Author: Blake Oestriecher / Source: Forbes
WWE Raw has raised some eyebrows thanks to its controversial decision to host Crown Jewel despite widespread pressure to cancel the show, resulting in a myriad of issues that could negatively affect the company in the long term.
Over the past several weeks, WWE’s image has taken a number of knockout punches, coinciding with plummeting stock prices after they skyrocketed to all-time highs earlier this year. Perhaps the most obvious reason behind WWE’s dropping stock price is that the company’s questionable decision to move forward with the Crown Jewel event (despite US senators urging the company not to and the general sense that continuing with the event is a bad idea) hasn’t sat well with investors or fans. Seeking Alpha’s Kevin Cavanagh pointed out that the sudden pessimistic outlook regarding WWE’s stock price and its immediate financial future stems from a series of disappointments that were predicted by the site’s Dan Victor earlier this month:
His [Victor’s] central thesis was that performance metrics such as slowing social media engagement, flat TV ratings, and tepid live event attendance suggested emerging signs of weakness. While social media engagement did not concern me, his latter two points certainly are concerns after looking at 3Q 2018 results. Take those concerns, add in poor merchandise sales, and add publish backlash about the relationship with Saudi Arabia and all of a sudden a stock with nothing but good news a few months ago (e.
g., TV deals, Ronda Rousey, International Expansion) has shifted to a stock with nothing but the bad news described.
Indeed, Crown Jewel has been more than just a public relations nightmare for WWE. It has drawn the ire of fans and critics alike for being a morally and ethically questionable event. Many have flat-out bashed WWE for the move while the general sense is that, at the very least, holding the show is a very obvious case of poor taste and bad timing. Yet, WWE released the following statement on its decision:
WWE has operated in the Middle East for nearly 20 years and has developed a sizable and dedicated fan base. Considering the heinous crime committed at the Saudi consulate in Istanbul, the Company faced a very difficult decision as it relates to its event scheduled for November 2 in Riyadh. Similar to other U.S.-based companies who plan to continue operations in Saudi Arabia, the Company has decided to uphold its contractual obligations to the General Sports Authority and stage the event. Full year 2018 guidance is predicated on the staging of the Riyadh event as scheduled.
Stephanie McMahon doubled down on that statement, telling Sky News (h/t WrestlingInc) it was an “incredibly tough decision” but a “business” one at heart:
Moving forward with Crown Jewel in Saudi Arabia was an incredibly tough decision, given that…
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