Sports Business Report: WWE Posts Record Quarterly Revenue, Renews Australian Broadcast Partnership

Editor’s Note: Welcome to a daily column we run here at BroBible breaking down the day’s biggest stories in sports finance with commentary from the sports money and sports fanatic perspectives. It comes to us via our friends at JohnWallStreet, publisher of a free e-mail newsletter focused on sports related public equities and their subsidiaries. You can sign up here.

WWE Posts Record Quarterly Revenue, Renews Australian Broadcast Partnership

Less than a month after the WWE announced U.S. broadcast deals for Monday Night Raw and SmackDown Live (worth $468 million/year), the wrestling promotion renewed its partnership with Foxtel for a 19th consecutive year. The newly signed pact ensures the WWE’s two highly-rated weekly cable shows (and PPV events) will continue to air live in Australia, but also gives FOX8 the rights to re-air Raw and SmackDown in prime-time on Tuesday and Wednesday evenings; Foxtel will carry one-hour versions of each program, in primetime, each week on Fox Sports and will make the shows available on demand following the initial broadcast. Financial terms of the deal were not disclosed. 

Howie Long-Short: When the WWE announced their U.S. deals in early July, we wrote “WWE isn’t done yet either, broadcast deals in 5 of their 6 largest international markets are also coming up for renegotiation. It’s now projected that the company’s 7 largest TV deals in aggregate will grow from $235 million in 2018 to an average of $542 million by 2021.” The 7 markets I was referencing were the US, UK, India, Canada, Latin America, Middle East and South Africa, so, any revenue coming from the Australian market would be on top of that figure.

Q2 ’18 was another landmark quarter for the WWE. The company posted record quarterly revenue (+31% to $281.6 million) and reported it had nearly doubled operating income (to $21.2 million) from the prior year quarter, news that sent share prices to a new all-time high ($85.93) on Thursday July 26th. The +31% revenue increase represents the company’s greatest YoY sales increase in 2 years.

In addition to strong financials, WWE reported significant growth in digital engagement; video views rose +58% YoY (to 14.4 billion) and the number of hours consumed watching WWE content across digital/social grew a staggering +71% YoY (to 509 million). The company also just crossed the 30 million subscriber threshold on YouTube, a figure that represents a larger following on the platform than that of the NBA, NFL, MLS, MLB, NHL, PGA TOUR and NASCAR combined.

While YouTube subscribers don’t directly correlate into dollars, WWE Network subscriptions do; and the company reported paid subs rose +10% (to 1.8 million) during the quarter ending June 30th. Co-President George Barrios said the company plans on growing its international subscriber base by adding more localized content and languages.

WWE shares are up +268% over the last 12 months, closing at $77.60 on Wednesday.

Fan Marino: The WWE recently announced it will host the company’s first all-women’s PPV event, entitled Evolution, on October 28th. The event, which will be live streamed on the WWE Network, will feature more than 50 female competitors from Monday Night Raw, SmackDown Live, NXT and NXT UK rosters. While current stars like Sasha Banks and Ronda Rousey are sure to be in attendance, so too are WWE Hall of Famers Trish Stratus and Lite; both already confirmed to be participating.

Speaking of Hall of Fame wrestlers, Hulk Hogan was recently reinstated by the WWE into their Hall of Fame after a 3-year suspension (racism). While that news does little for me (I don’t want to watch 64-year-old Hogan wrestle), whispers of the Rock’s potential return at WM35 are thrilling. It would only be fitting that the biggest mainstream star in the organization’s history would headline the marquee show.

Interested in Sports? Sports Business? Sports Finance? Sign-up for our free daily newsletter

TBT Thriving in Year 5, JWS Talks with Reigning 2x MVP Kyle Fogg

The Basketball Tournament (TBT) will culminate tomorrow (8.3.18) with a $2 million, winner-take-all game live on ESPN. The event, now in its fifth year, is thriving; TBT signed a major sponsorship agreement with PUMA for the ’18 tournament, has placed more games live on ESPN than ever before and is using a radical solution designed to create excitement (and eliminate the incessant fouling) at the end of games. We had the chance to connect with the reigning 2x MVP and Back-to-Back-to-Back TBT Champion (as a member of Overseas Elite) Kyle Fogg, just ahead of today’s semifinal contest, to talk about PUMA’s involvement and his decision to play overseas instead of pursuing an NBA career.

