WWE announced Thursday that 2021 company revenue increased by 12% to a company record $1.095 billion, the highest in their history.
The news came on the same day as their Q4 earnings call, the notes of which can be found below. Among other highlights mentioned in their release was a 24% increase in operating income to $259 million.
Year over year, fourth quarter revenue increased by 30% to $310.3 million while operating income increased 131% to $83.6 million. Part of that driver was live event attendance, including their return to Saudi Arabia, which wasn’t the case in the fourth quarter of 2020 as they held no live events.
Consumer product revenue increased by 21% to $32.6 million.
Live event attendance in the fourth quarter averaged 5200 which was down from the third quarter but in line with the fourth quarter of 2019.
As usual, the call was positive about the current day and the future, especially as relates to the next round of TV rights.
During the Q&A portion, WWE president Nick Khan indicated there are going to be more players bidding on rights than there were for the last round of deals as players like Netflix, Apple and others join the fight for sports streaming rights.
He later said they feel as good about a new deal for WWE Raw second day streaming rights as they did for their last Raw/SmackDown deals and Peacock/WWE Network deal. The rights are currently with Hulu and are up this year.
Peacock News
Khan provided numbers from Peacock that showed sharp increases in viewership from 2019 when they were on WWE Network:
July 2021 MITB: 25% higher
August 2021 SummerSlam: over 30% higher
September 2021 Extreme Rules 20% higher
October 2021 Crown Jewel in Saudi Arabia: 75% higher
November 2021 Survivor Series: almost 25% higher
He later noted that the first-ever Day 1 attracted 60% higher viewership than any December “premium live event” in company history and was a big success as it sold out.
He later put over the success of the Royal Rumble with “more than 44,000 in attendance” and the second largest gate in event history. There was 45% higher viewership on Peacock vs. the 2020 Rumble.
He said 3.5 million fully paid Peacock subscribers have watched WWE programming since moving over to the streaming service.
Khan said they are looking at more international partnerships with WWE Network in other countries and are going region by region, country by country to figure out the right partners like what they did with Disney+ in Indonesia recently.
Other Notes:
Vince McMahon provided brief remarks at the onset, saying WWE re-imagines their business every month and every week, citing a very flexible staff.
During the Q&A portion, there were no questions related to AEW, Shane McMahon, or talent cuts.
Khan said the company has more than a dozen signed content deals in the works utilizing existing IP that will be announced soon.
They are planning on two large-scale international events next year with Khan throwing in, “Why just limit it to two?,” indicating they are looking at more of them in 2023.
In talking about some of their various partnerships they signed over the last year, Khan said they have signed a deal for WWE-branded lottery tickets to debut in several states this year.
Khan mentioned how they are executive producers for the new Ronda Rousey show on ESPN+ called Ronda’s Places which is designed to be like the Peyton Manning show on that streaming service.
Bad Bunny and Johnny Knoxville’s appearances in the Royal Rumble were mentioned several times during the call with Khan saying that top stars are seeking out WWE for appearances and exposure.
There was lots of talk of gaming and how they feel it’s going to be even bigger. They talked about WWE2K and other offerings, noting that 85% of WWE fans identify themselves as gamers.
They talked about their NIL program several times and that they are hoping to attract talents that don’t quite make it to the NFL, citing Goldberg, Big E and others as examples of standout college athletes.
Stephanie McMahon said that there’s no reason WWE shouldn’t be in the hundreds of millions in the years ahead for both advertising and sponsorship revenue. They generated nearly $72 million in 2021.
She later said they are looking into how to be part of the Metaverse as they see a huge opportunity to be involved. They are doing their due diligence to go about things the right way.
WWE is planning on moving into their new office building in late-2022 according to a report in the Stamford (CT) Advocate.
Currently headquartered on the east side of the city, WWE will move to its new home at 677 Washington Street which is two miles away from their soon-to-be old home at 1241 Main Street which they own and have been featured on WWE TV in the past.
They also own a production center close by in addition to leasing more office space on the same street as the corporate office. They expect to sell their owned facilities, according to past financial reports.
WWE will be the building’s largest tenant with 415,000 square feet of office space and a production center.
WWE initially announced their decision to move to the 13-story tower and seven-story pavilion in March 2019 with an early-2021 move target, but the pandemic delayed that renovation and move. On recent quarterly investors’ calls, it was acknowledged the project was finally moving forward.
As of the second quarter of 2021, WWE was the city’s 12th-largest employer with nearly 700 employees.
Thanks to a more robust traveling schedule, WWE’s reported third quarter revenues were up 15% to $255.8 million year-over-year, one of several key numbers announced by the company Thursday.
On the quarterly investors call, Vince & Stephanie McMahon, president Nick Khan and others were happy with the company’s current financial position and, as expected, optimistic about the future.
During the Q&A portion, there were no questions about AEW.
In the release, they said their North American attendance drew the highest quarterly average in more than a decade. Their live event revenue was up to $28 million year-over-year with consumer products up to $25.1 million.
Per usual on these calls, Khan was bullish on the company’s prospects when it comes to the next round of TV rights deals, pointing to several new rights deals including the Premier League. He continued to push the importance of live programming as a key reason for that. He said they are just as bullish for this next round of negotiations as they were for the last one.
He did note that the second-day rights for WWE Raw with Hulu are up in the latter half of 2022 and that a deal will be done for those rights before then. He didn’t indicate whether Hulu would remain in the mix, but said he expects multiple suitors and referred to it as “a battle that will be intense and fun” for the rights, noting the landscape is much different now than in 2018 when the Hulu deal was initially done.
