WWE Stock: No Longer Down for the Count

Summary

---

WSJ Your Money Briefing

Episode Summary: WWE Stock: No Longer Down for the Count (August 29, 2018)

Main Theme

This episode, hosted by J.R. Whalen with guest Spencer Jacob (Deputy Editor, Heard on the Street), examines the dramatic resurgence of World Wrestling Entertainment (WWE) stock. The discussion centers on WWE’s transition from an underperforming, often underestimated company, to a top performer in the stock market, fueled by innovative media deals and new digital engagement strategies. The conversation also reflects on the company’s unique fanbase and the investing world’s evolving perception of WWE.

---

Key Discussion Points & Insights

1. WWE’s Stock Turnaround

• WWE’s Rocky History: Spencer Jacob outlines WWE's journey through “booms and busts" since going public, noting it is currently in a "boom period" ([02:34]).
  • Quote: "They've had some booms and busts and they're definitely in one of the boom periods right now. I think it could continue." – Spencer Jacob ([02:34])
• Recent Performance: The stock rose 162% in the year to date and about 700% since its low in early 2015 ([02:34]).

2. The Vince McMahon Factor and Leadership Innovations

• Tight Leadership Control: Vince McMahon remains central to WWE, maintaining "very tight control over the company" ([03:09]).
  • Quote: "You can't really discount Grand Poobah Vince McMahon... he's really very closely associated and has very tight control over the company." – Spencer Jacob ([03:09])
• New Executive Influence: Innovations have been introduced by younger executives, notably George Barrios, who helped close a lucrative content deal ([03:09]).

3. The Impact of New Media Deals

• Transformative Content Deals: WWE overcame skepticism from a disappointing 2014 NBCUniversal TV deal by splitting its current contract between Fox and NBCUniversal's USA Network—resulting in substantially better terms ([03:40]).
  • Quote: "They had, I guess, unrealistically high expectations or WWE didn't do a very good job negotiating that contract this time around. They actually split the contract... and got a much better deal." – Spencer Jacob ([03:40])

4. Evolving Viewership and WWE’s Digital Presence

• Declining TV Ratings, Rising Online Audience: Despite falling TV ratings, WWE’s online presence is booming, with billions of YouTube views monthly ([05:24]).
  • Quote: “They get billions of views per month on YouTube. And... it’s the number one sport worldwide in terms of YouTube views.” – Spencer Jacob ([05:24])
• Changing Sports Consumption: Jacob notes that younger and more diverse audiences are consuming WWE content differently than traditional TV, similar to trends in other sports ([04:33]).

5. Wall Street’s Reluctance and WWE’s Unique Appeal

• Investor Skepticism: Historically, analysts and fund managers have “missed the boat” due to demographic and cultural misconceptions about WWE’s audience. Only half of analysts rate WWE a buy, versus 80% average for other stocks ([05:59]).
  • Quote: "There’s a bit of a stigma to it... something like 100% of fund managers and stock analysts have been to college. Something like 10% of WWE fans have been to college or graduated from college." – Spencer Jacob ([05:59])
• Demographic Divide: WWE’s fanbase is mainly younger, racially diverse, and less college-educated, which may alienate some traditional investors ([05:59]).
• The “Fake” Factor: Jacob discusses WWE’s scripted nature and how, unlike real sports, "they decide the winner in advance," emphasizing both the entertainment aspect and fans’ enjoyment ([07:14]).
  • Memorable Moment: Spencer’s anecdote about his sons preferring the WWE Smackdown video game because the outcome isn’t predetermined ([07:14]).

6. How Listeners Can Participate in Stock Picking

• WSJ Stock Picking Contest: Listeners are invited to participate in the Heard on the Street summertime stock picks contest, making their own picks and comparing performance privately against WSJ editors ([08:38]).
  • Quote: “Subscribers to the Journal can go to the stock picking page and make two picks of their own and see how they stack up against each other.” – Spencer Jacob ([08:38])

---

Notable Quotes & Memorable Moments

• On WWE’s Recovery:
  "It was even worse when the stock was really beaten down and beginning this over 700% run." – Spencer Jacob ([05:59])

• On YouTube Dominance:
  “It’s the number two YouTube channel overall in the U.S. wow.” – J.R. Whalen ([05:42])

• On the Demographic Disconnect:
  “Not the sorts of people that you tend to meet at the barbecue in Westchester and talk about wrestling with.” – Spencer Jacob ([05:59])

• On the Scripted Nature of WWE:
  “Sorry to be spoiling anyone’s enjoyment of this, but it is fake. It is choreographed. It looks very exciting. And the physical feats... are very impressive, but they decide the winner in advance.” – Spencer Jacob ([07:14])

---

Important Timestamps

• 02:34 – Spencer Jacob discusses WWE’s stock history and current "boom period."
• 03:09 – The influence of Vince McMahon and the impact of younger executives.
• 03:40 – How the latest media deal differs from the disappointing 2014 agreement.
• 04:33 – The disconnect between declining TV ratings and WWE’s true reach.
• 05:24 – WWE’s massive digital and YouTube audience.
• 05:59 – Wall Street’s hesitation and demographic analysis.
• 07:14 – The nature of WWE as entertainment and the appeal of video game unpredictability.
• 08:38 – Invitation to the WSJ Summertime Stock Picks contest.

