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WWF's cash-flow smackdown

The economy is delivering World Wrestling Federation Entertainment a brutal hit, pile-driving revenues and earnings for the first fiscal quarter.

WWF said that, for the three months ended July, total revenues dropped 11%, to $90.7 million, while operating cash flow plunged 70%, to $7.1 million. During the quarter, the company suffered from a ratings slide following a shift from USA Network to TNN and has been caught up in the advertising slump. The cash-flow slide doesn't include expenses of the disastrous XFL joint venture with NBC, which was shut down after the final game in April.

CEO Linda McMahon called the quarter "a challenging one." Television advertising revenues decreased 17%, to $19.5 million, largely due to lower sales on its Sunday Night Heat
show on MTV. TV-rights revenues doubled. Event revenues dropped 20%, to $14.9 million, while attendance fell 22%, from 611,500 last year to 415,100. Total pay-per-view revenues declined 12%, although PPV buys were up.

On a positive note, McMahon said the company has held on in the upfront ad market, selling about 60% of its inventory with CPMs down just 3%. "We have not been forced to effect some of the deep price cutting effected by other networks."