World Wrestling Federation Entertainment Inc shares rose 7.9 percent after the entertainment company folded the money-losing XFL football league, whose television ratings set new prime-time lows for sports events.
Shares of WWF closed up US$1.04 at US$14.19, in trading on the New York Stock Exchange after touching US$14.74 earlier. The stock had fallen 32 percent since the XFL's Feb. 3 debut.
The WWF, which co-owned the XFL with General Electric Co broadcaster NBC, folded the eight-team league because it wasn't turning a profit. The network said it wouldn't have televised it a second season. The WWF, known for its professional wrestling productions such as "Raw is War," said it will have losses of about US$35 million on the XFL's first, and only, season.
"From a shareholder perspective, shutting down the XFL was the right move," said Breck Wheeler, an analyst with Legg Mason Wood Walker Inc, which owns WWF shares. Wheeler raised her WWF rating to "buy" from "market perform." Wheeler's 12-month target price for WWF is US$17 a share.
Branded as more aggressive than the National Football League, the XFL failed in its attempt to attract viewers with innovations such as players wearing microphones, cheerleaders dressed like Las Vegas showgirls and announcers that included Minnesota Gov. Jesse Ventura.
While the XFL's debut telecast on NBC was watched by 9.5 percent of the 102.2 million US homes with televisions, the league's viewership diminished rapidly. Its March 17 telecast drew the worst rating ever -- 1.6 percent -- for a sports event shown on network TV during prime time.
In March, league President Basil Devito said the XFL would fall short of its forecast for US$80 million in sales. The league failed to reach the TV audiences guaranteed to advertisers as interest in the league waned after its February debut.
In discontinuing the football league, WWF will be better able to direct its energy into getting the most out of its purchase of World Championship Wrestling from AOL Tim Warner Inc, said Peter Swan, an analyst at Pacific Growth Equities, who has a "buy" rating on the stock.
WWF agreed to buy the rival in March, a move that puts the two biggest US professional wrestling leagues under one roof.
"The management at WWF was pretty stretched trying to start a new football league, and this will help them concentrate on their core business," Swan said.
In March, the WWF agreed to buy AOL Time Warner Inc.'s rival World Championship Wrestling brand, putting the two biggest US professional wrestling leagues under one roof. The agreement gave the WWF worldwide rights to the WCW name, video library and other intellectual property.
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