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WWE’s earnings numbers, on the whole, were very strong. If you see the stock going down today, that is a byproduct of the overall market in distress.
As usual, Michael Weiss opened the show.
He turned it over to Vince McMahon, who opened by stating that WWE had achieved the highest revenue in its history in 2015. He spoke about growing the international revenue and how they did 8 billion views on YouTube, which made them the top sports network.
He trumpeted the Network being at almost 1.3 millions subscribers and how much they had grown from this time last year. He mentioned the new shows and talked about the high consumption of product by its subscribers, say that they watch more content than any cable company does. He said, correctly, that the fans obviously like the Network.
Vince said he was excited about the numbers and referenced the stock being down for the day. Overall, Vince was extremely happy with how WWE is doing, and he has every right to feel that way. We can complain all we want, but when the company does record revenues, Vince can always get the last laugh.
Then, he turned it over to George Barrios, who did his job of going over what was in the Earnings release.
George did make a point of saying we would get our next subscriber update on April 4, the day after WrestleMania. That is a great day to do it and it should set their all time record high.
Then the Q and A started.
The first caller asked about losing 50,000 subs in the quarter, despite adding new content. They were also asked about the potential of bundling the Network with with other properties. George said that to them, it’s about Network consumption and they see people doing 188 hours. He said that overall they are very happy with their overall programming. George said that they are open to all ideas for bundling, as they should be. But there is nothing to announce.
The next question was about minutiae. Basically they were asking about the timing of WrestleMania being in Q2 vs. Q1. They were asked about subscriber retention. He said that they came out last year at 1.217 and now they are giving guidance to 1.280, so they expect it to be higher.
Vince was asked how they will make WrestleMania a draw given all of the injuries. He said, “By being creative”. Vince said this year’s Mania will be as good as last year’s.
Vince was asked about the shows that will create hours of content. George answered and listed the shows and events that they do to make up the lineup.
George was asked about what the actual number of subscribers in India. Of course, he didn’t give the number. But, he did say India was a long term project due to the price and the fact that PPVs are sold over the air. He was asked about using Snap Chat and other social platforms, will they use them. Of course, because we are dominant is social media.
George was asked about how WrestleMania drives growth on the Network. He said yes, he expects it again this year.
A caller who really doesn’t follow the product asked if the one month free was still available. Way to be up to date on the company. Sheesh.
George was asked about whether they noticed any correlation between the TV ratings and subscriber churn. He said he doesn’t get into weekly churn, but they look at overall churn.
George talked about how they wanted to do a Media Center years ago, but then the financial crisis happened and they pulled out of it. Now, it doesn’t make sense since thinks have changed for the business.
They were asked about declining ratings. Vince said that their numbers are down, but not as much as the networks that they are on. Vince said that as George mentioned, there is an ecosystem now where people can watch in different ways, when they want. He said that TV ratings are, in essence, old school, but of course still important.
George was asked about giving more guidance and he said he didn’t want to get into that. He was asked how WWE does in recessions, he said it depends, in essence, how many people lose jobs in the economy. It depends on how bad the recession is.
They were asked what the NXT revenues were for the year. George wouldn’t get into that, of course. But he is thrilled with the engagement they have seen with NXT.
They were asked about NXT going on the road. That will continue. They will be expanding NXT. They are excited about it.
They were asked what the top five countries were for Subbers. The UK is great. Canada is good too. In the top ten, they have “a nice mix of country”.
Vince was asked about the tension that comes from NBC Universal when people choose to watch the TV product online as opposed to TV. He said that he brings value to NBCU because of the live nature of their product. He said that as they continue on that will make them more valuable to NBCU and everyone. The caller said, “it should be interesting” and Vince said, “It sure will”. That sounds very interesting for the next rights fees discussions with NBCU.
They were asked about their archives. They are vast.
They were asked about whether they would do a buyback of company shares with their cash reserves. The Board considers everything.
They were asked about the app and website, as opposed to social media. They will continue investing in what they own. They asked about marketing NXT outside of the Network. They said they will be deciding that about all of their products as they go forward. George said that while you can only see NXT on the Network in the US, in some countries they have licensing deals, so that should tell you they would be open to them here.
The three markets left to enter are China, Thailand and The Philippines. George expect to be in all of them in the next year or so.
George was asked to break down the viewing patterns of the different shows. He talked about it being about 20 percent for PPVs, and 80 percent everything else. PPVs are the top draw, obviously.
They were asked when the TV rights deal with India will allow PPVs to go to the Network. George didn’t want to comment on it.
They were asked about Japan and its potential. Is it a target market, giving the recent Japanese signings. George acknowledged that Japan is a great market for them.
A caller came up with a few reasons that the stock is down on the numbers. The market is down 372 points as I type this. That has a lot to do with it. In essence, George stated that since WrestleMania is so unique it makes forecasting difficult.
And that was the call.
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