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What’s worse, the company’s stock is less than half where it was nine and a half months ago. In an attempt to make sense of a situation messier than the abandoned Who Attacked Roman Reigns? storyline on “SmackDown,” TheWrap TV editor Tony Maglio tag-teamed with Wrestlenomics analyst Brandon Thurston to assess the state of the granddaddy of pro wrestling.

Also Read: WWE Stock Sinks 20% on News of George Barrios, Michelle Wilson Exits

OK, Brandon, as I write this on Monday, WWE stock is down another few percentage points. We get WWE’s Q4 and full-year 2019 earnings on Thursday morning and the XFL 2.0’s — which is supposedly independent from WWE — on Saturday. What’s going on?

It’s a lot of concerning news for WWE lately. Despite all that, WWE remains really financially secure. The nature of their TV agreements with NBCUniversal and Fox Sports, respectively for “Raw” and “Smackdown,” basically guarantees that WWE will break its own revenue records and probably profit records through 2024. The stock had a terrific run-up and subsequent optimism following the completion of those deals in spring 2018.

The reason for the stock decline of late is uncertainty. Why were co-presidents George Barrios and Michelle Wilson apparently fired? Barrios especially was the face of the company to the financial community. What was the nature of their disagreements alluded to in the press release? Does CEO Vince McMahon want to spend more? If so, is that going to adversely affect WWE’s profit performance?

Part of the concern, which may have played a role in the co-presidents’ exit, is delay around WWE’s international TV deals. The U.K. and India are their biggest TV markets after the U.S. The U.K. deal resulted in changing partners, going from Sky Sports to BT Sport, possibly at lateral or slight downgrade in economic value. Some analysts expected a slight upgrade in that market. The India deal expired with the end of 2019, but WWE programming is still airing with their partner there, Sony. So maybe a deal is imminent, but it’s not been completed on schedule. Analysts were expecting an upgrade from India as well. Is the delay related to WWE not getting the value they’d hoped for?

Additionally, the deal in the Middle East-North Africa region, being negotiated with Saudi-owned MBC is still overdue, which was in-part the company’s explanation on why adjusted OIBDA (WWE’s non-GAAP preferred profit metric) projections were downgraded from $200 million to a range of $180 million to $190 million. We know because it was stated in the aforementioned press release, that WWE is going to report on the low-end of that range Thursday.

The most interesting story to me is around why Barrios and Wilson are out. I expect we’ll get some hints from Vince on Thursday but will still be left with unanswered questions. Was spending the issue? Were there other factors? Trouble with international TV deals? The Live Events division has been struggling to make a profit. Was there strain in light of AEW getting an extension and upgrade to its deal with WarnerMedia? Is Vince having some remorse about the WWE Network, which was largely pitched by the co-presidents, not meeting the original 3-4 million subscriber goal originally set? Do Barrios and Wilson realize, as I’ve argued elsewhere, that McMahon’s involvement in creative is a detriment to star development and WWE economics, and was that a source of tension? Some reports indicate it was not a factor, but was there pressure from the relaunch of the XFL happening on Saturday and the use of WWE employees’ labor to support it? Hopefully we get some clues on these questions Thursday.

Also Read: How WWE Superstar Carmella Came Up With the 'Code of Silence' Submission Move

I personally wouldn’t bet on creative being much of a concern to Barrios and Wilson — at least not one high enough on their list at the very ominous time they were let go, which seems to have caught all (including possibly WWE HR) by surprise.

I, too, have heard some concerns over WWE employees spending time on the XFL 2.0 launch. Explain why that’s something between an optics problem and possibly illegal — or at least, arguably, a breach of fiduciary duties.

