Check out the latest World Wrestling Entertainment earnings call transcript.

If you're not a fan of professional wrestling, you probably don't give much thought to World Wrestling Entertainment (WWE). But the hyper hybrid of testosterone-fueled soap opera and pseudo-sport it creates...sells. And it sells a lot, as WWE has found new ways to profitably exploit.

That's part of the reason why contributor Dan Kline has made the company one of only a few stocks in his personal portfolio. In this segment from MarketFoolery, Kline and host Chris Hill get into the details about why it's such a strong business, where its risks are, and the reasons sports (and kinda-sports) audiences are worth more to networks than the folks who watch sitcoms.

A full transcript follows the video.

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Chris Hill: I was looking at your portfolio -- not your actual portfolio, but, everyone at The Motley Fool who's writing, who's producing content, all of our profiles are on, and our holdings are on there, so people at any moment can see what stocks we own. Two things stuck out to me about the stocks you own. One is, you own four stocks. I don't know that I necessarily had a number of my head, but I know it was higher than four. But what struck me was that, along with Apple and Microsoft, one of the stocks you own is WWE, which is one of those companies that we don't talk about very much on this show, to the chagrin of at least a couple of our listeners. I've gotten email and tweets over the last couple of years, where people are saying, "Hey, can you talk about WWE?" So, I'm going to use this opportunity to say -- I'm sort of tempted to lead with, why do you own WWE? For those unfamiliar, what is the basic thumbnail sketch of the business of WWE?

Dan Kline: WWE is a content company that has a sports-like -- they call it "sports entertainment" product. In terms of rights, it tracks like sports. It's very predictable. Ratings might inch up or down, but they're not going to plummet. They're not going to get canceled the way Disney could have a show on a rival network canceled and it impacts their bottom line.

Hill: Pro wrestling is not getting canceled, is what you're saying?

Kline: It has a core fanbase. And for the past few years, they've largely been operating unopposed. That's changing a little bit now. There's some new money in it. Sinclair has a rival. Shad Khan, who owns the Jacksonville Jaguars, is starting a rival. There's a lot of money in sports rights. That's changing a little bit. But previously, their biggest negative was the stigma of pro wrestling fans. Nobody thinks of me or Industry Focus host Nick Sciple as the typical wrestling fan. Owns a house, has a little bit of money. No, they think redneck who only wants beer commercials. WWE has worked really hard to change that reputation, to move the product a little more mainstream, a little bit more PG. That's been rewarded by massive television rights deals. Because live sports, even live pretend sports, people watch them as they air.

Hill: Wait, pro wrestling isn't real?!

Kline: I'm sorry to tell you. Now, of course, Hulk Hogan, totally real. But, all the more recent pro wrestlers... [laughs] But, it plays like a sport. Yes, the outcomes are predetermined, but you probably don't know them, even if you think you do and can guess it. If you're a fan, chances are, you have friends who are fans. It's just like, if I'm not going to watch the Patriots game yesterday -- my mother couldn't watch in real time. She had to send out a social media alert, "Don't text me about the game," she had to remember not to pick up her phone because it would appear on Facebook. Very similar with WWE.

Hill: Why couldn't she watch it in real time?

Kline: She had a tap dance event. [laughs] My mother, a woman of many talents.

Hill: Oh, OK. I didn't know if she was in a place where it was blacked out or something.

Kline: No, no.

Hill: There was a conflict.

Kline: She had people in her house that weren't football fans and couldn't watch. And I think, by the way, there should be an app that blocks all of your content, so you don't find out the score. But, in terms of WWE, Monday Night Raw, people watch on Monday night. Tuesday night, which is moving to Friday night, on Fox (now on USA moving to FOX), you have to watch those. So, Fox is paying $1 billion over five years for a WWE live two-hour show that does half the ratings of the sitcoms that they air right now. The sitcoms that air do about 4 million people. SmackDown, on a Tuesday night, does 2 million. Moving to Fox, a little bit better than USA, but Friday night, a lot worse, ratings are probably going to go down, and they still think it's worth $1 billion over five years. Because that sitcom, you can skip through the commercials when you're watching it on DVR four days later.

Hill: $1 billion for wrestling over a five-year period, that sounds like a good deal for WWE and its shareholders. If you're a Fox shareholder, maybe you're scratching your head a little bit.

Kline: I like the deal for both companies. Though, the piece that has hasn't really been talked about is, WWE in theory should be producing a lot of filler content for FS1, a lot of stuff that airs on their own network. One of the challenges they have is they created a streaming service because they didn't think this kind of TV deal was going to be there. They thought cord-cutting would happen a little faster, the stigma of wrestling might prevent them from getting big money. So, they created a network that they were going to sell to their core audience. Thought they could get to 4 or 5 million subscribers. They're only at about 1.8 million. It's a squishy number because they do a lot of free trials. They had to stop pushing that because now, they have to push Fox and USA. Comcast and Fox are paying huge money. But, five years from now, the cable universe may be very different. The only major caveat as a WWE shareholder is, if they can't get this kind of money again -- and we've never seen sports rights go down, so that's a big if -- but, the cable universe, the TV universe could be very fractured by then. And then, you're going to have a wounded WWE losing almost $2 billion over five years in revenue, and they're probably not going to pick up 3 million subscribers to their network.

Hill: I'm glad you mentioned sports rights. We can close on this. As you indicated, we've seen sports television rights come up for the major sports here in the United States, even smaller sports, as well. The price tag keeps going up, which leads to some people saying this is a bubble, it's going to burst at some point, there's no way this is sustainable. Where do you come down on this? Whether it's the NFL, the NBA, Major League Baseball?

Kline: All you need is two bidders. Right now, when the NFL rights come up, that won't be an issue. NBA, baseball, they benefit from the fact that you have DAZN, which is a pure streaming service, you have ESPN+ looking for pure digital content. The challenge with that -- and you're seeing it with UFC, Ultimate Fighting, mixed martial arts, whoever you want to look at -- they took what used to be free content on FS1 that lured you into the product, got you to buy the pay-per-view, and they're putting it on a paid service on ESPN+. They're getting a lot more money, but they're going to expose a lot less fans. So, you wonder if at some point, there's a bubble for some of that.

But if you're the NHL, a much lesser league in terms of rights, you're going to be able to say, "Hey, Yahoo is willing to pay twice as much as NBC or ESPN." And maybe you're not actually willing to go to Yahoo yet, but you'll get a little bit more out of NBC and ESPN. I think we've got at least one more round of escalating rights.