It’s hard to imagine in an era where the UFC dominates conversation and attention that the old school World Wrestling Entertainment (WWE.N) could become so profitable this late in their existence.
Just a few years ago the company was struggling and the stock price reflected that. But, while everyone has been talking about McGregor vs. Khabib or Mayweather vs. McGregor, the WEE has quietly been raking in profits this year
The reason for this was the WWE woke up to a reality that so many companies haven’t yet and that is, the television is dead.
The WWE decided to embrace a Netflix style streaming service for wrestling, bypassing the big cable companies and going direct to consumer. The strategy paid dividends. Thanks to 1.8 million streaming subscribers, its revenue has jumped to all-time highs.
The WWE did $281.6 million in revenue in Q2 of 2018, the highest recorded revenue ever by the company.
From a 52 week low of $30.09, to a high of $97.69 in, the stock moved 220% over the course of 2018.
This widespread shift away from cable TV toward direct-to-consumer offerings from companies such as Netflix, Facebook, Apple, Amazon, Hulu and others has led many investors to pull their money out of cable and telecom holdings and into tech stocks.
Compare the WWE’s chart to Dish Network (DISH.N), one of the largest US satellite cable providers on the market and AT&T (T.N), one of America’s largest cable providers. The two have an almost identical trend.
Another sector we believe will piggyback on the movement towards streaming, aided by the help of platforms like Twitch will be eSports: