WWE investors may receive additional information about the case by clicking the link "Submit Your Information" above.
WWE is an integrated media and entertainment company that is primarily known for its scripted professional wrestling shows. The Kingdom of Saudi Arabia is a country in Western Asia constituting the bulk of the Arabian Peninsula. Beginning in 2014, the Saudi government began hosting several WWE live events, which were very lucrative for WWE. Orbit Showcase Network (“OSN”) is a direct-broadcast satellite provider serving the Middle East and North Africa (“MENA”) region. On July 21, 2014, WWE and OSN announced a five-year exclusive media agreement, stating that “WWE’s flagship television program Monday Night Raw [would] air live on OSN, WWE’s exclusive pay TV partner in [MENA] through 2019.” On February 15, 2015, WWE and OSN jointly issued a release stating they were adding WWE Network to the five-year agreement as part of an expanded partnership. Then, in March 2018, the Saudi Press Agency announced that WWE and the Saudi General Sports Authority had signed a 10-year multi-platform partnership with WWE to hold wrestling events in the country. Analysts estimated the partnership was worth about $500 million to WWE.
However, by at least early 2019, tensions in the relationship between WWE and the Saudi government had reached a breaking point. The Saudi government had refused to make millions of dollars in payments owed to WWE. Further, OSN was contemplating the early termination of its obligations under its broadcasting agreement (ultimately terminated in March 2019) and had rebuffed WWE’s efforts to renew the agreement. These developments threatened WWE’s ability to reach a renewed media agreement in 2019, which WWE told investors was critical to its expansion plans in the MENA region and its growth prospects. Moreover, WWE was facing withering consumer engagement in its traditional markets. Rather than disclose these adverse developments, the defendants represented that WWE had continued to bolster its relationship with Saudi Arabia and was making significant progress on the renewal of the critical media agreement and its business initiatives in the country.
The behind-the-scenes turmoil began to be revealed in a series of partial disclosures. On April 25, 2019, WWE reported disappointing first quarter 2019 financial results and lower than expected guidance for the second quarter, revealing that revenues had fallen year over year on notable declines in the live events and consumer products segments. Several analysts tied the disappointing results and guidance to potential delays in scheduling a live Saudi event. Following this news, the price of WWE’s Class A common stock declined more than $13 per share, or 13%, to close at $85.38 per share on April 25, 2019. Then on October 31, 2019, WWE held the Crown Jewel live event in Riyadh, Saudi Arabia. After the event ended, news reports surfaced claiming that the Saudi government was effectively holding a number of WWE wrestlers “hostage” in retaliation for WWE’s decision to delay a live broadcast of Crown Jewel until the Saudis made tens of millions of dollars in past due payments. Estimates for the amount outstanding ranged from $60 million to $500 million. Following this news, the price of WWE’s Class A common stock declined more than $10 per share, or 15%, to close at $56.04 per share on October 31, 2019.
Finally, on an earnings call on February 6, 2020 to discuss disappointing financial results and guidance, WWE confirmed that its 2020 financial guidance did not include any revenues related to a prospective MENA deal. Following this news, the price of WWE’s Class A common stock declined another $4.50 per share, or 9%, to close at $44.50 per share on February 6, 2020.
The complaint alleges that, throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose that: (a) WWE was experiencing rising tension with the Saudi government and a breakdown in negotiations over a renewed broadcasting distribution deal; (b) the Saudi government and its affiliates had failed to make millions of dollars in payments owed to WWE pursuant to existing contractual commitments between the parties; (c) OSN had terminated the broadcast of WWE programming in the first quarter of 2019 and that this cancellation was symptomatic of a deterioration in the business relationship; (d) WWE did not have the ability to expand its operations in the Middle East or within Saudi Arabia as had been represented to investors; and (e) that as a result of the foregoing, the defendants’ statements about WWE’s business metrics and financial prospects during the Class Period were materially false and misleading and/or lacked a reasonable basis.
If you are a member of the class described above, you may no later than May 5, 2020 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Returning the attached form or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-844-887-9500 or 1-610-667-7706, or via e-mail at firstname.lastname@example.org. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.
Kessler Topaz Meltzer & Check, LLP
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