By Jason Powell, ProWrestling.net Editor (@prowrestlingnet)
Vince McMahon served as the host of a conference call pertaining to the 2020 first quarter financial report that was released on April 23, 2020 at Corporate.WWE.com. The following are the highlights of the call. Refresh the page for the latest updates.
-The call was hosted by Vince McMahon and interim CFO Frank Riddick. WWE Senior VP of Investor Relations Michael Weitz read through the legalities and then turned it over to Vince.
-Vince said that the pandemic only affected the quarter for a couple weeks. He said the made changes and will continue to produce content. He said they are family oriented and he thinks that will help them considerably.
-When it comes to television ratings, Vince said there wasn’t much change since moving to the WWE Performance Center, particularly with Smackdown.
-Vince said it’s a challenging environment, but you have to take advantage of it and do what you can to make it special. He spoke of making mini movies like they did at WrestleMania and doing personality profiles that the can and will do better.
-Vince also boasted about their social and digital platforms and said he doesn’t think any other property can do what they do.
-Vince called WrestleMania “a huge success for us over Saturday and Sunday night.”
-When it comes to the cuts, Vince said they are preparing for whatever the new normal is. Vince said he doesn’t know what that is and no one does. He said they can adapt quickly whatever it may be.
-Riddick ran through the financial report presentation. He stated that the pay-per-view rights deal that Vince teased in the last call was transformative. He added that they are unable to estimate when the rights will be sold, but they believe it’s possible.
-Riddick said the pandemic has affected their business. He said they were able to offset the losses of ticket sales and merchandise with their staff cuts. He said the affect may not be limited to those areas of their business. He noted that they saved roughly $4 million per month via the cuts.
-Weitz opened things up to callers. The first caller asked noted that Raw and Smackdown ratings have been soft, which he said is surprising because they are among the only sports on television. He asked why that’s the case and what steps they are taking to reverse it. Vince said it goes back to the product itself. He said they don’t have interactions with live crowds, but he said they are doing really well despite not having a live audience. He said everything they do is about getting a reaction out of the audience. Vince said they need to figure out ways to improve and they will, and he spoke of the wrestlers being able to be heard as they badmouth each other. Vince said it’s new for them and everyone without an audience. “It’s a different show,” Vince said. “It’s a completely different show.” Vince claimed that Raw has suffered in the ratings, while Smackdown has had little or no change. Vince also spoke of bringing in new talent coming in and it taking time to figure out where to use those talents. Vince said he’s convinced that Raw’s ratings will bounce back.
-The caller asked about the company’s dealings with Saudi Arabia. Vince and Riddick went back and forth over who would take it. Vince said they would love to have another “huge WrestleMania type event” and said they normally have two. He said Saudi Arabia is under the same constraints as everyone else due to the pandemic. He said they really want them to hold a big show in November or December, but they are unsure whether that’s possible. Vince said the good thing is that they won’t miss out on the money because they will just tack on the event to the back end of the agreement.
-Vince said he thought they would have their media rights deal done in Saudi Arabia. He said there’s still some uncertainty as to when that will happen.
-A caller asked whether the old or new Indian television rights deal is included in the first quarter. Riddick said the first quarter had India at the old deal terms.
-The caller also asked about the Fox deal kicking in and sponsorship. Riddick said some of the trends in advertising going into the second quarter were not experienced in the first quarter. He mentioned having a successful WrestleMania and the sponsorship that was tied to it and said the revenue is more transactional in nature.
-The next caller asked them to talk through their originally planned investments from their television rights compared to what will happen now. Weitz said they had expense growth in the past when it comes to how they are delivering content. He also cited incentive comp. He said they also had some carryover from some investments carrying over from the end of 2019. Weitz said the mode they’ve been in this year has been heavily focused on how to reduce costs, strengthen their current performance, and their investments in the new environment. He said they will be thoughtful in terms of how they invest in the future, but their focus is on having strong financials at this time.
-They were asked if they had any backup plans if Florida did a 180 and decided they were no longer an essential business. Vince said they do and there are a number of states that would want them.
-A caller asked about the live audience returning, potentially at Full Sail University. Vince said he doesn’t know how it will be done and whether the fans will be kept six feet apart or how it would work. Vince said the chances are they will be the first to do it like they have been the first to do other things.
