There are some big changes to WWE’s corporate structure-at least in terms of appearances. However, how much more window-dressing is Wall Street willing to accept without results? Variety.com reports:
WWE is poised for a massive management shakeup as longtime executives George Barrios and Michelle Wilson have been forced out of their roles as co-presidents and from the company’s board of directors.
Frank A. Riddick III, who has been a WWE board member for 11 years, has been named interim Chief Financial Officer, reporting to WWE chairman & CEO Vince McMahon. WWE said it would begin a search for a permanent Chief Financial Officer and Chief Revenue Officer.
The aftershocks were quickly felt. Yahoo! Finance reports:
Shares of WWE plunged as much as 14% to $53.50 in extended trading after the company announced that it’s replacing Co-Presidents George Barrios and Michelle Wilson, effective immediately.
FOX Business later revealed:
WWE shares fell more than 20 percent on the announcement. Despite the management shake-up, WWE said it “remains well-positioned to continue its growth and operate effectively against its strategic priorities.”
It appears the company won’t meet its expected earnings, much the same as what happened last time According to the Yahoo! Finance article:
The company now expects to report 2019 adjusted earnings of $180 million, down from as much as $190 million forecast previously. WWE is scheduled to release results on Feb. 6.
As fans and some business analysts know, WWE’s declining ratings, reported drops in live event ticket sales, stagnant WWE Network numbers, and reduced merchandise sales have been an ongoing problem. In the past, Vince McMahon spun the company’s problems as due to fans tuning out due to unexpected injuries to top stars. Vince’s “Boy Who Cried Wolf” tactic eventually wore thin, as Wall Street and (some) WWE stockholders woke up to McMahon’s tired excuse. Like any good corporate maverick, Vinnie Mac has lots of tricks and the latest seems to be slapping on a fresh coat of paint and proclaiming things are going to change.
As anyone who has watched WWE for any amount of time, Vince McMahon is always ready to tell the fans he realizes there’s a problem and that things are going to change. That some fans continued watching despite repeated broken promises arguably encouraged McMahon to think he can try the same approach with Wall Street. Was it coincidence the WWE hired Paul Heyman and Eric Bischoff last summer as Executive Directors for RAW and SmackDown’s creative departments after the company’s disappointing financial report? This seemed to placate shareholders despite Bischoff never seeming to assume any duties for SmackDown other than cashing his paycheck. He did make a convenient scapegoat when it was clear RAW and SmackDown weren’t improving and that new rival AEW was poised to add to the WWE’s problems.
The WWE’s recent dismissal of its Co-Presidents is further evidence Vince McMahon is unwilling to make any substantial changes to the WWE’s booking practices, particularly when he has a seemingly endless number of patsies to take the blame rather than him. If the WWE is making this big announcement ahead of its upcoming quarterly earnings report, one shudders to think how bad things are. Could the WWE’s relationship with FOX be shaky due to SmackDown’s uneven ratings? Are there big business deals the WWE counted on in overseas markets that have gone up in smoke? These questions may be answered after the upcoming quarterly earnings report (albeit through the WWE”s prefabricated point of view), but the biggest question isn’t whether McMahon will make the necessary changes to the WWE product, but how much longer investors will accept his flimsy excuses of change as the WWE failboat continues sinking.