WWE held a conference call with investors this morning to discuss their third quarter earnings of 2011. I was on the call as you can read a full recap below:
Michael Weitz opened the call and announced Vince McMahon and Chief Financial Officer George Barrios would be on today’s call.
McMahon took over and discussed profits being up after comparability factored in. Rather than recapping the words of McMahon, it’s best to read the results.
Vince said they have finally turned the corner with the WWE Network and are in a good position. He made it clear they have several ongoing discussions about partners for the network and are about to make a major announcement regarding the project. McMahon talked about the allocation of millions to the WWE Network for staffing and construction.
George Barrios ran down the results, including mentioning that ratings for WWE Raw were “flat.” We went over page 6 of the results. He said the company’s decision not to place WWE NXT and WWE Superstars is “strategic” in nature.
Barrios said in the next three months they are going to release their three most recent films by WWE Studios.
The launch of the WWE Network in 2012 will impact the quarter four earnings of 2011 because of start-up expenses. These expenses include an interactive website capable of hosting programming. Barrios reiterated the WWE Network will not change their current television deals domestically.
We went to the question and answer session.
WWE Network – Are you where you expected to be in terms of how close you are to actually launching the network?
Vince McMahon said “very much so” and almost at an “accelerated” rate.
Does similar failed networks give WWE pause in launching the WWE Network? Vince McMahon called the Oprah Network a miserable failure and said it doesn’t take a genius to figure out the Oprah Network didn’t capitalize on what Oprah does best. They tried to brand the Oprah name without having Oprah featured. They’re going to do the opposite because McMahon said they understand what fans want. He believes this will make the WWE Network extraordinary successful.
After discussing decline in toy revenue, the caller wanted to know about the strategy of WWE Studios with the decline in straight-to-DVD projects. McMahon said the decline doesn’t mean they “are not” backing away from future releases. While this is my opinion, it sounds like WWE plans on releasing their remaining WWE Studios projects then moving their focus more towards the WWE Network.
WWE is not scrapping their Media Center and will work in terms of what they have with the launch of the WWE Network.
Barrios said international live event attendance is “holding on” despite comparability being difficult because the company doesn’t run in the same venues and cities in the same quarters each year.
A caller wanted to know with The Rock returning what that meant for the attendance of Survivor Series. McMahon replied by saying Survivor Series sold out in 90 minutes.
Vince McMahon said there is no partnership with the WWE Network.
There was an uptick in the creative with Money in the Bank but things backed down for SummerSlam. Will the reality-based creative continue in the company or is there another reason buys fell?
McMahon said they will continue developing talent as they always have and there is a buzz around the product.
The caller wants to know how long this will translate into buys and attendance. McMahon said he’s always optimistic and is more optimistic now more than he has ever been.
Vince said there is more demand for their content than ever before.
A caller wants some sense of timing when WWE would provide a timetable for a potential partner for the WWE Network. The caller says they know WWE is spending money but there is not a specific timetable of a return. Barrios said they would be guessing if they set a date. Barrios said he’d say less than 6 months.
A caller wants to know how many hours and titles in the WWE tape library? What rights are tied to the library? George Barrios said they have 100,000 hours with 30,000 digitized. They’re investing into turning the digitized material into programming. Barrios said it’s the most underutilized and undervalued asset the company has.
A caller wants to know how many stars are currently in the WWE talent pool? Vince McMahon said it depends on what you call the “talent pool.” Barrios said they have roughly 150 people under contract with 2/3’s being developmental that people don’t know about.
Out of the names that people don’t know, what do you see in terms of the next Rock? McMahon sarcastically answered the question and said they were “very optimistic.”
In context of the shows currently running, will the existing shows remain in place for the duration of their current contracts? Vince McMahon said they need to be there to help build the network.
Finally, a caller asks about the distribution agreement for Monday Night Raw. The distribution agreement is a 5-year agreement through October 2014.