Thanks to Alexander Strauss for sending in the following recap of today's WWE conference call:
Michael Weitz opened the call by reading a prepared statement where he acknowledged Thursday’s earnings report and Business Plan & Potential Path To Significant Earnings Growth release.
Vince McMahon got on the call and put over social media growth and the numbers of the quarter. He mentioned their action figures doing very well and said this was a particularly good quarter. Vince brought up the Rolling Stones pay-per-view and charity work with Susan G. Komen for the Cure. He said their new deal with Take-Two Interactive was “very, very exciting.”
Vince then ran down current television deals. He said to expect 2013 to remain relatively flat due to increased production capacity and increased creative writing staff. WWE CFO George Barrios took over to crunch the numbers.
Barrios put over the increased number of domestic television hours the company has monetized with the third hour of Raw and new WWE programs. He cited a 12% TV audience increase in the US and said the company doubled their Twitter and Facebook followers.
George said there was an increase in High Definition buys for pay-per-views in the quarter, providing WWE with more revenue per buy.
Regarding the WWE Network, Barrios noted that under one million subscribers they would see the network as an investment but at three to four million subscribers, it could provide transformative growth. Costs reached $8.2 million in 2012.
The call then went to the question and answer session.
-Barrios reiterated there are not plans to bring Raw and Smackdown to the WWE Network and they are comfortable about having broad distribution in the US. Vince McMahon highlighted they use these deals to promote other revenue streams.
-A caller asked the likelihood of the WWE Network launching this year. Barrios said they feel good and are optimistic about a launch this year but said they were going to get out of predicting dates.
-George Barrios indicated that Wrestlemania accounts for more than half of their pay-per-view earnings which is why they’re willing to move the other pay-per-views to the WWE Network. Vince says they also assume that people who cannot afford the huge monthly pay-per-view bill will be able to subscribe to the WWE Network.
-Barrios said vision and focus on brand were the two aspects that really impressed WWE regarding Take-Two Interactive. The bankruptcy of THQ cost WWE $4-$5 million.
-Vince McMahon said they do have the ability to push past their PG initiative on the WWE Network depending on the time it airs. He put over the network’s ability to repurpose Attitude Era material as well as provide new material.
-Box office estimates won’t be released for new WWE Studios films “Dead Man Down” and “The Call” but they are very important to see how their new strategy will work out. The films are partner distributed which means they’ll get paid down the line and not the initial revenue at the box office.
-The $40 million TV rights fees should be nominal fees going forward.
-The target is 1 million subscribers to at least break even with the WWE Network. George Barrios reiterated from earlier in the call they believe at full distribution they can be at three to four million subscribers. Everything depends on carriage agreements and how quickly they can reach subscribers. The company feels within 6-12 months after launch they should have a good idea with how things are working.
Michael Weitz ended the call with investor contact information.
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