The wrestling circuit had been under pressure to either move, postpone or cancel the event given the broader pullback of financial and media interests in Saudi Arabia over the murder of journalist Jamal Khashoggi.
“WWE has operated in the Middle East for nearly 20 years and has developed a sizable and dedicated fan base,” the company said in a statement. “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.”
Previously, the WWE had issued only a terse statement saying it was “monitoring the situation.” As media entities, banks and even Treasury Secretary Steven Mnuchin made moves publicly distancing themselves from Saudi Arabia, the WWE faced intensifying scrutiny over the event. HBO host John Oliver called out the WWE during a segment recently on Last Week Tonight, lampooning the wrestling organization as clips were shown of its April event.
Analyst Eric Handler of MKM Partners last week pointed out that the stakes are not insignificant. Changing course for the Crown Jewel event could have dented cash flow in the fourth quarter by $2 million to $3 million. Should the WWE abandon its 10-year deal with the Saudis, which kicked off in the spring, the tab could be in the range of $16 million. The WWE acknowledged today that there is an ongoing financial risk in the situation, though it did not offer any specific figures.
The WWE’s on-air TV promos and website have been omitting mentions of the host country, and ticket sales slated to start last week have been delayed. Talent is another question mark, as several top stars have remained silent about whether they will participate.
In the third quarter, the WWE reported adjusted earnings of 35 cents a share, ahead of Wall Street estimates. Revenue of $188.4 million inched up 1% over the year-earlier quarter but fell short of estimates. The company’s stock, which has tripled over the past year, has dropped nearly 3% to $75.29 in mid-day trading. It has slumped almost 23% since peaking in late September at $97.69.
Saudi Arabia’s Public Investment Fund took a minority stake in Deadline and Variety owner PMC earlier this year for a reported $200 million.