WWE reports $8 million net loss in first quarter of 2014

WWE today announced financial results for its first quarter ended March 31, 2014, with the highlight of the news being that the company is reporting a net loss of $8 million in the quarter that saw the ballyhooed launch of the WWE Network, and projected increased losses in the second quarter.

WWE, in its report to shareholders, pinned the loss on the company’s launch of the WWE Network and lower results from its video game licensing business, due primarily to the transition to a new licensee. These factors were partially offset by improved results from the company’s filmed entertainment business, WWE said in the release.

More from the release:
– “With almost 670,000 WWE Network subscribers in the U.S. and nearly 400,000 domestic pay-per-view buying homes for WrestleMania 30, we are confident that we will reach our goal of 1 million subscribers by the end of 2014,” stated Vince McMahon, Chairman and Chief Executive Officer. To drive WWE Network subscriber growth, the company is focused on further developing programming, expanding distribution platforms and executing customer acquisition campaigns. The expansion of WWE Network in the U.S. and international markets will provide a platform for long-term growth over the coming years.
– “As we launched WWE Network, we invested in marketing, programming and customer service. Although our earnings declined in the quarter, our performance surpassed our guidance, which targeted a range of Net loss from $12 million to $15 million,” said George Barrios, Chief Strategy & Financial Officer.
– Regarding TV licensing agreements, WWE is continuing to negotiate with potential distribution partners in the U.S. and India.
– For the second quarter 2014, WWE expects net income to decline sequentially from the first quarter this year by a range of $7 million to $10 million, resulting in a net loss of $15 million to $18 million. The decline in earnings reflects increased live event profits due to WrestleMania 30, which are expected to be more than offset by increased WWE Network costs, a seasonal decrease in licensing and lower results from home entertainment (reflecting difficult comparisons to first quarter adjustments).