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There are 4 articles on this stock available only to PRO subscribers.
WWE's Narrow-Minded Focus Is Alienating Fans And Investors
- WWE is pushing the WWE Network in an effort to follow a business model similar to Netflix.
- This business decision is cannibalizing higher margin revenues, driving the company from a profit to a loss even as it downsizes and cuts costs to produce its content.
- WWE Network is having problems gaining traction as it doesn't have enough content to keep users engaged.
- Further declines in profits should be expected as WWE offers cheap/free price plans to stimulate growth.
- Jim Cornette, a veteran of the wrestling business, believes that pro wrestling is dying. Ominous words for a company that achieves all of its revenues from wrestling.
WWE Network's Temporary Free Price Is A Last Ditch Effort To Grow Closer To Netflix
- WWE has changed the WWE Network pricing several times in recent months. Right now new subscriber's can join the service for free in the month of November.
- WWE's third quarter earnings showed that revenues increased 6% while net income swung to another loss, marking the 4th straight quarter of negative earnings.
- WWE added just 31,000 net subscribers to the WWE Network between June 30th and September 30th bringing the total subscriber count to 731,000 - well below 1,000,000 goal by year end.
- WWE has only been able to add 30,000 subscribers outside the U.S. since the WWE Network expanded internationally on August 12th.
- The WWE Network will continue to be a huge burden to the company overall as it tries to become the Netflix of professional wrestling.
WWE CFO Discusses WWE Network During Wells Fargo Media Conference
- WWE's CFO outlined the three most important elements for the company's streaming subscription network to grow internationally.
- He repeated ambitious subscriber goals of 2-4 million, but did not address subscriber cancellations in Q2 and Q3.
- He struck a careful balance between OTT/MVPD relations: “WWE is not a proponent of cord-cutting or cord-shaving”.
WWE Could Be In Trouble As Network Struggles To Meet Expectations
- WWE's 3rd quarter earnings release beat on income but disappointed on top line revenue and WWE Network subscriber numbers.
- The WWE Network saw subscriber numbers climb from 700K to just 731K in the most recent quarter. The network needs approximately 1 million subscribers to be profitable.
- The company also decided to drop the 6 month commitment for a subscription and is also offering free content in November.
- The company's strategy to market the network primarily to the existing customer base instead of new customers could be contributing to the company's troubles.
World Wrestling Entertainment: Looking Ahead At Its Upcoming PPV And Q3 Earnings
- Two important upcoming dates for WWE are October 26th for their next PPV, Hell In A Cell, and October 30th before the market opens for Q3 earnings.
- The most important number investors will be paying attention to during Q3 earnings is the total number of subscribers for the WWE Network.
- Through its live shows the past month, the WWE has sent several signals that subscriber totals will not meet the 1 million goal by the end of the year.
- The failure of Redbox Instant, the slowdown of Netflix subscriber growth, and the introduction of HBO and CBS streaming products possibly leaves the WWE Network in a bad situation.
World Wrestling Entertainment: Why I Won't Be A Shareholder Again Anytime Soon
- WWE has seen its net income gradually decline into the red in recent quarters despite revenues, TV ratings, and attendance increasing in these same quarters.
- With simple math, WWE's expectations for its WWE Network in terms of subscriber count goals by the end of this year are largely unrealistic.
- The WWE Network will likely cannibalize other parts of WWE's Media Division segment besides PPV buys and largely hurt WWE's biggest revenue stream.
- Both shareholders and WWE fans should expect the WWE Network to see pricing and program changes in the future, as the WWE tries to balance its bottom line.
World Wrestling Entertainment Is Now At A Crossroads
- WWE.com had a very large increase in Google organic search engine traffic for the August 17th event.
- Based on an 26.9% increase in search traffic, this should substantially increase network subscriptions.
- Foreign expansion will only accelerate WWE past the break-even point as it's now over 30% of its cable business.
Could WWE's International Network Rollout Send Shares Higher?
- The 2Q14 earnings report assuaged some concerns that management was going to increase costs and capex dramatically by pumping too much cash into its World Wrestling Entertainment, Inc. Network product.
- The rollout of the WWE Network into the international market earlier than expected should accelerate subscriber growth starting in 3Q14 and return WWE to profitability.
