Details about WWE’s new deal with Peacock continue to stream in (get it?!?!), with none other than The Wall Street Journal providing the key piece of information:
“A person familiar with the deal said it runs five years and is valued at more than $1 billion.”
That means WWE Network has roughly doubled in terms of annual revenue for the company, from around $100 million (based on approximately 1 million subscribers at $9.99 per month) to around $200 million from Peacock.
It also means that, for the duration of this contract and its current television deals with FOX and NBCUniversal for SmackDown and Raw, WWE’s financials should be solid. And despite the pandemic, they were already doing really well.
Along with the Peacock deal, the company announced they plan to report their best financials ever from the fourth quarter of last year. With so much still unknown about how the world will handle COVID-19 this year, they’re not committing to 2021 guidance yet. But they plan to continue building on their historic 2020.
WWE® Announces Expectation for Record 2020 Results and Issues 2021 Guidance
– WWE completes strategic licensing agreement with NBCU’s Peacock service
– The Company expects to report record 2020 Operating Income of $209 million and record 2020 Adjusted OIBDA1 of $286 million
– WWE issues 2021 Adjusted OIBDA Guidance Range of $270 – $305 million2
– Fourth Quarter and Full Year 2020 Earnings Call Date Set for February 4, 2021
STAMFORD, Conn.—(BUSINESS WIRE)— WWE (NYSE: WWE) today announced expectations for its 2020 financial results and outlined guidance for 2021. The announcements were made in conjunction with the communication of a new agreement to license WWE’s premium content to NBCU’s Peacock service, which will become the sole streaming distributor in the U.S. of WWE’s first-run premium content.
Throughout the 2020 year, WWE managed a challenging environment particularly for producers of live content. WWE never went off the air. Because of that, combined with the implementation of extensive short-term cost reductions, COVID-19 had an estimated net neutral impact on WWE’s 2020 Adjusted OIBDA. Accordingly, the Company estimates its full year 2020 Adjusted OIBDA (unaudited) to be approximately $286 million, which would be a record, up nearly 60% from the prior year.3 A reconciliation of estimated 2020 Adjusted OIBDA to Operating Income can be found in the supplemental schedule on page 5 of this release.
Management expects restrictions related to the spread of COVID-19, particularly related to the cancellation, postponement or reduced capacity of ticketed live events, to continue at least through the first half of 2021. Additionally, management anticipates a significant year-over-year increase in WWE’s expense base due to the full return of employees from furlough and continued higher expenses associated with the production of its weekly Raw and SmackDown television content at the WWE ThunderDome from its stadium residence at Tropicana Field. The Company estimates it can achieve 2021 Adjusted OIBDA of $270 – $305 million as revenue growth, driven by the impact of the Peacock transaction, the gradual ramp-up of ticketed live events, including large-scale international events, and the escalation of core content rights fees, is offset by the increase in personnel and production expenses.
Management estimates that the stated 2021 Adjusted OIBDA guidance range would be 15% – 20% higher without the ongoing impact of COVID-19, which includes the loss of ticket and merchandise sales at live events and the increased investment in production to further fan engagement. Estimates of future performance beyond 2021 will be impacted by the return of these businesses and various other factors.
WWE is unable to provide a reconciliation of full year 2021 guidance to GAAP measures as, at this time, WWE cannot accurately determine all of the adjustments that would be required.
We’ll have full coverage of WWE’s financials when they’re released a week from Thursday.