There comes a time in every match where the protagonist is down -- so far down, he's almost out. When I was a kid, watching Hulk Hogan in the sleeper hold, you could be sure the finger would come up just before the third arm drop, waggling in defiance, before the crescendo and the turnaround.

Will there be a similar comeback for World Wrestling Entertainment (NYSE:WWE)? It's tough to tell these days. A look at this chart shows you where we are in the match. After a strong start and a roller-coaster ride through revenue troubles, we end up at yesterday's major earnings disappointment.

Even though I'm partial to this company and once highlighted it as a perfect stock for the lazy investor, I'm not going to try to make excuses for the performance. At a time when -- very different, granted -- entertainment companies such as Marvel Enterprises (NYSE:MVL), Pixar (NASDAQ:PIXR), Lion's GateEntertainment (NYSE:LGF), and DreamWorks Animation (NYSE:DWA) are raking in the cash with both hands, WWE's underperformance is a real problem. Is greasy grappling simply too 20th-century?

Maybe, to judge by this: The latest earnings tally came to $0.04 per share, less than a quarter of the... well, the quarter that WWE earned in the prior-year, um, quarter. It's only fair to point out that there was an extra pay-per-view event last year, and that was part of the reason for the 11% slide in revenues. The comparative decline at the bottom line is owed to a few factors, including a legal settlement last year that contributed $0.05 per share to earnings. But increased production expenses shafted gross margins, SG&A nearly doubled, and stock compensation charges went from $160,000 to almost $1.3 million. Yeah, that's a recipe for a big earnings smackdown.

To look at the other side of the coin, the balance sheets are stellar, and there was a doubling of the dividend, which raises it to around 4% at the recent closing price, a level that would compete for the attention of our resident Income Investor, Mathew Emmert, were it not for a couple of troubling facts. First is that this payoff will reward the biggest shareholders, Vince and Linda McMahon, more than anyone else. The next is that the firm's formerly copious free cash flow has been thrown out of the ring and beaten with a folding chair. So far this year, it's about one-eighth of the total last year.

With attendance continuing to slide, are we looking at the bottom of a cycle? Will the WWE get new stars with enough charisma to bring back the fans? Will there be a payoff from viewer-participant programming? I suspect so, someday. In the meantime, this stock would need to be a whole lot cheaper before I'd buy into the uncertainty.

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Seth Jayson was a longtime fan of Rowdy Rod Piper. At the time of publication, he held shares of Marvel Enterprises but had no position in other companies mentioned. View his stock holdings and Fool profile here. Fool rules are here.