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WWE sets another financial record while addressing the Vince-sized elephant in the room

WWE released its financial results for the fourth quarter (Q4) and full year of 2022. The company set a new record by generating 1.3 billion dollars of revenue in 2022.

Here is the information they specifically highlighted about their performance in Q4 2022:

  • Revenue was $325.3 million, an increase of 5%; Operating income was $62.7 million, a decrease of 22%; and Adjusted OIBDA was $90.2 million, a decrease of 4%
  • Returned $8.9 million of capital to shareholders through dividend payments
  • Crown Jewel was the most viewed international event in WWE’s history. Domestic unique viewership on Peacock increased 70% over the prior year event
  • Each WWE domestic premium live event (Extreme Rules and Survivor Series) was the most viewed event in its history with year-over-year increases of 36% and 46%, respectively, in domestic unique viewership
  • WWE announced a multi-year extension of its partnership with MultiChoice to expand the distribution of the Company’s content in Sub-Saharan Africa
  • In January 2023, WWE held Royal Rumble at the Alamodome in San Antonio, TX. The event was the most viewed Royal Rumble in WWE’s history, with a 52% year-over-year increase in domestic unique viewership, and generated the highest gate in the event’s history

Moving on to their financial results for the full year, WWE explained why they achieved record-setting revenue in 2022:

“Revenue increased 18%, or $196.3 million, to $1.3 billion, primarily due to the increased monetization of content, the return to a full year of ticketed live events and the staging of an additional large-scale international event in 2022.”

“The increase was also related to an increase in core content rights fees for the Company’s flagship programs, Raw and SmackDown, and the monetization of third-party original programming.”

The “additional large-scale event” refers to the fact that WWE ran two separate shows in Saudi Arabia in 2022, as opposed to just one such event in 2021. WWE broke their revenue record in 2022 because of escalating TV rights fees for Raw and SmackDown, running two Saudi shows, and having a full year of live tickets being sold (which wasn’t the case in 2021 due to the global pandemic).

Not surprisingly, WWE is thrilled about its business outlook for 2023, and expects to set another revenue record:

“The Company is targeting Adjusted OIBDA of $395 - $410 million for the full year 2023, which would be another all-time record result. The Company also expects to generate another year of all-time record revenue in 2023. This anticipated performance reflects an expected increase in media rights fees for the Company’s flagship weekly programming and premium live events, as well as a full live events touring schedule, including two large-scale international events, and an increase in advertising and sponsorship revenues. The Company anticipates that 2023 operating expenses will be relatively flat as an increase in costs to support the creation of content are offset by a decline in third-party original programming expenses, due to the timing of the production of premium WWE-themed series and specials, as well as a decline in eCommerce expenses as a result of the transition of the Company’s digital retail platform to Fanatics.

Management believes WWE is well positioned to capitalize on significant future opportunities. In 2023, key initiatives that could have meaningful implications on the Company’s performance include the renewal of the domestic licensing agreement for NXT, the renewal of licensing agreements for WWE content in certain international markets, the monetization of new third-party original programming, growth in advertising and sponsorship sales, and the performance of the latest installment of the Company’s flagship video game franchise, WWE 2K23.”

WWE also had to address all the payments related to Vince McMahon’s hush money scandal and the investigation into that matter, which increased the company’s operating expenses in 2022:

“As previously announced, a Special Committee of independent members of the Board of Directors was formed to investigate alleged misconduct by Vincent K. McMahon and another executive, who is no longer with the Company. In November 2022, the Company disclosed that the Special Committee investigation had been completed and the Special Committee had been disbanded. For the three and twelve-month periods ended December 31, 2022, the Company’s consolidated pre-tax results included the impact of $2.3 million and $21.7 million, respectively, of expenses related to the Special Committee investigation. Mr. McMahon has agreed to reimburse the Company for reasonable expenses related to the Special Committee investigation, net of any insurance proceeds. For the three and twelve-month periods ended December 31, 2022, the Company’s consolidated pre-tax results also included the impact of $7.4 million of expenses reflecting certain payments that Mr. McMahon has agreed to make (including amounts paid and payable in the future). The $7.4 million of payments were or will be paid by Mr. McMahon personally.”

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