Khan said that international restrictions on travel have slowed down rights negotiations in other countries, but that things have sped up,
The company’s successful SummerSlam weekend and a return to a more robust live touring schedule helped the year-over-year increase of $34 million. In brief statements early on, Vince McMahon said the return to touring is where the company “comes alive in so many respects.”
Intellectual property continued to be a buzzword as McMahon himself said new ways to monetize it are part of “the evolution of sports entertainment.” Khan talked about “the IP wheel” on the call as well, citing the Undertaker/New Day content on Netflix and the upcoming McMahon Netflix docuseries, the latter of which he said were “amazing” and “out of this world.” They want to increase value while finding new revenue streams.
Khan said they underwent a strategic examination of their pay-per-view model in the last year, making changes to focus on not just making the content special but the surrounding events for their big stadium shows. Part of the strategy was finding Saturdays when lots of visitors are expected in the cities for those big events.
Other notes:
Part of the selection of the Royal Rumble date, for example, was to not go up against the Winter Olympics and their partners in NBCUniversal.
Having more integration with athletes like Atlanta Hawks player Trae Young for the New Year’s Day show in Atlanta is coming, according to Khan.
They are bullish on the trading card market is booming right now and got multiple bids before deciding on Panini as the best partner for them.
They also continue to be confident in the NFT market. They were not asked about the John Cena NFT failure.
They are excited for the WWE 2K22 launch in March.
Stephanie McMahon said SummerSlam viewership was up 55% from 2020 on both WWE Network and Peacock.
She later said there’s no reason WWE can’t be generating hundreds of millions of dollars in advertising and sponsorship within the next 3-5 years.
They are the no. 1 sports brand on TikTok with nearly 15 million followers.
Khan said they are happy with the NXT relaunch and that several call-ups have already happened. The recruiting effort, led by Paul Levesque and Bruce Prichard, is focused on young athletes.
Arguably the most interesting quotes from Thursday’s WWE Q2 financial call came from Vince McMahon when he was asked about AEW — one of which has people trying to figure out what the chairman was trying to say.
During the Q&A portion of the investors’ call, McMahon was asked about whether he sees AEW as competition given their recent success and whether he feels the need to counter them with investing in more talent since they may eventually compete for media rights. The caller also asked if it could be a “rising tide lifts all boats” situation.
“It’s certainly not a situation where rising tides because….that was when Ted Turner was coming after us with all of Time Warner’s assets. That was a different situation. AEW is where they are. I really don’t know what their plans are. All I know is what our plans are. I don’t consider them competition in the way that I would consider WCW back in the day — not anywhere near close to that. I’m not so sure what their investments are as far as their talent is concerned…but perhaps we can give them some more (inaudible).”
The final few words had some people confused as to what McMahon meant because his voice got low and it was hard to understand, leading to speculation as to whether McMahon was indicating that AEW could sign more released talent as they have been doing as of late.
However, immediately after speaking, WWE president Nick Khan added some thoughts so it seems more likely that McMahon was verbally handing it over to Khan to share a few words.
Khan equated WWE to being in a horse race and that they have blinders on, looking straight ahead and making sure they stay in front of the pack. He reiterated the “everything is competition” line he and Paul Levesque have used before, stealing a line from Netflix’s Reed Hastings that sleep is their competition.
“If it was up to us, people could be up 24 hours a day watching content from different content providers, hopefully including ours. We don’t look at any organization particularly as competition. Yet we see everything as competitive with what we’re trying to do in terms of eyeballs,” he said.
WWE’s return to touring was a main part of Thursday’s WWE Q2 conference call, one that didn’t include any official news about their return to Saudi Arabia but did offer one soundbite regarding AEW.
One direct Saudi-related question came up when president Nick Khan was asked about a MENA rights deal to which Khan said he, Vince McMahon and others were deep into negotiations and were confident it would happen.
When asked if they are going to return there for a show, CFO Kristina Salen pointed to their investor guidance that they are planning on one large-scale international event for the second half of 2021. She did not confirm it was in Saudi Arabia as has been reported here and elsewhere.
When asked if he considers AEW as competition and a need to counter their investments in talent, McMahon said he doesn’t consider them competition like he did with WCW back in the day backed by Ted Turner. He said he didn’t know what their investments were in talent, but somewhat inaudibly mentioned something along the lines of “giving them more.” Khan said they consider everything competition.
During his portion of the presentation, Khan said many live events were outperforming the last time they visited the cities, both in revenue and in merchandise sales. Their first post-pandemic appearance in Houston, for example, was the highest grossing non-PPV WWE event in the venue in company history.
One of the more interesting notes was the year-over-year viewership notes on Peacock. Khan said viewership for Backlash was up 26%, Hell in a Cell was up 25% and Money in the Bank was up 40% from last year on WWE Network alone.
On the financial front, Q2 revenue was $265.6 million, up 19% year-over-year ($42 million). This was attributed to the continued monetization of content and live event revenue from WrestleMania ticket sales.
Operating income decreased to $46.3 million, down 17% ($9.4 million). Higher TV and event production for both the ThunderDome and WrestleMania were the reasons in addition to $8.1 million in severance and $3.2 million in compensation as employees returned from furlough.
Some other notes from the Q&A portion:
As he has done in the past, Khan discussed other media rights deals happening in sports across the world and how that will benefit WWE in the future.
McMahon said the last quarter was focused on efficiency both within the organization and with content production. He also pointed to positive trends in live event sales, TV tapings and digital video compensation.
According to Khan, SummerSlam at Las Vegas’ Allegiant Stadium has sold 40,000 tickets thus far (of a possible 45,000) and will be the highest non-WrestleMania gate in company history.
The remaining 2021 schedule will be released soon.
They recently re-upped their Australian rights deals and are looking to license WWE Network internationally.
Khan said more scripted and unscripted series are coming.
Grounds for the new corporate offices were broken in June and they expect to be able to sell their existing corporate building once they move in.
They will be dropping another NFT at SummerSlam, this time with John Cena.
Still without live crowds or an international supershow due to the pandemic, WWE reported Q1 revenues of $263.5 million, down 9% year-over-year.
Despite the dip, operating income increased by 22% to $65.1 million compared to last year. In both cases, they noted “the upfront revenue recognition related to the delivery of certain WWE Network intellectual property rights” as beneficial which was from NBC Universal as noted in their SEC filings.
Other highlights they noted during the quarter was WWE Network launching on Peacock, moving the ThunderDome to Tampa’s Yuengling Center, and a multi-year extension for NXT on USA and a move to Tuesdays.
WWE stock closed the day down 1.26% to $56.22.
Full audio from the call is below.
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Notes from the call which featured Vince McMahon, Nick Khan, Kristina Salen, Michael Weitz and Stephanie McMahon reading prepared statements and answering questions:
Vince McMahon said the pandemic allowed them to open “the WWE treasure chest”. He also said the current team is “the best management team in WWE history.”
Khan talked about recent sports media deals and how they continue to go up in revenue. He opined that separating linear and streaming rights with regard to pro sports appear to be over for now.
Khan said they are going to pursue WWE Network licensing deals in other countries.
Khan noted a 30% increase in viewership in China and touted how strong they are doing in India and the UK.
Khan noted they have signed a deal with CrunchyRoll for an anime series, touted how strong Young Rock has been, and that the Steve Austin A&E biography did the highest number for the network in 16 years. WWE Hidden Treasures retained 79% of that audience.
Salen said they will be in the ThunderDome through the end of June and still don’t expect to return to live event touring until the second half of the year. When they do, they want it to be in full and not a split with the ThunderDome.
Stephanie McMahon said they brought in or retained 14 sponsors for WrestleMania 37 which was the most-viewed live event in Peacock’s young history. She didn’t give specifics on numbers.
NFTs will continue, according to Khan. Because they own the majority of their intellectual property, they are going to be heavy into it and have a plan they are excited about.
Stephanie McMahon said Bad Bunny’s Raw appearances helped them increase 31% with the Hispanic demo.
Multiple references were made to a “large scale international event” which indicates a return to Saudi Arabia.
Khan said they and Peacock will both sell sponsorships and that the launch was the primary focus. Now, it’s further monetizing it.
Khan said their viewership numbers “are robust” and that linear content “is a challenge for everyone.” He said fans are the fourth wall and “we know immediately what’s working and not working.”
Asked about WrestleMania numbers on Peacock, Khan said they asked him not to disclose numbers but that when you wake up after two successful nights to phone calls/emails/texts from NBCU and Peacock executives, it means they are thrilled.
Asked about AEW and moving NXT to Tuesdays, Khan said “everything is competition” and attracting eyeballs to their content is what they are focused on. They believed NBC and NHL would part ways so moving to Tuesdays had nothing to do with them.
Salen cautioned a caller about their Q2 numbers year-over-year because last year, they ran in the Performance Center vs. this year where they will be running the ThunderDome.
Khan said they are “bullish” on live events, especially as related to merchandise.
On a Thursday investors call that featured a lot of positive vibes around the recent Peacock deal, WWE reported a record year of revenue despite a large year-over-year drop in the fourth quarter that showed how important the Saudi Arabia deal is for them.
2020 revenue finished at a company record $974.2 million, up from 2019’s $960.4 million — an increase of 1%. Their operating income saw a massive jump, up 70% to $208.6 million, up from $116.5 million in 2019.
Those numbers were despite a fourth quarter that saw revenue drop to $238.2 million, down 26% year over year from 2019’s $322.8 million. Live event losses mainly due to the absence of a Saudi Arabia show, advertising, and investment in the ThunderDome were given as reasons for the decline.
Despite not talking for the majority of the call, WWE chairman Vince McMahon was in attendance, speaking briefly at the onset that wasn’t heard for those listening as the audio started a few minutes late. WWE president Nick Khan, Stephanie McMahon, CFO Kristina Salen and Michael Weitz handled the majority of the speaking duties.
As noted, the impending Network move to NBCU’s Peacock was a focus. Both Khan and McMahon were excited about the crossover opportunities NBC provides with Khan specifically mentioning the WrestleMania venue announcement discussed during an NFL playoff game. He said to expect more piggybacking with big NBC events tied into WWE pay-per-view promotion.
McMahon couldn’t directly answer how new sponsorship opportunities would work under the Peacock deal, but reiterated the experience of Comcast/NBCU and WWE being alongside brand names like the Olympics and Sunday Night Football. Khan said the numbers “have seen a strong uptick” since McMahon took over sales and sponsorship six months ago.
As always, international markets are a big part of WWE’s future to which Khan said they are just getting started. They pointed to the recent India-focused Superstar Spectacle gaining 20 million viewers and mentioned the Latin American market several times with Puerto Rican star Bad Bunny and Damian Priest mentioned in the same breath.
Tied into the Q4 revenue drop, Salen was asked about the profitability of Saudi Arabia events and said that by looking at the fourth quarter, it should give a good indication of what the absence of an event can have.
Salen said outside WrestleMania, they don’t expect to have ticketed events until the second half of 2021 at the earliest. She said the eventual ramp up of live events, one large scale international event, core content rights and the Peacock deal in terms of future revenue increases, but cautioned several times that increasing production costs, personnel returning from furlough and the Thunderdome will offset some of that.
She said that the TV production expenses would not be offset by ticket and merchandise revenue when they return to having live events and that live production on Monday/Friday vs. Monday/Tuesday in 2019 is a big difference.
