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3 Factors Likely to Keep World Wrestling (WWE) on Growth Track
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World Wrestling Entertainment, Inc. focuses on increasing original content, subscriber growth, rising TV rights fees and monetization of video content across digital as well as direct-to-consumer platforms. Backed by such efforts, the company performed impressively in the second quarter of 2018 and prompted management to issue an upbeat view for 2018. These factors also raised investors’ confidence in this Zacks Rank #3 (Hold) stock.
As a result, shares of the company have gained roughly 8% in the past three months, outperforming its industry’s and S&P 500 index’s decline of 7.1% and 1.3%, respectively.
To remain on growth track, the company has put into place a number of initiatives. We have highlighted three such focus areas, which are likely to fuel performance in the upcoming periods.
Solid International Sponsorship
We note that second-quarter advertising and sponsorship sales surged 49.6% across media platforms. Revenues from international sponsorship have improved owing to joining of blue-chip advertisers such as KFC, Nestlé, AT&T and other gaming partners. Moreover, in an effort to boost revenues, WWE has reached an agreement with sports marketing agency, Lagardère Sports, which will facilitate it to acquire international sponsorship.
Efforts to Increase Subscribers
WWE’s number of average paid subscribers increased 10% year over year in the second quarter to 1.80 million. During the first six months of 2018, digital video views surged 58% to 14.4 billion, while hours consumed soared 71% to 509 million across digital and social media platforms. Management now envisions average paid subscribers of approximately 1.67 million for the third quarter, reflecting an increase of 10% from the prior-year period.
In the long haul, the company will continue banking on WWE’s content distribution agreement to bolster subscriber base. Earlier, the company stated that in some regions distribution agreement will expire in 2019. Notably, it is looking to renew the distribution agreement in the U.K. by end of 2018 and in India by the first half of 2019.
Penetrating its reach in television, WWE witnessed third fascinating season of Total Bellas, developed a new series, Miz & Mrs. (premiered on Jul 24, 2018) and announced the eighth season Fall return of Total Divas. The company believes that it will continue to add more WWE Network subscribers by augmenting content as well as distribution network.
Strategic Deals to Increase Revenues
WWE announced a multi-year deals with Fox Sports and USA Network for its flagship programs. These five-year deals for the U.S. distribution of WWE programs will be effective Oct 1, 2019. Per management, these agreements will improve the average annual value of WWE’s U.S. distribution to 3.6 times of the contract with NBC Universal.
Management had earlier stated that these agreements will likely bump up revenues from $311 million in 2019 to $462 million in 2021. There are other agreements that are to be negotiated and renewed in the 2019-2021 period, which might increase further. For 2019, WWE expects adjusted OIBDA of minimum $200 million assuming substantial revenue growth from the latest U.S. deals.
Wrapping Up
Apart from the aforementioned efforts, the company has been striving to expand its presence globally. It also undertakes sustained measures to come up with interesting content and thereby retain customers. All said, we expect such endeavors to continue strengthening the company’s performance and help it sustain in investors’ good books.
3 More Hot Stocks Awaiting Your Look
Deckers Outdoor Corporation (DECK - Free Report) delivered an average positive earnings surprise of 71.9% in the trailing four quarters. The company has a long-term earnings growth rate of 12% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Guess', Inc. (GES - Free Report) delivered an average positive earnings surprise of 8.8% in the trailing four quarters. The company carries a Zacks Rank of 1.
Wolverine World Wide, Inc. (WWW - Free Report) pulled off an average positive earnings surprise of 17.8% in the trailing four quarters. It has a long-term earnings growth rate of 10% and a Zacks Rank #2 (Buy).
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Image: Bigstock
3 Factors Likely to Keep World Wrestling (WWE) on Growth Track
World Wrestling Entertainment, Inc. focuses on increasing original content, subscriber growth, rising TV rights fees and monetization of video content across digital as well as direct-to-consumer platforms. Backed by such efforts, the company performed impressively in the second quarter of 2018 and prompted management to issue an upbeat view for 2018. These factors also raised investors’ confidence in this Zacks Rank #3 (Hold) stock.
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As a result, shares of the company have gained roughly 8% in the past three months, outperforming its industry’s and S&P 500 index’s decline of 7.1% and 1.3%, respectively.
To remain on growth track, the company has put into place a number of initiatives. We have highlighted three such focus areas, which are likely to fuel performance in the upcoming periods.
Solid International Sponsorship
We note that second-quarter advertising and sponsorship sales surged 49.6% across media platforms. Revenues from international sponsorship have improved owing to joining of blue-chip advertisers such as KFC, Nestlé, AT&T and other gaming partners. Moreover, in an effort to boost revenues, WWE has reached an agreement with sports marketing agency, Lagardère Sports, which will facilitate it to acquire international sponsorship.
Efforts to Increase Subscribers
WWE’s number of average paid subscribers increased 10% year over year in the second quarter to 1.80 million. During the first six months of 2018, digital video views surged 58% to 14.4 billion, while hours consumed soared 71% to 509 million across digital and social media platforms. Management now envisions average paid subscribers of approximately 1.67 million for the third quarter, reflecting an increase of 10% from the prior-year period.
In the long haul, the company will continue banking on WWE’s content distribution agreement to bolster subscriber base. Earlier, the company stated that in some regions distribution agreement will expire in 2019. Notably, it is looking to renew the distribution agreement in the U.K. by end of 2018 and in India by the first half of 2019.
Penetrating its reach in television, WWE witnessed third fascinating season of Total Bellas, developed a new series, Miz & Mrs. (premiered on Jul 24, 2018) and announced the eighth season Fall return of Total Divas. The company believes that it will continue to add more WWE Network subscribers by augmenting content as well as distribution network.
Strategic Deals to Increase Revenues
WWE announced a multi-year deals with Fox Sports and USA Network for its flagship programs. These five-year deals for the U.S. distribution of WWE programs will be effective Oct 1, 2019. Per management, these agreements will improve the average annual value of WWE’s U.S. distribution to 3.6 times of the contract with NBC Universal.
Management had earlier stated that these agreements will likely bump up revenues from $311 million in 2019 to $462 million in 2021. There are other agreements that are to be negotiated and renewed in the 2019-2021 period, which might increase further. For 2019, WWE expects adjusted OIBDA of minimum $200 million assuming substantial revenue growth from the latest U.S. deals.
Wrapping Up
Apart from the aforementioned efforts, the company has been striving to expand its presence globally. It also undertakes sustained measures to come up with interesting content and thereby retain customers. All said, we expect such endeavors to continue strengthening the company’s performance and help it sustain in investors’ good books.
3 More Hot Stocks Awaiting Your Look
Deckers Outdoor Corporation (DECK - Free Report) delivered an average positive earnings surprise of 71.9% in the trailing four quarters. The company has a long-term earnings growth rate of 12% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Guess', Inc. (GES - Free Report) delivered an average positive earnings surprise of 8.8% in the trailing four quarters. The company carries a Zacks Rank of 1.
Wolverine World Wide, Inc. (WWW - Free Report) pulled off an average positive earnings surprise of 17.8% in the trailing four quarters. It has a long-term earnings growth rate of 10% and a Zacks Rank #2 (Buy).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>