WWE (NYSE:WWE) shares popped nearly 10% after the company reported earnings on July 25. The company beat its earnings guidance, but overall revenue dropped and its streaming network lost subscribers.

None of these metrics matter all that much, though, as WWE investors will have nothing to worry about for a little over five years. That's the length of the self-identified "sports entertainment" brand's new television deals with Comcast (NASDAQ:CMCSA) and Fox (NASDAQ:FOX). Those deals essentially double what WWE earns for U.S. television rights, more or less ensuring larger profits for the company.

For investors, though, the real story isn't told by earnings -- it's about where the company's underlying popularity stands in five years when those deals come due.

Seth Rollins holds up a title belt.

Seth Rollins has been one of the top WWE stars. Image source: WWE.

Down for the count?

WWE has seen its popularity fall to all-time lows right before its rights increases kick in. That puts a lot of pressure on company executives to turn things around. The flagship Raw has seen ratings drop, but it still puts up very strong numbers for the U.S., which is where the show will continue to air.

SmackDown, however, will be moving to FOX and airing in prime time on Fridays from 8-10 p.m. Being on network television increases the potential audience, but the company will need to deliver about 3 million viewers for the show each week to be considered a success.

Hitting those numbers would mean reversing current trends. The company laid out its numbers in its second-quarter earnings release:

Domestic TV ratings for Raw declined 14% in the first quarter 2019 from the prior year quarter but improved to a year-over-year decline of 11% in June. The improvement in June occurred despite a tough comparison to game 5 of the NBA championship on Monday, June 10. Similarly, domestic TV ratings for SmackDown declined 13% in the first quarter 2019, but improved to a decline of 7% in June, consistent with the ratings performance of the top 25 cable networks, which declined 7% during the month.

Live attendance has also fallen, dropping by 12% in Q1 and 2% in Q2. In its first-quarter earnings call, the company blamed falling ratings and the attendance drops on the absence of several of its name personalities. But the reality is that WWE simply has not made new stars on the level of the ones it has lost, including John Cena (who still makes occasional appearances) and Dwayne "The Rock" Johnson.

Hulking up?

WWE popularity may have hit a low point, but wrestling has always been a cyclical business. The company may benefit from the fact that the pseudo sport itself may be on a major popularity upswing.

A number of smaller companies have built significant followings, and All Elite Wrestling (AEW), a start-up funded by Jacksonville Jaguars-owner Shad Khan, has secured its own weekly prime time show on TNT beginning in October.

AEW, which has sold its first few major shows without a TV deal, may take viewers from WWE. It could also bring back lapsed fans, and create new ones who may eventually check out WWE.

The wrestling war of the 1990s actually made the whole sport more popular. That could happen here, or WWE might step up its game to defend its position as the clear market leader.

WWE has to deliver enough ratings to keep FOX and Comcast happy. That means creating more fans, finding/building performers who connect with their audience, and regaining some lost popularity. That's daunting but not impossible, and having competition has historically been a positive for the company.

As an investor, however, it's important to see the big picture. Quarterly earnings will increase due to the TV deals even if attendance keeps falling. But that's not the key metric -- the numbers that matter are the ratings for Raw and Smackdown.

If those get stronger (or at least stabilize in Raw's case), the company will be able to get strong -- maybe even stronger -- deals five years from now. That's the finish line for the company, and really the only thing long-term shareholders should be considering.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.