During the question and answer portion of the call, Khan was asked about how to reverse rating trends for Raw and whether bringing content over from the Network could help. He said both parties would have to agree, but they are always hoping to exceed NBC’s expectations and increase ratings. They are focused on growing Peacock’s subscriber base.
Later, he said that, “We don’t believe we have lost eyeballs, but they have shifted from linear eyeballs to digital platforms,” pushing how good their numbers are on various social networks. “A continued good in-ring product will bring more eyes to linear platforms,” he said while adding that there was a big focus on the U.S. presidential race and the coronavirus by viewers.
Khan said he was happy with their network relationships and that “broadcast isn’t going anyway” specifically mentioning Fox’s Royal Rumble pre-show. He also said that the shutdown of NBC Sports Network won’t have any effect or impact on either Raw or NXT.
Other news and notes from the presentation and Q&A:
WWE Network subscribers increased to 1.5 million, up 6%.
They are planning to restart work on the new WWE offices in the second half of 2021, expected to run between $65-85 million.
They have worked out a deal with “a major sports league” to do championship belts with team logos based on how they send WWE title belts to championship winning teams. They think that’s an area that will grow in the future.
Operating income was down 64% year-over-year from 2019’s $99.8 million in Q4.
No surprise here, but event revenue was down 97% year-over-year in Q4.
Consumer revenue was down 12% year-over-year to $27 million, down from $30.8 million in 2019’s Q4.
Their cash and short term investments grew to $593.4 million, up from $250.4 million in 2019’s Q4.
Khan said that in terms of content partner satisfaction, they go by the three Rs: revenue (opportunity for the partners to sell against it), relevancy (excitement level) and ratings (subscriptions).
Wrestling Observer Radio with Dave Meltzer and myself, Garrett Gonzales is back.
We start off talking about the WWE Q3 financials, which Dave wrote extensively about in the latest issue of the Wrestling Observer. We also dig into the news of the Vince McMahon documentary and wonder if Dave will be asked to be in it.
We look at the sports/TV landscape as it relates to WWE, including the idea that WWE Network content is for sale according to Nick Khan. We talk about the latest with WWE talent and Twitch, Sting’s deal, NXT not being involved at Survivor Series this year, Pac, the latest on Khabib according to Dana White, and the upcoming obituary on Tracy Smothers.
Timestamps:
Start: WWE financials
27:52: Vince McMahon documentary announced
37:10: More on financials
45:44: WWE-Twitch
49:31: Sting’s licensing contract
51:25: NXT not in Survivor Series
55:47: AEW vs. NXT ratings
1:04:48: PAC resurfaces, WALTER/Dragunov match
1:07:40: Dana thinks Khabib won’t retire
1:10:48: Tracy Smothers
Driven by their TV contracts, WWE’s 2020 third quarter revenue finished at $221.6 million, up 19% from 2019’s third quarter — part of an optimistic call and overall upward trend in numbers.
The company noted the increase was offset by the loss of both ticket and live merchandise sales due to the pandemic. On a similar vein, their ecommerce numbers grew to $9.1 million year-over-year, impressive considering they had 74 live events in the third quarter of 2019 in addition to online in which to sell merchandise.
Operating income was up to $63.4 million, an increase of 9x year-over-year, thanks to the content rights fees increase and a decrease in event-related production expenses. WWE noted they paid out $5.5 million in severance pay due to pandemic related layoffs.
On another positive note, average paid WWE Network subscriptions were up 6% year-over-year to 1.6 million.
The third quarter saw the creation of the ThunderDome structure, which will add “an incremental $22 – $27 million investment” which includes “increased personnel expenses as employees return from furlough” in the fourth quarter.
The company noted they have $638 million in cash and short-term investments — “substantial capital resources to manage challenges that may lie ahead and to deliver on key strategic initiatives.”
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Call Notes (audio below):
Vince McMahon opened the call by saying how confident he was in this group of executives. saying there is an optimism and “new spirit, new vibrance” with the group.
WWE president Nick Khan announced a multi-part Vince McMahon documentary has been sold to Netflix with WWE and Bill Simmons (The Ringer, Andre doc) as executive producers. Khan noted the financial investment will make the series one of Netflix’s most expensive on the documentary side. No release date was noted.
Khan said they are still exploring options for WWE Network to reach a wider audience, a callback to when McMahon said earlier this year they were exploring options and partners for the Network that were put on hold due to the pandemic. There is interest and they are talking to partners, both domestic and global, on a regular basis about licensing.
McMahon answered a question about ratings, saying they aren’t the only thing they look at. He said they have far more fans than they have ever had. “WWE ratings are what they are, but you just can’t hang a hat on ratings being down,” he said. He said that while their TV programming is a mothership, they are being seen on other platforms all the time. He said they are doing everything they can and that viewers have been coming back, pointing to the ThunderDome, better writing, and better execution.
Khan put over how strong WWE programming did head-to-head against the Stanley Cup Finals and an NBA playoff game featuring the Los Angeles Lakers and LeBron James. He discussed how linear TV has lost eyeballs, but that media consumption hasn’t and is confident their rights fees will continue to go up.
They are still negotiating the long-discussed Middle East TV deal with no timeline for completion. McMahon said it will get done.
They are partnering with Sony India on a 2021 event that will develop Indian stars. It will air domestically here, but they didn’t say on which platform.
Khan discussed how they are prepared for the future, and are paying attention to what the FAANGs (Facebook, Apple, Amazon, Netflix, Google) are doing with live TV.
On where ThunderDome could be moving to, CFO Kristina Salen said their assumption is they will be in “some kind of center for foreseeable future” into ’21 with “lots of places for them to go.” She didn’t confirm when the Amway deal is up or when they would be leaving.
