Posts Tagged ‘WWE stock drop’

WWE’s value has dropped from $4.995 billion to $4.485 billion.

Obviously, that’s still a staggering amount of money, but the company’s overall value has gone down 10.21% since reports surfaced in The Wall Street Journal alleging sexual misconduct from Vince McMahon towards a female employee.

That 10.21% equates to $510 million.

IndieWire also reported that some metrics have actually gone up for the promotion. This past week’s editions of Raw and SmackDown, for example, had higher ratings for some segments than WWE has experienced lately. That, of course, could have something to do with the ongoing controversy.

WWE announced McMahon for last Friday’s SmackDown ahead of time, but they kept his showing on Raw under wraps until it happened.

The company’s value fell from $4.995 billion to $4.823 billion within 24 hours of allegations surfacing against Vince and John Laurinaitis. By Friday, that number had dropped to $4.647 billion, and it continued to plummet towards the $4.485 billion figure.

It’ll be interesting to see if things stabilise soon, or if that number will keep dropping. WWE definitely won’t see it as a plus that value has gone down over $500m, that’s for sure.

 By Marc Graser

That’s gonna leave a mark.

A day after signing a new multiyear deal with Comcast’s NBCUniversal to keep its flagship shows “Raw” and “SmackDown” on USA Network and Syfy, respectively,WWE’s stock took a nose dive off the top rope.

Shares in the company were trading at around $11.51 mid-afternoon on Friday, losing $8.42 from its close on Thursday, or a whopping 42%. They were down to $10.59 earlier in the day.

The stock instantly took a tumble on Thursday in after-hours trading after WWE released a statement revealing that the licensing fee it would get from the new NBCU deal wouldn’t double its previous pact, which had been a target for the company during its negotiations.

“Over the past six months, the company has negotiated television distribution agreements in the U.S., U.K. and Thailand, and is in the midst of discussions regarding the distribution of WWE content in India,” the company said in a statement on Thursday after the close of the bell. “The company estimates that it will increase the average annual value of these key television agreements to approximately $200 million, representing an increase of more than $90 million, that is nearly three times the increase achieved in the previous round of negotiations.

Analysts are estimating that WWE was only able to increase the fee by 50%, according to research firm Benchmark.

WWE also said it could lose between $45 million to $52 million this year as it tries to build out its all-digital WWE Network and sign up new subscribers. It’s aiming for 1 million by the end of 2014, but needs 1.3 million to 1.4 million subscribers (who pay $9.99 a month) to make up for declines in its pay-per-view business. All of its PPVs, including “WrestleMania,” are now shown on the streaming service. While they are also available on most PPV providers at around $50 per event, the WWE Network reduces the amount of revenue each individual event generates for the company going forward.

“The company’s valuation could take a heavy beating this morning, as the new domestic TV deal with NBCU likely disappointed investors over limited visibility, believability on the ultimate success of the Network,” Benchmark analyst Mike Hickey said. “The initial subscriber number from the Network disappointed investors, and we have received limited visibility to where subscribers are currently tracking or where churn will ultimately settle; an uncomfortable silence that will likely extend until early August. We remain optimistic for the global success of the WWE Network, but consider the OIBDA growth shift to the Network as an unfavorable risk rebalance over the near term.”