---

Tone and Style

The episode maintains the Wall Street Journal’s signature blend of objective analysis and approachable, conversational tone. Spanning both finance and pop culture, Jacob brings energy and personal anecdotes, while Whalen guides the discussion to actionable insights for investors and casual listeners alike.

---

Summary by: WSJ Your Money Briefing Podcast Summarizer
Episode Title: WWE Stock: No Longer Down for the Count
Date: August 29, 2018

Transcript

[Small Business Owner]

Access to affordable credit helps me pay my employees, but I don't really need it.

[Retail Industry Representative]

Inflation is killing me, but who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill.

[Small Business Owner]

See banks and credit unions help small businesses make payroll. This bill would cut the vital resources

[Retail Industry Representative]

they need while increasing megastore profits. They deserve it, don't they?

[Electronic Payments Coalition Spokesperson]

Tell Congress, stop the Durbin Marshall money grab for corporate megastores. Paid for by the Electronic Payments Coalition.

[J.R. Whalen]

With your Money briefing. I'm J.R. whalen. There was a time when investors in World Wrestling Entertainment were thrown to the mat. Well, times have changed. We'll get an update on the success of WWE in a moment. First, these money and markets headlines. You need to know some good news for home buyers. Home price growth slowed in June for the third straight month. Rising interest rates, along with elevated prices resulting from a lack of inventory are putting the brakes on price increases after gains had grown significantly faster than both incomes and inflation for most of the last two years. And the price increases appear primarily to be squeezing middle and upper middle class buyers, with the wealthiest Americans continuing to spend more to buy homes. Toll Brothers saw a 30% increase in profit in the quarter ending July 31, with customers spending $165,000 on average toward premium customization and design features. And a new federal law going into effect in September will make it easier for families to combat a growing problem of identity fraud of minors, allowing them to make inquiries about credit files in their child's name and freeze a file at no cost. Experts in the data security industry say that children are increasingly targeted by thieves who steal their Social Security numbers and create fake or so called synthetic identities that then open credit cards and take out loans or apply for public assistance. The credit reporting company Experian estimates that such identity theft will affect one in four children before they become an adult. We're joined by Hurt on the Street. Deputy editor Spencer Jacob and shares of World Wrestling Entertainment were seen by many as down for the count just a few years ago. But those who stuck with the likes of wrestlers AJ Styles and Charlotte Flair and Kyle O'Reilly have enjoyed sweet returns. But Spencer, it hasn't been a straight line upward for the stock.

[Spencer Jacob]

No, it hasn't. The company's been public for a while and they've had some booms and busts and they're definitely in one of the boom periods right now. I think it could continue. There's some skepticism. It's up 162% so far this year. It's up something like 700% since their last low, which was in early 2015. But they are kind of on the cusp of a very lucrative series of contracts that I think could keep the stock moving higher.

[J.R. Whalen]

We mentioned some wrestlers you can't really discount. Grand Poobah Vince McMahon, also from WWE.

[Spencer Jacob]

No, you can't. No. I mean, he's really very closely associated and has very tight control over the company. Personally, I think he's about 70 years old. There are some younger executives though who have pushed some innovations. George Barrios, the chief financial officer has now joined the board who was seen as instrumental in cementing this new, much more lucrative media deal that's going to kick in next year.

[J.R. Whalen]

This new comprehensive content deal put investors at ease, but there was a lot of concern, especially with a standalone TV deal with NBCUniversal.

[Spencer Jacob]

That's right. They are in the middle right now of an existing five year deal that expires next October. People were very, very disappointed when they heard the details of it back in 2014. Basically they thought that they were getting far too little because people were getting very excited at the time about UFC and things like that, other forms of live entertainment. And they had, I guess, unrealistically high expectations or WWE didn't do a very good job negotiating that contract this time around. It actually split the contract between Fox and its traditional home, which is Universal USA Network, owned by NBCUniversal and got a much better deal.

[J.R. Whalen]

You know, it's remarkable that TV ratings have declined for wwe, WWE and a lot of other properties as well. But it doesn't really mean the WWE has seen an erosion in its following and in turn its revenues. I mean, it has an enormous following online.

