The WWE had one major change and hints of a second one when it comes to business, which led to a major drop in the stock price.
WWE announced suddenly on 1/31 that co-Presidents George Barrios and Michelle Wilson were no longer with the company. No replacements were announced, and no substantive reason was given past there was a disagreement regarding the future direction of the company.
Barrios in particular had been the face of the company to the major stock analysts, who saw his departure as leading to major uncertainty. The departure also included notification that the financial numbers for the fourth quarter would be at the low end of projections.
“As you know, the board and I recently announced a management transition,” said McMahon. “This decision did not reflect a change in our strategy. It was made after careful consideration. We remain highly focused on growing the value of our content, furthering international expansion, and engaging fans across all platforms.”
We’re looking for reports from Tulsa tonight with the dark matches at the WWE Smackdown tapings and NXT in Citrus Springs, FL to [email protected]
We’re also doing polls this weekend for both New Japan shows in Sapporo, thumbs up, thumbs down or thumbs in the middle along with a best and worst match to [email protected]
No WWE house shows this weekend. It’s the new deal. House shows lose money so they are cutting way back on them.
CMLL TONIGHT AT ARENA MEXICO AT 9:30 P.M. ON THE CMLL YOU TUBE PAGE
Robin & Arkalis vs. Akuma & Espanto Jr.
Drone & Fuego & Diamond vs. Kawato San & Okumura & Virus
Stuka Jr. & Atlantis Jr. & Star Jr. vs. Negro Casas & Mephisto & Ephesto
Soberano Jr. vs. Templario
Angel de Oro & Titan & Niebla Roja vs. Gilbert el Boricua & Euforia & Gran Guerrero
A look at the current WrestleMania card, as well as what big name is being talked with, what big name is not on the card, as well as the Royal Rumble decision making is the lead story in the new issue of the Wrestling Observer Newsletter.
We also have complete Rumble coverage including a table with each participant, how long they were in, eliminations, number of entry and exit and more. We look at Vince McMahon’s change in the winners in the last week, the stories told in the Rumble, why the winners were changed, the return of Edge, his new contract, how he got such a big deal, the WWE injuries, the Andrade drug test failure, those who were not in the Rumble and why, business notes on the way and what are expected to be the biggest wrestling crowds of the year. We also look at viewer interest in the show, the interest as compared to the UFC 246 show, plus match-by-match coverage with star ratings and poll results.
The new issue also covers:
The sale of Pro Wrestling NOAH to CyberAgent, more on big companies buying wrestling franchises, plans for NOAH under the new ownership and the relationship with DDT as it stands right now.
UFC 246, with show notes, business notes and match-by-match coverage.
Worlds Collide with match-by-match coverage, star ratings, business notes and what did and didn’t work on the show.
Changes in the WWE house show business and why. We look at both the positive and negative of it. We also look at the behavior of Vince McMahon at the Rocky Johnson funeral, the incident with Brock Lesnar and Matt Riddle, new contracts signed, wrestler asking for her release, WWE Canadian numbers, Charlotte Flair talks Kairi Sane concussion, new WWE signees, the most-watched shows on the WWE Network and house show coverage.
New Year’s Dash from New Japan, the Jushin Liger retirement ceremony, match-by-match coverage with star ratings and the angles coming out of the show.
A bio on Hercules Ayala, one of the biggest stars of the glory days of Puerto Rican wrestling, covering how he started there, his work outside Puerto Rico, how he first got into Stampede Wrestling, his biggest matches on major stadium events including major bouts with Ric Flair and Randy Savage, his heel turn with Carlos Colon, the aftermath of the death of Bruiser Brody and how he was used to try and get the business back.
NWA Hard Times PPV show.
A bio on Carlos Rocha, the Portuguese star who was one of the biggest drawing cards in North America in 1971 and 1972 with his bloodbaths against The Sheik and Abdullah the Butcher. We look at those feuds as well as look back at The Sheik in Toronto during the period when he was one of the biggest single city draws in pro wrestling history, and how his undefeated streak put limits on the Rocha feud. We look at how Sheik vs. Rocha was the biggest drawing Toronto feud of the era, and why he outdrew Andre, Bruno, Bobo Brazil and all the other major Sheik foes in Toronto. We also look at his return to North America and his retirement run in the WWWF.
Regarding the Wednesday numbers, we’ve got full details, demos that each side won, how every segment did and what match ended up as the difference maker.
Full coverage of all the WWE and AEW television shows from the past week.
In-depth looks at the ratings of all the major shows, the key demos and quarters for AEW and WWE, what happened head-to-head and what can be learned from them.
Results of all the major pro wrestling events around the world over the past week.
ORDERING INFO: Order the print Wrestling Observer right now and get it delivered via mail, by sending your name, address, Visa or Master Card number and an expiration date to [email protected] or by going to www.paypal.com directing funds to [email protected].
