WWE News: 8/2 Vince McMahon conference call - WWE Network, WWE TV deal with Ion, Raw expansion to three hours
Vince McMahon hosted a conference call pertaining to the second quarter financial report that WWE released on August 2, 2012. The following are the highlights of the call.
-Michael Weitz of WWE Investor Relations opened the call and noted that he was joined by Vince McMahon and WWE CFO George Barrios. Weitz turned the call over to Vince.
-McMahon said the quarter was essentially flat. "It was nothing to write home about," Vince said. He touted the 17 percent increase in pay-per-view revenue. He noted the decrease in licensing profits was due to the lack of the WWE All-Stars title. Vince said the live events and TV ratings were flat.
-Vince boasted about the "excellent" television ratings for Raw 1000. He said the third hour of WWE Raw will give them more exposure.
-Vince laughed as he talked about remastering and releasing "No Holds Barred" and said it has done extremely well.
-Vince said people have been very patient regarding when and what the WWE Network is. He said they are not ready to make an announcement, but he feels very confident that next month they will be making one.
-Barrios said the company invested $5 million in Tout. He said the Tout app was downloaded more than 30,000 times after they included Touts in their live Raw broadcast. He ran through the second quarter earnings presentation.
-Barrios said the WWE Main Event television show will debut on October 3.
-Barrios touted upcoming movie releases, including "The Marine: Homefront" with The Miz, "Dead Man Down" starring Colin Farrell and co-starring Wade Barrett, "The Hive" with Halle Berry and David Otunga, "No One Lives" with Luke Evans and co-starring Brodus Clay, and a film called "Barricade" that will be released in September.
-Barrios also noted that they spent $100,000 to remaster "No Holds Barred" and expect to generate $300,000 in revenue from the film.
-Barrios raved about their increases in Facebook and Twitter follower count and Youtube views.
-They switched gears to take questions from callers. The first caller asked for more details regarding the range of format options for the WWE Network. Barrios said the three basic models that exist are broad basic distribution, a pay TV format, and a third would be "over the top." He said they continue to have discussions regarding all three.
-Barrios said he feels they've improved the content and functionality of the WWE website, and he said he feels increasing the social aspect of it has also helped improve their numbers in that area.
-Barrios said they will spend between $5 million and $10 million on programming for WWE Network this year. He ran through other expected costs. He said they will discuss the expense model and investment model once they release more details about the network.
-A caller asked to explain the pay-per-view growth this quarter. Barrios said WrestleMania buys were up roughly 15 percent. He said the other events were up 20 percent. The caller asked if they spent more on marketing. Barrios said he felt the creative was great and that's what drove it. He said marketing was essentially flat compared to the year before.
-The caller asked about North American attendance being down. Barrios said it's hard to make a comparison from quarter to quarter because they are in different markets. He acknowledged that Smackdown live event attendance is down from where they would like it to be. Barrios said they view the numbers as status quo.
-The caller also asked whether the Youtube content takes away from television. Vince said it enhances it. He turned the focus to the three-hour expansion and said the earlier hour helps them reach a different audience. He said they can't get much from that extra hour internationally because they have existing deals. He said the same is true for the WWE Main Event show. He said they expect that to change once the existing contracts expire.
-Barrios declined to say what percentage of Tout they own. He noted that they released the investment amount ($5 million).
-A caller asked where WWE expects the most growth from social media. Barrios said it's hard to draw a direct line. "I believe the bigger win is just enhancing the brand and engaging with our audience, and that ripples through everything," Barrios said.
-The caller asked about WWE Superstars and NXT television. Barrios said they continue to be broadcast internationally. He noted the change in the NXT format and taping location. He said it's been going "real well" and said the show "looks great." The caller specifically asked for an update about the shows airing in the United States. They breezed through that one with the usual line about how it could change. At least they didn't make the usual claim about the shows being in high demand.
-Regarding WWE Network content, Barrios mentioned Legends House and said they expect to have live programming as well. He mentioned their library and said they are creating new content using the library. He said they've developed a "compelling show" called "Monday Night Wars."
-The caller stated that as a shareholder, the company needs to say more regarding the WWE Network. "I'm quite confident that the next earnings call will have a lot more clarity for you," Vince McMahon responded.
-A caller mentioned that Raw and the pay-per-views seem to have become edgier. He asked whether there's been an intentional move to bring back double entendres from the Monday Night Wars era. Vince said he sees it as an evolvement, and feels the writing of the shows have been considerably better. He said he doesn't feel there's a topic they can't touch while doing it in a more acceptable way. He said they've been more G than PG, but he said you can stretch things. A caller asked whether they took it too far on the G-rating side, and Vince agreed with that assessment.
-This concluded the conference call.
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