World Wrestling Entertainment’s 2021 Financial Smackdown

World Wrestling Entertainment Inc. (NYSE:WWE) ended 2021 with its arm raised in victory and championship gold around its waist, having enjoyed record revenue of over $1 billion, drawn larger audiences than ever before, developed a strategy to hold more events in stadiums and negotiated new consumer product deals.

The stock ended trading on Friday at $51.71, a gain of $3.90 per share, or 8.16%. After closing, it moved up another $1.29 to $53 a share.

World Wrestling Entertainment's 2021 Financial Smackdown

World Wrestling Entertainment’s 2021 Financial Smackdown

“In 2021, we reached a significant milestone of over $1 billion in revenue, for the first time in the companys history,” Chairman and CEO Vince McMahon said in a statement. “We ended the year with strong performance across each of our business lines that reflected the engagement of a wider audience with distribution on new digital platforms, including Peacock, and the return of fans at our live events.

Frank Riddick, WWEs chief financial and administrative officer, noted that for 2021 the Stamford, Connecticut-based company achieved record revenue and adjusted operating income before depreciation and amortization, which exceeded the high end of its guidance. Adjusted Oibda increased 14%, reflecting higher revenue and profit from the distribution of network programming on Peacock, the contractual escalation of rights fees for flagship shows “Raw” and “SmackDown” and the return of ticketed audiences to live events.

2021 saw World Wrestling Entertainment launch content on Peacock, NBCUniversals streaming service in the US, providing a larger audience and increasing viewership for its premium live shows, original series and large video library.

President Nick Khan told investors during the companys fourth-quarter earnings call that the decision over a year ago to move its streaming setup from its own standalone service to Peacock has greatly increased the size of its audience. NBCUniversal licensed WWE content for $1 billion over five years. Five events streamed last summer and fall, Khan pointed out, posted gains of 20% to 75% each compared to pre-pandemic editions in 2019 hosted on WWE Network.

Khan said 3.5 million Peacock subscribers have watched WWE programming since the WWE Network folded last spring amid the Peacock integration, Deadline.com reported. Price is one key reason. At the time of its shutdown, WWE Network cost $10 a month and had accumulated 1.5 million subscribers since launching in 2014 as an early direct-to-consumer foray. A range of WWE programming, including live events, is offered at no charge as part of Peacock Premium. The service costs $5 a month for most subscribers, and is bundled at no charge for others along with pay TV or broadband packages.

The company also finalized a new strategy for premium live events that focuses on staging them in stadiums rather than arenas, and utilizes targeted dates to maximize live audience potential. In addition, management inked consumer product deals, including partnerships with Blockchain Creative Labs (Fox) to launch an NFT marketplace and with Panini to be the exclusive provider of WWE trading cards.

For 2022, the company highlighted key initiatives that could have meaningful implications for long-term growth include the licensing of WWE Network in international markets, monetization of new original series, the licensing of Raw second window rights, further progress with sponsorship sales and the continued execution of WWEs stadium strategy for premium live events.

This article first appeared on GuruFocus.

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