Asked about NXT, Khan put over their ratings from Wednesday and didn’t comment on length of the USA deal but that Network subs have held without NXT there.
Prior to their investors call Thursday afternoon, WWE released their 2020 Q2 numbers which showed a year-over-year decrease but a record year-to-date revenue record, buyoed by theiir TV contracts and some big savings with not running live shows.
This was the first full quarter WWE hasn’t been able to run live shows since the pandemic began.
The company saw a year-over-year operating income increase to $55.7 million for the quarter, up from $17.1 million from 2019, thanks to running shows at the Performance Center and as the release said, “to a lesser extent…a decrease in accrued management incentive compensation.”
Additionally, net income, adjusted OBIDA, and cash flows were all up.
Revenues for Q2 decreased to $223.4 million, down from 2019’s $268.9 million with the company pointing to “unfavorable timing” for their February show in Saudi Arabia. Conversely, yearly revenue hit a company record $514.4 million, up 14% from the prior year.
With both digital views and hours consumed increasing, WWE Network paid subscriber numbers ended the quarter up 6% to 1.69 million while the average for the quarter decreased to 1.66 million. WWE added their long-discussed new free tier over the past quarter.
Another positive: while consumer products were down by roughly $1 million, ecommerce revenue doubled to $12.6 million. They cited new belt sales and video game revenue as helping in that area.
WWE stock closed the day on a positive at $45.43 with after hours trading showing some favorable response to the news (up nearly 3%) as of this writing.
Notes and audio from the investors call can be found below by clicking the red button ‘Right Click Save.’
Their social media followers dipped very slightly which said was due to some content being geoblocked.
The lack of live events resulted in a $48 million drop year over year. WWE had to cancel 53 domestic shows and 23 international events in the quarter.
The increase in subscribers marks the first time they’ve seen that since the fourth quarter of 2018.
They achieved WrestleMania Week viewership records of just under 1 billion video views across digital and social platforms, up 20% from last year.
Core content fees made up $132.9 million of the $200.1 million in media revenue for the quarter, up from $69 million from the previous year’s quarter.
Raw viewership was down 24% year over year, following USA Network’s 26% year over year decrease while SmackDown was up slightly by 4% year over year while Fox’s numbers were down 4% year over year.
Notes from the Q&A portion (Vince McMahon, interim CFO Frank Riddick, Michael Weitz)
VKM was asked about the “softness” of the ratings. He essentially blamed it on a lack of audience interaction, but said they can have better storylines, more compelling characters and more content that isn’t in the ring that is interesting to viewers.
EVP Jayar Donlan answered a question about the Network who said they made some moves into localization and advertising.
VKM said he doubts the Saudi Arabia show will happen this year but that will depend on the economy.
VKM asked why NXT and AEW have bounced back from the COVID-19 downtick while Raw/SmackDown hasn’t. He said because “they’re new” and that it’s up to WWE to make Raw/SmackDown more youthful.
VKM asked about Heyman’s firing from creative, he didn’t really give much of an answer. He did say Paul Levesque helps on Raw and SmackDown when asked if he should help more given his success on NXT.
They were asked about the EVOLVE wrestling purchase which was said to be a “content purchase deal” in very small size with no merger & acquistion elements attached to it.
Asked if there are any options at looking at live shows outside the PC with fans, VKM curtly said they are looking at all opportunities currently.
WWE’s cost cutting measures are continuing as some producers and referees will see their pay cut as much as 20% due to the pandemic, according to our Dave Meltzer on Saturday’s Wrestling Observer Radio.
PW Insider also reported Saturday that “a number of executive and officials” were told over the last few days that their pay would be reduced.
The moves continue a trend that began on April 15th when the company announced several areas for short-term cost reductions and cash flow improvement which included “reducing executive and board member compensation; decreasing operating expenses; cutting talent expenses, third party staffing and consulting; deferring spend on the build out of the Company’s new headquarters for at least six months; and both layoffs and furloughing of a portion of their workforce immediately.”
Dozens of wrestlers, producers, referees, and other talent were laid off or furloughed as part of the moves. Meltzer said that if contracted talent were asked to take a pay cut, they could become free agents which means other groups like AEW could try to sign them. Thus, that would be a last resort.
Prior to their investors’ call Thursday afternoon, WWE released their 2020 Q1 numbers, showing 60% year-over-year net revenue growth to $291 million with average WWE Network paid subscribers hovering at 1.46 million.
They added that Network subscribers peaked at 2.1 million on April 6th due to their highest amount of weekend subscriber additions (Friday-Sunday) in their history. On the call, they declined to say how many were free vs. paid but in their key performance indicators, they listed 1.6 million paid.
WWE stock closed the day at $39.07, but after hours trading appeared to look favorably upon the news, increasing to $42.50 as of this writing.
The XFL wasn’t mentioned during the call.
Notes and audio from the investors call can be found below by clicking the red button ‘Right Click Save.’
Notes fromthe release and the presentation part of the call:
The reason for the year-over-year increase were their TV rights fees, offset by a reduction in both live event ticket revenue and merchandise sales.
Operating income was $53.3 million, up from the prior year quarter’s $6.8 million loss.
A record 46 million hours were consumed during WrestleMania week, up 28% from the prior year. Digital video views increased 25% to 9.6 billion and 344 million hours were consumed, up 15%.
They addressed some of the changes they had to make due to COVID-19, all of which was discussed previously. They offset the loss of ticket and merchandise sales by reducing operating events and a “new model” for generating content.
Vince McMahon said the coronavirus only affected a few weeks during the quarter and that they will continue to produce “compelling content” in the weeks ahead.
