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Full recap of WWE’s third quarter 2019 earnings conference call



WWE held its third quarter 2019 earnings conference call on Thursday that featured Michelle Wilson (Investor Relations) and George Barrios (Chief Financial Officer). Vince McMahon wasn’t on the call due to him being in Saudi Arabia. Here are the highlights:

– The conference call opens with a welcome to everyone on the call.

- Barrios ran through the revenue numbers. Revenues were $186.3 million as compared to $188.4 million in the prior-year quarter. Operating Income decreased to $6.4 million from $18.1 million in the prior-year quarter. Media revenues increased to $146.1 million from $142.1 million in the prior-year quarter. WWE Network’s average paid subscribers decreased 9% to approximately 1.51 million. 

He touted that SmackDown drew an average of 3.1 million viewers for the first few shows. That beat FOX programming the month before by 150%. 

– Wilson ran through the media content and brought up their strategy with SmackDown on FOX, Raw and NXT on USA Network, After The Bell podcast as well. She stated that revenue for live events dropped because of fewer shows. She brought up WWE 2K20 by stating, "The feedback has been mixed, but we believe in Take Two Interactive."

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

- Barrios was asked about moving NXT from the WWE Network to the USA Network and eventually leaving Full Sail, he stated that the strategy around putting NXT on USA is about the value of live content TV rights, and worth the risk of taking it off the Network. He avoided the latter question. 

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- Barrios was asked about the hurdles of a TV deal in India, he stated that they expect to have a deal done by the end of this year. 

- Barrios was asked about changing the price point of the WWE Network, he stated that there is a difference between their offering and other streaming services (Disney+, HBO Max, etc). 

- The original hours of programming on the WWE Network was asked. He said that NXT will go on the Network about 24 hours after airing on the USA Network. He brought up fans getting the weekly show and TakeOver specials. He stated that 200 hours of original content go up on the Network aside from PPV events. Barrios again mentions the Network tiers (premium, free, etc)

- A caller asked if bringing in Tyson Fury and Cain Velasquez for Crown Jewel raised expenses and whether it is profitable. He wouldn’t get into. He said the company has "accelerated investments in their core in-ring talent."

- When asked about short-term engagement by fans, Barrios stated that “We continue to be super focused on the in-ring content: storytelling, production. I think it's fair to say we brought some of that investment forward due to that.” 

- Caller asked about how NXT is contributing to the bottom line. Barrios declined to discuss details

- A caller asked about Eric Bischoff’s WWE departure and whether Paul Heyman is fully integrated into the creative team of Raw. Barrios stated that Vince McMahon created these roles in order to strengthen the teams while he takes a step back. He said that they are trying to recruit the best talent possible. He wouldn’t get into the individual roles of Heyman and Bischoff.

- A caller was asked about the impact of AEW on their business, Barrios said that everyone is a competitor in some degree but they try to drive fans to Raw and SmackDown. He said that there is a lot of competition for eyeballs. He listed WWE in the second tier among the NBA, NASCAR, etc, while AEW is on the third tier. They're a competitor and "we take them seriously, our expectation is that we win".

- A caller was asked about losing wrestlers to AEW such as Jericho. He wouldn’t get into but stated that as the company gets better, their talent gets better. He said individual talent has choices to make, but WWE has resources the orders of magnitude over any other company. He said WWE is the biggest [wrestling] company in the world within its space and he would imagine the talent would think which is better to align with. "I would imagine those things are important" to talent thinking of jumping.