WWE set viewership records last quarter as revenue jumped 25% and the company’s planned merger with Endeavor’s UFC announced in April remains on track to close in the second half of 2023. Media sales jumped more than 30% to $320 million, revenue from live events surged 50% to $62 million.
WWE CEO Nick Khan called the UFC deal “historic,” creating a “one-of-a-kind global sports and entertainment company.” The combination will create a new public entity, one of the few standalone public companies in sports and entertainment, run by Endeavor CEO Ari Emanuel. The new company, valued at $21 billion, will be a subsidiary of Endeavor, with 51%, and the other 49% controlled by WWE.
Khan told investors on a conference call after the numbers that Vince McMahon, WWE’s executive chairman, had major spinal surgery two weeks ago and is currently out on a medical leave of absence. The longtime former CEO and majority shareholder grew the company into a global powerhouse. He stepped back last year amid a probe over sexual misconduct and payouts to women, but returned to the board in January and announced a strategic review that led to the UFC deal.
Second-quarter highlights saw viewership for weekly flagship programs, SmackDown and Raw, increase 26% and 19%, respectively, in the 18-49 demo, significantly outperforming overall broadcast and cable television. WWE premium live events, WrestleMania, Backlash and Night of Champions, set global viewership records with year-over-year increases of 29%, 34% and 45%, respectively.
Weekly shows Monday Night Raw and NXT air on NBCUniversal’s USA Network and Friday Night SmackDown on Fox with five-year deals ending in 2024. Peacock, which absorbed the WWE’s previous stand-alone streaming network in 2021, retains streaming rights to the wrestling circuit through 2026.
Khan said “productive” rights negotiations continue and he’s “optimistic” results “will be what we expected.”
Asked why talks seem to be progressing more slowly now than they did last time around, and if Hollywood strikes and overall turmoil in the media business are slowing things down, Khan said: “Last time, the starting prices for Raw and SmackDown were much, much less than the starting prices are now… You can control a lot of the process, you can never control the timing of a negotiation.”
He called the writers and actors strikes “unfortunate” and said he was glad to hear the news yesterday that the WGA and AMPTP are looking to restart talks.
In live events, WWE said average attendance in North American of 9,870 was up 45% for the quarter ended in June. In July, Money in the Bank at The O2 in London was WWE’s highest-grossing arena event in company history, seting new records for viewership, sponsorship revenue, merchandise revenue and social media activity.
Overall, WWE sales rose by $82 million to $410 million on events and higher media rights fees.
Operating Income increased 26% to $87.3 million on higher revenue partially offset by higher expenses including content creation and costs related to its “strategic alternatives review” and merger deal.
Net Income of $52.0 ($0.67 a share) was up from $49 million ($0.58).