Full recap of WWE’s fourth quarter 2018 earnings conference call

WWE held their fourth quarter 208 earnings conference call on Thursday that featured Michelle Wilson (Investor Relations), George Barrios (Chief Financial Officer), and Vince McMahon (CEO and Chairman). Here are the highlights:

– The conference call opens with Barrios welcoming everyone to the call and runs through some of the earnings. Revenue increased 16% to $930.2 million for 2018, the highest in the Company’s history.

– McMahon got on the call and stated that they continued the focus on deepening engagement, increasing the production of original content. He bragged about new TV deals with USA Network and FOX. He brought up Greatest Royal Rumble as well as Super Show-Down being extremely successful. When it came to achieving record revenue in 2018, McMahon stated, “In other words, we know what we’re doing.” He hopes to have another year of record-breaking results.

– Barrios started going through the financial highlights. WWE Network averaged paid subscribers increased to 1.59 million paid subscribers, consistent with the Company’s guidance. Revenues increased 29% to $272.5 million from the prior year fourth quarter primarily driven by the increased monetization of content. International revenue increased 58% to $317.8 million from $201.3 million in the prior year, the highest in the Company’s history and the first-time international revenue has exceeded $300 million. Live events in the United States were down by 7% for the quarter. Barrios ran down how ticket sales for live events have increased in revenue but actual tickets bought are down to an average of 5,000. He notes TV attendance is growing or stable and total attendance, and revenue is trending up. For 2019, they expect to have a record OIBDA revenue of at least $200 million. Also, the company expects to have $1 billion in revenue next year.

– Wilson ran through the media content and brought up having a loyal audience with Total Divas and Total Bellas. She stated that international events were the most watched shows on the Network for this quarter. She then ran down the consumer products, which showed that merchandise sales were down for the quarter.

– The ‘other’ earnings section is up $42.9 million from the last three months of 2017. Thus, Crown Jewel made around $40-45 million in revenue. Barrios says they will no longer provide a Network subscriber number update on the day following WrestleMania. This is something that they’ve done since the launch of the Network in 2014.

– This was when they opened the call up for questions.

– Regarding the potential third season of Mixed Match Challenge, Wilson stated that the first two seasons have been a great experience and learning about time viewed. They learned about creating short term content by working with Facebook. When it comes to a potential third hour of SmackDown Live, Barrios stated that live programming is valuable and when making decisions about live content, they have a lot to consider. He added that once they make that decision about the third hour of SmackDown, they’ll let everyone know.

– When asked about the new UK television deal, Barrios responded by stating, “I think it’s fair to say all the agreements will be made by the middle of the year.”

– When asked about a “new wrestling promotion being launched” and how it impacts them, Barrios declined to comment on that. He did state that they have confidence in their brand and the talent that they have and will find. He believes WWE is the premier organization.

– A caller asked about the potential of launching more Performance Centers around the world; Triple H wasn’t there so Barrios answered by stating, “In the next 5-10 years, our ability to develop global content could be as valuable as our Western content.”

– Barrios was asked about potentially putting NXT content on FOX, “WWE has become a media company.” He added that it depends on where the content fits best. Praise for Halftime Heat and how well it trended. “In our view it’s the second most valuable unit in our bundle” on the WWE Network.

– McMahon was asked how much of an impact will it be and hurt the WWE brand if Ronda Rousey leaves, he stated that bringing her in gained the attention of more women. He stated that having her under their banner, it creates a new version of herself and she helps create new talent. He praises Rousey’s ability to make the transition to pro wrestling. “Ronda is one of the brightest people we’ve ever done business with.” He would talk about how several stars have gone down with injuries or not having talents that they thought they would have such as John Cena and Dean Ambrose. He thinks that these are some of the reasons that viewership for Raw and SmackDown have dropped as well as attendance. “You have to change the storyline.”

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