SPOTLIGHTED PODCAST ALERT (YOUR ARTICLE BEGINS A FEW INCHES DOWN)...
WWE announced today that co-presidents of the company, George Barrios and Michelle Wilson, will depart the company immediately and will no longer serve on the board of directors, leading to a sharp drop in stock value in after-hours trading.
WWE stock closed the day largely steady at $62.30 (up $1.36). In after hours trading after news of the corporate leadership changes spread, WWE stock dropped 23.19 percent as of late evening, down $14.45 per share to $47.85. The last time the closing share value was lower was in May 2018, nearly two years ago.
WWE is undergoing a search for a new Chief Financial Officer and Chief Revenue Officer. In the interim, 11 year veteran of the WWE Board of Directors Frank A. Riddick III will serve as CFO and report to Vince McMahon, WWE’s chairman and CEO.
“I would like to thank George and Michelle for their 10-plus years of service and contributions to the organization,” said McMahon in a press release. “I am grateful for all that was accomplished during their tenure, but the Board and I decided a change was necessary as we have different views on how best to achieve our strategic priorities moving forward.
“We have a deep team of talented, experienced, and committed executives across the organization, and the Board and I have great confidence in our collective abilities to create compelling content, engage our global fanbase across platforms, increase revenues, and drive shareholder value.”
A Variety story today notes that WWE stock has dropped in recent months amidst concerns about soft ratings for its flagship TV shows “and rising competition from upstart wrestling organizations like All Elite Wrestling (AEW) on TNT. … (A)nalysis conducted at the beginning of January found that AEW’s Wednesday night show, Dynamite, currently enjoys a solid ratings edge over NXT in both Live+Same Day and delayed viewing.”
Regarding Smackdown moving to Fox, Variety reported:
Smackdown moved to Friday nights on Fox in October 2019, the beginning of a five-year deal between the network and the sports entertainment brand valued at $1 billion. The show doubled its audience in adults 18-49 in the Nielsen Live+Same Day ratings on its initial outing on the broadcaster compared to its last airing on USA Network. That first Fox show featured a special appearance by Dwayne “The Rock” Johnson and a championship match between Kofi Kingston and Brock Lesnar. Since then, the show’s ratings have fallen in line with where they were on cable, with the most recent episode earning a 0.7 rating and 2.5 million viewers over its two-hour broadcast.
WWE’s press release noted optimism about their path forward without Barrios and Wilson. “WWE remains well positioned to continue its growth and operate effectively against its strategic priorities, including content creation and distribution, digitization, and localization in key markets around the world. The Company expects its full year 2019 Adjusted OIBDA to be approximately $180 million.”
A Bloomberg News article tonight notes issues that predated the change in management today:
Media reports had hinted that management was struggling to renew distribution contracts overseas, including international deals in key regions such as the Middle East. And earlier in the year, John Oliver, the comedian and late-night talk show host, had criticized WWE’s McMahon in a segment on “Last Week Tonight.” …
Oliver said that wrestlers were dying at a faster rate than professional football players, and that WWE failed to provide health insurance because the company deemed its talent independent contractors. WWE later rebuffed Oliver’s assertions, pointing to its “longstanding” talent wellness initiative. The program offers wrestlers a yearly physical and testing for brain function and substance abuse.
In recent months, Wall Street had seemed to grow more optimistic about WWE — following the expansion of a live event partnership in Saudi Arabia and an agreement with Fox Corp. to air “Friday Night Smackdown” in the U.S.
Event programming, encouraging long-term TV contracts and relatively predictable revenue alongside cash flow growth makes the company “well positioned,” Alan Gould, an analyst at Loop Capital Markets, said in a note last month.
Riddick previously served as CEO for FloWorks International, LLC, JMC Steel Group, Formica Corporation, and Triangle Pacific Corp., and President/COO of Armstrong World Industries, Inc. He has also served in executive management positions, including Chief Financial Officer, Controller, Treasurer, and Vice President of Mergers and Acquisitions during a career that spans 40 years. Riddick also served as Compensation Committee Chairman and member of the Audit Committee as a part of WWE’s Board of Directors.
Getting rid of those two won’t change anything.
The product is still not very good. I agree 100 percent.