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Michael Weiss welcomed us to the call. Vince McMahon and Frank Riddick will be handling the call. No George and Michelle obviously. He explained the terms of the presentation and then turned it over to Vince.
Vince welcomed us. Q1 was really strong, beating their revised guidance. He said that COVID-19 didn't have a big effect so it was only a few weeks of the period. They have adapted to the pandemic and he feels they are a family product. He said that they were there. As far as TV, they are considerably off on Raw and about even on Smackdown.
He said that audience didn't drop much at first but it has. It's a challenging environment. He said that they have to take advantage and make it special. He mentioned mini movies and personal profiles, which they will improve. He talked about how much their social numbers were up. He was very happy about that and doesn't know any other company that can do that.
He said WrestleMania was off the chart with record digital views. It's the most social event in their history. And the Network reached its highest point in history over Mania weekend.
He said that with the challenging environment they in and talked about the cuts they made last Wednesday as a way to get ready for what's to come and what is the new normal. He joked no one knows what that is, including him. He said they will figure out the new normal as it comes. Their growth prospects remain strong. He said that we have to get the country opened back up and see what it looks like when we do, and be flexible.
He then turned the call over to Riddick, who went over the release (which is posted on the site).
Now it's time for questions!
Vince was asked about the soft ratings of Raw and Smackdown. You don't have much competition. Why are they down?
Vince said it goes back to the product itself. He said it's a different feel to do shows without fans. He said he thinks they are doing really well without an audience. He said that the audience is such a huge part of the show and that's the why for its down. He said that they need to figure out a way to get around that. He said that they can go outside of the environment to do things other than just matches. He said it's brand new and that makes it a completely different show. He thinks they will get there and take this negative and turn it into a positive. He said Smackdown is about even but Raw has suffered because they have a lot of new talents and it takes a while to get them over. It takes time.
He was asked about the MENA deal. He said that the Saudis want to have another huge event there. But they are under the same constraints we are under the pandemic. They want to do a show later this year but we don't know if the pandemic will allow it. If they don't do the show, they will just add an event at the end of the deal. They are still working on the MENA deal. Sometimes things move slowly. He hoped it would be done by now but it's now.
He was asked if the revenue in Q1 were from the new India deal or the old one and was asked about sponsorship trends since the pandemic started.
Frank said India was on the old terms. He said that they are seeing different sponsorship in the second quarter. When will the new India deal start? Q2.
They were asked about what planned investments they had won't be done now.
Michael said talked about technical aspects. They are working to do things that will strengthen their current position during the pandemic. It's a balance of aligning the business with reducing costs while producing strong financials. They can cut back on some things for now.
They were asked what would happen if Florida did a 180 on the essential business thing. Vince said they have backup plans and a number of states would welcome them.
Is there any chance they could go to Full Sail so they could have fans there. Vince said they are just waiting to see what happens going forward. He doesn't know what it will take but when they do, it will be done safely. They will be the first ones to do it, just like they are the first to do everything else.
There isn't much to report on working with an OTT due to the pandemic. Would they make changes to the Network? They will do whatever they can to add value to the Network. Vince said that COVID caught people with their pants down. A number of people want their Network he said. He said things are in flux do to the pandemic.
Vince was asked if he has any early thoughts as to how COVID will change WWE. Vince said he doesn't know if they will be in the live event business as they were before. They are ready but he thinks it will take a while before people are ready to be in a group of thousands of people. They are highly adaptable and they will figure it out. He thinks that it will be more content oriented and digital media oriented. It's not a problem, it's an opportunity.
Is there any risk that USA and FOX will say this isn't the product we paid for? He said that none of them are doing as well as they want to be, but it's not any of their fault. There's nothing out there right now. He said they have a really good relationship with both, they have each other's backs.
Was the 2.1M sub number paid? No, it includes free subs and they declined to give the paid number.
How will losing Mania and live events affect Q2? Will they be profitable. Yes it should be Frank said (and dude, look at the new TV revenue, what kind of question is that to even ask Captain Obvious). It's too early to really look at Q2 due to the pandemic.
Vince's fan who always asks questions asked him to use a crystal ball after she praised him. He doesn't want to use the crystal ball.
Do they think the new subs to the Network is due to new content or that people we shut in. He said it was probably both. He said it could be that they were tired of Netflix and wanted to see, and I quote, strong men running around in their underwear.
Vince was asked if it made sense to just run at the PC from a cost perspective. He said it's cheaper to do, but their audience is so much a part of it. He said it may cost less to do it at the PC but the audience reactions make it worth it. He mentioned how hard his people are working and how it's so hard to work with no reaction from fans.
Frank was asked how much money the new deals they have done internationally will bring in. Frank said we haven't released that. They aren't answering.
When will the free tier on the Network start. Probably in Q4.
Any guess on when WWE will have its next live event? No guess from Vince. They have holds on buildings but he has no idea. People want to see it, but he has no idea when or what it will even look like when they can do it.
They asked about some of the cuts they have made. Do they see something down the road? Frank said that they don't know what will happen down the line due to COVID so they wanted to be proactive and maybe have had an abundance of caution. They don't see anything now where they will need the cash but they want to be ready just in case. Vince said Cash Is King. We have no debt. We are just being conservative and maybe overly cautious.
What did they do to drive Network subs for WrestleMania? Michaels said they had the free tier, ESPN and FOX development and brand building.
Vince was asked about talent morale. Other leagues shut down because they wanted safety for their athetes. Vince said they do everything imaginable. They test for fever, ask if people have been exposed, they do everything for safety. They are very careful. Talent is sequestered in a hotel when they are there. They clean all the time with Clorox 360. HHH said they work with a bio chemical company that uses a super strong cleaning solution that lasts 90 to 120 days. It super strong and stays behind even when things are cleaned by other cleaners. They are doing everything possible. Vince said that as soon as tests are there, they will be using them. Talents have taken working as a challenge and a duty. He said they know people are stuck at home. He said some can't come down do to "existings" (Roman Reigns) but he thinks they get it and he is so proud of the talent.
They were asked about unenmployment and how it will affect their fans. They don't have that information. obviously. It's not like every fan checks in to let the company know if they are working (I said that, not them). Vince added their fans are robust. They will consume the product any way that they can. Vince said the new normal may mean the buildings charge less for rent, so they will drop ticket prices. Vince said you need to adapt to that.
The same guy asked if they know if their people will pay if they lose their jobs. It may be Vince said but again, WE DON'T KNOW, WE DON'T HAVE A CRYSTAL BALL.
Will their be a new 2K this year? Frank said there will not be a launch this year.
That was it. They thanked us for coming!
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