Rates in the United States are $14.50 for 4 issues, $35.50 for 12, $70 for 24, $116 for 40 and $149.50 for 52.
In Canada and Mexico, the rates are $16 for 4, $27 for 8, $38.50 for 12, $76 for 24, $126 for 40 and $162.50 for 52.
For the rest of the world, rates are $18 for 4, $48.50 for 12, $93 for 24, $155 for 40 and $201.50 for 52.
If you order by mail with a check, cash or money order to P.O. Box 1228, Campbell, CA 95009-1228, you can get $1 off in every price range.
FRIDAY NEWS UPDATE
There really isn’t a lot more on Vince McMahon’s firing of co-Presidents Michelle Wilson and George Barrios yesterday. It came out of nowhere. Those in the company have no answers as to why. Stock insiders claim it was due to a disagreement regarding investing money into the company. The profit margin for the fourth quarter and the year is at the low end of projections, and for the year, was down $20 million from the original guidance. WWE said yesterday that annual OIDBA will be around $180 million, at the beginning of the year they projected $200 million. In October they changed that projection to from $180 million to $190 million. Keep in mind the original guidance for the year only had one Saudi show and no NXT television revenue worked in. Both did sell millions of dollars of WWE stock back in July. President of WWE is a tough position because everyone in it gets dumped, and even Vince’s own wife didn’t last in that position. It’s always said when you work too closely with Vince, and are not family, you are going to have a shelf life.
The stock closed today at $48.88 per share, down $13.42 per share from yesterday’s close. It’s an overreaction because the reality is the key TV deals are still in place for years and the company is idiot proof as far as making money for years. That said, Wall Street was stunned and a lot of questions regarding earnings being lower than expected were being asked. And Wall Street doesn’t even know about the house show cutback or the decline in the interest of the Rumble. Another big thing will be the network subscription number on 12/31 which will be announced in six days. It is possible it could fall below 1 million if it stays above 1 million, it will be a sign that putting NXT on television had no real effect on network numbers. But that’s an if.
Analysis have had very divergent views of the stock. Morgan Stanley has just its projected price to $54, Evercore ISI to $50 and Loop Capital to $50. But MKM Partners still lists a projected price of $92.
WWE announced that Frank Riddick III, who will be the interim CFO until they find a permanent person for the spot, will be paid $33,333.33 per week.
Bret Hart announced that he will be having surgery to remove basal cell carcinoma, a form of skin cancer.
WWE
Roku and FOX are at a negotiations stalemate. Roku’s distribution deal ends tonight. Roku claims they have been unable to reach a new deal with FOX and FOX also declined an extension to the current deal.
UFC
Diego Sanchez was suspended for three months for testing positive for Ostarine and S-23 from a test that came back on 10/26. That means his suspension is already over. Sanchez had one of his supplements tested and both substances showed up and thus his suspension was only three months instead of two years since that indicated inadvertent usage.
Similarly, Ovince Saint Preux tested positive for Ostarine and di-hydroxy-LGD-40-33 and two other drugs in an 11/1 test. He submitted his supplements to be tested and they showed the supplements contained the banned substances. He also was given a three month suspension which is also now over.
Blagoi Ivanov vs. Augusto Sakai has been added to a 5/9 PPV show from Sao Paulo, Brazil. Marion Reneau vs. Ketlen Vieira was also agreed to on the how according to an original report from MMA Junkie.
Cody Stamann vs. Raoni Barcelos is earmarked for the 3/28 show in Columbus, OH.
AEW
Riho and other women from Stardom were on this week’s episode of S.W.A.T. on CBS. The team had to go to Japan to transfer a prisoner who escaped and Riho played the prisoner’s girlfriend. She played a wrestler and there were wrestling scenes in the show.
MISCELLANEOUS
Mistico will be out two to three months after surgery to remove a screw that came loose stemming from a 2014 surgery when he broke his leg. Doctors put a rod in his leg to help heal it and one of the screws became loose. They had been building a Mistico vs. Gran Guerrero big match that will have to be put on hold.
Defy has its third anniversary show tonight in Seattle at Washington Hall with the Jurassic Express from AEW, The Strong Hearts form AEW, Killer Crown, plus Schaff vs. Artemis Spencer in a ladder match and Josef Samael & Jacob Fatu vs. The Amerikan Gunz in a tag team title match.
Impact announced that there will be an Ultimate X match on its 4/3 show in Ybor City, FL.
CWO on 2/9, 2/17 and 3/12 at The Rockpile Bar & Nightclub in Toronto.
All Star Wrestling on 2/29 in Vancouver, BGC at the Maritime Labour Centre.