A lawsuit was filed recently related to WWE’s relationship with XFL’s parent company, Alpha Entertainment, LLC. The plaintiff isn’t claiming damages yet, but is demanding records. Basically there’s suspicion that the two McMahon-controlled entities are engaged in dealings that are very favorable to Alpha and not in WWE shareholders’ interests. WWE sold Alpha the XFL intellectual property and is, on an ongoing basis, providing Alpha with support services of WWE employees. The suit alleges conflicts of interest and raises the possibility that transactions are being made at a rate that is below fair market value. The plaintiff (Oklahoma Firefighters Pension and Retirement System) is a very small shareholder, so this may be an attempt to begin class action.

Vince McMahon formed Alpha Entertainment as a separate entity, to remove WWE from the risk that would be presented by his second attempt at a pro football league. WWE’s SEC filings disclose that the XFL IP was sold to Alpha for $1 million. The lawsuit shows a slide from an AAF business pitch deck where it’s suggested the Ebersol family would offer WWE $50 million for the IP (however such a deal between McMahon and Ebersols obviously never materialized). Trademark filings show McMahon’s favored law firm (K&L Gates) simultaneously represented WWE and Alpha as it relates to the relevant IP, an alleged conflict of interest. SEC filings also show that WWE is charging Alpha for support services.

WWE employees are doing XFL work, and Alpha is paying WWE for that work. But the lawsuit points out there have been no disclosures about the terms of the agreement, nor how the charges are being calculated. It’s suggested an independent committee should have been appointed to ensure agreements between WWE and Alpha were in the interest of WWE shareholders, and there are no disclosures to show any such action was taken. I’m not a legal expert but it seems like a reasonable case for the plaintiffs. It’ll be interesting to see if more records are made public as a result. (In the Oklahoma Firefighters Pension and Retirement System’s legal filing, the group says that on Sept. 17, 2019, WWE declined to allow for an inspection of the wrestling company’s books. It goes on to say that on Dec. 9, WWE declined to produce documents it demanded. WWE did not immediately respond to TheWrap’s request for comment on those statements in the Oklahoma Firefighters Pension and Retirement System’s legal filing.)

If you wonder exactly how shy of those WWE Network sub predictions the SVOD service currently is, ahead of Q3, we charted its entire existence. It didn’t do any better in the third quarter, when WWE Network averaged 1.51 million paid subscribers. Next quarter will get the WrestleMania bump, but this one…

On WWE Network, in the previous earnings report, WWE projected 1,430,000 for average paid subscribers for Q4. If accurate, which they usually are, that would be a 10% decline from last year’s Q4. It’ll probably mean a full year of decline in U.S. subscriptions. As part of the industry analysis I did recently, I found international subscriptions are falling too.

Taking the weekly “NXT” program off the WWE Network in favor of putting it on the USA Network doesn’t help subs. We should be able to deduce from Thursday report what WWE’s getting in the way of compensation from NBCU for the “NXT” move. “NXT” was the most popular weekly program on the Network, although it’s important to remember the peak NXT Takeover events remain exclusively on the service. I think the larger reason for the decline in subs, like the decline in other areas of business you noted earlier, is that WWE hasn’t made big stars lately and John Cena is following Dwayne Johnson’s footsteps to move on to an acting career.

The technology wrestling uses to reach audiences and the qualities that hook fans always changes over the years, but what still hasn’t changed in the long history of pro wrestling is that it’s a star-driven business. Distribution strategy is essential, but it’s blunted if there aren’t big stars in big matches to deliver. Fortunately for WWE they had a couple decades to build themselves up as far and away the biggest wrestling brand in the world and they find themselves in a media market where the value on live sports-like programming has exploded, so they’ve got a lot of financial security.

Also Read: How Massachusetts Wrestler Carmella Became WWE's 'Princess of Staten Island'

So the consensus estimate forecasts WWE earnings per share of 73 cents on $333.28 million in revenue. Those would both be way up from last year. Do you have a prediction as to a beat or a miss?