He acknowledged that Raw ratings were off considerably year to year and said SmackDown has been fairly consistent. He said it’s a challenging environment, but that you have to take advantage of that environment and make it special. They will continue to look to create mini-movies like they did at WrestleMania.
He talked about how WrestleMania was “off the charts” for social interaction and that Network subscriber additions over the weekend were the highest in their history.
Notes from the Q&A portion (Vince McMahon, interim CFO Frank Riddick, Michael Weitz)
McMahon said they have several states ready as backup plans, ready to welcome WWE if Florida suddenly wasn’t an option.
VKM was asked about “soft ratings” during the coronavirus pandemic and how to reverse the trend. He said, “It goes to the product itself. It’s a different feel completely.” He said they are figuring out ways to adjust in this new environment, and that Raw has seen a lot of new talent that people are getting to know.
On the Middle East deal, Saudi Arabia wants to have another event but unsure if they can give the all clear for November or December just yet. They will just tack on the event to the backside of the contract so they won’t lose the money. They are still working on MENA rights, but it’s going slowly.
There will be no new video game this year.
When asked if they could film at Full Sail with a live audience practicing social distancing, McMahon admitted he doesn’t know what “live audience” will mean anymore (testing, distancing, etc). “if anyone know how to do it in a safe and exciting way, it’s us.” He added they will likely be first like they always are.
He later said he doesn’t know if the company will be in the live event business as they were before, saying they are going to be more content oriented. “It’s not a problem. It’s an opportunity.” He later wondered if arenas will charge less in rent due to expected lower turnout which would then mean lower ticket prices.
McMahon says coronavirus caught everyone with their pants down, but they still think a Network deal with a streaming partner is close and that a number of people still want their content. A free version of the Network will likely come in Q4.
He went over how talent and employees are tested at the PC. They do “everything imaginable” including a sequestered hotel, monitoring everyone, forms, etc. Paul Levesque made an appearance talking about a company they contracted for specific cleaning and coating services.
He put over the talent and that they have risen to the occasion. He’s very proud of them.
Raw ratings were down 16% year over year while USA Network was down 29% and the top 25 cable networks were down 5%.
SmackDown ratings were up 16% year over year while Fox was up 36% and the big four broadcast networks were down 6%.
Average paid Network subs were down to 1.4 million year over year from 1.58 million in 2019. Paid domestic was down to 1.05 million from last year’s 1.1 million.
Average live event attendance was up, but that was due to just 42 events in the quarter due to the coronavirus. They held 91 worldwide shows in Q1 last year.
Live event revenue declined to $17.5 million from last year’s $26.2 million in the prior year’s quarter.
Core content rights fees doubled to $133 million year over year while advertising and sponsorship was up to just $17.4 million from 2019’s $10.9 million.
Consumer products declined to $16.9 million, down from $20.8 million in the prior year’s quarter.
They declined to give an outlook for Q2 and the rest of the year due to the uncertainty surrounding the pandemic.
“Left My Wallet” returns with different take on the WWE fourth quarter financials plus Buffalo Bills talk with Wrestlenomics‘ Brandon Thurston!
Brandon is one of the best technical wrestlers inside of the ring, but is also a master of wrestling business and analytics outside of the ring. We talk about his thoughts on the recent WWE financial earnings call, what he thinks WWE pay-per-views would have drawn had they not been on the Network, his thoughts on the future of WWE stock and whether investors buy low or jump ship.
We also discuss his hometown Buffalo Bills and the triumph and tragedy they brought a young Brandon growing up there in the 1990s. We discuss the Scott Norwood miss, the only game ever without a punt, their Super Bowl losses, the Music City Miracle, Doug Flutie, the taste of Flutie Flakes, and his own firsthand account of what it was like to be at the game. for the greatest comeback in NFL playoff history.
There has been a lot written and talked about in terms of WWE financials the past week. But, you must hear Brandon’s unique take and thoughts on the current state of the business and where he thinks it’s headed.
Prior to their investors’ call Thursday morning, WWE released their 2019 Q4 numbers, showing 18% revenue growth to $322.8 million, good for their highest quarterly revenue in company history.
The reason for the increase was revenue from their new TV deals, offsetting lower revenue from their live events. Quarterly net revenue in Media increased to $264.6 million, up from Q3’s $205.3 million. Year over year, Media net revenue increased to $743.1 million, up from 2018’s $683.4 million.
Despite the increase, Wall Street didn’t respond favorably as the stock was trading at $42.34 as of this writing, down $6.62 from Wednesday.
Notes and audio from the investors call can be found below by clicking the red button ‘Right Click Save.’
An increase in operating income of 87% to $99.8 million due to the increase in TV rights fees.
$107.6 million adjusted OIBDA, an increase of 67%.
WWE Network subscriptions dropped by 10% to 1.42 million. They are predicting a slight increase to 1.47 million for Q1 of 2020.
Some key highlights for 2019:
Yearly revenue was $960.4 million, a record high for WWE.
Operating income was $116.5 million.
Their adjusted OIBDA was $180 million, the third straight year it has increased.
$120.8 million back to shareholders by way of share repurchases and dividends, a company record.
New and renewed content distribution deals with BT Sport and Channel 5 (UK); Fox Sports (Latin America); PP Sports (China), and SuperSport (Africa)
Video views increased by 10% to 34.5 billion with hours consumed increasing to 1.3 billion across both digital/social media platforms, up 7%.
There was an interesting note regarding their ‘Cash flows generated by operating activities’ decreasing to $121.7 million (down from $186.7 million) “driven by unfavorable changes in working capital primarily related to our fourth quarter event in Saudi Arabia and the payment of the prior year’s accrued management incentive compensation.”
Quarterly and yearly notes for Live Events/Consumer Products/Network
Quarterly live event revenue increased to $27.4 million, but was down from last year’s $34.4 million. The lack of a supershow in Australia was blamed as well as less events.
