WWF Profits Body-Slammed by Decline in Revenues

World Wrestling Federation Entertainment Inc. on Thursday posted lower quarterly profits, hurt by a decline in revenues.

The company, which has produced wrestling stars such as The Rock and Chyna, on Thursday posted lower fiscal third-quarter profits as revenues took a beating due to lower attendance, advertising weakness and a drop in tourism.

The pro wrestling company, a producer of live events and TV shows, said net income, including a gain related to the demise of the XFL pro football league, was $9.4 million, or 13 cents a share, in the fiscal third1.7 million, or 16 cents a share, a year earlier.

Revenues at World Wrestling Federation, whose ad revenues for the company, home to "Raw" -- the highest-rated series on basic cable -- and teen hit "Smackdown," fell to $21.3 million from $22.4 million a year-earlier while branded merchandising revenues fell to $26.8 million for the quarter from $31.7 million a year-earlier.

Licensing revenues fell 22 percent due primarily to the timing of the introduction of new video game titles in the current quarter, and overall merchandise revenue slipped 3 percent due to lower attendance.

The company said publishing revenues slipped 10 percent because of a decline in newsstand units sold and revenue for its theme restaurant and store in New York's Times Square fell 15 percent due to the drop off in tourism after the Sept. 11 attacks on the United States.

Earnings before interest, taxes, depreciation and amortization (EBITDA) fell to $11.3 million from $22.7 million last year due to lower revenues, lower margins in branded merchandise businesses, and increased selling, general and administrative expenses.

The Stamford, Connecticut-based company said it plans to introduce more live events and bring more branded merchandise to market, building on the sellouts and response it has gotten from fans at its events.

"This will pave the way for additional pay-per-views and television programming opportunities. The combination of our inherent creativity and the depth of our talent roster has provided the momentum for a successful extension of our brands," said World Wrestling Federation Chief Executive Linda McMahon in a statement.

Shares of World Wrestling Federation are down nearly 15 percent from a year ago and off nearly 23 percent from their initial public offering price of $17 in October 1999. The shares were last off 18 cents at $13.10.

The company has been struggling to recreate its image and regain momentum lost after the purchase of Ted Turner's rival league World Championship Wrestling last year and its failed expansion into football with the XFL league.

"We are encouraged by the early signs of success as we lay the foundation to support the creation of multiple story lines and the introduction of new talent under the WWFE umbrella," McMahon said.

Pro wrestling legend Hulk Hogan has returned to the story line as the company tries to woo audiences back.