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By Mike Johnson on 2020-07-29 12:51:00

With COVID-19 preventing a stockholders meeting in person, World Wrestling Entertainment held a virtual meeting on 7/16.  The video of the meeting was uploaded to WWE’s Corporate site several days ago.  This morning, I sat down to listen to the call.  Below is my coverage.

The presentation opened with a big WWE hype video, touting all the success of the company and its popularity in different circles.

Taking part in the call were Vince McMahon, Michael Weiss,  Interim Chief Financial Officer Frank Riddick III, incoming CFO Kristina Salen (who was just announced as hired and officially starts on 8/3),Stephanie McMahon, Paul Levesque and several other executives.

Everything they discuss are forward-based statements, which could change based on how the world changes, as we’ve seen in the last year!

Vince said they are in the middle of extraordinary times in their business,  They are doing everything they can to mitigate the effect on their business.  They are taking every precaution to protect their talent and staff.  They have also undertaken financial reductions to help insure the long-term value of WWE.  They believe they have the chance to take great advantage of the changes in the market.  They are “so thankful” for the sacrifices their talents and staff have made to continue to create “compelling” talent and thanked their audience for being with them.

Frank Riddick III ran down a list of their business for 2019 and beyond.  2019 was their sixth annual revenue record.  They had record profit with their operating income, thanks to their new TV deals for Raw and Smackdown.  They expanded the reach of their live broadcasts and had over 500 live events globally.  In the fourth quarter of 2019, their new deals with USA Network and FOX.  They added NXT to the USA Network.  They renewed their China broadcast deal and produce WWE Now in Mandarin.  They have continued to develop the technology for the WWE Network and increased their social media platform on Twitch and Snapchat.  

The WWE Main Event film was seen by 25 Million Viewers on Netflix.  They touted the popularity of the Big Show Show in its first week.  They pushed relationships with Hyundai, Coca-Cola, Microsoft, KFC, Mars, Unilever, etc. and that they continue to build partnerships with new potential advertisers.

They talked about the impact of COVID-19, including halting live events and PPVs starting with Wrestlemania. They have halted giving financial guidance given the situation.  Their first quarter for 2020 was up 60% thanks to the new TV deals.  

In discussing their COVID-19 response, they have "implemented extensive measures to protect the health and safety of Performers and staff", shifted corporate staff to work from home, produced content via the WWE PC and have continued to "innovate business."   Their short term cost reductions include reducing management compensation, decreased operating expenses and furloughing employees.  They have delayed spending money on their new corporate HQ, drew $200 million from a credit facility and have temporarily suspended their stock repurchase program.

The company had $500 million they could spend to weather the challenges of COVID-19.

They are giving careful consideration to the changes in the media and broadcast world and they are in the middle of putting plans together.  They are looking to continue to work on relationships and build new ones for the future.

They then went into the Q&A section with Michael Weiss moderating.

They were asked about the safety precautions they are taking to protect the talents.  Paul Levesque noted that since Mid-March, they have been producing content on a closed-set with only essential personnel there.  Their protocol for the sets include antimicrobial sprays and coatings, pandemic level cleaning and disinfecting during and in between productions, COVID-19 testing using PCR testing before all productions.   No one is allowed to enter without a negative test result.  Social distancing and sanitizing is required for all on set, as are masks.  If someone tests positive they are required to self-quarantine for 14 days and cannot return to work until they symptom free and test negative.  They do extensive contact tracing when someone tests positive.  They update their standards as soon as there are updated guidelines and they are working with the local and federal government as well as the CDC to be on top of the latest guidelines.

They were asked how the free version of the WWE Network is doing, Frank Riddick III said they had early positive results from the free tier in terms of using it to convert free subscribers into paid ones.  They believe enhancing the engagement will enhance the health of the Network.

They were asked how documentaries like Last Ride will be utilized going forward.  They praised how well it did and it was a great example by capitalizing on the documentary genre.  They can continue developing them for different platforms, including their own.

Riddick backed away from the long-planned multi-tiered version of the WWE Network, noting they don’t believe multi-price tiers would maximize their subscriptions.  They instead are hoping they can take free Network subscribers into new paid subscribers.  They are also working on creating special pricing for international markets.  They also want to continue to develop their advertising ability with the Network.

They are doing more to engage with fans on social media and other platforms than they ever have before and the early results are very positive.  They are exploring virtual fan meetings as a potential new offering.

