Net profits drop 21%
WWF Entertainment, creators of “Raw Is War” and “Smackdown!” reported a 21% drop in net profit as ratings drooped, costs rose and a weak advertising market took its toll.
The Stamford, Conn.-based group also said Thursday that chairman Vincent McMahon agreed to sell 1.9 million shares, about 2.6% of the company stock, to investor Invemed Catalyst Fund for $25 million. The fund had acquired some shares in the open market and now will hold a 3.5% stake in WWF.
First-quarter profit dropped to $12 million from $15.2 million the year before. Revenue was down 11% to $91 million as TV ad revenue fell 17%.
Live-event revenue fell to $15 million from $19 million partly due to fewer events and falling attendance, likely due to the economic downturn. Revenues for its branded merchandise — action figures, CDs and videogames — fell 32% to $18.3 million.
CEO Linda McMahon, who founded the company with her husband, said in a statement the company’s “business plans assume growth in our key business drivers as the introduction of new (storylines) and talent take hold.”
Ratings for the flagship TV shows, she said, have already started to perk up.
It’s been a rough ride of late for WWF, which posted a steep fourth-quarter loss earlier this year due to writeoffs from the short-lived XFL football league.