WWF’s Popularity, Profit Get Slammed

Dwindling TV audiences and the terrorist attacks have dampened fans’ appetite for the World Wrestling Federation Entertainment Inc.’s made-up mayhem.

The company posted a 49% decline in net income Wednesday for its fiscal second quarter and warned that full-year sales may slip by as much as 13%.

WWF said net income totaled $4.8 million for the three months ended Oct. 26, down from $9.5 million for the same period a year earlier. Revenue fell 12% to $98.2 million.

The biggest professional wrestling producer, WWF creates live wrestling matches, the “Smackdown” television show and licenses related merchandise.

The Stamford, Conn.-based company cut its sales projections for the year, citing a drop in the number of households with access to its pay-per-view events.

Much of the drop-off is due to the fact that Hughes Electronics’ DirecTV satellite service is no longer carrying WWF programs. The two sides failed to reach a deal on revenue-sharing and broke off negotiations in October.

During the second quarter, attendance at the WWF’s 55 events slipped to 475,000 from 630,300 for the same number of events during the period a year ago. Pay-per-view buys dropped to 1.2 million, down from 1.7 million last year.

The souring outlook follows a series of financial woes at the company, which went public two years ago. WWF and its chairman, third-generation wrestling promoter Vincent K. McMahon, lost $47 million this year in the wake of his disastrous foray into professional football with the ill-fated XFL league.

WWF said it will take a $2-million charge next quarter to account for cutting 39 jobs, or 9% of its work force, which the company announced Nov. 9. The move is expected to cut costs by $14 million.

WWF executives said fiscal 2002 sales would total $395 million to $415 million, instead of the $492 million to $501.6 million they projected in June.

Chief Executive Linda McMahon said the company also suffered from a slowing economy and lower attendance at shows after the terrorist attack.

But “the popularity of our entertainment remains strong,” McMahon said. She cited the company’s upcoming Wrestlemania event, which sold about 52,000 tickets in the weekend it went on sale and is expected to be the highest-grossing event in the company’s history.

WWF said it plans to stage an international tour and open a London office in 2002 to widen its expansion overseas.

WWF, which is absorbing rival World Championship Wrestling, also is banking on a boost in popularity from the release of the film “The Scorpion King,” which stars a WWF wrestler known as the Rock.

WWF shares, priced at $17 when the company went public, have dropped 20% in the last five months and fell 10 cents Wednesday to close at $12.15 on the New York Stock Exchange.