Yahoo.com reported the following earlier today.
The WWE announced Thursday that it had re-signed with NBCUniversal in a deal that would pay WWE about $150 million a year, a decent increase of 50% on the previous contract but nowhere near the spike investors had been waiting for.
According to Forbes, McMahon, the chairman and CEO of WWE, lost $350 million in a span of 24 hours.
The loss was the result of a few factors, including lack of confidence in WWE’s new online streaming network and a somewhat lackluster new TV deal. The new online streaming network has only picked up 700,000 subscribers since launching, and WWE said it expects the network to lose between $45 million and $52 million this year.
The new TV deal, while still impressive, is far smaller than what some investors thought. WWE’s contract with NBCUniversal to keep its hit shows “Raw” and “Smackdown” is worth around $150 million annually, which is half or one third of what many initially thought it would earn.
Together, the weak performance of the online streaming network and Thursday night’s announcement of the new TV deal led WWE’s stock to drop $8.86 (from $20.13 to $11.27).
A lack of confidence in the product and falling shares have dropped his fortune to an estimated $750 million.
This is scary because a big loss of money means that the wrestlers will probably be the ones feeling the impact financially. Production values could drop, less emphasis on being a “show” and more on being a “product” for marketing, and developmental territory backing are just some of the potential woes. Plus, they still haven’t figured out how to make a Stone Cold or The Rock level superstar other than John Cena and even he doesn’t fit the bill anymore.
Only time will tell if the WWE Network will make a true difference.