WWE Quarterly Earnings Report - Vince McMahon Says "We Know What We're Doing", AEW Mentioned

Posted By James Walsh on 02/07/19

WWE held its fourth quarter conference call and financial year recap today. Highlights are below.

* Michael Weitz introduced Vince McMahon, George Barrios and Michelle Wilson. He mentioned the news of WWE’s stock buy back program which they announced today.

* Vince McMahon talked about WWE recording record revenue and profit, saying that, “we know what we’re doing.” He mentioned international revenue topping $300 million for the first time ever and that more growth is to come due to the new TV deals that will start this year and be backed by a big marketing push. He put over the success of shows like Greatest Royal Rumble and Super Show-Down which drew their largest international audience in years. Said they continue to push their reality TV programming and mentioned Miz and Mrs. along with Total Divas and Total Bellas. Put over the Evolution PPV and Mixed Match Challenge on Facebook. They are transforming WWE, and Barrios noted that this is the fifth year in a row with record revenue, crediting Crown Jewel and Super Show-Down specifically.

* Wilson mentioned Crown Jewel, Evolution, Super Show-Down, and NXT/NXT UK as the most-viewed programs on WWE Network.

* They want to increase their production facilities so they can create more international content.

* They mentioned that the WWE Custom Tees site has been a big success and that they will expand it globally.

* Their mobile games have been successful and they have the #1 action figure line in the United States with Mattel.

* Barrios said that they want to invest more in talent, as well as creating more content and digitizing more content. He mentioned creating the next iteration of WWE Network, which will likely be tiered.

* Barrios said that WWE will not host earnings calls or issue press releases the day after WrestleMania, since it’s so close to the quarterly announcements.

* The Q&A portion started.

* The first question was about guidance on investments they will make this year. He mentioned again how they want to focus on local content in international markets as well as more digital content and digitizing content.

* They were asked about Mixed Match Challenge, and Wilson said they learned quite a bit about increasing viewership to Facebook Watch and producing content for Facebook, but it sounded like the show won’t continue.

* Next question was on the “UK process.” They said that they are working on many key markets such as India, the UK, Latin America and the Middle East and hope to have deals soon. They were aiming to have a new UK deal done by the end of 2018 but it didn’t happen, and are now aiming for a new deal by mid-2019.

* Barrios didn’t want to comment on more potential shows in Saudi Arabia.

* The next question was about possibly adding a third hour to Smackdown/6th hour of live content per week. Barrios said they have to add that extra hour of live content where it would be most effective and are evaluating their options.

* They were asked about a “new wrestling promotion” and if it is driving their costs higher (likely referencing All Elite Wrestling, AEW). Barrios said it is too early to tell and didn’t say much about the other promotion but said WWE believes they have the best wrestlers and global organization.

* Barrios talked about having many content deals in different parts of the world which are set to expire and how that will impact their evaluations for 2019.

* The topic of China came up. They said that consumption of RAW and Smackdown in Mandarin has helped drive the product. Mentioned that they have producers on the ground which has helped, and that digital and social growth is fast there. They are hoping to do more localized content in Mandarin for the market.

* The next question was about opening up more Performance Centers internationally. Barrios mentioned that Vince McMahon said recently at a meeting that WWE’s ability to create localized content in new countries would be just as important as getting RAW and Smackdown on in those countries. Barrios said the UK performance center is “light scale” and they want to start with that one and grow from there.

* They said that they are buying back stock because they have confidence in their free cash flow for the next few years.

* They talked about how profitable their advertising revenue is.

* On the topic of NXT possibly being on FOX, Barrios said that WWE is always looking for ways to reimagine itself and that they have many ideas that they are considering and working on. He noted the big shift in WWE over the last decade — becoming a media company instead of a live gate/tickets/merchandise company. With that in mind, the question is always where to put their content and they are open to everything.

* Barrios said NXT is the second most valuable thing on WWE Network behind the PPVs, that Takeover events are always trending, and that Halftime Heat ended up beating out many Super Bowl advertisers in terms of what was trending worldwide during the Super Bowl.

* They were asked if new streaming services from AT&T and Disney would impact WWE’s growth. They put over the uniqueness of WWE programming, said there is nothing else like it in the world, and that they have the flexibility of bundling with other companies or standing on their own. They mentioned how they poll WWE Network subscribers regularly and always get great feedback.

* The next topic was Ronda Rousey and her potential exit from WWE. Vince said that Rousey gave WWE visibility and helped them reach more women, adding that she is part of the WWE brand now. He put over how smart Rousey is and said that she will come in and out of WWE going forward, saying she has been very valuable. He noted though that wrestlers aren’t cartoons and do suffer injuries or have other things going on in their lives at times. He mentioned Roman Reigns and John Cena as examples of talent that they had plans for but they ended up having other things come up. He talked about how many notable wrestlers were injured last year and that they have to adapt to it as it happens. He said that when key talent get injured, the stories don’t end up being as good as what was originally planned and that TV ratings and live attendance suffer, but that it’s part of the business that can’t be controlled.

* They talked about the next iteration of the WWE Network, saying a big reveal is planned for it. They mentioned a few things such as having content in languages other than English, being able to consume content on any digital platform, integrating free video into the network, etc.