WWE’s smackdown continues.
As investors bid down the company’s stock for a fourth straight day on Wednesday, Chief Financial Officer George Barrios climbed into the ring to refocus Wall Street’s expectations.
“It’s a significant pivot in the business model,” Barrios admitted, saying the shift by the WWE away from its long-standing reliance on pay-per-view cable and satellite revenue to having a direct relationship with customers via its digital network will take some time to work out.
Speaking at JPMorgan Global Tech and Media Conference, Barrios said it would likely take 1.3 million to 1.4 million subscribers to its $9.99-per-month over-the-top network to make up for the revenue it had been getting from its PPV events.
As of April 7, the latest figures available, WWE had 667,287 network subscribers.
Roughly 700,000 to 900,000 households ordered two to three PPV events — at $45 to $60 a pop — a year, Barrios said.
The slower-than-expected rollout of the WWE Network, which debuted Feb. 24, along with the renewal of its cable TV carriage deal with NBCUniversal had spooked investors — who chopped 45.6 percent from the company’s value over just four trading days.
WWE shares closed Wednesday at $10.85, down 0.7 percent.
Vince McMahon, WWE’s chairman and CEO, after getting Wall Street excited over the prospect of a huge new TV contract — perhaps double the existing deal — admitted the actual new NBCU deal, announced last week, was underwhelming.
“We were a little disappointed in our NBCU deal, quite frankly, but when you add up all our television deals, we nearly doubled — we’re at about $200 million, so internationally we did a lot better than we did domestically,” said McMahon, who lost about $350 million in net worth over the four-day WWE stock slide.
The difference between WWE’s TV contract bravado and reality didn’t escape the notice of two law firms, which are looking to slap the bombastic McMahon with some legal action.
A WWE spokesman said the Stamford, Conn., company hadn’t heard directly from either law firm.