These are the dark days of wrestling. When World Wrestling Entertainment(NYSE: WWE) CEO Vince McMahon kicked off last month's annual meeting, he tried to lift somber spirits by announcing that the shareholder event was not a wake. He asked for the lights to be turned up, but even under brighter lights, the media company still can't find what it's looking for.

Last night, the company revealed it will post a loss for its fiscal second quarter. While the wrestling promoter faults a litigation charge for the shortfall, it can't deny it has real problems that need to be addressed.

The same platform that launched careers is now caught between The Rock and a hard place. Turnout at its live events and television ratings have been weak. The pay-per-view monster might as well be branded pay-per-few these days.

With the company expecting to report no more than $390 million in revenue in 2002, it will mark the second consecutive year the top line has dipped. Earnings will fall for the third year in a row, too, as it pegs fiscal year operating income to come in between $27 million and $29 million.

But if the temptation here is to tag out and short the living daylights out of the stock, consider that WWE still sports a sparkling balance sheet, with $4 a share in cash. It has been trimming its overhead in recent quarters, too. While Raw on Viacom's(NYSE: VIA) TNN and Smackdown may have seen better days, WWE prides itself on reinvention. As it continues to build up its content library, don't bet it will make an XFL-esque wager on nostalgia to bring it back into favor.

Are the McMahons clever enough to script a turnaround? That remains to be seen, but don't call the Undertaker just yet.