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One of the main topics of conversation Dave Scherer and I had on our audio show yesterday for PWInsiderElite.com subscribers was what sort of new revenue streams were left for WWE to mine given the pressure placed upon them by stockholders.
WWE themselves admitted those issues in today's earnings release and 2020 Business Outlook, noting the following:
"Management believes that WWE is well positioned to take advantage of significant growth opportunities, including the rising value of live sports content, the growth of media and entertainment in international markets, and the development and/or expansion of other businesses, such as WWE Network. In 2020, the Company believes that escalation of rights fees will provide contractual revenue growth of approximately $185 million,4 and that this growth will be partially offset by an increase in operating expenses associated with developing new sources of revenue, the full-year impact of 2019 investments to support the creation of content, the reset of performance-based management incentive compensation, and the annual rise of staff costs.
The Company is pursuing several strategic initiatives that could increase the monetization of its content in 2020 and/ or subsequent years. These include distribution of content in the Middle East and India as well as the evaluation of strategic alternatives for the Company’s direct-to-consumer service, WWE Network. At this time, the outcome of these initiatives is subject to considerable uncertainty.
Excluding the potential impact of these initiatives, management estimates the Company will achieve 2020 Adjusted OIBDA of $250 - $300 million. Management believes it has the potential to exceed this range, but is unable to provide additional guidance at this time.
The Company previously discussed a step-up in capital expenditures in conjunction with its workplace strategy. For 2020, the Company estimates total capital expenditures of $180 - $220 million, which includes approximately $130 - $160 million to buildout its new headquarter facility and strengthen its enterprise technology infrastructure; and for 2021, the Company estimates total capital expenditures of $120 - $140 million, including approximately $80 - $100 million to complete construction.4,5 The Company expects total capital expenditures will return to approximately 5% of revenue by 2022, which is in line with the historic range of approximately 4% to 7% of revenue and are predominantly to maintain existing infrastructure.."
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