Sports entertainment powerhouse WWE, which has agreed to merge with Endeavor’s UFC to create a live sports and entertainment titan, reported higher second-quarter earnings and record revenue on Wednesday, exceeding Wall Street expectations for several financial metrics. The performance was powered by a record-breaking WrestleMania in early April, as well as higher viewership and live events ticket sales.WWE’s latest edition of its big annual event, the two-night WrestleMania 39 in Los Angeles, on April 1 and 2, broke various records. The company previously said it was the highest-grossing WrestleMania in WWE history, breaking records in viewership, gate, sponsorship, merchandise, and social media presence. For example, WrestleMania 39’s gate revenue exceeded $21.6 million, with sponsorship revenue exceeding $20 million and merchandise sales up by 20 percent from the previous year’s record.Each WWE premium live event (WrestleMania, Backlash and Night of Champions) in the latest quarter “set global unique viewership records, with year-over-year increases of 29 percent, 34 percent and 45 percent, respectively,” the company also said on Wednesday. Live events revenue jumped 51 percent, “reflecting continued strong demand for domestic and international events.”WWE also touted its ratings trends. “Viewership for WWE’s weekly flagship programs, SmackDown and Raw, increased 26 percent and 19 percent, respectively, in the people 18-49 demo, significantly outperforming overall broadcast and cable television, which both declined 12 percent,” the firm said.WWE’s second-quarter revenue of $410.3 million marked an increase of 25 percent over the same period of 2022 and a quarterly record. Operating income of $87.3 million rose 26 percent, while adjusted operating income before depreciation and amortization (OIBDA) jumped 54 percent to $140.7 million, also a quarterly record. Net income for the second quarter rose from $49.0 million to $52.0 million, making for an earnings gain from 58 cents to 67 cents per share.“We generated strong financial results in the quarter, highlighted by record quarterly revenue and adjusted OIBDA,” said WWE CEO Nick Khan. “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 premium live events such as Backlash, Night of Champions and Money in the Bank, all delivered record viewership. Our weekly flagship programs, Raw, SmackDown and NXT, delivered strong double-digit growth in viewership, significantly outpacing overall industry performance.”The sports entertainment giant on Wednesday also reaffirmed its expectations for 2023 adjusted OIBDA in the range of $395-$410 million, which would be an all-time company record result. WWE also reaffirmed its projection to generate record revenue in 2023.Early this year, WWE, led by Khan and chief content officer Paul “Triple H” Levesque, saw co-founder Vince McMahon return to the boardroom as executive chairman after he had last year retired amid a misconduct probe, including alleged hush money payments to former employees, that was led by the board.“During the three and six months ended June 30, 2023, the company incurred $5.3 million and $7.1 million, respectively, of expenses related to costs incurred in connection with and/or arising from the investigation conducted by the special committee of members of the company’s board of directors, related revisions to the company’s financial statements and other related matters,” WWE shared in an update on Wednesday. “Mr. McMahon has agreed to review in good faith and reimburse the company for all reasonable costs incurred in connection with and/or arising from the investigation,” related revisions to the firm’s financial statements and other related matters. To date, McMahon has paid approximately $17.4 million to reimburse WWE for costs that have been incurred and paid by the company, it reiterated a previously disclosed figure in its latest earnings report.After WrestleMania weekend, the mega-merger with mixed martial arts firm UFC was unveiled. The combined company will be 51 percent controlled by Endeavor and 49 percent owned by WWE shareholders. The partners expect the deal to close during the second half of 2023.For the three and six months ended June 30, WWE’s financial results included $18.8 million and $25.4 million, respectively, of “expenses related to the strategic alternatives review and agreement with Endeavor,” the company also detailed on Wednesday.
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