Combate Americas on 2/21 in Mexicali, Baja California which will air on Univision, Univision Deportes, AXS in the U.S. and Televisa 5 in Mexico. The main event has Rafa Garcia (11-0) vs. Humberto Bandenay (18-7, 1 no contest) for their lightweight title, plus Yasmine Jauregui (4-0) vs. Karen Cadillo (4-1).
River City Wrestling on 2/8 in San Antonio at The Grand Event Center.
559 Fights on 2/8 in Orange Cove, CA at the Community Center will crown a middleweight champion with Jared Velasquez (4-3) of Orange Cove against A.J. Perez (3-1) of Fresno.
WWE announced a big management shakeup today, with two members of their leadership no longer with the company.
A press release that was issued this afternoon revealed that co-presidents George Barrios and Michelle Wilson are gone from WWE effective immediately and will no longer serve on the company’s board of directors.
“I would like to thank George and Michelle for their 10+ years of service and contributions to the organization,” Vince McMahon said in the press release. “I am grateful for all that was accomplished during their tenure, but the Board and I decided a change was necessary as we have different views on how best to achieve our strategic priorities moving forward.
“We have a deep team of talented, experienced and committed executives across the organization, and the Board and I have great confidence in our collective abilities to create compelling content, engage our global fanbase across platforms, increase revenues, and drive shareholder value.”
WWE noted that Frank A. Riddick III has been named the company’s interim Chief Financial Officer. The company has begun a search for a permanent Chief Financial Officer and Chief Revenue Officer.
Riddick has been on WWE’s board of directors for more than 11 years.
Barrios and Wilson were promoted to co-presidents and appointed to WWE’s board of directors in 2018.
As of this writing, WWE stock is down 20 percent in after hours trading.
WWE will announce their fourth quarter and full year 2019 earnings results next Thursday.
The subject of Ronda Rousey’s contract was probably the biggest news outside of the financial figures covered at the WWE investors call this morning, along with strong hints regarding multiple suitors for the television deal that expires in the United States in September 2019.
Paul Levesque said that they are finalizing the Rousey contract right now and that it was a multi-year deal. WWE will be her priority and will be the first option on her schedule. He said that Rousey wants to be part of the DNA of the WWE.
The other major news was that George Barrios and Michelle Wilson have been promoted to Co-Presidents of the company. Vince McMahon will remain as CEO. McMahon insisted once again that with the start-up of the XFL, that his duties in WWE will remain unchanged and that the league would be run by football people.
As far as the numbers went, WWE produced more revenue in the fourth quarter, at $211.6 million, than ever before, but overall profits were down. WWE profits for the quarter were $4.8 million, although that was largely due to $18.9 million in income taxes in the quarter. In 2016, the quarter generated $194.9 million in revenue and $8.0 million in profits, but the tax was $4.8 million.
For the year, WWE produced a record $801 million in revenue and generated $32.6 million in profits. In 2016 they generated $729.2 million in revenue and $33.8 million in profits.
The stock at this writing is up 70 cents per share to $34.69.
The decline in profits was due to a one-time charge of $11.3 million from the enactment of a new tax law, $10.9 million of which was a non-cash charge due to the remeasurement of deferred tax assets and $400,000 regarding foreign earnings.
However, Donald Trump’s new tax law change will greatly benefit the company in 2018 and lead to a significant increase in profits. It is a virtual lock that profits will finally break past the pre-Network numbers in 2018.
So while profits were slightly down this year, normalized they would have been up, although still below pre-Network years.
For the year, profitability was up in most segments, with the key being television, which will grow in revenue in 2018 due to escalators in the television contracts, and is expected to grow greatly in 2020 when new contracts are in effect.
WWE was hinting of multiple suitors to drive the television deals up that are currently in negotiation. As reported in the new Observer, negotiations going on with UFC for a new television deal have seen money offers significantly increase even with greatly declining ratings. WWE’s ratings currently are steady from the past year.
For the year, only home entertainment, arena merchandise, and the movie division showed decreased profits.
In the fourth quarter, there were declines in profits of arena events, largely due to running two fewer shows and mostly due to a significantly less successful European tour. Also down were profits in arena merchandise and a slight decline in WWE Shop profits even though revenue in that sector was up.
On December 31st, the WWE Network had 1,065,000 U.S. subscribers, 406,000 subscribers outside the U.S., and 76,000 people getting it for free, for a total of 1,547,000. One year earlier, the Network had 1,033,000 U.S. subscribers, 370,000 subscribers outside the U.S., and 70,000 people getting it for free, for a total of 1,473,000. The outside growth was due to it being available in more places.
As far as paid numbers, they were almost identical with our predictions of 1,068,000 in the U.S.
During the fourth quarter, there were 413,000 people who dropped the Network and 377,000 who added, for an overall decline of 36,000. Last year’s fourth quarter saw a decline of 41,000.
