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Questions and Answers from today's WWE Conference Call:
The first question asked about what it cost to miss the PPV from quarter two on the bottom line. George said it was about $3M revenue impact. He was asked about the development of the Network. Vince said all options are open to them. He said the rights fees for their top shows could be tied to a Network deal. He said they are in very good shape going forward.
They were asked about raising the price on tickets as audience has declined over recent quarters, and will it keep people from attending. George said that they have kept most prices low and only raised the top prices so it hasn't matter.
Vince was asked what the company has learned in relation to film. The caller put over the success of The Call. Vince said that they have tried a number of models and they have found the best one. They have Michael Luigi running it and good deals with distributors. They are now getting non-WWE fans to come to the movies. He said that they needed to broaden their fan base for movies and they have. The caller said that it makes sense to put the WWE talent in secondary roles to established stars. Vince agreed and said that their talents can headline direct to DVD movies and he hopes that at some point headline them.
Vince was asked when the negotiation process will be begin here for Raw and Smackdown and how, given the "ridiculous" money being paid to lower rated sports events, how could they not double their rights fees. Vince said, "I think you answered the question". He said that he thinks WWE is the last great franchise that is available. He said that they can't deny the numbers that WWE brings in, "They're huge". He said WWE is poised to garner double or who knows what in rights fees.
George was asked what the higher production costs were for Mania. He said that it cost more from production because it was the New York area and in spending on talent. He was asked specifically if it was money spent on The Rock and he said he didn't want to comment on that.
They were asked about the change in licensing on videogames and if they expected shipments to return to normal. George said that they were happy with their new deal and they are excited about the new game. They expect growth.
They were asked about spending going up. They were asked if that is evidence of a Network announcement. Vince said every quarter they get closer and closer. It's the longest 12 to 18 months in history!
They were asked how tied decisions for the Raw and Smackdown TV deals were tied to the Network. George said they were separate, meaning they want deals for those shows on their own, not on the network.
They were asked about PPVs being down. George reiterated that it was due to more expenses for being in the New York area and the loss of the PPV. They were asked if production costs will be cheaper in New Orleans next year and he said that will probably be the case, since New Orleans isn't as costly to do business in as the New York area.
They were asked about the growth in WWE.com. George said that it was due to the significant investment in production of the product, via the app, social media, etc. He said that the growth in staffing is the reason that costs were up in delivering content via the net. George talked about the different variables of the net, advertising revenue, e commerce and delivering digital media.
They were asked about how the Performance Center will work. George said he wouldn't go into specifics but obviously with moving the Center it had expenses. He said that they usually have 50 to 100 people in the developmental program at any time.
Vince was asked about his statement about getting more money for their rights fees. He flat out asked if the company expected to get significantly more money for their rights fees. Vince said that he will allow the person asking to put a hammerlock on him if they don't.
They were asked about their tax rate going from 36 to 38%. George said that he expected their tax rate to be within 34 and 37% for the rest of the year.
That was it.
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