Excluding NXT, WWE held 70 shows in Q4 (50 North America and 20 International). That’s down from 2017’s 87 Q4 events (64 North America and 23 International).
Year over year, live event revenue fell to $125.6 million, down from $144.2 million in 2018. That was attributed to 56 fewer shows, lower average attendance, and the lack of an Australian supershow.
Average North American attendance increased by 15% to 5800 with an average ticket price of $57.13.
Average International attendance decreased to 4100 with a 30% average ticket price increase to $84.26.
Quarterly consumer product revenue increased to $30.8 million, but was down from last year’s $32.8 million. Year over year, it was down to $91.7 million from 2018’s $102.6 million. Lower video game royalties were to blame.
The loss of Mixed Match Challenge on Facebook Watch contributed to a $7 million decrease in the Other category for Revenue.
Yearly Network revenue was down to $184.6 million, down from $199.3 million in 2018.
WWE entered into agreements for slot machines and ice cream sandwiches, inspired by the classic sandwiches from the 1980s.
Here are what they are looking at for 2020:
An estimated 2020 OIBDA of between $250-300 million due to the full year of revenue from their TV deals with Fox and NBCUniversal
Content distribution deals in the Middle East and India which has been discussed in previous quarters.
The “evaluation of strategic alternatives” for WWE Network, something that has been discussed for a year.
Call Notes
In the most intruiging and game-changing part of the call, Vince McMahon says that the “selling of our rights to the majors” could be a significant revenue increase for the company, adding there is very strong interest in it. At this point, there’s nothing that would stop the company from selling the rights to their major shows like WrestleMania, Royal Rumble, or other entities, according to interim CFO Frank Riddick. That would indicate big changes to the Network are coming and coming soon.
McMahon said Barrios and Wilson leaving was due to differences in the vision of the execution of plans going forward, but that the company won’t miss a beat.
They are confident the content deals in MENA and India will be done, but the timing and finances are what is uncertain. MENA would be a new deal while the India deal would be incremental money as they already have an existing deal. Regulatory and government matters are what have held things up.
McMahon was asked if AEW has changed anything for them. He said it hasn’t as WWE’s focus remains on storylines and resolutions. NXT continues to compete against them.
They were asked repeatedly about the XFL, forcing McMahon to reiterate several times that WWE and XFL are two separate entities completely.
Talent costs have increased as revenue as increased as they get a percentage, something McMahon says he’s quite proud of.
Even though McMahon has a few more direct reports, he said he can handle it. “I’ve got broad shoulders and I can handle a lot.”
We’re looking for reports from Tulsa tonight with the dark matches at the WWE Smackdown tapings and NXT in Citrus Springs, FL to [email protected]
We’re also doing polls this weekend for both New Japan shows in Sapporo, thumbs up, thumbs down or thumbs in the middle along with a best and worst match to [email protected]
No WWE house shows this weekend. It’s the new deal. House shows lose money so they are cutting way back on them.
CMLL TONIGHT AT ARENA MEXICO AT 9:30 P.M. ON THE CMLL YOU TUBE PAGE
Robin & Arkalis vs. Akuma & Espanto Jr.
Drone & Fuego & Diamond vs. Kawato San & Okumura & Virus
Stuka Jr. & Atlantis Jr. & Star Jr. vs. Negro Casas & Mephisto & Ephesto
Soberano Jr. vs. Templario
Angel de Oro & Titan & Niebla Roja vs. Gilbert el Boricua & Euforia & Gran Guerrero
A look at the current WrestleMania card, as well as what big name is being talked with, what big name is not on the card, as well as the Royal Rumble decision making is the lead story in the new issue of the Wrestling Observer Newsletter.
We also have complete Rumble coverage including a table with each participant, how long they were in, eliminations, number of entry and exit and more. We look at Vince McMahon’s change in the winners in the last week, the stories told in the Rumble, why the winners were changed, the return of Edge, his new contract, how he got such a big deal, the WWE injuries, the Andrade drug test failure, those who were not in the Rumble and why, business notes on the way and what are expected to be the biggest wrestling crowds of the year. We also look at viewer interest in the show, the interest as compared to the UFC 246 show, plus match-by-match coverage with star ratings and poll results.
The new issue also covers:
The sale of Pro Wrestling NOAH to CyberAgent, more on big companies buying wrestling franchises, plans for NOAH under the new ownership and the relationship with DDT as it stands right now.
UFC 246, with show notes, business notes and match-by-match coverage.
Worlds Collide with match-by-match coverage, star ratings, business notes and what did and didn’t work on the show.
Changes in the WWE house show business and why. We look at both the positive and negative of it. We also look at the behavior of Vince McMahon at the Rocky Johnson funeral, the incident with Brock Lesnar and Matt Riddle, new contracts signed, wrestler asking for her release, WWE Canadian numbers, Charlotte Flair talks Kairi Sane concussion, new WWE signees, the most-watched shows on the WWE Network and house show coverage.
New Year’s Dash from New Japan, the Jushin Liger retirement ceremony, match-by-match coverage with star ratings and the angles coming out of the show.
A bio on Hercules Ayala, one of the biggest stars of the glory days of Puerto Rican wrestling, covering how he started there, his work outside Puerto Rico, how he first got into Stampede Wrestling, his biggest matches on major stadium events including major bouts with Ric Flair and Randy Savage, his heel turn with Carlos Colon, the aftermath of the death of Bruiser Brody and how he was used to try and get the business back.
NWA Hard Times PPV show.
