WWE held a conference call with investors on Thursday to go over the company's 2013 Second Quarter Financial Results. I was on the call on behalf of WrestlingNewsWorld.com and compiled the following notes:
Michael Weiz opened the call by reading a prepared statement. Vince McMahon and WWE Chief Financial Officer George Barrios will be joining us on today's call.
Vince McMahon said there is no sense in dwelling on their performance and that they were a little bit below of where they thought they were going to be. Vince said they do know what they are doing, by the way and put over the fact that Wrestlemania 29 was their highest grossing pay-per-view in their history (official statement). Vince talked about growing their audience through "Total Divas" by attracting women. He said to quote an E! executive, the show was a "home run." He said the reality series gives them the opportunity to do more things like this.
McMahon said ratings for Raw and Smackdown are about the same but they've increased their television viewership overall. He put over their upcoming animation projects with WWE Studios and working in partnership with The Bridge Direct (details here). Vince discussed the upcoming John Cena line in Kmart and sponsorships for the company. McMahon said WWE is a safe environment to be associated with and pointed to deals with Kraft and Doritos. He said Fruity Pebbles has renewed their sponsorship of the company.
Vince said they're finishing up a overseas tour that has gone very well. McMahon put over social media growth and said they have a lot of "what they call products" coming out as well. He said they're leading social media in terms of how it's used. Vince said they are using the WWE App, which has close to 7 million downloads, to provide so much viewer interaction so no one changes the channel. He said it's more than stats and things other networks try to do but there is programming there. Vince said he knows they are trying to teach the audience how to watch television again. He said no one can do it like they can.
McMahon talked about global markets, including the UK and negotiations in India. Vince said they have been undervalued in the United States but that will not be the case going forward. Vince talked about the opening of the WWE Performance Center and the ability to attract "so many more individuals" from all over the world. He talked about talents that made their debuts at Wrestlemania this year. Vince said it takes time for talents to "get over" but they have a plethora of good talent in their developmental system.
Vince said those are some of the metrics that should be considered when evaluating what he considers a lousy quarter from a financial standpoint. Vince handed the call over from George Barrios.
George outlined the numbers like only he can. While he crunched a lot of numbers, the talk regarding the WWE Network was very vague. Barrios pointed towards the company's research for a network and the potential for a paid subscriber base. He continuously referred to it as "a potential network."
The line was then opened for a question and answer session.
A caller wanted an update on the WWE Network. Vince McMahon said all the options were open for them. He talked about television deals coming up and the potential WWE Network being tied to that. George Barrios talked about the increased ticket prices and they have to do with premium seating.
A caller asked Vince McMahon to talk about what the company has learned in terms of how they do movies. Vince said they explored a number of models but have found the right one with the success of "The Call." Vince said they need to broaden their footprint in everything they do and WWE Studios is making money for them now.
Vince talked about talent roles in films. He said in addition to John Cena, The Miz and Randy Orton carried starring roles in a smaller scale in straight-to-DVD projects. He put over the supporting roles in major films.
WWE's contracts with the USA Network for Monday Night Raw and with SyFy for Smackdown are up at the end of the year. Vince talked about lesser sports getting huge rights fees but said they are poised more than anything is out there to garner double or "who knows" how much more about what they are now getting. Vince said they are the last major franchise left.
George Barrios said they invested more on the talent side and production side for Wrestlemania 29. He would not go into specifics as to what they paid The Rock. He said the event overall was about a million dollars down.
Barrios said they are very excited about the partnership with Take Two for WWE 2K14. A caller wants to know the expectations, Barrios expects the results to get better and better each year.
A caller asked "how tied" the Raw and Smackdown negotiations are to the potential WWE Network. George Barrios said they are separate discussions.
A caller wanted to know about the profitability decline in the pay-per-view segment. Barrios talked about WWE Over the Limit being moved and higher production and talent expense for Wrestlemania 29. He reiterated that all in the event was down about $1 million for last year.
Vince said he will allow a caller to put a hammerlock on him if they do not double their television rights fees.