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RONDA ROUSEY CONTRACT UPDATE, VINCE ON WHETHER XFL WILL CHANGE HIS DAY TO DAY WWE DUTIES, WHEN MIZ'S REALITY SERIES WILL DEBUT, WHERE'S THE TIERED WWE NETWORK & MORE: COMPLETE WWE EARNINGS CONFERENCE CALL COVERAGE

By Mike Johnson on 2018-02-08 10:52:00

Welcome to PWInsider.com's coverage of WWE's fourth quarter and complete 2017 earning release conference call with Vince McMahon, Michelle Wilson, George Barrios and Michael Weiss taking part.

Michael Weiss welcomed everyone to the call.

Vince McMahon commented that they hit the high end of their guidance.  Their Network subs raised to 1.53.  They were up to 20 billion video views and was the most viewed channel on YouTube.  He put over the creation of the Mixed Match Challenge and the forthcoming Miz and Mrs. Reality series, noting that was the tentative title for that series.  He noted they were working on virtual reality content, celebrated the 25th Anniversary of Raw and the first-ever Women’s Royal Rumble.

McMahon credited Triple H and Stephanie McMahon for signing Ronda Rousey “contractually” and for pushing the continued women’s evolution in the company, which he said opens lots of doors for the company.

George Barrios began recapping the earning release.  2017 was the highest earnings and profit in company history.

George Barrios ran down the changes WWE will make in their reporting of financials, which was basically a recap of the press release they issued this morning.

They opened the line for Q&A!

They were asked about the Mixed Match Challenge, specifically the goals in creating the series with Facebook and whether the results gave them insight into how Raw and Smackdown would do exclusively digital.  Barrios said they were happy with the results and they are learning on the production level every week.  They don’t have any benchmark to compare it to in terms of how the fans engage the product, but they are learning every week, and Facebook is happy.  They are watching how audiences watch long-form content on digital platform but didn’t give the idea they were ready to make the leap.

On the financial end, Barrios said they weren’t getting paid what they would for Raw and Smackdown but it’s a good move to make as everyone wants content that will bring an audience and engage them.

They were asked about changes in production expenses for certain quarters and they pointed out that Wrestlemania always has a little more expenditure with spending and production.

They are working on "retrofitting" their production facility after purchasing the building but didn't want to give guidance beyond that.

They were asked about the escalation of fees for Raw and Smackdown in different regions.  They raised 8-10% in the top markets.  The deals vary on a percentage basis depending on the market, but their top seven deals make up the vast majority of that revenue.  When they work with third-party production company, as they do with their reality series, that does change it a bit.  They try to focus on the Raw and Smackdown deals and the top seven deals are the top ways to do so.

They were asked about online advertising revenue.  They make money off their video views.  WWE and Google both sell ads for those.

Vince was asked about how the relaunch of the XFL would affect his day to day duties with WWE and whether his $100 million stock sale was enough to sufficiently fund it.  Vince said there would be no changes in what he does on a day to day basis and he will have a separate team working on the XFL.  He said he didn't think the $100 million would fund the league but didn't comment beyond that.

They were asked if WrestleMania coming later meant any changes to the WWE Network.  It won't be a major issue.

They were asked about what sort of demand they have received about television rights fees this time around, especially about digital rights and the WWE Network.  Barrios said there were some who were negative on their launch in 2014 but today everyone is building a social and digital perspective.  They avoided answering if they were receiving more interest from different players this time around vs. the last TV rights negotiations.  Barrios responded, “You’re kidding me, right?” and everyone laughed.

Mixed Match Challenge has been a “tremendous test” for the company.  Facebook is very happy, and they were all happy with creating content that was unique that had never been done before.  They put over the company’s ability with coming up with ideas when the opportunity presents itself.

In 2018, they are going to continue to invest in content, data and local markets.  They may localization of content in multiple languages.  They want to do more social and video engagement front.  They want to balance growing the bottom line and making investments that will pay off in the long term.

They were asked about plans to launch the tiered system.  Barrios said the Network is their second largest revenue maker right now and the business continues to grow.  It’s the second largest branded service out there.  Longer term, they believe localizing it and doing things with “tiering” is a real opportunity down the line.    He didn’t really give any timeline.

They were asked about the Miz reality series.  They are looking to premiere it in the summer and it will be a six-episode first season.

Vince was asked about the growth from their social and video views and whether it will be a marketing channel or a revenue stream.  Vince said it’s “good content” that has led to the growth and it’s both revenue and marketing.  Barrios said it’s an incredible channel for them and the revenue is coming.  People had the same doubts over the cable business.  Dollars follow eyeballs.  It’s not where traditional TV is yet, but they believe it’s going to continue to grow.  Wilson noted a huge portion of their views are outside the United States and they are looking to grow that.

They were asked about FOX pivoting towards a live sports plan and how that changes NBC’s exclusive window to negotiate a new deal, meaning does WWE want to get out from that and negotiate with everyone.  Vince said he knows everyone has done their homework and when you do the overall rating to what they deliver vs. the entire week for the USA Network, “I’ll let you make those connections” but if you take their rating and add it to what other Networks do, you can see what it would do.  Vince said they have proven that their audience will follow them from one place to another.

Barrios said they aren’t going to comment on how anyone else (FOX) feels but the “information” about their ratings is “all public.”

They are continuing to plan and create local talent and series for the UK market on both the WWE Network and with Sky, their TV partner there.  They are looking at doing the same in India, pointing to the local content and TV they create there.
 

They were asked about the fan base reaction to Ronda Rousey and whether she would be part-time like Brock Lesnar or an “Ambassador” like The Rock.  Triple H did a run-in and said they are finalizing the deal now.  It’s a multi-year deal and they are going to be her priority and they have “first look” on everything.  She wants to be in the DNA of the company and wants to make this their life now.

Vince McMahon said she fits in with what they are doing now.  Stephanie McMahon said that they’ve seen the women go to main event performers and revenue driver.  She brought up the first-women’s bout ever in Abu Dhabi leading to a “This is hope” chant from men and women.  The fan response for the women, Rousey included, exploded in terms of social media and engagement.  The segments with the women are proving to be some of the highest rated segments.

Vince McMahon said it all shows what the women’s evolution means to them.  Stephanie said everyone, including their media partners, have great interest in the movement.  The audience demanded it and their women are rising to the occasion with every opportunity.

Triple H said that the increased popularity in the women’s division has led to Ronda wanting to be involved and be part of this globally around the world. It’s just starting to attract women like Ronda in wanting to be involved in WWE.

When asked about negotiations for TV, Barrios quipped, “You’ll find out soon enough.”

That was it for the call.

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