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WWE looks to right the ship in Saudi Arabia

Fans cheer during the World Wrestling Entertainment (WWE) Crown Jewel pay-per-view at the King Saud University Stadium in Riyadh on November 2, 2018. (Photo by Fayez Nureldine / AFP) (Photo credit should read FAYEZ NURELDINE/AFP/Getty Images)

World Wrestling Entertainment (WWE) announced it return to the Kingdom of Saudi Arabia on Friday, June 7. The event, which will emanate from the King Abdullah Sports City Stadium in Jeddah, will feature WWE stars of the past and present. “WWE Superstars” Roman Reigns, Undertaker, Kofi Kingston, Braun Strowman, Seth Rollins, Goldberg, AJ Styles, and Brock Lesnar are all scheduled to be a part of the event which will stream live on the WWE network. The June 7 event will be the first time the WWE will hold a show in Saudi Arabia since the controversial “Crown Jewel” event which took place on November 2, 2018.

“Crown Jewel” sparked controversy because it was held just weeks after the murder of Saudi journalist Jamal Khashoggi at the Saudi Arabian consulate in Istanbul, Turkey. Many have accused Saudi Crown Prince Mohammed bin Salman as being the orchestrator of the killing, since the journalist had been a critic of Saudi Arabia’s ruling monarchy. In response, many companies and captains of industry distanced themselves from the Kingdom — but not WWE.

Fans cheer during the WWE "Crown Jewel" World Cup 2018 tournament at King Saud University Stadium in Riyadh, November 2, 2018. REUTERS/Faisal al Nasser

The wrestling and entertainment giant chose to continue with the show due to a 10-year partnership with the Saudis as part of Crown Prince Mohammed bin Salman’s “Saudi Vision 2030” to broaden its economy. Despite some backlash by the likes of late-night talk show host John Oliver, the show was a success. In Q4 2018, WWE’s international revenue increased 58% to $318 million. That marked the first time in company history that international revenue surpassed the $300 million mark. Saudi shows like “Crown Jewel” and the earlier “Greatest Royal Rumble” played a big part in WWE reaching such lofty numbers.

On April 7, the WWE held it’s record-breaking marquee event, WrestleMania, but on April 25 WWE’s Q1 earnings posted a surprising miss. WWE revenues were down in Q1 to the tune of $182.4 million, compared to $187.7 million in the prior year’s quarter. Operating income fell to $6.8 million compared to revenue of $21.8 million. WWE chairman and CEO Vince McMahon cited talent injuries for the earnings miss. During WWE’s latest earnings call McMahon said injured talent led to a decrease in live event attendance which led to the decline in merchandise sales.

Following the announcement, shares of WWE were down 13%. In addition, WWE has also been experiencing a rating slide. On April 22, ratings for the company's flagship program “Monday Night Raw” dropped 11% from the prior week. It would be safe to say that the largest wrestling company in the world is looking toward the June 7 event in Saudi Arabia to help cure its post-WrestleMania hangover, along with a pair of mega TV deals with Fox and NBCU which take effect this fall that is worth over $1.2 billion.

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