WWE Starts Post-Vince McMahon Era With Strong Q2 Numbers; Co-CEO Stephanie McMahon Lauds Father As “True Founder And Entrepreneur”
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Stephanie McMahon, the daughter of former WWE founder Vince McMahon and now the company’s Co-CEO, began the company’s second-quarter earnings call with a tribute to her father as a “true founder and entrepreneur.”
Earlier this summer, she and Nick Khan were named Co-CEOs of the company as a board-initiated investigation into Vince McMahon’s conduct began. After the probe verified claims from numerous women of sexual harassment, retaliation and payoffs, McMahon resigned in July. Along with its financial results, the company reported earlier this morning that the investigation is now “substantially complete.”
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McMahon and his wife, Linda “poured their heart and soul into building this business and taking WWE from a regional wrestling promotion in the 1980s to the global entertainment enterprise we are today,” Stephanie McMahon said. “He built the foundation we stand on and prepared us for the future.”
Prior to the call, WWE reported strong results for the quarter, which had to be restated due to $14.6 million in “unrecorded payments” made by Vince McMahon to several women. Stephanie McMahon noted that her father remains “very much the controlling shareholder” of the company, and “still has his eyes on what is best for our business in terms of maximizing return to our shareholders.”
Net income climbed to 58 cents a share, from 34 cents a share in the year-ago quarter, while revenue grew 24% to $328.2 million. Both metrics beat Wall Street analysts’ consensus estimates.
Frank Riddick, the company’s chief financial and administrative officer, said $1.7 million in costs were incurred in the quarter due to the McMahon probe. The ex-CEO has indicated he will pay for those costs, Riddick noted, thought the company also expects to see additional financial expenses related to the investigation down the road.
Vince McMahon took over WWE from his father in the early 1980s and turned it into a global media empire with lucrative partnerships with NBCUniversal and Fox in the U.S., and deals for streaming and other media rights in 180 countries around the world. Last year, it inked a billion-dollar agreement to have its streaming network absorbed into NBCU’s Peacock.
Khan emphasized during the call the auspicious trends in the sports rights marketplace, including recent pacts for Formula One and an expected one for the Big Ten. The F1 deal, he said, offered a good template for WWE in that it combines linear TV with streaming. SmackDown airs weekly on Fox, a broadcast network, and Raw airs on USA, a basic cable network, and Peacock is the venue for live events like WrestleMania and SummerSlam.
“We like that mix,” Khan said. “It’s always important to us that the access to the content is easy. … We thought Formula One was smart, for whatever that’s worth, in sticking with their incumbent and passing on a little bit more money for a streaming-only option.”
Stephanie McMahon was also asked by an analyst about her long-term plans given the dramatic changes in the company’s management ranks of late. In her previous role as chief brand officer, she had taken a leave of absence to spend more time with her family, only to return to the C-suite just a few weeks later.
The exec extolled her deep roots in the business, noting that she began working in an unofficial capacity for WWE when she was 8 years old, modeling catalog merchandise and spending time in the company’s headquarters because her parents didn’t have money for child care. “I’ve worked my entire life for this business. I love this business,” she said. Getting a three-week break during her leave was “more than a lot of folks get,” she continued. “I was not forced into returning. … I offered.” The WWE is “something I believe in to my core.”
As to the recent Wall Street chatter about a potential acquisition of WWE, McMahon added, “we will properly evaluate any opportunity that comes our way.”
Enticed by the potential of a lucrative M&A deal and encouraged by steady ratings and healthy market demand for live programming, investors have shrugged off the turmoil involving Vince McMahon. Shares in WWE have risen to multi-year highs in recent days, and the stock gained another 3% on the earnings news in start the day at about $74.60.
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