Updated November 5, 2022 to improve clarity.
Based on evidence from WWE’s own filings as well as public legal filings, we can be quite confident the Saudi Arabian government pays WWE about $50 million for each event in the country since 2018. Here I’ll explain how we know that.
But first, why is $50 million per event is significant to WWE’s business?
So that’s about $100 million in revenue for WWE per year.
This is an enormous amount of revenue for WWE. In 2018, the year the deal was made, the wrestling company reported $930 million in annual revenue. $100 million would account for more than 10% of the company’s yearly gross.
For further 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, just the first five Saudi events WWE held under the agreement add up to more revenue than all Wrestlemania ticket sales combined, ever, adjusted for inflation.
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 their Trending Schedules provides a comprehensible table.
Notice the “Other” line under the “Media” division. This is where WWE reports revenue related to Saudi events.
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 make 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.”
How do we know $50 million is the per-event value?
The values in “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 by Wrestlenomics in yellow here:
There are 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.
This is a spreadsheet I used to estimate how the “Other” media revenue line breaks down.
In the last 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 analysis of WWE’s revenue reporting to support the notion of a $50 million per event value, but 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
Activity in WWE’s accounts receivable line suggests the Saudi government pays for at least some portion of the events in a delayed manner.
That activity is illustrated in the table below, where related comments from the company is collected from WWE’s SEC filings:
Paragraphs in WWE’s filings report what percentage of the amount in accounts receivable (money owed to WWE) is owed by the company’s most-indebted customer at the time. WWE doesn’t disclose the identity of the customer but this allows us to see that the company is owed more than $60 million by a single customer in some quarters. There’s seemingly no reason why that customer couldn’t be the Kingdom of Saudi Arabia.
In WWE’s Q3 2019 earnings 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. “
It seems possible KSA is paying with interest, or the revenue for each event is more than $50 million, or, perhaps more likely, WWE is being reimbursed for some expenses.
Is it possible the payment Barrios referenced 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 between The Undertaker and Goldberg. The amount, $60 million, is in excess of $50 million, possibly because it includes payment for multiple events or because it includes interest accumulated due to delayed payment.