Wham! World Wrestling Entertainment (NYSE: WWE) crushed a company record for event sales with the latest version of its annual extravaganza, WrestleMania. The event grossed $8.9 million -- a nice chunk of change, but the company needs more than a full house at its big event to get back on the growth wagon.

No longer on steroids
Once a reliable producer of growth, WWE has seen little of it lately. Revenue crawled up only 1% year over year for fiscal 2011 to hit $484 million. Nothing grew very impressively for the company, including the all-important live events and TV segment. Despite honest attempts at diversification, this unit still produces around 70% of company sales. It's too bad, then, that last year it took in only 2.5% more revenue on an annual basis.

A better opportunity for growth lies in international expansion. After all, the company actively produces shows all over the world, including hot economic regions like Asia. However, it also seems stuck overseas. The 2011 take from outside North America fell slightly year over year, while its percentage of overall revenue didn't budge, at 28%.

The only significant line item rising to any degree is the company's spending. Cost of revenue grew in both the company's latest reported quarter and fiscal year, at a respective 17% and 15% clip year over year. Yikes. Compounding this is the company's habit of blowing out its free cash flow via the payment of generous dividends. This is pleasant for shareholders in the short term, who are enjoying the stock's relatively high yield (nearly 6% at the moment), but it's clearly unsustainable.

DiversiMania should be running wild
The company will always rely heavily on live shows and TV. After all, such offerings are the roots of success for any sport -- just ask the NFL -- no matter whether the contest is spontaneous, scripted, or some combination of the two. Growth comes from skillfully leveraging those powerful assets in order to sell related products to loyal customers, and this is what WWE has struggled to do.

By contrast, look at Walt Disney (NYSE: DIS). Its core is film and TV, but it then uses its strongest assets to create products across other business units, with an animated film character often becoming a child's toy, a theme ride at Disneyland, or the central figure in a spinoff TV series. As a result, the House of Mouse brings in balanced revenue from its various segments, with no one segment making up more than half its overall sales. Time Warner (NYSE: TWX) similarly encompasses all types of media, with assets it can leverage to produce profits across its business. This kind of spread greatly reduces the risk of one over-weighted division dragging down the results of the company as a whole.

Both companies have net margins that are currently around double those of WWE. They've also produced them more consistently over time, a stunt the wrestling firm hasn't yet managed to perform.

Coming soon to a TV near you...
But investors shouldn't tap out of WWE quite yet. Company chairman and CEO Vince McMahon is eternally ambitious and determined to succeed and thrive. More encouragingly, he's flexible in his approach to the business -- if one of the company's units starts lagging too far behind, he has little problem cutting it loose. Witness the short life of the XFL, an arena football league the firm operated for one mercifully brief season.

One eventual winner may be the WWE Network, a cable channel devoted entirely to wrestling. WWE has an immense library of classic footage of the sport, particularly in the wake of its acquiring rival promotions over the last decade or so.

The company's many devotees should provide a strong audience for the channel; if this can be leveraged into revenue and profit, it'll bring a touch of that much-needed diversification to WWE's business. A WWE investor can only watch and hope the results match the hype.

WWE will probably disappear from the ranks of high-yield dividend stocks in the near future, but we think this won't be the case for the companies featured in this free report.