On the downward turn of ratings, Vince McMahon said they have a 30+ year track record in creating characters and they have confidence in continuing to do so even with no live audience.  Their engagement metrics are paramount in all of their businesses.  They’ve seen a growth in digital since the COVID-19 pandemic but TV has been down.  But, they are still the number one series on the USA Network and on Fridays, they are consistently number one in “key demos.”   They expect a positive impact for viewership in the long term.

On volatility of the WWE stock, Frank Riddick III noted everyone involved here are shareholders of the company and they have succeeded in some major financial aspirations.   They have enhanced their liquidity and cut costs in the wake of the pandemic.  They have expanded their content and are one of the few to continue producing new content.  They launched the free WWE Network.  They hired their new CFO.  They believe the sources of their long-term growth remain strong.

Vince McMahon added that he’s the largest shareholder and he “really” cares about the company.

They were asked about why they don’t have a WWE channel on SiriusXM.  Vince said they’ll probably get there and if it would work well for them, they’ll explore the avenue.  It all depends on the situation.  

They were asked about the leadership team.  Frank Riddick said they’ve added several members of the team, including the new CFO.  They review succession plans for all key executives annually, including for Vince McMahon.

They were asked for the plan for “physical capital going forward.”  They decided to delay the construction of their new HQ in order to reduce cash flow during the pandemic.  For the rest of 2020, the range of the expenditures will be in the $30-$40 million range, which is about normal.  They expect that will go up in 2021 when they resume construction. 

They were asked about adding fans and shareholders to the Board of Directors.  They noted everyone on the board are shareholders and said they are confident with those who are part of the board.  They are always looking for ways to improve the quality of the Board.  That is a long way of saying NO FANS.

Triple H said they have not used the WWE Performance Center in Great Britain since the COVID-19 pandemic hit in March.  They are monitoring with the local government and they are working out plans for producing new NXT UK in-ring material.  The talents are really excited and looking forward to getting back to work, but it is all reliant on being able to do things as safely as possible.  When they can do it safely, they will be back up and running.

On the NXT front, Paul Levesque said NXT is both a third global brand but also a learning ground, a place where they make new stars and “increase the stars of the future for Raw and Smackdown.”  He said he is very happy with the NXT ratings in the current circumstances.  Their long-term is very exciting and they have a lot of athletes in the pipeline.  The future is very bright.

They were asked if they will build up new stars with Brock gone and fans out of the buildings.  Vince McMahon said Levesque has done an extraordinary job of creating new stars for NXT, who then come to Raw and Smackdown.  He said the fans are the third performer in the ring traditionally and they utilizing a digital and social “imprint” to build new stars.

On the potential return of live events with fans in attendance, Vince McMahon said you have to follow what’s going on.  Sometimes you think you have the answer, then you don’t with COVID-19.  They are working with arenas and have tentative dates but they haven’t pinpointed when that can be.  When they can, they will capitalize on it

On Saudi Arabia, McMahon said they are going through what we are going through here in the United States.  WWE hopes to be back there before the end of the year but they can’t 100% guarantee that will happen based on the pandemic.

On their new HQ, Frank Riddick III said they are analyzing their physical space requirements as well as their advanced media group based on their adaptations from the pandemic.  They are working on new requirements for the space.  Their television production team has been working remotely and they are working on a plan now as to how all this will inform the new HQ, but they don’t have those answers yet.

On content aimed at women, Stephanie McMahon said they are proud of those opportunities.  She praised their reality series and the Bellas’ YouTube channel.  Becky Lynch will be part of Rumble when that animated film is released.  The women “continue to knock it out of the park.”

They were asked about a potential physical WWE Hall of Fame.  Vince said that the interest in that “continues to build” and it’s a possibility down the line.

On being asked whether they would expand to Latin Channels such as FOX Deportes or Univision, Vince McMahon said, “Yes, absolutely.”

They were asked about AEW taking their market share in ratings.  Paul Levesque said there is a moment in time when something launches and it’s exciting and there’s some interest in that.  He said it’s a big world and WWE continues to be focused on their product and stars.  They have a very long track record of doing this successfully for many years and they will continue to do so.

If something prevents them from taping in Florida going forward, they do have a contingency plan in place but they didn’t state what that may be.  Vince said there “is always a B Plan.”

On Wrestlemania potentially being moved from Los Angeles in 2021, Vince McMahon said it wouldn’t be fair to talk about other potential cities but lots have bids and want Wrestlemania, but they haven’t announced anything yet.

The XFL shutting down had zero to do with WWE’s cost-cutting in April.  Their response to COVID-19 has been driven by WWE itself, nothing else.

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