NEW YORK (TheStreet) -- World Wrestling Entertainment (WWE - Get Report) shares were nearly cut in half, as investors digested the latest television deal, and were clearly unhappy with it. Analysts have also voiced concerns that the company's return to profitability may happen later than expected.
Under the terms of the agreement, Raw, WWE's flagship show, returns to the USA Network, while Smackdown will run on Syfy. WWE executive Paul "Triple H" Levesque made the announcement in a press conference at NBC's Upfront presentation.
Currently, Raw is televised live on the USA Network, while Smackdown is taped on SyFy on Tuesday, and then airs on Friday.
Shares of WWE were plunging in pre-market trading, losing 47.1% to $10.54.
Following the announcement, WWE said that it expects to potentially double or triple its 2012 OIBDA (operating income before depreciation and amortization) to a range of $125 million to $190 million by 2015.
"We continue to achieve significant increases in the value of our largest television agreements, a key component of our business plan" stated Vince McMahon, Chairman and Chief Executive Officer. "The rising value of our content coupled with the global expansion of WWE Network will provide the foundation for long-term growth that continues to transform our business over the coming years."
"With the favorable renegotiation of our largest television agreements, WWE transitions to a subscription-based business model for future growth," added George Barrios, Chief Strategy & Financial Officer. "Successful execution of our WWE Network strategy could significantly raise the Company's earnings profile and better reflect WWE's tremendous global appeal and brand strength. With such execution, the Company anticipates sufficient financial resources, including debt capacity, to fund growth, support ongoing business requirements and maintain its current dividend." Despite the new television deal, investors were clearly concerned about the viability of the Network and the television deal, as several analysts pushed out earnings estimates, with one downgrading the company. Here's what a few of them had to say.
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