WWE in Financial Trouble?

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WWE in Financial Trouble?

Things just can’t seem to go right for the WWE and Vince McMahon lately. First, AEW (All Elite Wrestling) gets a TV deal, and he launches a war on them, then the ratings for 2019 are among their worst ever, if not the worst. But then their stock continues to drop. All of this has fans wondering is the WWE in financial trouble, and will this be the end of the sports entertainment giant?

Stock losses are mounting

2020 hasn’t been kind to the WWE as their stocks have fallen more than 30% so far this year and show no signs of stopping, costing them an estimated billion dollars overall. In the midst of this, they had two co-presidents, Michelle Wilson and George Barrios, quit, which only caused the stocks to continue plummeting. Add to that the company’s report of “considerable uncertainty” about the immediate future and things aren’t looking good.

At least, for the moment.

According to cnn.com, the WWE said on Thursday it was considering “alternative strategic options for the WWE Network.”

The WWE Network is their streaming service that offers old shows from WWF and WCW years as well as pay-per-views for $9.99 a month. They also offer new pay-per-views for free as part of the service, and that’s where this statement could cost them.

It’s been reported that the WWE wants to sell those events to networks or other streaming services “seeking content.” While it’s hard to imagine they’d remove them from their network package, it’s a concern fans have, and it will cost WWE subscriptions as fans go subscribe instead of paying the $60+ for the pay-per-views through cable providers.

The fact of the matter is, the WWE doesn’t hold the interest for many to shell out that kind of cash to watch events filled with lackluster matches.

And that’s been part of the WWE’s problem. Their in-ring product is bland and suffering, most of their top superstars are mid-carders at best, and they ignore their fans. This has led to lower interest in the United States, as shown by their poor ratings in 2019.

On the plus side, WWE reported fourth quarter earnings of 78 cents a share, topping forecasts and earning $323 million — 20% more than last year.

But considering the WWE is currently being investigated for possibly violating federal security laws, as reported by ringsidenews.com and their stocks are may not stop falling for some time. Often, it doesn’t matter if someone is innocent or guilty. What matters to investors is whether or not they’ll lose money. And losing money for a publicly traded company is not good for the CEO.

There’s always hope

Always the salesman and businessman, Vince McMahon has remained confident that things will turn around.

“We believe the value of live sports will continue to increase, particularly in today’s evolving media landscape, and we are well positioned to take advantage of this trend to maximize the value of our content.”

In other words, he’s banking on the XFL being a success this time. I recently reported that he knows and is willing to take a $375 million dollar loss over the next three years in the hope new TV contracts will cover the costs and the league will start making a profit.

There’s an old saying about never putting all your eggs in the same basket. Basically, having diverse interests is important in the event another doesn’t work out. It makes sense and wish McMahon the best of luck.

This is also a bold gamble by a man who has made a living out of seeing the big picture and acting on it, and while the WWE and McMahons still have incredible revenue power, there’s always the possibility of collapse.

To be fair, losing the WWE would be a bad thing for wrestling fans as we’d lose an outlet, but it could help other younger companies grow and take the spot. The trick is who will be able or willing to do so?

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