Tag: wwe q2 financials

WWE’s Vince McMahon doesn’t feel AEW is competition like WCW was

Posted on by Josh Nason

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 Q2 financials: Record revenue, Saudi Arabia deal, more

Posted on by Dave Meltzer

Although profit margins did not meet analyst expectations, the news had to be considered an overall positive coming out of today’s WWE second quarter business release.

The WrestleMania quarter set a record in revenue at $281.6 million, and finished with $10 million in profits. This compares to the second quarter last year which did $214.6 million in revenue and $5.7 million in profits.

The positive results saw the stock at $85.01, an all-time record, at this point in time.

Revenues were well over expectations, although the profit margin was less than most investors expected. The profits benefited from lower taxes, but also included very high executive bonuses due to other metrics met.

The huge increase in revenues comes in what is listed in the media category as $60.6 million listed as “other,” up from $11.9 million. Other is listed as “Other forms of media monetization reflect revenues earned from the distribution of other content, including, but not limited to, scripted, reality and other in-ring programming, as well as theatrical and direct-to-home video releases.”

The key aspect of this change is likely the Saudi Arabia deal. The company noted they have a confidentiality clause in their deal and thus did not discuss the nature of that agreement past that it was a ten-year deal that included an annual show.

The nature of the talks indicated that the idea of a November show there isn’t happening as was talked about after the first show, as they specified it would be a once-a-year event.

OIBDA in the quarter was $43.5 million and the company has increased its target for the year to the $160 million to $170 million range, well above previous projections of $145 million to 150 million.

The company’s cash-on-hand was $341.6 million, the highest level in years and up from $297.4 million at the end of December.

Other good news regarded the retention of WWE Network subscriptions.

In 2017, after WrestleMania, the Network had 1,661,000 subscribers, and on June 30, that number fell to 1,568,000. This year the drop was from 1,808,000 subscribers, a number inflated by all the gimmick offers, but only fell to 1,742,000, meaning a strong 11 percent increase over the same day last year. It should be noted the increase was consistent in both the United States and overseas, as opposed to just overseas growth as had been the key to much of the recent year growth.

Basically that meant that the people who sampled at lower prices this year stuck with it at full price at a much higher rate. That means whatever the reason, whether it was the programming mix or the big events during the quarter, the Network retained Mania subscribers at its best level in history.

At the investment call the company said they would be increasing the amount of content, mentioning more new events were coming.

They also expect to announce the new United Kingdom TV deal by the end of this year and the new India deal in the early part of next year. The U.K. and India deals are the second and third biggest revenue television deals they have.

George Barrios pushed that with the economic markets in India and China growing that they had to get their piece of them, noting the prioritization of those markets. They also noted that 45 percent of the talent in developmental right now is from outside the U.S., as they look to the future internationally.

Profits from the media division are significantly higher, likely due to the Saudi deal.

Live event revenue was slightly down and profits were down from $17.1 million in the quarter last year to $13.4 million this year. Attendance was down both in the U.S. and outside, but that was offset to a degree by higher ticket prices, so revenue dropped from $52.8 million to $52.3 million. But costs of touring were up.

Consumer products revenue increased from $24.6 million to $26.7 million, but operating income declined from $5.5 million to $4.6 million in the category.

If you factor out WrestleMania, North American house show attendance fell from an average of 5,500 to 5,000. International, largely the European tour, dropped from 6,300 to 5,700, but with much higher ticket prices.