84 million. So taking in what they got for their TV deal along with the current prospect of the WWE Network’s profit, WWE will have near $300 million this year.
That does not include if people are added to the Network gross, buy PPVs on TV, merchandise, DVDs, WWE Studios projects, etc. Oh, and those Network numbers are only for Americans. WWE Network has not been launched overseas yet. So it is by no means a failure like some would boast.
So who is saying WWE was broke again?
The WWE Network is said to have lost some money, which is where the stock holders really have their fun in blasting the company. Currently, it is not profiting despite it’s potential to do so as you have to factor in operating costs versus what it gets quarterly. So this current quarter WWE lost money with it, around $8 million. But WWE still added over $100 million to it’s former TV deal. Meaning you add what WWE has been making annually and add the TV deal profit. The Miami Herald has a good argument on this, saying:
“Do the math. WWE lost $8 million for the quarter. There are four quarters in a year. Hypothetical, if WWE continued to lose $8 million a quarter because of the WWE Network, that’s a $32 million loss for the year. Not good. But factor the new TV deal raise of about $60 million annually. Take the $60 million gain and subtract the $32 million loss, and you still profit about $28 million for the year between the two.”
So, did WWE lose money for the year? Not quite. And we still have not yet factored in the overseas possibilities or the potential additions for the American audience for WWE Network or the overseas TV deals. This is also not including what WWE will bring in with their other properties. So that all being said and proven in theory and fact, WWE is not in financial trouble. Especially when they stand to profit higher this year than last, despite potential loses for a streaming service that will cost a lot up front to get going.
The WWE is led by a very brilliant individual known as Vince McMahon, a man who is known for taking chances in business. That seems to be lost on stockholders who are anal about numbers and not potential. WWE did not survive the wrestling boom and fall by being badly run. Vince had to do things people didn’t agree with and take chances no one thought would work, but did. So will WWE profit? Are they still worth the investment? Annually, yes. They are surely a buy and sell at the perfect time kind of company, but what company isn’t these days, right?