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MCMAHON TALKS ABOUT SMACKDOWN'S RATINGS, WWE 24/7 EXPANDING, THE FUTURE OF WWE FILMS AND MORE 
by Buck Woodward 

Following yesterday's release of WWE's first quarter numbers, the company held an investor conference call with Chief Executive Officer Linda McMahon and Chief Financial Officer Michael Sileck. After reading prepared statements on the numbers, a question and answer session was held with investors. Here are highlights from the call: 

- WWE's video distribution deal with Sony has expired, but they are continuing to work under the terms of the old deal while negotiating a new one. WWE has been pleased with their relationship with Sony and the way they have gotten WWE's product into retail chains. 

- The litigation with JakksPacific/THQ is ongoing, but the company continues to do good business with them, as they are obligated by their contracts to continue to work together at this time. Linda said the business relationship is "strained" at times, but given the circumstances, they are still delivering good product to the marketplace. 

- The addition of WWE 24/7 to Comcast has put them in a position where they are available in over 50% of the 30 million homes that can currently receive video-on-demand programming. 

- An interesting point was made that WWE's average live attendance for this quarter (5,300 as compared to 4,600 last year) was affected by the inclusion of ECW, which runs smaller venues, and that if you only compared the Raw and Smackdown houses to last quarter, the increase would be greater, with the average for this quarter being approximately 5,700. 

- Linda admitted the digital business was "lagging" in terms of getting the number of stream requests for online content (PPV and 24/7) that they wanted. She put over the expansion of the website with the additional ECW site and the continued addition of content to the Divas site. 

- WWE Films has two new scripts in development right now. The principle photography for The Condemned has completed, and they are looking at possibly releasing it in the Fall of 2007. They are happy with the success of See No Evil so far, which is now being distributed internationally. They are looking forward to the release of The Marine, and plan to continue their policy of keeping the movie budgets low and not moving forward into a new project until they feel they are ready for it (in terms of having the right script). They are still looking into made-for-TV and direct-to-video movies as well. 

- WWE doesn't except their video-on-demand expansion to hurt DVD sales, and they will continue to offer different products in both formats. 

- When asked if there would be a Taboo Tuesday event this year, Linda said yes, then corrected herself that it was now a Sunday PPV (Cyber Sunday). Linda said they felt they would have a "broader audience" by putting the show on the familiar wrestling PPV day of Sunday. 

- One of the more interesting questions raised was whether the Smackdown brand was being "utilized optimally", pointing out the decline in TV ratings. Linda noted the ratings drop was not just because of the move to Friday nights, but because of the frequent preemptions in major markets due to baseball. Linda stated that when they relaunch the show on CW, there will be fewer preemptions due to sporting events, so they can "continue to build Friday nights". Linda said that being on CW will give them better "station penetration" in some major markets as well. 

For those curious, there were no questions asked about Kurt Angle's departure from the company, the Rob Van Dam & Sabu incident, or the fact that WWE had numerous changes to the Great American Bash PPV due to talent being taken off the show because elevated enzyme levels in the liver, or about the Wellness Program at all. 

I found Linda's comments about the Smackdown ratings interesting. While the move to Friday nights (which took place one year ago) has resulted in a lot of preemption problems, the simple fact is Smackdown has only managed to break past a 3.0 rating once since the move, and that was for the Eddie Guerrero tribute episode the week he passed away. Even when it hasn't been preempted at all, it has struggled in the viewership department. I have a lot more on this in today's edition of This Day In History.

The entire call lasted less than 40 minutes, with around 15-20 minutes of it being the reading of prepared statements. In another unusual move, the call took place less than three hours after the financial numbers were released, giving investors little time to review the numbers and prepare questions. In the past, WWE would often give a day (and sometimes more than one day) for investors to review the numbers before the conference call.

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