By Jason Powell, Prowrestling.net Editor (@prowrestlingnet)
Vince McMahon and members of senior management served as the hosts of a conference call pertaining to the 2018 second quarter financial report that was released on July 26, 2018. The following are the highlights of the call. Refresh the page for the latest updates.
-The call was hosted by WWE Chairman & CEO Vince McMahon, Co-Presidents George Barrios and Michelle Wilson, and and WWE Investor Relations Michael Weitz. Weitz read through the legalities and turned the call over to Vince.
-Weitz read through the legalities and then turned things over to Vince.
-Vince spoke about WrestleMania and the Greatest Royal Rumble. He also mentioned the new television rights agreements, then touted the Mae Young Classic 2018. He also said there will be additional new content that will be announced “shortly.”
-Barrios and Wilson read through the financial presentation.
-They opened the phone lines for callers.
-The first caller asked for more details on the Saudi Arabian partnership for the Greatest Royal Rumble and what’s next with that deal. Barrios cited confidentiality clauses for not giving specifics. He said they have been talking for the last ten years to invest in data to understand their fans better. He also spoke about investing in digital and international markets, and all of that led to this deal. He noted that it’s a ten year partnership that will include major events like GRR. He added that they are still working on the timing.
-The next caller spoke about the increased revenue in the quarter and asked about the revenue recognition policies and whether it should be considered a long term benefit. He also asked if they are producing enough content as there is demand and whether there’s an opportunity to ramp up content. Barrios said they will talk about the investments they will make at a later date, but “there is no doubt we are nowhere near” reaching the level of content they can produce. He feels they can grow with more content and localizing the content via airing in various languages. Barrios said they are investing for the long term and they believe it’s a ten-plus-year runway. Barrios also said the deal in Saudi Arabia is unique and pointed to the live events, media, and sponsorship sections. He said the predominant amount of is listed in the “other” section.
-A caller asked about the Australian stadium show and asked if it’s a similar type deal and if they are pursuing Saudi-type deals. Barrios said they are trying to win the battle for time and then the monetization opportunities will present themselves. He said the Australian deal is “very different” than the Saudi deal, but he once again said they won’t get into specifics.
-Barrios spoke about how the company purchased a building next to their production facilities. He said they were going to do the build out this year, but they delayed it because they are evaluating those plans. “The opportunities in front of us are incredible,” he said. Barrios said they hope to finalize those plans by the end of the year and then they can discuss it.
-A caller asked why no is the right time for NXT UK and rolling out television distribution in that company. Wilson assumed the caller meant the UK tournament and pointed out that they did the first version of that tournament the year before. She said the UK Tournament is the perfect example of the way they want to localize their content. She said they expect to do more of that going forward. She said “not necessarily” regarding television rollout in the UK (presumably meaning that content will air on WWE Network).
-The next caller asked about the WWE Network churn. Barrios said the most important metric in any subscription business is retention. He noted that they get seasonal bumps, especially due to WrestleMania. Barrios said he, Vince, and Wilson are never happy with that number.
-The same caller mentioned they had two of their biggest live events ever in the quarter with WrestleMania and GRR, yet the live events averages are dropping. Barrios spoke about it being venue based and said things have been pretty consistent. He said they don’t include the NXT events in their numbers. When it comes to international events, he said it depends on what country they are running in and it’s not the same profile from year to year.
-The caller asked if the network cannibalizes the live events. Barrios said they believe it helps and specifically mentioned the marketing of those events as one of the benefits.
-The caller asked if there’s a reason the international subs can’t have the same margin profile as the United States over the long haul. Barrios once again touted localizing the content over time.
-The next caller asked for more details about how they can benefit from data going forward. Barrios said the date lets them know what the consumers like. He said it helps them understand what’s really driving the engagement. He said as the theory is that the better you know the fans and the better you can put smiles on their faces the easier it will be to monetize.
-The next caller noted that they were entering year two of the buildout of the WWE UK brand. He asked about turning it into a WWE Europe brand over the long haul. Wilson once again spoke about localizing content. She said it will be a priority for them and the marketplace will determine how they distribute the content. She mentioned the success of the WWE Performance Center and praised Paul Levesque. She said 40 to 45 percent of the talent in that pipeline are coming from outside the United States. She spoke about the possibility of replicating the PC outside the United States.
-A caller asked about customizing the home page for WWE Network. “Coming soon to a network near you,” Barrios said with a laugh. He added they wouldn’t get into more specifics on when that will happen.
-The next caller asked about consumption data and whether the right move is to double down on their current international markets or to expand elsewhere. Barrios indicated it’s more about going deeper with their current markets.
-With no further callers, they closed out the conference call.
Powell’s POV: Perhaps the biggest non-financial topic was the hint that a more customizable home page is coming to WWE Network. Jake Barnett has mentioned numerous times in Dot Net Weekly that the network layout feels dated at this point, so it’s good to see they are clearly on the verge of addressing it. It’s interesting that there was so much talk in the past about tiering the network and that no longer seems to be a topic of conversation amongst the callers. On the financial side, I’m surprised there weren’t more questions about how different the numbers would have been without the Saudi Arabian show. The callers got into the live events decline, but that’s about as close as anyone came to mentioning it specifically. Jake and I will be discussing this call, the notable financial numbers, and all the news of the week in the Dot Net Weekly audio show later today for members. For membership information, go to PWMembership.net.
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