While becoming a successful company is hard, remaining a successful company is even harder. It's time to take a broad look at what WWE could do to maintain their high share price and continue to profitably grow revenues. Note, I'm trying to avoid ideas that are strictly based around shaping creative. The one thing that WWE has proven they are capable of doing well is writing and producing live events and televised wrestling shows. Instead of offering generalized mantras like "Push Daniel Bryan" or "Make New Stars", the purpose of this article is to focus on things that would mean more to a non-WWE fan who was also a potential investor.
10. Drop WWE Studios
The WWE Studios/WWE Films has been a bust. At every conference call there are discussion of reforms and promises that better times lie ahead. Honestly, financial burden and poor performance from the WWE Studios project isn't the biggest game changer, but it's the most glaring item on the segment breakdown. The project has cost the company $54M in impairment charges which are awkwardly reported each year as the imagined revenues from their theatrical releases and straight-to-DVD fail to materialized. WWE has spent $132M in Production Costs (net of the associated benefit of production incentives) on released "films" yet they've only grossed a total of $107.1M in revenue. In other words, WWE has discovered a very elaborate way to lose $36.3M in profit. It's a boondoggle and remains an agitating point among investors. Early on, they had a hit in the original Marine film (released way back in October 2006). That film ended up earning the company +$15.4M in profit. However, since then, all of WWE's victories have been on a much smaller scale. The Marine made ten times more all of their other "profitable" films combined (Christmas Bounty, The Call, The Day, No Holds Barred, Marine 2, Behind Enemy Lines 3 Columbia). It's been nearly a decade-long debacle and it's time to cut the cord.
I'm a professional wrestling analyst, an improviser and an avid NES gamer. I live in Saint Paul, Minnesota and I'm working on my first book (#wrestlenomics). You can contact me at chris.harrington@gmail.com or on twitter (@mookieghana)
The WWE Studios/WWE Films has been a bust. At every conference call there are discussion of reforms and promises that better times lie ahead. Honestly, financial burden and poor performance from the WWE Studios project isn't the biggest game changer, but it's the most glaring item on the segment breakdown. The project has cost the company $54M in impairment charges which are awkwardly reported each year as the imagined revenues from their theatrical releases and straight-to-DVD fail to materialized. WWE has spent $132M in Production Costs (net of the associated benefit of production incentives) on released "films" yet they've only grossed a total of $107.1M in revenue. In other words, WWE has discovered a very elaborate way to lose $36.3M in profit. It's a boondoggle and remains an agitating point among investors. Early on, they had a hit in the original Marine film (released way back in October 2006). That film ended up earning the company +$15.4M in profit. However, since then, all of WWE's victories have been on a much smaller scale. The Marine made ten times more all of their other "profitable" films combined (Christmas Bounty, The Call, The Day, No Holds Barred, Marine 2, Behind Enemy Lines 3 Columbia). It's been nearly a decade-long debacle and it's time to cut the cord.