WWE CONFERENCE CALL – Vince McMahon Opening Remarks, Q&A on Network consumption, NXT, int’l business, more

WWE Fourth Quarter 2015 Conference Call
February 11, 2016
Hosts: Vince McMahon & financial executive George Barrios

Vince McMahon’s opening remarks

– McMahon stressed record annual revenue and WWE becoming the #1 sports channel on YouTube. McMahon said they are aiming to be the #1 channel on all of YouTube.

– McMahon said they are “thrilled with our 2015 performance,” but noted some investors “obviously are not,” referring to the stock being down six percent in early Thursday trading.

– Most of McMahon’s comments were read of the third slide of the earnings presentation HERE.

Q&A Highlights

In general, WWE management declined to offer specific answers on numerous topics. (There were 13 individual sets of questions from investors and analysts, counting follow-up questions as the conference call neared the one-hour mark.)

– There was an interesting discussion about the make-up of WWE Network content consumption. The base is WWE’s figure that the average subscriber watched 188 hours of content on a yearly basis.

Asked to break that down, Barrios said about 37 hours (20 percent) were the monthly PPVs.

That leaves 80 percent for the original content, which accounted for about 30 percent of total viewing, and the library content, which made up about 50 percent of total viewing.

The inverse is true from a “TV Ratings” comparison in the sense that the individual PPV events generate the highest viewership (more special, less frequent), followed by the original content (it’s new), and lastly the individual library content (not live or new, plus more supply available). The middle ground is the original content.

– One topic that Barrios declined to address was the financial impact of the NXT brand. Barrios labeled NXT a “specific product line,” which WWE does not disclose business results for.

Instead, Barrios noted they are “thrilled” by engagement with the product at live events, on WWE Network, and through social media. Going forward, WWE has decided to continue pushing forward with international NXT touring after their recent U.K. debut.

– Asked for the Top 5 Network countries, Barrios said the U.K. and Canada are the top int’l markets after the U.S. domestic presence. He added, “In the Top 10, we have a nice mix of countries.”

WWE is emphasizing the India market, but Barrios declined to provide guidance on how India has performed since the Network launched at the end of 2015. Barrios said they are taking a “long-term” approach to growing the subscriber base in India.

The remaining markets to reach are China, Thailand, and the Philippines. Barrios said one, two, or potentially all three will be finalized in the next 12 months.

– Barrios offered an interesting take on how WWE views the Japan market. WWE is not putting Japan in the same business emphasis group as India, China, the Middle East, or Latin America. However, they see the market as important for providing talent to their roster. “We’re mainly just talent focused,” Barrios said.

– As for WWE’s overall business within the global market, Barrios noted that WWE believes they are resistant to any recession factors, but they are not immune to the “overall global economy.” The idea being that since WWE is increasing its international presence through the Network and live event touring, their success rate will depend on whether people have money to spend on entertainment.