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Welcome to PWInsider.com's coverage of WWE's first quarter 2021 earnings conference call!
Michael Weiss, SVP of Financial Planning and Investor Relations, welcomed everyone to the call. Vince McMahon, Nick Khan, Stephanie McMahon and CFO Kristina Salen are taking part in the call.
Vince thanked everyone for joining them. He said they were in "survival mode" due to COVID-19, like everyone else, but now they are opening the "WWE Treasure Chest" with the best management team in WWE history. They are poised to take advantage of new revenue streams, new opportunities, new platforms and more. He's never been as excited about the business as he is now and he's always been excited.
Nick Khan said there have been significant changes to the media industry. He talked about changes in the right fees in media, showing the importance of live content, noting that the NFL and NHL have seen big raises in their rights, even with linear ratings down. Deals like that are indicative of the media marketplace and where it is heading. The overwhelming majority of media networks are buying the rights to linear and streaming rights together as opposed to splitting them apart. They are confident that their rights portfolio are in the right place to take advantage of that. They were thrilled with the results of Peacock hosting their first Wrestlemania and the promotion from their partners with FOX and NBCU leading into it and coming out of it. They are excited about replicating the licensing of the WWE Network to potential partners internationally similar to how they licensed it to Peacock.
Khan talked about success they have had in India, the UK and China and they are looking at ways to grow those.
They dropped their first ever NFT Wrestlemania weekend, many of which sold out in seconds. They will be doing more NFTs in the future.
They also made a key deal in the gambling space with Draft Kings. They are now an official gaming partner for WWE.
They have sold a multi-episode WWE anime series to Crunchy Roll.
They praised the Young Rock and Biography: Steve Austin success. The Austin episode was the highest rated in 16 years.
Stephanie said this year's Wrestlemania was historic for many reasons. She said it felt amazing to stand on stage, look out and see and hear the cheers of the audience. There wasn't a dry eye as everyone celebrated the power of belonging. Going from last year to this year was a full circle moment of hope. They changed their signature to THEN. NOW. FOREVER. TOGETHER. They had record breaking numbers.
They launched their Peacock partnership in just 52 days. Wrestlemania was the most viewed live event in Peacock's young history. Wrestlemania media coverage increased 25%. Creatively, everything kicked off with the Wrestlemania edition of Smackdown on FOX. She ran down the major celebrity involvement for the weekend.
WWE had a record new and returning record 14 blue chip partners for Wrestlemania this year.
Video views for Mania week hit 1.1 billion and 33 million hours of content were consumed. WWE-related content saw 115 million engagements. Mania 37 was the most socially engaged event each day of the weekend. They had record merchandise sales per capita at the stadium.
They had specialized vaccination messaging for the market in Florida and worked with community outreach programs locally in The Tampa market.
TV viewership remained stable as they transitioned to the Thunderdome. Smackdown increased 9% while Raw stayed stable. Bad Bunny's appearances brought a 37% increase in the Hispanic demographic for his segments.
Stephanie said WWE is ready to work with brands to help cultivate and create unique ways to promote them, pointing out the Ford segments with Samoa Joe (not mentioning him) but also the Old Spice campaign with the creation of the new Panther character.
CFO Kristina Salen said she was amazed by the WWE team at Wrestlemania 37 weekend. She began recapping the financial numbers that were released. You can find those on the front page of PWInsider.com.
Salen said they do not expect to regularly stage live, ticketed events until the second half of 2021.
They began taking questions.
They were asked about sponsorships and what sort of inventory is tied to the Peacock side. They were asked what opportunity WWE sees in the coming years. Stephanie says there is potential upside in mirroring what sports leagues do and capitalizing on the talents, who are influencers themselves, plus the fact they own 100% of their Intellectual Property. Khan said they would be selling the inventory with Peacock. Launching the product was the focus and now that everyone is happy with that launch, they can get their ducks in a row.
They were asked what sort of lift they expected for the ratings as they get back towards the traditional live event format. They look at ratings the way they think buyers look at it - its a robust number of linear, streaming, digital, etc. There's a challenge in linear content for everyone. How often do you watch something on a streaming device or your phone? It's easy. They launched the WWE Network in 2014 because they saw where things were going. They get it. That's why they did the Peacock deal. They want live fans back and performers in front of them as it's the best way to know what's working and what isn't. When they do, it will benefit all forms of their business.
They were asked about differences between viewership between Wrestlemania last year and this year. Peacock asked them not to share numbers. When you don't hear from partners after the show, that's a problem. Peacock was in contact with them all weekend about how happy they were. They wanted to expand the fan base and that's why they did that deal.
They were asked about NXT and how AEW is doing so well. Does WWE care? Khan said they are focused on getting eyeballs on their own content. Last time, they were asked about the NHL impact on their business. They don't believe NBC and NHL won't be in business going forward and the move had nothing to do with NHL. They are pleased with the increase in NXT ratings and they are focused on themselves and nothing and no one else.
They were asked about who the potential players may be looking at live events, noting Amazon. They know Apple has been looking at live events so it's something that could happen but hasn't happened yet. There are behemoth digital companies looking to get into the space. They believe there will be significant competitors for premium content rights. Live matters and that's what WWE does.
They were asked if they have sold everything they can monetize right now. In the United States, they are locked in Raw and Smackdown content through October 2025. That's for existing content, not new content and not internationally rights. So, they are looking at international and other potential platforms.
Most of their Peacock licensing fees will be reflecting starting in quarter 2 earnings for 2021.
They were asked about the return to touring. Would they hold a residency while phasing in touring or will they go full borne into touring. They haven't yet decided on this summer but their hope is that in the second half of the year, they go full touring. Their current guidance includes them going full touring towards the end of the year. They are looking forward to getting back out on the road again.
They were asked whether the success of e-commerce has been a result of the lack of live event merch sales. Salen said they have really taken advantage of the trends to try and bring costumers to WWEShop permanently. They released three title belts this quarter. They pushed legends for fans who care about classic stars. Khan said the brick and mortar business has changed either forever or for some time to come. They remain bullish on the return of live events and fans buying merchandise there.
They will be in the NFT business long-term. They want to be there for the fans. These are the baseball cards of the digital world.
They were asked about whether the plans to develop local talent and having Performance Centers due to the pandemic. The plans haven't change, but they were delayed by COVID-19. They did a show for their partners SONY in India, Superstar Spectacular, that drew a 5X rating vs. their usual rating in India. They were thrilled to do that in Florida. It's very difficult to do international events and building right now and the plans will be resuming when they are out of COVID, which they believe is heading that way.
Salen noted that the brand is so strong, they can be global without traveling. They have partners they can look to help them invest and promote themselves in those markets and help guide them to unique opportunities.
They were asked if the Peacock partnership covers new deals that haven't been struck. Stephanie said that any partnerships that are seen on Peacock, WWE and Peacock are working on those. She said when you are working with teams that have sold for The Olympics and The Super Bowl, it provides WWE opportunities they've never had previously.
They were asked about the level of investment going forward. Salen said that when they think about new opportunities, its about them harvesting or optimizing what is already there, not building something new. They will spend money on a new HQ that they have delayed two years now. They are really excited about the future.
There's been no change in the timing of what they expected in regard to Peacock except some of it hit in Quarter One.
They are very pleased with the results of NXT's new deal.
They were neophytes about NFT at the start of the pandemic but now they know it. There is room to learn and they are confident that they can deliver what their audience is looking for.
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