A bio on Carlos Rocha, the Portuguese star who was one of the biggest drawing cards in North America in 1971 and 1972 with his bloodbaths against The Sheik and Abdullah the Butcher. We look at those feuds as well as look back at The Sheik in Toronto during the period when he was one of the biggest single city draws in pro wrestling history, and how his undefeated streak put limits on the Rocha feud. We look at how Sheik vs. Rocha was the biggest drawing Toronto feud of the era, and why he outdrew Andre, Bruno, Bobo Brazil and all the other major Sheik foes in Toronto. We also look at his return to North America and his retirement run in the WWWF.
Regarding the Wednesday numbers, we’ve got full details, demos that each side won, how every segment did and what match ended up as the difference maker.
Full coverage of all the WWE and AEW television shows from the past week.
In-depth looks at the ratings of all the major shows, the key demos and quarters for AEW and WWE, what happened head-to-head and what can be learned from them.
Results of all the major pro wrestling events around the world over the past week.
ORDERING INFO: Order the print Wrestling Observer right now and get it delivered via mail, by sending your name, address, Visa or Master Card number and an expiration date to [email protected] or by going to www.paypal.com directing funds to [email protected].
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FRIDAY NEWS UPDATE
There really isn’t a lot more on Vince McMahon’s firing of co-Presidents Michelle Wilson and George Barrios yesterday. It came out of nowhere. Those in the company have no answers as to why. Stock insiders claim it was due to a disagreement regarding investing money into the company. The profit margin for the fourth quarter and the year is at the low end of projections, and for the year, was down $20 million from the original guidance. WWE said yesterday that annual OIDBA will be around $180 million, at the beginning of the year they projected $200 million. In October they changed that projection to from $180 million to $190 million. Keep in mind the original guidance for the year only had one Saudi show and no NXT television revenue worked in. Both did sell millions of dollars of WWE stock back in July. President of WWE is a tough position because everyone in it gets dumped, and even Vince’s own wife didn’t last in that position. It’s always said when you work too closely with Vince, and are not family, you are going to have a shelf life.
The stock closed today at $48.88 per share, down $13.42 per share from yesterday’s close. It’s an overreaction because the reality is the key TV deals are still in place for years and the company is idiot proof as far as making money for years. That said, Wall Street was stunned and a lot of questions regarding earnings being lower than expected were being asked. And Wall Street doesn’t even know about the house show cutback or the decline in the interest of the Rumble. Another big thing will be the network subscription number on 12/31 which will be announced in six days. It is possible it could fall below 1 million if it stays above 1 million, it will be a sign that putting NXT on television had no real effect on network numbers. But that’s an if.
Analysis have had very divergent views of the stock. Morgan Stanley has just its projected price to $54, Evercore ISI to $50 and Loop Capital to $50. But MKM Partners still lists a projected price of $92.
WWE announced that Frank Riddick III, who will be the interim CFO until they find a permanent person for the spot, will be paid $33,333.33 per week.
Bret Hart announced that he will be having surgery to remove basal cell carcinoma, a form of skin cancer.
WWE
Roku and FOX are at a negotiations stalemate. Roku’s distribution deal ends tonight. Roku claims they have been unable to reach a new deal with FOX and FOX also declined an extension to the current deal.
UFC
Diego Sanchez was suspended for three months for testing positive for Ostarine and S-23 from a test that came back on 10/26. That means his suspension is already over. Sanchez had one of his supplements tested and both substances showed up and thus his suspension was only three months instead of two years since that indicated inadvertent usage.
Similarly, Ovince Saint Preux tested positive for Ostarine and di-hydroxy-LGD-40-33 and two other drugs in an 11/1 test. He submitted his supplements to be tested and they showed the supplements contained the banned substances. He also was given a three month suspension which is also now over.
Blagoi Ivanov vs. Augusto Sakai has been added to a 5/9 PPV show from Sao Paulo, Brazil. Marion Reneau vs. Ketlen Vieira was also agreed to on the how according to an original report from MMA Junkie.
Cody Stamann vs. Raoni Barcelos is earmarked for the 3/28 show in Columbus, OH.
AEW
Riho and other women from Stardom were on this week’s episode of S.W.A.T. on CBS. The team had to go to Japan to transfer a prisoner who escaped and Riho played the prisoner’s girlfriend. She played a wrestler and there were wrestling scenes in the show.
MISCELLANEOUS
Mistico will be out two to three months after surgery to remove a screw that came loose stemming from a 2014 surgery when he broke his leg. Doctors put a rod in his leg to help heal it and one of the screws became loose. They had been building a Mistico vs. Gran Guerrero big match that will have to be put on hold.
Defy has its third anniversary show tonight in Seattle at Washington Hall with the Jurassic Express from AEW, The Strong Hearts form AEW, Killer Crown, plus Schaff vs. Artemis Spencer in a ladder match and Josef Samael & Jacob Fatu vs. The Amerikan Gunz in a tag team title match.
Impact announced that there will be an Ultimate X match on its 4/3 show in Ybor City, FL.
CWO on 2/9, 2/17 and 3/12 at The Rockpile Bar & Nightclub in Toronto.
All Star Wrestling on 2/29 in Vancouver, BGC at the Maritime Labour Centre.
Combate Americas on 2/21 in Mexicali, Baja California which will air on Univision, Univision Deportes, AXS in the U.S. and Televisa 5 in Mexico. The main event has Rafa Garcia (11-0) vs. Humberto Bandenay (18-7, 1 no contest) for their lightweight title, plus Yasmine Jauregui (4-0) vs. Karen Cadillo (4-1).
River City Wrestling on 2/8 in San Antonio at The Grand Event Center.
559 Fights on 2/8 in Orange Cove, CA at the Community Center will crown a middleweight champion with Jared Velasquez (4-3) of Orange Cove against A.J. Perez (3-1) of Fresno.
