By Ronen Ainbiner
WWE has been the subject of much controversy lately — mostly centered on its executive management team.
Chairman, CEO, and Head of Creative Vince McMahon stepped down this summer amid allegations of sexual harassment and affairs paired with hush money settlements. His daughter, Stephanie McMahon, and Nick Khan will be co-Chief Executive Officers.
The company even had to delay its quarterly earnings reports through an SEC filing on Tuesday that stated WWE /zigman2/quotes/207109722/composite WWE +1.14% discovered more undisclosed payments by McMahon — amounting to $19.6 million in uncovered settlements.
Nevertheless, WWE is still one of the best-performing sports companies trading on public markets this year — its stock is up ~45% YTD .
How is this possible?
This week, we’re looking at WWE’s strategy, business, and financial statements to understand how it got here and what to expect in the near future.
With so many ongoing crises — a recession, high inflation, supply chain complications, a war in Eastern Europe, the scraps of the coronavirus pandemic, and rising interest rates — 2022 has been challenging.
Most assets within all markets (fixed income, equities, debt, crypto, NFTs, etc.) have had a tough year.
Even though the S&P 500 is only down 12% YTD — after falling as much as 23% since the beginning of the year — you can still sense a bit of fear in the market.
As of this week, no company in sports media and entertainment has outperformed the market as much as WWE:
Madison Square Garden Entertainment (MSGE) is down 16% YTD.
Disney — which just smashed its latest earnings, reporting that its Disney+ subscriptions rose to 152.1 million during the quarter (higher than the 147 million projected) — is still down ~24% YTD.
Public markets won’t always mirror the true fundamentals of a company. Speculation, rumors, and general market sentiment can influence performance.
Yet the markets are usually a solid proxy for future expectations of an asset, and with WWE’s current performance, it would be an understatement to say the market has high expectations from the top wrestling entertainment provider in the world.
In the preliminary financial results report published on July 25, 2022, WWE announced it expects revenues of $328 million for the second quarter — up from $266 million for the same quarter in 2021.