JWS: Puma is sponsoring The Tournament and outfitting the teams (uniforms, shooting shirts), but players are permitted to wear the sneaker brand of their choice. That’s not the case for your professional team, though is it?

Kyle: The Chinese Basketball Association is sponsored by Li Ning, the same brand that Dwayne Wade and C.J. McCollum are signed with; so, everybody has to wear their shoes. If you wear another brand, you must cover the logo. I wear Nike’s and cover the logo, but this year I’ll probably wear the new McCollum’s that came out. I won’t be personally sponsored by them, but it will be OK to wear those shoes since the league is sponsored by that brand. Players that have shoe contracts with other brands are allowed to wear their signature shoe. There are guys on the Chinese National Team who are sponsored by Jordan Brand and they’re allowed to wear what they want, they don’t have to cover the logo.

Editor Note: PUMA’s participation in TBT is notable as the company chose just 2 partners to invest in as it relaunches itself back into the basketball space; the NBA is the other. PUMA has also committed to offering a blanket endorsement contract to any TBT player that makes it to the NBA during the ’18-’19 season. It’s certainly possible, 16 players did it last year.

JWS: You played one season in the D-League, back when player compensation was low; that’s no longer the case with 2/3 of the players making $70,000 + medical. If that offer was on the table back when you made the decision to go overseas, would you have stayed? 

Kyle: I decided to go overseas just because the money wasn’t great in the D-League. I wanted to be able to help my mom and make some money while still doing what I love. If the compensation was better, I probably would have thought more about sticking it out and trying to make the NBA; I think that’s why a lot more guys are doing that now, it’s possible to make a living now playing here (U.S.).  

Editor Note: Kyle is playing under a 2-year $2 million contract in the CBA.

Howie Long-Short: Puma SE (PMMAF) reported a +42% YoY increase in profits (to +/- $36 million) on revenues that rose a currency adjusted 15% YoY (to $1.2 billion) during Q2 ’18, as all regions and product segments reported double digit growth. The performance would have been stronger had euro been stronger, the national teams they sponsor performed better and if they were seeing returns (not just marketing expenditures) on their basketball business. Shares dropped -5.5% on the news and have continued decline since, closing on Wednesday at $500.91.

Fan Marino: Kyle Fogg was a part of University of Arizona legend Lute Olson’s final recruiting class. A 4-year player, Fogg finished his senior year on the All-Pac12 first team in 2011-2012. I had to ask Kyle a few Wildcat related questions.

Fan: How come there is no Arizona team in The Tournament?

Kyle: Most of the guys are in the NBA and they can’t play.

Fan: Who was the best player you played with at Arizona?

Kyle: Derrick Williams. His sophomore year was unbelievable. He dominated everyone, I’d never seen anything like that. He was unstoppable.

Editor Note: These 2 videos highlight the most memorable moments from Derrick’s sophomore season. Enjoy.

Game saving block vs. Washington

32-point performance vs. Duke  

Interested in Sports? Sports Business? Sports Finance? Sign-up for our free daily newsletter

What is JohnWallStreet?

JohnWallStreet, located at the intersection of sports and finance, is a destination for the educated sports fan.

While we won’t be publishing “hot takes” on LeBron’s relative greatness to Jordan, we will be offering up the most relevant sports related business news, in easily digestible bites, with commentary from both the sports money and sports fanatic perspectives.

We’ll cover publicly traded professional teams & stadiums (MSG, RCI, BATRA, MANU), television networks (DIS, FOXA, CMCSA, CBS, TWX, MSGN), apparel & footwear companies (NKE, UAA, ADDYY, FL, LULU), equipment companies (GOLFELY, FIT), ticketing companies (EBAY, LYV) content and facilities providers (CHDN, DVD, ISCA,TRK, LMCA).  If it trades on Wall Street, and has a sports angle, it’s in our wheel house.

Howie Long-Short and Fan Marino will be providing their expert opinions on each story. They have slightly different areas of expertise. Fan Marino is a firm believer that the SEC is the premier football conference. Howie Long-Short knows it as the Securities & Exchange Commission. Fan Marino lives and dies with the college selection of 5 star, blue chip recruits. Howie Long-Short spends his days analyzing blue chip stocks. Howie Long-Short knows that Black Monday occurred on October 19th, 1987. Fan Marino swears it happens every January after Week 17. You get the point.

Interested in Sports? Sports Business? Sports Finance? Sign-up for our free daily newsletter