It’s evident the Saudi government pays WWE about $50 million for each event. Here I’ll explain how we know that.
So that’s about $100 million in revenue for WWE per year.
This is an enormous amount of revenue for WWE. For context, a modern Wrestlemania generates about $15 million in ticket sales. The largest gate ever for a pro wrestling event was $17.3 million in 2016 for Wrestlemania 32 in Arlington, Texas. Each Saudi event is equal to about three modern Wrestlemanias-worth in ticket sales.
In fact, the five Saudi events WWE has held far total to more revenue than all Wrestlemania ticket sales combined, ever, adjusted for inflation.
For another measure of context: $50 million is roughly an entire year’s revenue for New Japan Pro Wrestling, which is probably the #3 wrestling company in the world for revenue. (All Elite Wrestling is probably #2.) New Japan generated $52 million from August 1, 2018 to July 31, 2019 — its most recent non-pandemic fiscal year.
So how do we know the value is about $50 million?
WWE consistently reports 11 different revenue lines (categorized into one of three divisions), which you can find referenced in documents on the company’s corporate website. Page 2 of the Trending Schedules gives the most accessible view. More on this later, but this what the Trending Schedules revenue segment detail table looks like:
Notice the “Other” line under the “Media” division. This is where WWE reports revenue related to the Saudi events.
Okay, but how do we know Saudi event money is reported in the “Other” segment within the “Media” division?
Lines in WWE’s quarterly reports (10-Q) filed with the SEC makes this evident.
WWE’s Q1 2020 report, published in April, mentions how the February 27 event in Saudi Arabia affected the “Other” media revenue line. From p. 33:
“Other revenues increased by $53.1 million, or 565%, primarily driven by the timing of our large-scale international event, Super ShowDown, coupled with $4.9 million of revenues associated with the timing of delivery related to our WWE Studios content.”
So how do we know $50 million is the per event value?
The “Other” media revenue line is much smaller in quarters in which there was no Saudi event, and much higher in quarters in which a Saudi event did occur.
The dates for each Saudi event is as follows:
- 4/27/2018: Q2 2018
- 11/2/2018: Q4 2018
- 6/7/2019: Q2 2019
- 10/31/2019: Q4 2019
- 2/27/2020: Q1 2020
WWE’s fiscal year is simply the calendar year. Quarters containing Saudi events are highlighted in yellow here:
Now, there are obviously other revenues sources besides Saudi event money going into the “Other” media line. The “Other” line also consists of reality TV series (Total Divas, Total Bellas, Miz & Mrs.), WWE Studios, and whatever’s left of home entertainment, and the Mixed Match Challenge programs that aired on Facebook in 2018.
I show how I estimate what the non-Saudi revenue is to come to $50 million in this spreadsheet. Here’s a screenshot:
In the green row, underlined in red, you can see how I couldn’t find a home for about $50 million of the revenue in each of the quarters that contained a Saudi event.
There’s not only this estimate to support the notion of a $50 million per event value. There’s other evidence as well.
One of the most-listened to episodes of Wrestlenomics Radio: an audio documentary timeline, produced in June 2019, on WWE’s relationship with the Saudi government
Conspicuous trends in WWE’s accounts receivable reporting
There’s been some conspicuous activity in WWE’s accounts receivable line, which suggests the Saudis pay for at least some portion of the events in a delayed manner.
Said activity is illustrated in the table below, where related information is collected from WWE’s SEC filings:
Paragraphs in WWE’s financial report what percentage of the amount in accounts receivable (money owed to WWE) is owed by the largest customer. This allows us to see that WWE is owed more than $60 million by a single customer in most recent quarters. And it’s very possible that largest customer is the Kingdom of Saudi Arabia.
In WWE’s Q3 2019 conference call on October 31, 2019, WWE’s then-co-president George Barrios mentioned on the call that after the quarter ended (September 30, 2019), WWE received a cash payment of $60 million. Barrios said:
“Notably, subsequent to quarter-end we received a $60 million payment for an outstanding receivable that would have resulted in year-over-year cash flow growth and positive free cash flow in the period had it been received during the quarter. “
So it seems possible KSA is paying with interest, or the revenue for each event is more than $50 million, or, perhaps most likely, WWE is being reimbursed for some expenses.
But wait — isn’t it possible the aforementioned payment was from something other than a Saudi event?
Not according to a declaration under penalty of perjury from WWE’s chief accounting officer, Mark Kowal, who “[a]mong other things, [oversees] the corporate accounting for payments received by WWE in respect of WWE events held in the Kingdom of Saudi Arabia”.
Kowal’s statement is related to a shareholders’ class-action lawsuit filed against WWE. The relevant portion of Kowal’s statement reads:
“KSA paid the full fee due with respect to WWE Super ShowDown 2019 prior to WWE Crown Jewel. In fact, WWE publicly disclosed in its Q3 2019 Earnings Conference Call held at 11 am ET on October 31, 2019 — prior to the start of WWE Crown Jewel 2019 later that day — the receipt of a $60 million payment for an outstanding receivable subsequent to the close of the quarter. Following the receipt of that payment, the full fee due with respect to WWE Super ShowDown 2019 had been paid, with $1.9 million of reimbursable costs relating to the event subsequently paid comprised of payments advanced by WWE for (i) shared costs (security, ground transportation, hotels, catering); (ii) customs and VAT; and (iii) merchandise/freight costs.”
Kowal essentially confirms that the $60 million payment disclosed by WWE on October 31, 2019 was indeed related to a Saudi Arabia event. That event was Super ShowDown 2019, which took place on June 7, 2019 in Jeddah. The show is probably best remembered for the main event that 50-plus-year-olds The Undertaker and Goldberg struggled to pull off.