WWE’s Third Quarter Financial Results: DVD Sales Down, More
WWE held their quarterly earnings conference call today, here are the highlights…
* Vince McMahon started out the call, noting that they grew 5% in profits attributed to home video and PPV, offset by an impairment from WWE Studios, television sales of about two hours and licensing.
* Average attendance per event is 4,100. Ratings remained flat, which they seemed happy with. He also noted that PPV numbers were down.
* Vince stated that they are in a good place as far as the WWE Network goes, and that they expect expenditures between $4-6 million for construction, staffing and such. He also said that they should have a big announcement for the network soon.
* Operating income increased 3% for the quarter.
* The company had lower sales of licensed products, such as DVDs, across the board except for video games. They were down 24% for action figures and other toys alone but noted that last year they had a hugely successful launch.
* They noted they were down in TV revenue due to their choice not to place NXT and Superstars with partners domestically. They explained that this was a “strategic decision for the long term good of the brand.”
* Magazine sales continued to drop.
* WWE Films profits declined $5.5 million from this time last year due to lower video sales and theatrical grosses.
* They have $181 million in cash and assets.
* They feel that the WWE Network will accelerate their earnings growth in terms of TV exposure and international awareness, again stating that it would launch in 2012. Without saying so, they essentially confirmed that NXT and Superstars would end up on the network.
* The Q&A session was next.
* In regards to the network, Vince says that they are on schedule and also noted that they’ve hit the optimum time to launch a Network of this kind. When asked about specialty networks like Oprah’s not doing well, he says it was because she did not do what she does best and whey they launch, they will be doing what they do best.
* Again on the network, they will launch the Network in a way that fits the company’s infrastructure, but over the long term, they believe the new Media Center they want to build will be part of their future. Vince also noted that the network would be solely owned by WWE.
* It was brought up that things picked up creatively in the build to Money in the Bank and then settled back down. Vince stated that he did not understand what they were asking, and that they still have buzz around the brand and will continue to build on that. Vince says they have been doing this for 50-years and that he is very optimistic.
* They mentioned that THQ was launching a Facebook-based WWE game, and that WWE does well in this media.
* In regards to the YouTube deal, Vince said that here continues to be a land grab for content and they are very happy as Intellectual Property owners, and that their content was in demand now more than ever.
* When asked about the WWE Video Library, they confirmed over 100,000 hours of footage, with 30,000 hours digitized for the launch of the network. They continue to work on the digitizing of the library, and feel that it is their most underutilized and unappreciated asset.
* They were asked about their talent pool, and noted that they have over 100 talents under contract. When asked if there was another “Rock” on the horizon, he stated that 99-100% of their FCW roster could be the next Rock. There was audible laughing on the call at that point.
* They said that NXT and Superstars not being on the air cost them around $9 million in distribution fees.
* When asked if they would move all of their TV to the WWE Network, Vince stated that it was important not to do that, so that they could cross promote the new network.
* The current deal for Raw on USA Network lasts through 2014.