Linda McMahon, as I'm sure most investors are aware, is no longer the CEO of World Wrestling Entertainment (NYSE: WWE). Her husband, Vincent K. McMahon, now occupies the role. The reason? Political ambitions. She wants to be a senator. Now, here's the question: should shareholders be worried about the change?

My opinion? Investors shouldn't worry at all. Well, perhaps that's overstating it a little, but I think there are a few things media observers should keep in mind.

Continue reading World Wrestling Entertainment should be just fine after management change

World Wrestling Entertainment should be just fine after management change originally appeared on BloggingStocks on Tue, 22 Sep 2009 08:00:00 EST. Please see our terms for use of feeds.

So what's the problem here? A couple things. First, costs need to be controlled (the press release does mention this issue, as well as a desire to be more careful when it comes to capital expenditures). Second, CEO Linda McMahon has to get fans excited about wrestling again. If you look at the buy rates for the pay-per-view events, you'll notice they've been declining. I think one thing that WWE must do is figure out a way to make its secondary pay-per-view shows a must-purchase item for the part of the fan base that falls outside of the hardcore wrestling viewer but doesn't exactly reach the realm of the casual audience. If the company can bring shows like The Great American Bash and Unforgiven up to the level of a SummerSlam, then the company will really be on a growth track.

Continue reading WWE: Again, it's all about the cash flow

WWE: Again, it's all about the cash flow originally appeared on BloggingStocks on Fri, 07 Nov 2008 14:38:00 EST. Please see our terms for use of feeds.

I was sent a press release today concerning World Wrestling Entertainment (NYSE: WWE). It was one that I had missed. WWE, as many may know, has a pretty high dividend yield. Problem is, in this trading environment, some high dividend yields have proven to be predictors of disaster. As an example, were you trading Newcastle Investment (NYSE: NCT) by any chance? Then you know what I mean. For many stocks, high yields are merely a ticket to Dividend-Cut City. Or how about General Electric Company (NYSE: GE)? That company didn't cut its dividend, but management indicates that there won't be a raise in the dividend this year. It's been many, many years since GE refused to raise its quarterly payout. In many sad ways, it could be considered a cut.

Yet, here's something encouraging for investors in WWE. Management at the world's most famous wrestling institution has come out swinging, eager to alleviate the fears of shaken investors in a world bloodied and bruised by the financial crisis (hey, maybe that could be a new wrestling character, Financial Crisis, and his finishing move could be the Mark-to-Market). According to the press release, WWE intends on keeping its current quarterly payout for the long term. The very high yield of 9%, as far as execs are concerned, is doable.

What are income investors to make of this? Well, in my opinion, long-term investors might do well with WWE stock. Consider that we are not dealing with a financial company. Like GE, WWE didn't say it intends to raise the payout. But WWE has increased the dividend quite a bit since it first initiated the shareholder-friendly initiative. In this environment, the ability to keep a high yield is something that could be valuable.

Continue reading World Wrestling Entertainment: Long-term play for dividend fans?

World Wrestling Entertainment: Long-term play for dividend fans? originally appeared on BloggingStocks on Wed, 01 Oct 2008 17:00:00 EST. Please see our terms for use of feeds.

World Wrestling Entertainment (NYSE: WWE) entered a match it apparently was unprepared to win this time around. I'm talking about a match for the most coveted prize on Wall Street: The Earnings Championship Belt.

During the second quarter, WWE had to lie down for the count. The top line saw a depressing decrease of nearly 6%, coming in at $129.7 million. The bottom line saw no growth whatsoever, as WWE earned $0.10 per diluted share, the same amount that was earned in the year-ago period. According to Briefing.com, this represents a miss of two pennies. One thing that must be noted is that the big Wrestlemania event took place during the second quarter last year and the first quarter this year.

Of course, one of the most fascinating elements of WWE's stock is its incredible yield. Right now, the company is trading at a yield greater than 9%. Considering WWE's massive brand power in sports entertainment, and the fact that wrestling should always be with us, that sounds like a great deal, correct? It could be over the long term.

However, a look at the cash-flow statement does not offer a lot of encouragement, to be honest. Operational cash flow declined massively, dropping 94% during the six-month period. And for both the quarterly period and the half-year period, there was negative free cash flow by management's own calculation. So, as can be seen, servicing a dividend with no free cash flow is like Rey Mysterio trying to body slam Andre the Giant.

Continue reading World Wrestling Entertainment: Management brought B-team to Q2

World Wrestling Entertainment: Management brought B-team to Q2 originally appeared on BloggingStocks on Wed, 06 Aug 2008 15:15:00 EST. Please see our terms for use of feeds.