-The caller brought up farming out the pay-per-view rights. Riddick said there are interested parties, who are simply more focused on the pandemic. He asked about another approach. Riddick said they would consider any options. Vince chimed in and said the pandemic caught everyone with their pants down. He said they were very close with a number of parties interested in WWE Network, but the bottom fell out. He spoke about making improvements to the network and marketing in the meantime.
-Vince once again spoke about being highly adaptable and it being a creative environment when it comes to live crowds returning.
-A caller asked if there is any risk with broadcast partners saying that the current product isn’t what they paid for due to the lack of live audiences. Vince said their partners are not doing as well as they would like to and he said neither is WWE. But Vince spoke of how they are understanding and how they have a good relationship with both partners (NBCU and Fox). “And they have our backs, as we do theirs,” McMahon said.
-A caller asked for clarification as to whether the 2.1 million subscribers they had over WrestleMania weekend were all paid subscribers. Riddick said they were not and declined to state how many were paid.
-The caller asked if they still believe they are on a path for a record adjusted OIBDA year. Riddick declined to provide guidance and cited the uncertainty related to the pandemic.
-The next caller asked if they believe it will take viewers a long time to return to live events. Vince said his crystal ball isn’t showing more than anyone else’s, but he they are adaptable and he thinks they will do very well.
-A caller asked about Raw and Smackdown costs by running at the WWE Performance Center compared to running it with a live audience. Vince spoke of there being fewer expenses, but he said they need an audience. He said it’s more costly running remotely (with a live audience). Vince gave “kudos” to all of the performers. “They are working so hard,” Vince said. He said it’s different, but the performers are stepping up.
-A caller asked about increases in international deals they’ve struck aside from the Middle East deal that isn’t completed. Riddick said they can’t get into specifics on the international deals.
-The caller brought up a free tier on WWE Network. Riddick predicted sometime in the fourth quarter.
-Vince was asked for his best guess about running his next live event. Vince said no. He said they have hold on buildings, but it’s evolving. He said he knows people are itching to get out of the house and to come see their product, but he doesn’t know what it will be allowed and no one does.
-Vince responded to a question by pointing out that they have no debt. He said they are being overly conservative due to the uncertainty.
-A caller asked about paid subs for WrestleMania being down a bit while free subs were up, and questioned what they did on the promotional side. Weitz said there were a lot of creative things they did to drive the growth around WrestleMania. He mentioned expanding access to the free tier and partnering with Fox and ESPN to run classic content.
-The caller asked about talent morale and testing for coronavirus. Vince said they do everything imaginable. He said they have a form that talent has to fill out weekly. He said they are monitoring their talent and employees at the PC and are very careful about how many people are in the venue at the same. He also spoke about having talent sequestered at a hotel. He mentioned pandemic cleaning of the ropes and ring apron. Paul Levesque chimed in and mentioned the company they work with that uses a special cleaning product that lasts for 90 to 120 days. He said they coated their facilities, production trucks, etc. with this cleaning solution. He said they are taking every precaution they’ve been advised to take and then some. Vince said that they will be right there when the testing is more accurate. He said the talent have taken it as a challenge and a duty. He said they have really risen to the occasion. “They’re very, very special athletes,” McMahon said. He praised them for wanting to give. “All in all, I’m so proud of them,” McMahon said.
-The next caller asked about how the pandemic has affected their fanbase. Riddick said they don’t have much data. Vince said WWE fans are very robust. He said that if they announced they were running Madison Square Garden it would sell out immediately. Vince also mentioned that arenas will need to lower the rent prices and they may need to do the same. Vince said no one has a crystal ball on this.
-The caller asked about potentially unemployed fans and whether they could pay for the network. Vince once again said on one has a crystal ball. He said they will be flexible and will adapt to wherever things go.
-A caller asked about a new WWE 2K video game. Riddick said there would not be a launch of a new game this year.
-With no callers waiting, they wrapped up the call.
Powell’s POV: Vince was pretty straight forward with his repeated mentions of not having a crystal ball. He laid it on thick by saying they could sell out MSG if they were allowed to run right now, but for the most part he was good about not making unrealistic predictions during such uncertain times. Vince was also highly complimentary of the talent and crew. One can only hope that he’s expressing those sentiments to them directly and not just on a conference call. Jake Barnett and I will discuss this conference call and all the news of the week in a special Friday edition of the Dot Net Weekly audio show for members. Join us via PWMembership.net.
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