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Welcome to PWInsider.com’s ongoing coverage of WWE’s 2018 Third Quarter Financial Results conference call.
Michael Weiss welcomed everyone to the call. He introduced Vince McMahon, George Barrios and Michelle Wilson.
Vince said they continued to effectively execute their strategy this quarter. They are deepening the production of their original content, including Miz & Mrs, The Mae Young Classic and the second season of Mixed Match Challenge. They continue to showcase their brand power with the 1000th episode of Smackdown. He put over the Australia event. He said they are looking forward to Evolution and then Crown Jewel.
George Barrios recapped the numbers in today’s release.
They produced 400 hours of content this quarter.
Raw and Smackdown remain the highest rated shows on the USA Network.
They expanded original content on the WWE Network. The most viewed programs this quarter included Summerslam and the Mae Young Classic. They pushed that Evolution has sold out this Sunday.
They pushed the launch of NXT UK and that Super Show-Down was one of the most viewed events of 2018.
Digital video views are up to 29.9 billion views.
They created 170 hours of social and digital content including Mixed Match Challenge.
They are working on creating a larger amount of localized content for international markets.
George Barrios noted that the decision to move forward with Crown Jewel was a "difficult decision."
They opened it up for the Q&A portion of the call.
The first question was regarding Saudi Arabia. Vince was asked about his thought process about keeping Crown Jewel. Vince said it’s a sensitive subject these days and their statement says all they were going to say about this today.
It was pointed the live event side was been a weakness the last few quarters and were asked about that. Vince said live events has always been a barometer of how they are doing. Vince said they know what is wrong with the live events, saying they are something of “antiquated” and that they know how to fix it and that is something they are going to be working on and when they do, they expect a turn around.
They were asked about international branding for the NXT brands. They have the UK brand. The strategy is about widening the pipeline for talent as they create more monetization for the company with that content. It allows them to deepen the brand with a 24/7 presence in those markets. They expect they will one day have academies (Performance Centers) in all major markets in the world and that’s the hope. There’s no timeline or plan on how they will roll those out.
They have projects they are working on to “re-imagine” portions of their business, which we may find out more about in the fourth quarter.
They were asked what they have learned from the Facebook relationship from season one of the Mixed Match Challenge to the current season. It’s been a positive relationship. It’s been early for FB in terms of learning how to drive users to their Watch tab and they are happy to be part of that process. They are learning how to get fans to that Tab and how to monetize their fans on that platform. They learned the 11-minute episode in the first season wasn’t long enough for the engagement they wanted, so they’ve made the episode length longer this season.
They were asked about advertisers being down this quarter. There’s always timing because portions of revenue are tied to certain events like Wrestlemania but there’s no problems structurally. They have added some new partners including Hyundai as part of their September community outreach campaign against pediatric cancer. Riot Games and Coca-Cola have been new partners as well.
They were asked about costs rising in 2019. Barrios said if you look at their investments, it’s about growing the business globally, creating new content and diving into their data information. He mentioned a potential Academy in 2019, improvements to the WWE Network and more being worked on. A lot of the successes they achieve today are based on actions they took 3-4 years ago and today they are making decisions and investments that they will harvest years from now.
They were asked about the potential tiered system of the WWE Network. Barrios joked they are always getting a little closer to that. When they do things that touch their consumer, they are always going to do it right. They are working to re-imagine live events, production of Raw and Smackdown. He said it might be a 2019 event, but they aren’t going to go more into that.
They were asked how many events are slated for Saudi Arabia next year. They will touch more about that in the next quarter as they have that year locked in.
They were asked about moving PPVs from Sony to streaming in India. They have to look at trends and how mobile content is consumed. They will think about what they do will do with all the content they create when deals come up and they renegotiate and figure out the best place to create the best monetization for each deal.
They were asked how they measure success for NXT internationally. Barrios said the more global they get, they more sense it makes to have a talent base that reflects that. How they can monetize the academies? They will work on how to grow the brand and monetize those markets. In some markets, It depends on the success of Raw and Smackdown locally. In others, it may be the success of their streaming content. All of this could be a game-changer for them as they expand.
They were asked how important the addition of more in-ring content on the Network to its success is and what it would take to add a one-hour women’s show to the Network. Michelle Wilson said they have an enormous amount of data and they can see exactly what drives the Network. A lot of in-ring content drives the Network. NXT is one of the top viewed series outside the PPVs. The feedback from subscribers shows that the audience wants more in-ring content. They are trying to service that. Localization will help them locally, but they are seeing viewership from NXT UK across the globe.
They have talked about a women’s show, but they haven’t figured out when and where to do it. It’s on the road map of ideas.
They were asked what risks outside of their control remain with Saudi Arabia. Barrios said the complexity of the situation is obvious. They pointed back to their statement.
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