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Welcome to PWInsider.com's coverage of the WWE Earnings Reports for the third quarter of 2017.
Michael Weiss welcomed us to the call.
Vince McMahon said that he knows everyone already has the numbers. He reviewed the major numbers that were released. He said they are looking for great numbers in China and talked about how the localized "review" shows in different localized markets are doing "pretty well" for them. He said they are moving more and more in that way and believes it will help them in many ways. He noted they signed several female names from the Middle East and tagged in Triple H to pronounce their names. Vince put over the forthcoming India tour as well as the company's digital media views and social media, which he said were extremely important to the future of the company. He also said they have secured 20 new advertisers as part of their relationship with their NBC Universal relationship and said they are looking forward to a record 2018.
They have nearly 200 advertisers vuia NBCU now.
George Barrios began reviewing the numbers and said the WWE TV rights them. Licensing was up $4.1 million this quarter.
The Network averaged over 1.52 subscribers, in line with their guidance, up 4% from this time last year.
Licensing was up $2.1 million, credited to mobile game sales being up.
They continue to shift to a "direct to consumer" business with the Network, etc.
Michelle Wilson discussed the company's Performance Center now having 40% international talent and the company's moves to meet their global audience with localized shows and the WWE Network's launch via PPTV in China. New deals with advertisers and sponsors have led to a 29% rise in advertisers internationally.
They are looking at hitting 200 billion video views before the end of the year.
Barrios continued to review the numbers in the press release.
The Raw and Smackdown deals in the United States will expire September 2019. They will open negotiations next year. They expect to announce a deal between September 2018 and May 2018. The UK and India deals will be expiring late 2019 as well and they will open negotiations for those in the second half of 2018. India negotiations will open in the first quarter of 2019 and they expire in the last quarter.
The Q&A portion began.
They were asked if there was an exclusive window for NBCU to negotiate before they talk to other players. Barrios said he didn't want to break that down. They have communication with other outlets so they know what the other outlets' visions are and to make sure they understand WWE's vision.
They were asked about their investment in their digital media. Barrios talked about how important the data they are building is and how they can go deep with data to serve them for what will "put smiles on their faces" and to offer them specific content.
They were asked about the 20 new advertisers and where they were coming. They were also asked if there was any churn on NBCU advertisers. The adds have been an incremental growth over time, going from 100 to 200. They had previously been waiting for studios to come to them for advertisement but now they have blue chip advertisers like Toyota, Nationwire and Crickett Wireless.
They were asked if the decline in NFL ratings is a concern for them in terms of payment for live sports programming. Barrios said 7-8 years ago, they sat down and discussed how important it was to own the social and digital media platforms. They have paid close attention to building that. They, however, still believe in the pay-tv platform. He said they believe there will still be bundles, although the bundlers may be different. Raw and Smackdown are still powerful in the market place and they'll see what happens as the landscape continues to change.
They were asked about localization of content for the WWE Network and competition in the space. Barrios said they are not a general entertaining platform like Netflix and its there to "superserve" their most passionate fans. They have been working on localization on all of their platforms. He predicted they will have multiple tiers and that it would be broadcast in more than one language. They are balacing growth with timing. They are broadcasting PPVs live in nine languages. They were specifically asked about where things stood with the UK brand but did not address it. As we have reported here, they are pitching it to different UK broadcasters as a weekly series.
They were asked about details on what they are seeing in China since launching the WWE Network. They said it's a long play in the market and it's still too early. They and their partners have been pleased with the early sign ups in that market. They have a team on the ground there for digital and social and are presenting Raw and Smackdown there live.
Vince was asked specifically about programming. They were asked why they weren't doing the moves that WWE is making internationally 15 years ago. Barrios jumped in and said that things have changed. Before they had to find space in those local markets where now they can get content into any broadband enabled home in the world. WWE is different with resources and infrastructure today that it didn't have then. The world has changed and so has the company. They have muscles now they didn't have then.
Vince joked he answered the question well.
They were asked about women's talent and whether the return they are getting comes from data for the Network. Barrios said they get the data from the Nielsen data, the Network, and other aspects of data. Time is their economic unit and they can see they are getting people to spend time with their content.
They were asked whether the original WWE Network programming is taxing their resources. Barrios said they have been doing 70-80 hours per quarter. They do 500 hours of archival content per quarter and debut about 70 hours new. He wouldn't say they aren't taxing their people because that would likely make those people mad, but they have a great time that is growing. They believe they will help fuel their growth. The person asking the question thought the content was all produced in Orlando. DUH. Barrios swiftly used that to push how great the PC has been for them as has been international.
They were asked about whether they can get international subs higher over time. They are growing slowly and their ability to go direct to consumer is important. Some quarters will be better than others and they aren't losing sleep as they are focused on the long term.
They were asked about the female competitors and how "shocking" it is that women's wrestling is growing in the United States. They were asked what percentage of the roster are women and how that impacts their relationships with business partners. 35% of the roster currently is female. It's been a vision that Paul Levesque brought to the company when he joined the management team. They pushed the importance of the feedback they get, the social media trends, etc. and when they see that, they are obviously going to invest in it. The Mae Young Classic viewership was on par with the male tournaments that they have done.
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