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Despite an ongoing misconduct investigation against the recently resigned boss, WWE outperformed analyst estimates for revenue and profitability in Vince McMahon’s final quarter as CEO and chairman of the board.
The company reported a net income of $49 million, up from $29.2 million in the second quarter of 2021, primarily due to improved operating performance. In addition, following the resumption of live events, WWE’s net income increased to $66.1 million in the most recent quarter from $43.8 million in the first quarter of 2021.
In the second quarter of 2022, WWE’s revenue climbed by 24% to $328.2 million. Frank A. Riddick, WWE’s chief financial and administrative officer, stated on the results call that “our income increased primarily due to the return of a full schedule of live events.”
WWE’s operating income rose by 50% to $69.3 million as revenue and profitability rose. According to Riddick, this rise was principally caused by greater event-related costs linked to the resumption of live event traveling and higher production costs linked to the development of the yearly WrestleMania. As a result, WWE’s operational income margin improved from 17% to 21%.
During the earnings call, Riddick spoke on the ongoing inquiry into McMahon’s alleged misdeeds. Riddick claims that a special committee looked at Vince McMahon’s alleged wrongdoing made up of the independent board of directors members. The updated financial filings include $19.6 million in unrecorded expenses for Vince McMahon’s personal payments between 2006 and 2022.
Although these contributions had no direct financial effect on WWE operations, according to Riddick, they were recorded because they were made by a significant shareholder and were viewed as being beneficial to the business. In addition, according to Riddick, McMahon would cover the $1.7 million cost connected to the expenses the business has experienced as a result of the probe.
The 42-year-old company’s financial report came just as it was preparing to renew the U.S. media rights to two of its most well-known shows, Raw and SmackDown.
During the call, Nick Khan, the co-CEO of WWE, stated, “as everyone knows, the marketplace has become even more crowded with purchasers.” “Deep-pocketed tech companies’ interest is at an all-time high. For example, after the launch of their ad tier, we think Netflix’s interest in live broadcasts increased. Khan stated that he plans to enter the streaming market, following in the footsteps of Formula One, the NFL, and Major League Soccer.
WWE may see a change in ownership
Following revelations that he had given four female workers $15 million in hush money, McMahon’s 40-year tenure as WWE’s CEO and chairman came to an unexpected end. At the end of July, the 76-year-old CEO resigned from his position. However, McMahon continues to be WWE’s largest shareholder with 81.1% of the voting power and a 38.6% ownership stake in the company’s outstanding stock.
Since the investigation began, the company’s stock price has increased by around 9%, which can be related to rumors that WWE may be put up for sale.