WWE EARNINGS – Full-Year 2015 Business Break Down – WWE increasingly top-heavy, comparison to 2014 & 2013

After a two-year transformation period, WWE’s core business is now driven primarily by TV Rights Revenue and WWE Network. This follows a period of TV re-negotiations for both domestic and international markets, plus the switch-over from a PPV to Network business model.

The result is WWE is increasingly top-heavy. Their top segments (TV Rights Revenue and WWE Network Revenue) made up 59 percent of total revenue in 2015, up from 54 percent in 2014, and 49 percent in 2013.

WWE has also begun the process of increasing their international presence through the Network. In the past, WWE ebbed and flowed in international markets. Now that the Network is accessible in a vast majority of markets, WWE has a consistent revenue stream to draw from.

2015 Full Year Business Break Down

– Total 2015 Revenue was $658.8 million, up 21 percent from $542.6 million in 2014.

WWE noted that the “Network and Television segments accounted for nearly $100 million (85 percent) of the overall revenue growth.”

Annual Business Profit was $61.6 million, a flip from a $15.5 million loss in 2014 during the Network ramp-up period.

– Domestic Total Revenue was $489.0 million (74 percent of the total), up 15 percent from $426.2 million domestic revenue in 2014.

– International Revenue was $169.8 million (26 percent of the total), a 46 percent increase compared to $116.4 million in 2014.

WWE noted that the revenue increase was “driven by the increased monetization of content (WWE Network) as reflected in the Company’s Media Division, across the EMEA and Asia Pacific regions.”

Media Division 2015 Break Down

– Total Revenue of $425.4 million (65 percent of the total), up 25 percent from $339.9 million in 2014.

Profit was $154.4 million, doubling profit of $75.4 million in 2014.

• TV Revenue was $231.1 million, up 31 percent from $176.7 million in 2014.
• WWE Network Revenue was $159.4 million, up 39 percent from $115.0 million in 2014.
• Home Entertainment Revenue was $13.4 million, cut in half from $27.3 million in 2014.
• Digital Media Revenue was $21.5 million, up three percent from $20.9 million in 2014.

Live Events 2015 Break Down

– Total Revenue of $124.7 million, up 13 percent from $110.7 million in 2014.

WWE attributed the revenue increase to a “9 percent increase in average ticket prices at WWE events in North America, including WrestleMania.”

Also contributing to the increase was WWE ran 11 additional shows, producing more revenue, and expanded the NXT touring schedule to produce more revenue.

– Profit was solid at $38.0 million, up 37 percent from $27.8 million in 2014.

Consumer Products 2015 Break Down

– Total Revenue was $98.4 million, up 26 percent from $78.1 million in 2014.

Profit was $42.8 million, up 33 percent from 2014.

• Licensing Revenue was $48.9 million, up 27 percent from $38.6 million from 2014.
• Venue Merchandise Revenue was $22.4 million, up 16 percent from $19.3 million in 2014.
• WWE Shop Revenue was $27.1 million, up 34 percent from $20.2 million in 2014.

WWE Studios 2015 Break Down

– Total Revenue was $7.1 million, down 35 percent from $10.9 million in 2014.

WWE reported an annual loss of $1.5 million, a reversal of a modest profit of $0.5 million in 2014.

Regarding revenue, WWE noted: “The decrease in revenues was primarily due to the performance and timing of results from WWE’s portfolio of movies as the prior year reflected the strong performance of The Call (released theatrically in March 2013). During 2015, the Company released six feature films compared to seven feature films in 2014.”

Corporate & Other 2015 Break Down

– Total Revenue was $3.2 million, a slight improvement on $3.0 million in 2014.

Related Expenses were $172.1 million, an increase of 14 percent from $151.4 million in 2014.

• $79.5 million went to Corporate Support (an increase of 18 percent from 2014 spending)
• $92.6 million went to Business Support (an increase of 10 percent from 2014 spending)

Within the $15.9 million increase in Corporate spending was a “$12.2 million increase in management incentive compensation based on WWE’s performance as well as higher salary and legal expenses.”

The increased expenses were “partially offset by a $1.3 million reduction in marketing expenses associated with the Company’s key strategic initiatives.”

Comparison of Yearly Results

WWE’s total revenue has increased exponentially since 2013, when WWE reported $508.0 million in total revenue.

WWE advanced to $542.6 million in 2014 before leaping to $658.8 million in 2015.

The key driver is TV Rights Revenue, followed by the Network following a two-year transformation process.

The two concerns are Home Entertainment (DVD sales) and WWE Studios (movies). Both segments require a purchase through “Old Media” methods – buying a DVD product in a brick-and-mortar store, buying through an online retailer, which requires waiting for the item to be shipped, or going to a movie theater to watch a movie.

WWE has offered their movies through Digital Download, but the profit margins are slim and the movies have not been compelling-enough to produce strong sales.