The WWE Saudi Arabia show will continue despite the reputational risk

adminOctober 26, 2018




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He said the planned "Crown Jewel" wrestling event will continue in Saudi Arabia's capital next week despite questions from analysts and observers about the potential risk to the company's reputation.

The decision, announced Thursday in the company's quarterly earnings statement, comes as many Western companies try to distance themselves from the country following the assassination of Saudi journalist Jamal Khashoggi and allegations that the Saudi government was involved.

The media and entertainment company based in Stamford, Connecticut, cited contractual obligations with the General Sports Authority, the government body responsible for sports in Saudi Arabia, as the basis for its decision to continue the event on November 2. in Riyadh.

The election, the company said, was "similar to other companies based in the United States that plan to continue operations" in Saudi Arabia.

Many Western executives canceled appearances at a three-day conference this week called the Future Investment Initiative, dubbed "Davos in the Desert." However, many oil industry executives attended. Saudi officials said agreements totaling more than $ 55 billion were reached in the energy, transport and petrochemical sectors.

"WWE has operated in the Middle East for almost 20 years and has developed a considerable and dedicated fan base," the company said in the statement, adding that its 2018 earnings guide is based on the organization of the event in Riyadh as programmed. "Given the atrocious crime committed at the Saudi Arabian consulate in Istanbul, the company faced a very difficult decision."

A spokesman for the WWE declined to comment on the decision beyond the earnings statement.

The WWE decision to move forward with the event comes when the Saudi government changed its explanation of the assassination of Mr. Khashoggi, a government critic who wrote a column for the Washington Post.

Saudi Arabia said on Thursday that Mr. Khashoggi's murder was premeditated, after he said earlier that his death at the Saudi consulate in Istanbul was unintentional and that it was in the hands of dishonest agents.

It also arises as questions arise about how the organization of the event would affect the reputation of the company with its talent, fans and investors.

WWE's revenues increased 12% year-over-year for the nine months ending September 30, the company said on Thursday. The jump is partly due to an agreement with the Saudi government, which analysts believe is worth between $ 40 million and $ 45 million a year for 10 annual events there.

The company's shares closed at $ 75.68 on Thursday, down 2.2%. The shares of the company's stock reached a maximum of 52 weeks at $ 96.73 on September 28.

The company, which has spent years working on its reputation, had a major impact on its ambition to organize the event in the weeks after Mr. Khashoggi's death. Comedian John Oliver on his HBO television show "Last Week Tonight" spent part of a segment on Mr. Khashoggi mocking the WWE, observing the obsequious tone of the organization towards his Saudi hosts.

Pro Wrestling Sheet, a website focused on the wrestling industry, reported Thursday that the best WWE draws Daniel Bryan and John Cena refuse to appear in "Crown Jewel."

A WWE spokesman declined to comment on the two stars, both scheduled to appear in Riyadh. "As always, we maintain an open line of communication with our artists and will address each situation accordingly," he said.

The reception of the fans at the "Greatest Royal Rumble", held in April in the Saudi city of Jeddah, was mixed after women were not allowed to compete and the talent openly thanked the Saudi government, according to Ryan Satin, editor at head of Pro Wrestling Sheet. Putting in the "Crown Jewel" event could make the problem worse, he said.

"It could cause problems for WWE in the long term," Satin said. "Most people were quite uncomfortable with the situation [around the ‘Greatest Royal Rumble’]"But now with the murder of Mr. Khashoggi, it causes more problems for the fans, the people of the company and the fighters."

WWE can not operate in isolation from what is happening in the countries where it is expanding, said Davia Temin, president and CEO of Temin and Co., a corporate reputation management firm.

"Expanding your brand globally also means facing the political situations in those countries," he said.

Write to Samuel Rubenfeld at samuel.rubenfeld@wsj.com



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