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Welcome to PWInsider.com's ongoing coverage of WWE's 2021 Fourth Quarter and complete year 2021 earnings call.
On the call are WWE Chairman & CEO, Vincent K. McMahon, President & Chief Revenue Officer, Nick Khan, Chief Brand Officer, Stephanie McMahon, and Chief Financial & Administrative Officer, Frank A. Riddick. Seth Zaslow, the new WWE Senior Vice President, Head of Investor Relations welcomed us to the call.
Vince McMahon said they brought in a "considerable" increase of revenue over the last year. He said they have re-imagined the company and that's something they do every month. Their performance speaks for itself and for what they have done long term.
Nick Khan said almost a year ago, they announced they would license the WWE Network to Peacock. He compared Peacock numbers to their old numbers on the WWE Network. The Money in the Bank 2021 viewership was 20% higher than the last year. Summerslam was 30% higher than 2019 on the WWE Network. Their Extreme Rules 2021 was 20% higher than 2019's edition. They were up 75% for the last Saudi Arabia vs. the last Saudi event on the Network. Survivor Series was way up as well. They have 3.5 million viewers on Peacock in the States vs. the 1.1 million WWE Network subscribers.
Khan touted they have expanded the audience and viewership with their product and the partnership with Peacock. More fans are watching the marquee WWE events than ever before. Khan said the marketplace puts more value on their intellectual properties.
They have over a dozen scripted and unscripted projects 'sold' based on WWE IP that will be announced soon, domestically and internationally.
Khan praised the new trading card and NFT partnerships. There will be an announcement on the NFT marketplace soon and WWE branded lotteries will be rolling out in multiple States later this year.
Khan put over the extended new deal with Mattel for the WWE toy license. They expect even more growth.
Khan said they "got back to work" with Day One on 1/1 with the belief a holiday date would drive viewers, attendance and merchandise. The show sold out and was one of the highest viewed events on Peacock ever. They kicked off the Road to Wrestlemania at the Dome in St. Louis. It was the largest merchandise sales ever at a Rumble event, the second highest attended Rumble event ever and Peacock viewership was 45% higher than the 2020 Rumble event.
Khan praised the Bad Bunny and Johnny Knoxville appearances.
Khan noted the next Saudi Arabia event will be on Saturday 2/19 and they couldn't be more pleased to be getting back to staging major events internationally. There will be more news on that front later this year.
Khan put over the Disney relationship with their recent Indonesia deal and said WWE was an Executive Producer on the EPSN+ Rowdy's Places, which I don't believe was ever noted before. He said the show just debuted, but the first six episodes have been on ESPN+ for months. They added a new episode looking at ECW yesterday.
Khan mentioned the Rey Mysterio as the cover artist for WWE 2K22 video game. Khan said they are not shocked by all the recent acquisitions in the gaming space. He pointed out all the consolidation trend in TV and theme park spaces and expect that sort of consolidation to continue.
Khan then talked about the live rights of sports programming, noting billions has been spent to bring top tier sports to streaming services. He said it is just a matter of time before Netflix or Apple+ look for partners. He said they couldn't be more optimistic about where they stand as outlets look for partners with first-run live programming.
Stephanie McMahon talked about the importance of WWE stars in major sports and pop culture. Big E starred in the cold open for the Fury vs. Wilder fight. Sasha Banks was the star of the ESPN College Football National Championship broadcast. Paramount used WWE to promote Jackass Forever, with WWE content getting 12 million views on social media and Knoxville on major talk shows talking WWE. She praised Ronda Rousey and Bad Bunny at the Rumble.
The Rumble date was the highest Peacock app usage to date. She praised partnerships with Door Dash and others as part of the Rumble.
All indications on the new WWE 2K video game are very positive. She praised the quarterly performance of the WWE Champions mobile game. They are looking at all the recent video game acquisitions and the next generation of fans are important to them, as that's where the fans will be.
Stephanie then discussed the first-ever WWE Next in Line deals, noting they want to offer a platform for college athletes who don't make it to professional sports but want to continue their athletic careers. She put over Gable Steveson's signing.
Stephanie ran down WWE's social media power, saying they had over 50 billion views across their accounts. She then went through some of their advertising integrations with Netflix's Red Notice and Pizza Hut. She noted The Rock was a WWE Hall of Famer, which hasn't actually happened yet.
Frank Riddick began reviewing the date in the press release for their earnings.
They went into the Q&A Portion of the call:
They were asked about any renewals of one-time payments for the rights renewals. Nothing yet.
They were asked about what they hope to achieve this year with the sponsorship side of the company. Stephanie said there's no reason to think they be making hundreds of millions in that side of the business in future years. They are engaging new revenue streams and utilizing their talent to help build around their IP and brand.
The Disney+ deal in Indonesia was brought up. Nick was asked about Disney and Discovery covering so many countries, so why start with a one country deal and whether they wanted to do more blanket deals. They are doing region by region deals as to what partners make the most sense for that region. Disney made the most sense for that region. He said they will be in "good shape in a couple of month" on those type of deals.
They were asked about WWE's views on the Metaverse and VR given how they have extended into physical and digital media in the past. Is the company investing in that space or looking for rights deals on that front? Stephanie said they are exploring it for WWE as they realize it's a place people will go to socialize so that leaves huge opportunities for WWE. They are doing due diligence and learning as much as they can. They are actively involved in investigating. They like to be ahead of the curve on things but right now are doing the work to learn.
They were asked about the financial impact of Peacock's second WWE year. They received a significant payment up front in relation to their IP so they won't have that this year. Revenue can change based on the Premium Live Events. The deal has an escalation for it, so it will be slightly up this year but they won't get the up front payment they received at the start of the deal.
They declined to give guidance on media expenditures but they will have touring and international events they will have to push and advertise.
They were asked about whether to expect two large scale international shows this year. They expect at least two. Nick Khan teased they may not be limited to just two.
They noted the Hulu deal is up this year. We can confirm expires in late-December.
They were asked about the Next in Line program and how it compares to taking talent from "regional, smaller promotions." Steph said WWE offers the athletes more than anyone else because it provides opportunities for those may not have another path forward athletically. They used Goldberg and Big E as examples of athletes who continued their careers after football with WWE.
Khan said they have a triple play in broadcast, streaming and digital. They have advertiser-friendly content with helps in broadcast and cable. You need content that can be sold to advertisers. They believe they have out-performed on Peacock thus far on subscription and advertising areas.
They were asked about the Raw "second window" renewal. They feel as good on that as they do on their NBC and FOX deals as well as their Peacock deal.
They were asked about WWE's strategic placement. Khan said everyone wants to be in business with those who create good content and they have a 35 year history of that. He thinks there will be even more buyers in two years vs. now.
They were asked if broadcast would be what they pursue when the FOX deal ends or if they would be looking at a streaming service. Khan said their premium events are on Peacock and the regular season, Raw and Smackdown, are on USA and FOX. They still think big event programming will be on both. They won't discount those buyers but they realize premium dollars are being spent on premium services. When the WWE Network was launched, they were second after Netflix, perhaps third, but then the marketplace became cluttered so it made more sense to partner with others.
The final question was about the last Saudi event and whether there were any changes financially vs. the past. No major changes.
That was it for the call!
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