WWE held their fourth-quarter 2016 earnings conference call on Thursday that featured Michael Weitz (Investor Relations), George Barrios (Chief Financial Officer) and Vince McMahon (CEO & Chairman). Here are the highlights.
– The conference call opens with Weitz welcoming everyone to the call and runs through the earnings.
– McMahon got on the call and stated that they earned $729 million this quarter and that it was the highest in WWE history. He hyped 205 Live and WWE UK Championship tournament. He noted that 205 Live would have live events and their own merchandise. He brought up how the UK Tournament will increase popularity in the country. “Efforts to localize talent and create new revenue streams.” He joked about the 294 million watched hours on WWE Network and said that all that people are doing is watching the network. He brought up social media and said that “Our social and digital platforms… which is a big barometer for me.” He mentions that attendance record of over 100,000 for WrestleMania 32 wasn’t 101k paid people but includes ushers and ticket takers.
– Barrios took over and listed WWE operating highlights. WWE’s revenue was $729.2, which is up from Q4 2015 of $658.8 million. Operating income was $55.7 million, which is up from the $38.8 million of Q4 2015. He noted that the average paid WWE Network subs were up 24% from Q4 2015. 7,000 hours of content is now on the streaming service. Barrios talked about how WWE Network library is four times as large as it was compared to when it launched in Feb 2014. He commented on their partnership with NBC and making SmackDown a live show. He noted that WWE’s action figures are the second most selling figures behind Star Wars. He brought up that the media division’s revenue was up 17% from Q4 2015. Barrios talked about the $193 million of net revenue from convertible notes they issued in December. Long-Term Growth Strategy. No details on Q4.
– Weitz opened the call up for questions.
– When asked if the WWE UK Championship tournament helped free subscriptions for the network and a possible weekly UK TV show. Barrios said that the tournament helped the network and saw a lot of engagement with their metrics around the world. McMahon said that Tyler Bate, who is the UK Champion, has already appeared on other WWE programs and noted that they could easily make it a weekly show. They’re interested in the possibility but nothing official yet. He noted that other UK talents could join WWE. McMahon phrased the quarter is “super-serving” the WWE Universe.
– Barrios said that WWE expects growth to start in Q2 and accelerate through the year.
– When asked about live events being increased in 2016 and if they plan to do the same in 2017. Barrios said that they plan to do more live events especially due to the brand split. However, he doesn’t expect that live event attendance will increase because of the increased amount of events. He noted that they would increase marketing for those events. He noted that the profit was affected because of timing and the Royal Rumble.
– When asked about the WWE UK tournament again, McMahon said that they haven’t tapped into that market a lot yet, but the possibilities are endless. He brought up using UK talents and doing live events in the country.
– WWE answers question to imply that they will again be offering WrestleMania for free on the Network for “new subscribers” in 2017. McMahon said that “You’ll see some vacillation from one pay-per-view to the next.” More viewers come to Smackdown, more viewers come to watch Raw. The big wheel keeps on turning. That’s our strategy.” He noted that they’re not one big show anymore but two different shows. “Freshens up Talent & gives us longer range for the talent. More room for more talent. More live events.” He noted that SmackDown ratings are up while RAW’s ratings are on a decline much like the NFL ratings.
This wraps up the call.