- Cost cutting measures worth ~$40 million annually should increase 2015 EPS by ~$0.50. Most of these are from staff reductions and should be an easy target to hit.
- 2014 and 2015 Consensus forecast has room for upside. Upside revisions from international subscriber growth and aggressive cost cuts could act as a positive catalyst to drive the shares higher.
WWE Tries To Give Itself Float With Streaming Video Subscriptions
- World Wrestling Entertainment’s old business model gave it a wide moat but little or no float.
- By switching to a business model based upon streaming video subscriptions, it is trying to give itself a lot of float.
- WWE is experiencing huge losses because it is effectively giving away its premium pay per view wrestling events to attract fans to its streaming video channel.
- If it works, the streaming video experiment could give the WWE as much as $167 million a year in additional revenue.
World Wrestling Entertainment: A Short SWOT Analysis
- World Wrestling Entertainment has had an interesting year. The integrated pro wrestling exhibitor is in the midst of a dramatic transition as it enters the digital media market.
- So, which types of investors are best suited for the company’s stock?
- In this article, we will attempt to address that question by taking a brief look at World Wrestling Entertainment’s business and performing an easy-to-follow SWOT analysis.
World Wrestling Entertainment: The Company Can't Afford OTT Digital Network Underperformance For Long
- Company is undergoing a strategic shift with a wild range of intrinsic values depending on the Digital Network. 2014/15 will be a defining time period for the company.
- Digital Network is not working out so far, will need to get more subscribers quickly to justify further investment.
- Television deal should have been more lucrative than $150m in the US.
- Not all is lost, WWE is a great brand with a competitive moat.
World Wrestling Entertainment: Why Investors Should Stay Away
- WWE's goal of 2 to 3 million WWE Network subscribers in the steady state is aggressive.
- The company is very mismanaged and the product has been deteriorating.
- The future of WWE's stock is dependent on the number of Network subscribers, which is difficult to predict.
World Wrestling Entertainment Inc: Yum, I Love Eating Crow
- In FY2015, television rights OIBDA should increase by $65 million to roughly $120 million.
- WWE's core popularity and brand are strong, measured by its live events revenue and weekly television viewership.
- The market isn't pricing in any upside optionality with shares trading at $11.35.
The World Wrestling Entertainment Opportunity And Floor Valuation
- The stock fell 43% due to investor style positioning issues and mis-management of expectations.
- WWE is a unique attractive asset with true franchise and brand value.
- A good entry point valuation floor given WWE Network subscriber execution risk is 10Xs historical annual FCF ex-films of $50M + net cash, which is $7.63 a share.
Lemelson Capital Announces Stake In World Wrestling Entertainment And Calls On Board To Pursue New Management Or Ownership
- Lemelson Capital, previously short the stock, announces a new stake in company.
- Ongoing losses, operating failures, material misstatements warrant and require urgent executive management changes or a sale of the company.
- Underlying business has value, but not under current management.
Wed, Nov. 19, 9:42 AM| 1 Comment
Thu, Oct. 30, 9:18 AM
- World Wrestling Entertainment (NYSE:WWE) reports its WWE Network expanded to 731K subscribers in Q3.
- 31K subscriber were added during the period - 3K in the U.S. and 28K international.
- The company's media division increased revenue by 5.8% to $76.9M.
- Live events revenue -13.1% to $21.8M.
- Strategy: The company plans a new pricing plan of $9.99 per month beginning on November 1.
- WWE +1.7% premarket.
Thu, Oct. 30, 8:57 AM| Comment!
Fri, Oct. 24, 2:23 PM| Comment!
Wed, Oct. 22, 2:37 PM
- Shares of World Wrestling Entertainment (WWE -7.1%) slide lower again as sentiment remains shaky following a short presentation yesterday by Mangrove Partners.
- "We think people are really unhappy and that the number of [[streaming]] additions is going to prove very disappointing," warns analyst Nathaniel August.
Tue, Oct. 21, 1:16 PM| Comment!
Thu, Jul. 31, 3:58 PM
- World Wrestling Entertainment (WWE +3.2%) is an unusual gainer in an otherwise down day, after reporting a smaller than expected Q2 loss and announcing a 10-year deal with Rogers Media to be the exclusive distribution partner of all WWE pay-per-view events throughout Canada.
