- World Wrestling Entertainment (WWE) posted record revenue totals in 2020 despite the COVID-19 pandemic.
- The pandemic’s main impact on the promotion has been the absence of an in-person crowd at live events.
- The WWE was effective in maintaining their event schedule despite the challenges of the pandemic and has continued to produce content.
It’s no secret that the economic externalities of the COVID-19 pandemic have not impacted all businesses equally. Some businesses and industries have been devastated–the cruise industry, amusement parks, international travel, restaurants and bars have been hit extremely hard by the COVID-19 pandemic and the accompanying mitigation measures. On the other extreme, companies like Amazon, Domino’s Pizza, Target, Home Depot, etc. have not only been able to survive but thrive during the past year.
Initially, live sports got a big boost from a ‘captive audience’ that was stuck at home without many entertainment options. As time has gone by, however, the novelty of being able to watch actual sports after a couple of months without any has dissipated. Since then, it’s been a completely mixed bag for sports properties. Some have prospered but others have struggled. Not even the NFL was immune to the impact of the pandemic–after a season during which TV ratings disappointed the Super Bowl posted the worst viewer numbers since 2007.
One company that managed to turn in decent financials despite the pandemic is World Wrestling Entertainment aka the WWE. Vince McMahon’s financial empire didn’t escape completely unscathed–the XFL was forced to shut down due the pandemic–but a by-product of the league’s demise was his ability to focus on the ‘core product’ of professional wrestling. As a result, the WWE posted their best revenue numbers ever. Here’s how SportBusiness broke it down:
World Wrestling Entertainment posted record-level revenue for 2020 despite the ongoing Covid-19 pandemic, with the company crediting its ability to keep many of its events going and develop new forms of fan engagement.
Amid an ongoing inability to have large-scale fan attendance, WWE reported $974.2m (€813.1m) in full-year 2020 revenue, up 1 per cent from 2019, even after revenue for the 2020’s fourth quarter by itself fell 26 per cent to $238.2m amid the loss of a large-scale event in Saudi Arabia.
Operating income for all of 2020 rose 79 per cent to $208.6m, boosted by increases in content rights fees, while operating income for the fourth quarter fell 64 per cent to $63.6m.
Even with these decent numbers, they didn’t reach analyst expectations and as a result the WWE stock has experienced a substantial drop (NYSE: WWE). Yahoo Finance summed it up succinctly with the title of an article reporting the hit: “WWE Q4 earnings were a bust but it still had a record breaking year.” Revenue in Q4 2020 fell 26% to $238.2m due primarily to the loss of a lucrative live event in Saudi Arabia. Despite the rough Q4 and missed earnings expectations WWE Chairman and Chief Executive Vince McMahon was able to put a positive spin on the situation:
“As you can see, we’re generating some pretty strong financial results in a very challenging environment. We continue to produce content. We never missed a week in terms of producing content. It shows the flexibility and our commitment to our audience, which we will always have.”
Credit where it is due–the WWE never stopped scrapping and found some innovative ways to improve their product, cut costs and increase revenue streams. In August, they retooled their TV production which originates from the Amway Center in Orlando. Like many other sports, it lost much of its intensity without fans. In response, they co-opted some of the successful idea of the NHL and NBA to create an enhanced viewer experience:
The property has created what is now calling the WWE ThunderDome, shifting out of the WWE Performance Center, where other recent WWE events have been staged, into the much larger, nearby Amway Center for its SummerSlam Weekend beginning August 21 with Friday Night Smackdown.
Using the lack of other live events at the downtown Orlando, Florida, arena, typically the home of the National Basketball Association’s Orlando Magic, to establish a open-ended residency at the venue, the WWE ThunderDome will feature a wide array of LED videoboards, lasers, drone cameras, pyrotechnics, smoke effects, and amplified crowd noise to create its most elaborate venue set ever.
They also changed the venue location of the upcoming Wrestlemania 37 event from Los Angeles to Tampa to make sure that at least some fans will be in attendance. Most recently, they completely shifted gears in their content streaming strategy by shutting down the WWE Network and licensing the content to NBCUniversal for use on their Peacock streaming platform. Stephanie McMahon, WWE chief brand officer, explained the rationale behind the move:
“In order to be competitive, we need to pivot away from the [streaming] technology necessary for an optimum user experience and allocate our resources against what we do best: content creation, production, and storytelling. And we get to do it with a trusted partner we have had for more than 30 years: NBCUniversal. Partnership with Peacock not only provides a greater value proposition for our current subscribers, it also allows us to deliver our most premium content to a significantly larger audience.”
All in all, it was a pretty elegant move for the WWE–they’re able to cut the costs of running their own network, reach a bigger audience (33 million Peacock subscribers compared to a million or so for the standalone WWE Network) and bring in some hefty revenue–the deal which starts in March is reportedly worth more than $1 billion USD. In addition, they’ve been able to broker a number of additional sponsorship deals. To wit–in late January, the WWE signed a multi-year partnership with Cricket Wireless to become a ‘co-presenting sponsor’ of the Royal Rumble PPV event. The next focus for the company is to increase streaming viewership internationally.
At the time of publication, Ross Everett has a long position in WWE.