×

Plans at WWE cause 4Q loss

Film revamp, TV network launch, online businesses take toll

In one of the busiest periods of WWE’s history, the company is readying to launch a new TV network, overhauling its struggling film division, and prepping next month’s “WrestleMania 28,” featuring Dwayne “The Rock” Johnson, all while producing its weekly shows, events and expanding its presence overseas.

Much of the activity took a toll on WWE’s bottomline during the fourth quarter, with the company reporting a net loss of $8.6 million (versus net income of $8.1 million) and revenue declining to $112.9 million, from $122.5 million during the same year-ago period that wrapped Dec. 31.

Company chalked up declines to its TV, film and online businesses.

“In 2011, we evaluated several paths for creating new programs and distributing all of our content in a way that optimizes its value,” said Vince McMahon, chairman and CEO of WWE. “Executing this strategy effectively, including the potential creation of a WWE Network, has the power to transform our business. Our ongoing investment to expand and maximize the value of our content is the most potent approach for driving our future earnings.”

McMahon gave few new details on when its new WWE Network would launch this year, during a conference call with investors. Execs there have been busy negotiating carriage deals with a variety of partners.

It ponied up $4 million last quarter to staff up talent from the cable biz and produce a slate of series, which it fully owns, including reality fare like “Legends House.” Its TV licensing biz took a hit because its held back on distributing shows “NXT” and “Superstars” in the U.S.

It’s also developing a separate slate of series for its revamped YouTube channel, designed as a marketing vehicle to drive auds to WWE’s TV shows.

As for WWE Studios, McMahon wants to give the film arm some time to grow under new head Michael Luisi, who was tapped to oversee the division in last September (Daily Variety, Sept. 7).

Rather than fully develop and produce its own slate of films, Luisi has been busy picking up films from festivals like Sundance and Toronto, co-producing projects with other shingles, and locking down deals with Fox to grow its direct-to-homevideo franchisees like “The Marine” “to improve the profitability of our movie business,” McMahon said.

Company will invest another $15 million to $25 million on up to eight films this year, despite a string of disappointments — films that didn’t appeal to WWE’s fanbase.

Film arm earned $4.3 million in revenue during the quarter (compared to $7.9 million a year ago), while profits came in at $1 million. Division was forced to write off $12.2 million in impairment charges during the quarter due to pics “The Reunion,” “Bending the Rules,” “Barricade,” “See No Evil,” “Knucklehead” and “The Chaperone” not performing as well as expected on homevid.

In the past, its pics have received limited theatrical runs before hitting homevid. Films would play a large programming role on WWE Network, but would likely get more significant play in theaters through new partnerships.

Overall domestic retail revenue for homevid titles declined 14%, or $1.8 million, due to an 8% decrease in shipments to 825,000 units and a 5% decline in average effective prices to $13.50 during the quarter.

During the quarter, WWE saw dips in pay-per-view buys with “Hell in a Cell” down to 182,000 (versus 210,000); “Vengeance” at 121,000 (compared to 137,000 when it was called “Bragging Rights”); “Survivor Series” at 281,000 (244,000) and “TLC” at 179,000 (195,000). Still, revenue from PPVs were up 2% to $14.6 million. The company’s biggest PPV, “WrestleMania 28” takes place April 1, from Miami.

Revenue from live and televised entertainment business were off 2% to $81 million. Its 78 events (including 31 overseas), down from 84 a year ago, earned $26.9 million, up 1%.

TV rights fees generated $33.9 million, off from $35.7 million, due to the absence of “Superstars.” Meanwhile, revenue from consumer products decreased 15% to $18.7 million. Licensing revenue fell to $9.5 million from $12.3 million, primarily from a 15% decline in toy sales during the holidays, which took a toll on most toymakers.

Magazine revs were $2 million, down from $3.1 million, while digital media-related businesses declined 14% to $8.9 million.

WWE posted $483.9 million in revenue fro the year, up from $477.7 million, while net income came in at $24.8 million, down from $53.5 million, again primarily due to investments in new content platforms.

More Film

  • MPAA Logo

    Motion Picture Association of America Hires Emily Lenzner as Communications Chief

    The Motion Picture Association of America has appointed veteran public relations executive Emily Lenzner as its executive VP of global communications and public affairs. She will report to Chairman and CEO Charles Rivkin and oversee the trade group’s communications team in the U.S. and internationally. Lenzner will start Aug. 1 and be based at the MPAA’s [...]

  • See Taylor Swift Unveil Feline Moves

    See Taylor Swift Unveil Feline Moves for First Time in 'Cats' Behind-the-Scenes Teaser

    Taylor Swift fans finally get to see some of the results of all those years spent studying her roommates Meredith and Olivia — and also, not incidentally, some time with a choreographer — in a new behind-the-scenes teaser for the movie “Cats.” The three-and-a-half-minute featurette has footage of Swift striking crouching feline moves as well [...]

  • CGR’s Immersive Premium Format Set for

    Immersive Theater Technology Set for US Debut in Los Angeles

    French multiplex company CGR Cinemas has selected the Regal LA Live as the first U.S. theater to use its Immersive Cinema Experience technology. The ICE format will be unveiled in the fall at the downtown location in a partnership between CGR and AEG. The companies made the announcement Wednesday but did not reveal which title [...]

  • Amazon Developing Original Series Based on

    Amazon Studios Buys 'Selah and the Spades,' Will Develop Original Series (EXCLUSIVE)

    Amazon Studios has acquired worldwide rights to “Selah and the Spades,” a gripping look at a prep school drug dealer, Variety has learned. The film marks the feature debut of writer and director Tayarisha Poe and had its world premiere at this year’s Sundance Film Festival where it was a favorite with critics. Amazon has [...]

  • The Ultimate Guide to 2019 Comic-Con

    The Ultimate Guide to 2019 Comic-Con Parties and Activations

    Hollywood is heading down the California coast to San Diego because It’s time for 2019 Comic-Con International. The annual cosplay celebration officially kicks off tomorrow, July 18, with a preview happening tonight. Here, Variety gives you a guide to this year’s parties and activations. Make sure to check back for updates. Wednesday, July 17Amazon Prime [...]

  • The Wound African Cinema Berlin Film

    Finance Forum Brings African WIP Into Focus at Durban FilmMart

    The 10th edition of the Durban FilmMart, which unspools parallel to the 40th Durban Intl. Film Festival, will feature 10 fiction and 10 documentary works-in-progress taking part in its annual Finance Forum. The leading co-production market on the continent, the Forum brings together producers, distributors, sales agents, broadcasters, funding bodies, and other industry players from across the [...]

  • The Lion King

    'The Lion King' Looks to Roar Life Into Domestic Box Office

    Hollywood just can’t wait for “The Lion King” to hit theaters. That’s because Disney’s highly anticipated remake is expected to draw herds of moviegoers at a time when ticket sales are seriously struggling. Box office watchers predict that the studio’s grand return to the Pride Lands could become one of this year’s biggest hits. “The [...]

More From Our Brands

Access exclusive content