WWE Survives COVID with a Little Help from Peacock

Company reports net income of $43.8 million.

Last week WWE reported its first quarter 2021 financials, revealing a bit of optimism after 2020 shut down the company’s popular live events. Revenue for the first quarter was $263.5 million, a decrease of 9% or $27.5 million, reflecting the loss of 2020 ticket sales and related merchandise sales. This revenue loss was partially offset by the upfront revenue received for certain WWE Network intellectual property rights. The network’s move to NBCUniversal’s Peacock on March 18 will likely continue to improve WWE’s financial situation.

“During the first quarter, we continued to effectively execute our strategy, demonstrating our ability to adapt to a challenging live event environment and to expand the reach and monetization of our content in a changing media landscape,” said Vince McMahon, WWE chairman and CEO, in an April 22 news release.

“The launch of WWE Network on NBCU’s streaming service, Peacock, the multi-year extension to distribute NXT on USA Network and the successful staging of WrestleMania illustrate the enduring and increasing value of the WWE brand as the foundation for long-term growth,” McMahon added.

Other financial highlights for the quarter include the following:

  • Revenue from live events was $0.5 million, a decrease of 97% or $17.0 million because of lack of live events last year. The revenue earned from events in 2020 came from 41 events held during the first quarter. Operating income from live events was $4.5 million, an increased loss of 41% or $1.3 million, because of canceled events.
  • Operating income was $65.1 million, an increase of 22%, or $11.8 million.
  • Adjusted OIBDA was $83.9 million, an increase of 9% or $6.6 million.
  • Adjusted OIBDA margin increased from 26.6% to 31.8%.
  • WWE reported net income of $43.8 million, or $0.51 per diluted share, compared to $26.2 million, or $0.31 per diluted share, in the first quarter of 2020.

Operational highlights include the following:

  • WWE has a multi-year agreement with USA Network for NXT which will move the two-hour, live show to Tuesday nights.
  • Digital video viewers were 9.4 billion, a decrease of 2%, but hours consumed were 367 million, an increase of 7% on digital and social platforms.
  • WrestleMania 37 was held in Tampa Bay, Florida to two sold-out crowds of 51,350 fans. This was the first live WWE event with a ticketed audience since the COVID pandemic began last year.
  • WrestleMania Week viewership hit a record high of nearly 1.1 billion video views across digital and social platforms, a 14% increase over the prior years. Nearly 32 million hours of content were viewed during the week, an increase of 9% year-over-year.

Company guidance

In January, WWE issued guidance for the year’s Adjusted OIBDA which they estimate will range between $270 million and $305 million. This will include revenue from WWE’s new relationship with Peacock, the ramp-up of ticketed live events and content rights fees. The company’s first quarter were solid, but primarily as a result of the licensing arrangement between the WWE Network and Peacock. Because the revenue recognition occurred up front, this revenue will not carry over to future quarters.

Insider Take

It seems like NBCU’s Peacock saved the day, at least for the first quarter of 2021. Though WWE will likely not return to its former glory this year, the slow return of live events will give the company hope for the future. Also, though revenue recognition from Peacock came early in the year, WWE can wind down its own platform and get out from under those costs. All things considered, WWE started the year off fairly decently.

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