- The company plans to get its WWE Network to 1.4M subscribers; almost twice the number it had at the end of Q2; to achieve that, it announces new pricing options and plans to cut its workforce by 7%.
Thu, Jul. 31, 8:45 AM| Comment!
Fri, Jul. 25, 2:43 PM| Comment!
Thu, Jul. 17, 12:15 PM
- Shares of World Wrestling Entertainment (WWE +6.5%) move higher on heavy volume on renewed buyout speculation.
- The M&A buzz in the media sector kicked into a higher gear yesterday after 21st Century Fox made an offer for Time Warner.
- Though the streaming sub growth at WWE hasn't dazzled, analysts think the initiative could still draw interest from a company on the distribution side of the business.
Mon, May. 26, 10:12 AM
- Mari Cibelli's Marathon Partners - as its name suggests - invests for the long haul with a concentrated portfolio of growth names. Since the fund's 1997 inception, it's up an annualized 16.8%, more than double the S&P 500, and Cibelli is taking advantage of the selling in small caps to add to his favorites.
- One recent buy is Shutterfly (SFLY) which makes up about 20% of Marathon's AUM. Cibelli thinks consumers will grow disenchanted with rival products from Facebook and Snapchat, and sees SFLY revenue growing 16% per year through 2016, and enterprise value more than doubling to about $2.4B by then.
- Marathon's 2nd-largest holding is XOOM, where he expects pre-tax earnings to jump to $80M from less than $10M this year. If the stock sells for 20x that figure, it should more than double from here.
- World Wrestling Entertainment (WWE) is Marathon's 4th-largest holding at 6% of AUM, and the pummeling since March has brought the shares back down to around Cibelli's original 2011 purchase price of $11. The NBCUniversal deal will increase WWE's revenue by 50% instead of 100%, and Cibelli has adjusted his target price accordingly, but still sees the stock as a double by 2016.
Fri, May. 23, 8:11 AM
- Shares of World Wrestling Entertainment (WWE) are on watch after sinking over 40% in less than a week.
- Execs were on the defensive this week on the impact of the company's shift from a pay-per-view business to a subscriber model.
- CFO George Barrios said at a JPMorgan conference that the company is less than halfway to reaching its goal of 1.3M-1.4M subscribers for the WWE Network.
- Meanwhile, CEO Vince McMahon looks to be trying to unwind some of the initial bravado over a deal with NBCUniversal with several law firms stirring things up for disgruntled shareholders.
- JP Morgan Global Technology, Media and Telecom Conference webcast
Thu, May. 22, 6:41 AM
- WWE Studios will partner with Lions Gate (LGF) for six new action films under the terms of a new deal between the companies.
- The World Wrestling Entertainment (WWE) subsidiary has worked with Lions Gate before on productions to some degree of success.
- Paul Wright, also known as Big Show, will star in the first film of the new partnership.
Sat, May. 17, 8:25 AM
- World Wrestling (WWE) shares plunged 43% Friday after CEO Vince McMahon failed to wring a huge increase in TV fees from NBCUniversal, raising questions about WWE's future and highlighting a shortcoming in McMahon's leadership style: While an unbeatable promoter, he has at times struggled to master corporate negotiations and dealings with Wall Street.
- McMahon took the TV negotiations personally: He played hardball in talks with NBCUniversal, demanding to more than double the value of their previous ~$100M deal, but he wound up renewing the deal with an increase analysts estimate at 50% - nice, but well short of what Wall Street had come to expect, and what McMahon may have bragged he would get.
- "The bottom line is no other entities were willing to pay a higher price tag for the programming than its current partner.” analyst Daniel Moore says.
- Despite being short WWE two months ago, Lemelson Capital is now long WWE and calling for the board to replace the management team or explore a sale of the company.
Fri, May. 16, 12:46 PM
Fri, May. 16, 9:17 AM
WWE vs. ETF Alternatives
World Wrestling Entertainment Inc is engaged in the development, production & marketing of television & pay-per-view event programming and live events & the licensing & sale of consumer products featuring its World Wrestling Entertainment brands.
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