WWE’s Q1 financials focus on company’s hot product, not revenue decline

WWE released its financial results from the first quarter of 2023.

The report covers the three months before WrestleMania 39, and the bombshell news about the planned Endeavor acquisition & merger with UFC. Both still get ample coverage, however.

Here is the information they specifically highlighted about their performance in Q1 2023:

• Revenue was $297.6 million; Operating income was $53.1 million; and Adjusted OIBDA1 was $84.2 million

• Returned $8.9 million of capital to shareholders through dividend payments

• Each WWE premium live event (Royal Rumble and Elimination Chamber) set domestic unique viewership records with year-over-year increases of 52% and 54%, respectively

• Viewership for WWE’s weekly flagship programs, Raw and SmackDown, both increased 7%, significantly outperforming overall cable and broadcast television, which declined 15% and 6%, respectively

• North American Live Events ticket sales revenue increased 52% over the prior year period, reflecting a 37% increase in average attendance

• In April, WWE announced an expansion of its partnership with Fanatics, with Fanatics assuming management of WWE’s on-site event merchandise business as of May 1, 2023

The revenue figure is down from the previous quarter, and year-over-year from Q1 2022. WWE attributes that to their shifting the first show in Saudi Arabia into the second quarter this year (Elimination Chamber was in Feb. ‘22 while this year’s first trip to the KSA will be this month’s Night of Champions).

As mentioned above, WrestleMania also technically happened in Q2. The report still dedicates a section to reiterating the successes of that event, including it being the highest-grossing & most-attended event in company history, increases in merchandise sales & sponsorship revenue, and improved domestic & global streaming viewership.

Offsetting the lack of those events was a big uptick in North American ticket sales, as well as the contractually negotiated increases in their media right fees which routinely happen. Overall, the report presents a company with a hot product that consumers want to see —either live and on their screens

CEO Nick Khan put his spin on that with this quote from the report:

“We are off to a strong start in 2023. Operationally, we continue to effectively execute our strategy, including staging the most successful WrestleMania of all time in early April. WrestleMania, as well as our other successful premium live events such as Royal Rumble and Elimination Chamber, and strong viewership for our weekly flagship programs, Raw and SmackDown, further expanded the reach of our brands and enhanced the value of our content.

“Strategically, we entered into a historic agreement with Endeavor to create a one-of-a-kind company. With WWE and UFC we intend to form a global sports and entertainment business that has the potential to unlock vast growth opportunities for both businesses. We believe that bringing these two iconic and highly complementary brands together will allow us to increasingly capitalize on the rapidly expanding, global appetite for live sports events and premium entertainment content, with the goal being to maximize value for our shareholders.”

Regarding that Endeavor/UFC deal, much of what’s covered in the report are high-level details they’ve shared before. WWE does reiterate that the goal is to close on it in the second half of this year.

The report is out ahead of an investor conference call with Khan, Chief Content Officer Paul Levesque, and Chief Financial Officer Frank Riddick this morning. We’ll have more on that later.