WWE 2022 Q1 Financial Analysis: Revenue Breakdown, Adjusted OIBDA Up, How WWE Performed On Peacock

This time last year, the hot topic surrounding WWE’s finances with a new U.S.-based distribution deal with Peacock, moving WWE Network content, including live airings of pay-per-view events, to the relatively new streaming service.

One year later, WWE continues to tout the value of that Peacock deal, announcing what they deem to be tremendous viewership numbers for some of its biggest events, primarily WrestleMania.

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“We are off to a strong start in 2022, highlighted by record quarterly revenue and Adjusted OIBDA,” said Vince McMahon, WWE Chairman & CEO. “We continued to effectively execute our strategy, including staging the most stupendous WrestleMania ever in early April. WrestleMania, as well as our other successful premium live events such as Day 1, Royal Rumble, and Elimination Chamber, further expanded the reach of our brands and enhanced the value of our content as evidenced by increased ticket revenue and viewership. We continue to monetize our intellectual property across various platforms through our media rights agreements, both domestically and abroad, as well as through the monetization of new original series, including our expanded partnership with A&E.”

While there were no massive surprises or any real major talking points discussed in this earnings call, today did affirm the company’s continuous growth as it returned to live events. WWE previously showed that it can financially succeed during the pandemic when there were no live events with fans in attendance. Now the question was how much would WWE change as fans can attend live events and if perhaps their expectations would be too high as a result.

As this article will prove, that is far from the case. The company continues to post record revenues and quarterly profits as well as an increase in viewership for its biggest event, WrestleMania. Although WWE is not fully back to how it operated pre-pandemic, they have taken several steps in the right direction to continue ensuing their financial future under the current media rights deals with both FOX and NBCUniversal, which still have a couple of years left on their present, respective contracts.

WWE Revenue Up, How It Compares To Past Years:

Total revenue this year resulted in a quarterly record, finishing at $333.4 million, an increase of 27% and surpassing what some people had projected heading into the earnings call.

The lack of live events in the first quarter of 2021, resulted in a drop in total revenue year-over-year, ending at $263.5 million. With live events returning, as well as three pay-per-views (one of which took place in Saudi Arabia and another in a stadium), revenue shot up.

The company also announced a $66.1 million net profit for the quarter, which is $22.3 million more than last year’s Q1, and nearly tripled 2020’s Q1 net income ($26.2 million). WWE also noted an Adjusted OIBDA of $111.7 million, up 33% year-over-year.

Breaking down the three biggest categories of revenue (Media, Live Events, and Consumer Products), it’s easy to see how WWE has improved year-over-year thanks to the return of live events with fans in attendance. WWE performed better in all three aforementioned categories than it did in Q1 of 2020 and 2021.

Media in Q1:

  • 2020: $256.6 million
  • 2021: $242 million
  • 2022: $278.1 million

Live Events in Q1:

  • 2020: $17.5 million
  • 2021: $0.5 million
  • 2022: $23.1 million

Consumer Products in Q1:

  • 2020: $16.9 million
  • 2021: $21 million
  • 2022: $32.2 million

Total Revenue in Q1:

  • 2020: $291 million
  • 2021: $263.5 million
  • 2022: $333.4 million

Trying to compare things further before 2020 in this sense would make comparisons a lot murkier. Back then, WWE didn’t have the Peacock deal and up until a few years ago, it did not have the benefit of the current media rights deal, which has been a big reason why the company is financially secured for years to come.

Its operating income finished at $92.4 million for this past quarter, which was way up from last year’s operating income of $65.1 million, and 2020’s operating income in Q1, which was $53.3 million in Q1.

Second-quarter projections are also high, with WWE estimating a 2022 Q2 Adjusted OIBDA range of $80 million to $90 million, which would be anywhere from a 17% increase to a 32% increase from the prior-year quarter.

WWE Business With The Return Of Fans Attending Live Events:

As previously mentioned, the return of live events was a big reason for the increase in total revenue for this past quarter. And that’s not even including this year’s WrestleMania, which took place in Q2.

While last year’s Q1 had no events to sell tickets to, this year had a total of 53 (52 in North America and one international event). Still, the number of live events held in Q1 is nowhere near the amount of events WWE held before 2020. In 2019, WWE had 90 live events in North America for Q1 and 99 in 2018. Still, the company’s return to live events resulted in them making millions in various categories, even beyond ticket sales.

Speaking of ticket sales, the company made $19.9 million in ticket sales for North American events for Q1, which is also up from 2020 Q1 at $15.2 million (though COVID-19 resulted in some live events being canceled starting in mid-March).

In addition, the return of live events for the first quarter of 2022, resulted in $4.5 million made in venue merchandise. That, in turn, more than made up a $2.3 million drop in online sales that 2021 Q1 had.

Attendance for live events for Q1 returned to within the normal range of attendance before the pandemic with 22 averaging roughly 5,700 fans per live event in North America. That is down from the roughly 6,300 fans in Q1 2020, but slightly up from the three-year average from 2018-2020 which was approximately 5,500 fans in Q1.

WWE Viewership On Peacock & Television:

In regards to WWE’s viewership on Peacock, WrestleMania 38 garnered record viewership, not just on the streaming service, but in company history.