Doing the math, I have trouble getting to $333 million in revenue for the quarter. At best I can get to about $283 million. That’s all counting on $50 million from a Saudi Arabia event, there being some money for “NXT” on USA Network, and a step-up in new “Raw” and “SmackDown” money. If I’m close, this sheds light on additional reasoning for the exit of Barrios and Wilson. That would close the year at about $921 million in revenue, down from 2018 ($930 million). 2019 was a year where they were originally talking about hitting $1 billion in revenue. The last time annual revenue fell from the year prior was 2009. Recall too the company has adjusted financial projections in the last two reports, based on the delay in completing the MBC deal. If that deal was completed by now, one would think there’d be a press release.

This is the first quarter with payments from the new U.S. TV deals, which will definitely mean a large increase in that line, but I expect the payments to contractually escalate over time, so the smallest payments of those 5-year deals will be in this report. To meet 73 cents in EPS, net income in the quarter has to be $60-$66 million, depending on diluted shares. The vast majority of profit is going to come from the media division. Despite the usual holiday tour, I think it’s likely little money is made on live events again this quarter. And consumer products will provide a minority of profit. I see net income being around $55 million, which would end the year for total net income at about $63 million, down from last year’s record-breaking $99.6 million. Diluted shares have been around 90 million lately, which would imply an EPS of 61 cents for the quarter.

I’m glad you mentioned stars. Who do you see as WWE’s top three to five stars? Who do you see there that should be pushed more to main event status?

Many of WWE’s major stars that jump to mind aren’t full-time. As far as name recognition, it’s John Cena, Brock Lesnar, The Undertaker. Does Ronda Rousey count? Goldberg, Triple H, Shane McMahon, Vince, Stephanie. To a wider audience, the Bella Twins. It doesn’t feel likely Cena will be appearing at any time other than a WrestleMania at this point. The star power for the average PPV isn’t as great as it is for the Saudi events. As far as those who appear on a weekly basis: Roman Reigns, Becky Lynch, Seth Rollins, Randy Orton, Charlotte are their 5 biggest names, if I had to pick.

I think there are countless wrestlers who would be bigger stars under a different creative system, including those I already mentioned. But Rusev, Bayley, Braun Strowman and Sasha Banks stand out as those who could’ve been bigger stars for WWE. I think a component in the audience decline is some fans feel frustrated seeing so many talented wrestlers not reach their potential for reasons that are, perceptibly if not actually, out of their control. And it feels like the window has passed for many. It’s encouraging though to see Drew McIntyre make his comeback after being released a few years back, now winning the Royal Rumble match recently. I think with his size and personality, Big E could still be a main-eventer as a singles wrestler. NXT talents Bianca Belair and Velveteen Dream seem destined for big things as well.

Finally, do you see a near-to-midterm future with no WWE Network? In light of the XFL 1.0’s failure and the disastrous AAFL, what are your XFL 2.0 predictions?

As far as the network goes, I could see a future where WWE sells rights to the PPVs to a bigger streaming player like DAZN or Peacock or ESPN+. In that case, there’s probably still a WWE Network to offer the company’s enormous video library, which there’d still be a market for. The company is benefiting from collecting data on its subscribers too, which they use to market additional WWE products too. The infrastructure is there and there’s still value in the library and data, so I don’t think it’s ever going away outright.

Finally, on your XFL 2.0 question. As outrageous as the idea is of trying to do the XFL again, Vince probably has a good shot at it. He cashed out about $380 million in stock to fund it, so I don’t think this is going to end up like AAF where the funding backed out. He has multi-year TV deals in place, so the XFL is probably ready to be around for a few years to lose money and see if it can gain a following that they can then leverage into huge rights fees later that will cover the initial costs. The XFL and AEW propositions are somewhat alike in that way: betting that there’s space for a secondary brand, requiring strong funding upfront, taking initial TV deals that don’t pay big money but have strong reach, and hoping to later capture the lucrative market in TV for live sports. The strategy seems to have already paid off for AEW.

Is any present-day strategy paying off for WWE? Check back with TheWrap on Thursday morning for the wrestling company’s earnings report and our analysts. WWE will hold a conference call at 11 a.m. to discuss the results.