The Saudi Arabia Controversy Could Cost WWE $16 Million

WWE has found themselves embroiled in controversy after it was found journalist Jamal Khashoggi was brutally murdered at the consulate in Istanbul. With no announcement yet of Crown Jewel being taken out of Saudi Arabia, Dade Hayes of Deadline has an article up revealing the details of what pulling out of the Saudi Arabia deal could cost WWE in 2019. Below are quotes from the article:

Eric Handler of MKM Partners maintains a buy rating on the stock, with a 12-month price target of $95. It closed today’s trading session at $83.98, down a fraction. Handler estimates a decision to delay or cancel the wrestling circuit’s November 2 “Crown Jewel” event in Saudi Arabia, or move it out of the country, could cause a $2 million-$3 million hit to fourth-quarter cash flow.

“WWE has been quiet,” Handler wrote. The Raw promotional tactic “leads us to believe management is exploring the possibility of moving the event outside the country,” he added.

Were the company to go beyond the Crown Jewel event and walk away from its 10-year, multi-platform partnership, the hit to 2019 operating income would range from $12 million-$16 million, Handler estimates. He called that “not an inconsequential number, but far less impactful than WWE’s new TV contracts” with networks including Fox.

Saudi Arabia’s Public Investment Fund took a minority stake in Deadline and Variety owner PMC earlier this year for a reported $200 million.

You can read Hayes’ entire article by going here.

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