Beyond the previously-discussed financial boon that WWE has enjoyed with the Peacock deal versus WWE operating the WWE Network in the United States, its reach has also been something WWE has benefited from.

According to WWE in the most recent earnings call, there was a 15% increase in WrestleMania viewership this year on Peacock compared to how it did in 2020, which was the last time the WWE Network was available in the United States. In addition, during the earnings call, WWE touted WrestleMania 38 viewership, saying it was the most-watched WWE globally ever. As far as how it compares to Peacock’s programming, WWE said WrestleMania was the second-most viewed event on the streaming platform, behind only the Super Bowl.

All of this tracks with what WWE claimed in the past where certain events performed significantly better than it did the last time it was on the WWE Network, such as Survivor Series, Royal Rumble, Money in the Bank, and SummerSlam:

- Money in the Bank: 2021 show did 25 percent higher than 2019 show

- SummerSlam: 2021 show was more than 30 percent higher than 2019 show

- Extreme Rules: 2021 show was 20 percent higher than 2019

- Saudi Arabia Event: 2021 show was 75 percent higher than 2019 show

- Royal Rumble: 2021 show was almost 45 percent higher than 2020 show, which took place before the pandemic

- Survivor Series: 2021 was almost 25 percent higher than 2021 show

"In 2021, we saw a 15% increase in viewership from 2020, which was the last WrestleMania to air in the US on WWE Network. This momentum continued into 2022, where this past month, we saw a 61% increase from 2021. We also doubled WWE viewership in total on Peacock over the past WrestleMania weekend compared to the year prior. We did not hit a ceiling our first year on Peacock. During WrestleMania weekend, nearly one-third of all Peacock accounts viewed WWE content. WrestleMania 38 was the second most-watched live event in the history of Peacock behind only this year's Super Bowl," said WWE President Nick Khan on the first quarter 2022 earnings call. "This tells us we're reaching new fans on the service and growing WWE's audience with the growth of Peacock alongside the existing robust partnership and viewership with USA with Raw and Fox with SmackDown."

This is now the third consecutive year that WrestleMania served as a two-day event instead of its traditional one-day affair. Needless to say, WWE appears to be content with the early results of these WrestleMania shows, as well as the increase of larger-scale shows held in stadiums.

In terms of television viewership, Raw has declined 7% year-over-year from 1.858 million viewers per episode in 2021 Q1 to 1.721 million viewers in 2022 Q1. Primetime cable viewership has also gone down year-over-year at an even steeper decline, down 11%. As for the USA Network, Raw’s television home in the United States, the network’s viewership was up 3% year-over-year, but that’s with the benefit of the Winter Olympics airing on the network. According to WWE, USA Network’s viewership was down 15% year-over-year excluding the Winter Olympics.

For SmackDown, viewership was nearly identical year-over-year with this year’s Q1 averaging 2.199 million viewers per episode while last year did 2.191 million viewers per episode for Q1. FOX’s viewership also remained steady year-over-year.

Other News & Notes:

  • Despite the record revenue for this past quarter, the company is not changing its year-end projections for Adjusted OIBDA, instead reaffirming its expectations. WWE is still targeting an Adjusted OIBDA range of $360 million to $375 million for the year, which would be an all-time record. The company commented on it, saying, “This range of anticipated performance reflects the continued ramp-up of live events, including large-scale international events, and increased monetization of content, partially offset by increased production, content-related, and other expenses.” At this current pace, WWE could potentially exceed its $360 million to $375 million expectations for this year.
  • With early signs pointing to the Peacock deal being a good one for WWE, the company answered a question during the earnings call on whether or not it could lead to a deal beyond 2024 where it could bundle the U.S. media rights to Raw and SmackDown. WWE’s response was the following: “The bundle can be a very powerful tool. Obviously, we have a strong relationship with FOX, so we’ll talk to both incumbents first and see what makes the most sense and move forward from there.”
  • When it comes to WWE staging more large-scale televised international events, WWE said it is pretty much set in its touring with the upcoming show in Cardiff, Wales and a second show in Saudi Arabia this year, but to anticipate more next year.
  • After many months of waiting, WWE has finally announced a broadcast deal in the Middle East and North Africa (MENA) region, a topic that has been brought up several times in past quarterly earnings calls. The deal with MBC Group sees all WWE premium live events and live episodes of Raw and SmackDown airing in the region. The partnership kicked off with WrestleMania 38 which took place on April 3 and 4.
  • With WWE returning to the console gaming space, the company announced that it is very pleased with the release of 2K22, reviews of the game and the exposure gamers have given it on Twitch. Stephanie McMahon announced that WWE has signed a deal for an RPG game that will be announced soon. WWE appears to be focusing more on targeting that demographic, claiming that over 80% of WWE’s audience self-identifies as gamers.
  • During the earnings call, Khan said WWE will be building on the on-site merchandising opportunities in the future, such as the Axxess Superstore.
  • WWE stock closed at 4:00 p.m. ET at $59.49, but it did rise to over $62 within a couple of hours after closing thanks to the positive financial earnings report.
  • WWE’s social media reach in terms of followers posted Q1 records, ending at 1.221 billion, which is the second-highest it has ever been.
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