World Wrestling Entertainment (NYSE: WWE) stepped into the Wall Street ring on Tuesday -- and lost. The company's stock dropped about 8% at closing on the Q1 earnings release (it did recover a bit during the after-hours session). I'd probably call this profit-taking, although there was one thing about the earnings report that I didn't like: free cash flow.

Let me say first, though, that revenues increased more than 50% to $162.6 million, and that earnings per share rose almost 29% to 27 cents (according to Briefing.com, this matched expectations). This is excellent growth, and it shows the resilience of wrestling as an entertainment brand; sure, many on Wall Street may not take the company seriously, but they're wrong. I enjoyed, by the way, that WWE increased the buy-rates for its Royal Rumble and No Way Out pay-per-view events. Pay-per-view is a very vital part of WWE's operations, in my opinion. And let's not forget a big driver for the quarter -- Wrestlemania XXIV -- which brought in more than million buys.

Unfortunately, free cash tumbled off the mat, decreasing 77%. And, no, the amount generated did not cover the generous dividend that WWE pays. I would really like to see free cash flow do well every quarter since WWE has been a steady dividend-increaser over its time as a public company. Management must focus on the cash-flow statement and make it a priority.

Besides cash flow, my other favorite thing to look at with WWE is how its film operations are faring. Longtime shareholders know that its Hollywood ambitions have gotten off to a shaky start, but during the quarter, WWE films contributed profits equal to $1.9 million on recognized revenues of $11.3 million. I think WWE should continue making movies and build up as deep a library as possible. There are probably a lot of shareholders who think that WWE should drop this scheme, but I would disagree with such a notion. You can just tell that the McMahon's want to become as big a competitor as possible to larger media companies like Disney (NYSE: DIS), Time Warner (NYSE: TWX), News Corp. (NYSE: NWS), and Viacom (NYSE: VIA). Like it or not, WWE needs a movie division.

So, I liked the earnings, but I'm wishing for a better free-cash-flow picture next time around. Over the long haul, I'm hoping WWE lives up to my expectations, as I think it will grow over time and become a larger media company.

Disclosure: I own shares in Disney; positions can change at any time.