World Wrestling Entertainment is setting its sights on new markets in Brazil and Russia after successfully battling one of its toughest opponents -- the economic downturn.
"We, as a company, really have never been stronger… We've seen strength across the board and our footprint today is considerably more extensive … light years away from where we were in '97," Andrew Whitaker, president of WWE International, told CNBC.com.
The Connecticut-based group saw some resilient results throughout the financial crisis and expects earnings to grow at an average annual rate of 15 to 20 percent through to 2012.
"WWE was a cult attraction; that really is no longer the case," Whitaker said.
WWE could seem like a bit of an unlikely survivor, but the company has come a long way from its regional beginnings in Stamford. And its resilience indicates there is a strong market for its particular brand of staged wrestling.
"As long as they keep it entertaining and fresh, it's fine. They are an entertainment business … Until something better comes along I think it will do well," Michael Pachter, an analyst who covers the stock at Wedbush Morgan Securities, told CNBC.com.
The downturn has been generally a good thing for WWE because consumers are spending more time watching television instead of paying to go out, according to Pachter.
But WWE has still suffered some serious body blows from the recession. Partly due to the developed economies of Europe and the US being particularly hard hit
In the third quarter, North American revenue slipped 2.3 percent year over year to $81.3 million. Revenue from Europe, Middle East and Africa (EMEA) fell 15.8 percent to $14.4 million.
The Asia Pacific region surged with an 83.8 percent revenue jump to $12.5 million and the Latin American region showed similar growth of 82.4 percent to $3.1 million.
The apparent weakness of the developed markets reflects the damage of the recession, according to Whittaker. Despite making significant inroads into emerging markets, he said the company still feels it has a long way to go.
We're Never Happy
"We're never happy … that's very much part of the ethos of the company. We never rest on our laurels," Whitaker said.
Brazil and Russia and top of WWE's list of key new markets, but it won't be an easy win, he added.
The key to breaking into new markets like Brazil and Russia is tapping into the local culture and getting some of the country's home-grown talent in the ring, Pachter said.
The storylines that work in a US soap opera wouldn't work in Brazil or elsewhere, so the writers have to reflect their audience and that's true for the WWE, he said.
Brazil will be a tough market to break because of its long history with wrestling, but it also already has a strong batch of wrestlers who could take up the challenge, according to Pachter.
The group has been surprisingly successful in fending of competition from the likes of Total Nonstop Action Wrestling (TNA), according to Pachter. He said that outfits like TNA have shied away from competing head to head and have sought to find a fresh take on the old model.
Securing the right TV distribution deal is the key to the WWE's survival, according to Whitaker.
The group's approach of delivering large swathes of programming works best with multi-channel broadcasters, he said. Interest in the shows can be short-lived if confined to a signal channel broadcaster.