More on WWE's TV Deal - Stock Tumbles Following Announcement
Posted by Jeremy Thomas on 05.15.2014
Plus some insight into WWE Network numbers...
- WWE's stock did a header following the announcement of their deal with NBC/Universal. The stock closed at $19.93, which was up 3%, but is down $4.24 (21%) in after-hours trading. The reason for this is the announcement that the new deal will be for $200 million, which is contrary to Vince McMahon's statement on last year's earnings call that they expected to at least double the value of their TV deal. Last year's numbers were about $160 million.
You can see the full financial details in a press release here. The company is using a bit of wordsmithing (which may be perfectly reasonable) in the release, noting that the $200 million number is "representing an increase of more than $90 million, that is nearly three times the increase achieved in the previous round of negotiations."
The release also notes that there are about 77 milion broadband homes between the US and certain international markets that "have an affinity" for WWE content and that based on the percentage of homes who have signed up for the WWE Network, they should have between 2.5 million and 3.8 million subscribers. They estimate that 1.3 million to 1.4 million subscribes will be required for the network to offset the "complete cannibalization of the company's Pay-Per-View and SVOD businesses" as it would generate about $40 million, on par with the company's Pay-Per-View and SVOD businesses in 2012.