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WWE Gets Smacked Down: What Wall Street's Saying

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.

The company also provided an update on the WWE Network, something CFO George Barrios said was a "ground breaking event" in an interview with TheStreet earlier this year. Stamford, CT.-based WWE said it needs between 1.3 million and 1.4 million subscribers at "steady state" on a global basis for the WWE Network's incremental OIBDA to offset the complete cannibalization of the Company's Pay-Per-View and SVOD businesses. "At 1.3 million to 1.4 million subscribers, the Company's Network segment, which includes the results of WWE's Network, Pay-Per-View and SVOD businesses, would generate OIBDA results of $40 million, (+/- 10%), which is on par with the OIBDA profits generated by the Company's Pay-Per-View and SVOD businesses in 2012," the company said in the press release.

"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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SYM TRADE IT LAST %CHG
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