WWE News: Details on WWE's Disappointing Financial Results for 2011
I wouldn’t want to be around Vince McMahon anytime soon.
The WWE boss and other company officials held a conference call Thursday to discuss the company’s fourth-quarter earnings and overall performance in 2011, and the results were incredibly disappointing.
The company took a substantial loss in the fourth quarter of 2011, losing almost as much money as it had earned in that quarter in 2010.
WWE (NYSE:WWE) today announced financial results for its fourth quarter ended December 31, 2011. Revenues totaled $112.9 million as compared to $122.5 million in the prior year quarter. Operating loss was ($13.1) million as compared to Operating income of $14.4 million in the prior year quarter. Net loss was ($8.6) million, or ($0.12) per share, as compared to Net income of $8.1 million, or $0.11 per share, in the prior year quarter. Excluding the impact of film impairments and network related expenses in the current year quarter, Adjusted Operating income was $3.1 million as compared to $14.4 million in the prior year quarter. Adjusted Net income was $1.8 million, or $0.02 per share, as compared to $8.1 million, or $0.11 per share, in the prior year quarter.
McMahon put most of the blame on TV licensing issues and the failures of WWE Studios, but the lack of TV homes for NXT and Superstars as well as a poor performance from its film division shouldn’t get all the blame.
Realistically, there are countless factors that contributed to the WWE’s dismal 2011 and, in particular, its rough fourth quarter. When the WWE released its fourth-quarter earnings report Thursday, we got a look at the pay-per-view buyrates for Hell in a Cell, Vengeance, Survivor Series and WWE TLC.
And it wasn’t a pretty sight.
Aside from Survivor Series, all of those pay-per-views took a substantial plunge in the number of buys, which speaks to what I think is one of the WWE’s biggest issues: an outdated pay-per-view philosophy. Though the WWE has already made a number of changes to its PPV schedule for 2012, I think it is going to take much more than that to avoid another disappointing year in 2012.
Is the future of the WWE in jeopardy?
I’m talking about wholesale changes such as dramatically decreasing the number of PPVs, the price of them or, assuming the right clearances are in place, moving most of them to the WWE Network.
The WWE’s pay-per-view dilemma, issues with NXT and Superstars and problems with WWE Studios are all logistical problems that the WWE has to address this year in order to prevent the company from taking a huge hit to its bank account once again. Unfortunately, I think we’ll see a bit of a panic in the company that results in the firing of a number of superstars and company executives during the annual “spring cleaning” period.
That might help in the short term, but the biggest problem the WWE has isn’t anything I’ve mentioned. It’s the company’s overall product.
If the WWE can consistently put on quality programming like it did around Money in the Bank in 2011, then more people will tune in, making it easier for the rest to fall into place.
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