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Good morning and welcome to PWInsider.com's live, ongoing coverage of WWE's Second Quarter Earnings Call for 2022, the first-ever call in the post-Vince McMahon era.
Stephanie McMahon, Nick Khan, Frank Riddick and Paul Levesque are on the call.
Stephanie welcomed everyone to the call. She wanted to address the recent changes and said Vince McMahon has retired. Her parents "poured their hearts and souls" into making WWE from the local promotion to what it is today. They had succession plans in place and she is honored to work with Nick Khan and Triple H.
McMahon went into the history the three have together. They all independently fell in love with WWE as kids and now they get to run the company as professionals. Their goals are to maximize the company's worth by increasing revenue across the board. She praised the second quarter numbers being increases from last year's quarter two earnings. She then praised the viewership growth for all the PPV events. Backlash was 49% up from the year before. HIAC was 45%. MITB was 17%. Summerslam was 20% increase in viewership.
McMahon then praised the ratings for Raw, Smackdown and the A&E programming that is in its second wave. They have passed 70 billion lifetime views on YouTube.
McMahon said she spent her entire life in and around the company and is humbled and appreciative in her new role. She praised WWE and its fans.
Nick Khan stated they have seen substantial increases in live events and consumer products. WWEShop has been relaunched via Fanatics and there will be an expanded assortment of products in the future. They've exceeded 2022's full year performance for trading cards with Panini already with more coming later this year. Their first NFT collection sold out in less than 24 hours. The second in less than 16 hours. Their first activations with On Location at HIAC and Summerslam "exceeded all sales from the prior events."
They rolled out The Undertaker's One Man Show at Summerslam weekend, which sold out. They announced a second for Cardiff, Wales, which sold out in three hours and there will be more.
Khan praised the company' live events and noted they drew in the area of 50,000 to Summerslam. Over 45,000 tickets have been sold for Clash at the Castle. They will be back in Riyadh, Saudi Arabia in the first weekend of November.
On Media Rights, they prepare for the U.S. rights renewals for Raw and Smackdown. Interest in "deep pocketed tech companies" has never been higher in live programming, pointing out Netflix's interest in Formula 1 racing. He ran down all the big players and where they stand for live sports programming. As the streaming landscape matures, they believe WWE's ability to present events puts them in a great position.
Triple H said he's had the good fortune to work in WWE for 30 years. He always wanted to take the opportunities and learn the "whys" of what the company did what it did so it can translate to what they do before the camera. He is confident their current team will do a great job and they are already showing fans the early indications of their work. He put over the Brock Lesnar tractor spot at Summerslam saying he's never seen anything like that ever in his 30 years. That moment surpassed 20 million views in social platforms over 24 hours. They will be writing compelling storylines for the most intruiging characters and they will develop new talents.
He segued into the NIL program, saying they have signed over 30 athletes. They have also taken steps to make the talent development process more "robust" and to attract younger athletes. He praised the tryouts over Wrestlemania and Nashville tryouts. They have signed 50 new developmental talents with the average age of 23.
HHH put over Wrestlemania ticket sales, the most successful first-day sales in Mania history with over 90,000 tickets in the first 24 hours. They are 80% sold out for an event eight months away with zero matches announced. They have never had such strong advance sales for any Wrestlemania in history.
Frank Riddick began reviewing the numbers they released this morning. You can find those elsewhere on PWInsider.com.
Thank you for your support of PWInsider.com.
They are now taking questions.
They were asked about the company's second window rights for Raw (currently with Hulu) and whether they are better off waiting to package it with the Raw and Smackdown rights coming up. Nick Khan said it's a delicate balance and they discuss it all the time. They are discussing and will figure out.
They were asked about year over year advertising being down this quarter even though Wrestlemania was part of the quarter. Stephanie said they have seen an increase in the number of partners they have brought up and they project growth throughout the year, but not a ton of growth. It's a slow process and they are committed to the $100 million number they have tossed out and they are working to it. They had a "hold due to the current situation" but they are moving forward in that regard.
They were asked about the positives of more markets bidding and offering subsidies for holding events there. Khan said they are receiving a subsidy for the Cardiff event and are seeking to do that more with major PPV events.
Khan was asked about the value of Raw and Smackdown as they go into the new deals. It's important that access to the product is easy, breaking down how Raw and Smackdown are easily available and the PPVs are on Peacock. It all comes down to the market and what's best for the stockholders.
HHH was asked what opportunities does he see as he refreshes and improves the product. The opportunity in front of them is massive. He was told to have "first day on the job thinking" by a great man and he's been doing that since his first day here. He wants to recognize what is and isn't working from the overall picture to the smallest details. It comes down to creating iconic characters and putting them in fantastical storylines and watching how fans react to that along the way. They have a massive opportunity not just for existing but new stars as well.
Stephanie was asked about taking her recent leave of absence and just said she is 'committed" to the company so he wanted clarity on whether she wanted to remain in her role. She said she has been working in the company in some fashion since she was 8 years old. She took the leave realizing she needed a break to spend with her family and take a break from the grind. She got three weeks, which she said is more than most get in that position and offered to come back. She wasn't "forced to return", she stated. She put over how much she loved the company and what they do for the fans. Reading between the lines that he was hinting at whether she might be looking to sell the company, she stated Vince McMahon remains the controlling shareholder and has his eyes on what is the best for their business. Nick, Paul, Frank and she remain in charge and they will do what is best for everyone. She believes in the company in her core.
They were asked about ratings. Khan said live delivers across the board, even on streaming.
They expect Cardiff to be very profitable because of the subsidy they are receiving and planning for it to be a sold out. Venue merchandise is something they have done a better job at for major events and that helps the profitability for those events as well.
They were asked about where they stand with expenditures on the WWE HQ change. They will spend $270-$300 million, which was in line with their expectations. They should be done with 75-80% by the end of the year.
They were asked about international events. They are looking at expanding the international touring and adding another international PPV. They sold out overseas on the last tour, including Germany and France and expect to continue to do well there.
They were asked about global TV viewership. They are doing Cardiff in part to help raise viewership in the UK. They are the second most popular sport in Indian beyond Cricket. They are working on WWE Network developments in Australia and more.
They were asked how WWE's business will respond to recession. They are now 70% contractual today in how they earn their money and 30% transactional (tickets, merch, etc.) If they are truly in a recession so far, they haven't seen any impact yet. The impact would be lower because of how their business is set up. But the impact would be for things that are a transactional nature.
They were asked about their approach for cost increases that will come with the rights fees increases and whether they would share that $ with talent (Mike: Well, they should) or with increased production. They would management talent expenses against that but they expect margins and expenses to expand in the media section.
They thanked everyone for taking part in the call and their interest in WWE.
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