[Spencer Jacob]

If you just looked at that, then you would draw some very pessimistic conclusions. If you just looked at that for Major League Baseball or NFL or anything, you would draw some very pessimistic conclusions. But they would be wrong conclusions because TV viewership is trending older, a lot older. And especially it's very male, very middle aged to even in the case of sports like baseball, almost in the senior citizen range in terms of the average viewer. But people watch sports in different ways now. They pay for content, you know, in the case of mlb, MLB Network or people who like fantasy football will watch Red Zone. And it's the same for WWE where people pay for watching pay per view events or they watch clips for free on YouTube. This is actually. They have a gigantic YouTube presence that

[J.R. Whalen]

really jumped out at me is an amazing following they have on YouTube.

[Spencer Jacob]

Yeah, it's huge. I mean, they get billions of views per Month on YouTube. And I mean, if you. To the extent you consider it a sport, it's the number one sport worldwide in terms of YouTube views. And I think it's the number two YouTube channel overall in the U.S. wow.

[J.R. Whalen]

This is like a sea change for WWE. As you point out in your column, live entertainment had much of a problem attracting investor interest, but the World Wrestling Entertainment that's had a history of getting a cool reception from Wall street, and that seems to be turning around just recently.

[Spencer Jacob]

Yeah, I think analysts seem to have kind of missed the boat on this, and I think part of it. And one person I spoke with who's a longtime wrestling journalist said that there's a bit of a stigma to it and that might hurt it. And if you think about the audience of WWE, you something like 100% of fund managers and stock analysts have been to College. Something like 10% of WWE fans have been to college or graduated from college. And that might be part of the problem. Kind of understanding its appeal. You have sort of teenage boys or even preteen boys who are very into it. You have largely black, Hispanic, rural, uneducated audience that are into it. So different demographics. Not the sorts of people that you tend to meet and meet at the barbecue in Westchester and talk about wrestling with. Not that there aren't people who fit that demographic either. But that might be part of the problem in understanding its appeal and missing some of the turning points. If you look at it right now, for example, only half of analysts rated a buy, whereas the average for any stock rated by analysts is close to 80%. It's a, you know, that. That's a fairly cool reception. And the stock has, you know, that the. It was even worse when the stock was really beaten down and beginning this over 700% run. So I have three teenage boys, you know, and they at one point were really into it, although they noted, you know, they were really into wrestling video games, too. They had a WWE Smackdown video game. Smackdown is the name of one of the shows, and they loved it. They know the name of every wrestler and all the different moves. And, you know, and were telling me that, like, actually the video game is the only thing where you actually don't know the outcome because you're fighting against each other. Two of my sons will fight each other, and, you know, they're actually competing. Whereas in wwe, that's one of the sort of, you know, strikes against it in a way, is that it is, obviously, if you didn't know this. Sorry to be spoiling anyone's enjoyment of this, but it is fake. It is choreographed. It looks very exciting. And the physical feats that one sees in a wrestling show are very impressive, but they decide the winner in advance. And that's why it's sort of. It is a sport, I guess, in a sense, but not a sport in the sense of the outcome not being known, although it is not known to the viewers at the time. And it's not known to the extent that there actually is gambling. There's sports gambling on WWE outcomes, which I found very surprising.

[J.R. Whalen]

Now, World Wrestling Entertainment, as we've been talking about, seen by many as being an attractive stock. It's a component of the Herd on the street team's summertime stock Picks feature. Spencer, how can our listeners get involved?

[Spencer Jacob]

So there is a very good way for people to participate in the contest, which is that just as each herd rider around the world is making two stock picks as part of this contest, my two were WWE and Skechers, both of which I was long readers. Subscribers to the Journal can go to the stock picking page and make two picks of their own and see how they stack up against each other. And it's totally private. You see how you rank against us. And at the end there'll be some prizes handed out for the winners. We've had overwhelming response from readers already just in the several hours that the stock picking contest has been open. And it's open for the next several days.

[J.R. Whalen]

All right, you can check it out on WSJ.com or the WSJ app. And that is Wall Street Journal deputy editor of Heard on the Street, Spencer Jacob joining us here in our studio. Spencer, thanks for being with us.

[Spencer Jacob]

Thank you.

[J.R. Whalen]

And that's your money briefing. I'm JR Whalen in New York for the Wall Street Journal.

[Small Business Owner]

Access to affordable credit helps me pay my employees, but I don't really need it.

[Retail Industry Representative]

Inflation is killing me, but who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill.

[Small Business Owner]

See banks and credit unions help small businesses make payroll. This bill would cut the vital resources

[Retail Industry Representative]

they need while increasing megastore profits. They deserve it, don't they?

[Electronic Payments Coalition Spokesperson]

Tell Congress, stop the Durbin Marshall money grab for corporate megastores paid for by the Electronic Payments Coalition.