WWE Q3 Conference Call Report – Vince McMahon Speaks Out

Credit: Larry Csonka

Here are highlights from today’s WWE Q3 conference call with George Barrios and Vince McMahon…

* They spent what felt forever discussing the report, simply quoting numbers and not offering a lot of original content (just what had already been released).

* They hyped the fact that they over 420 million social media followers, but didn’t discuss that they have converted under 1% of those followers to network subscribers.

* Vince focused on the fact that they now have 731,000 network subscribers, and that they gained nearly 300,000 subscribers in the quarter. He did not mention the fact that they also lost 255,000 subscribers during the same quarter

* Vince feels staying at $9.99 and dropping the six-month commitment is the right way to go. He really pushed the month of November being free, comparing it to services like Hulu Plus giving away a month.

* Barrios pushed the network revenue being up, and the increased viewership for PPVs. The plan is to continue to invest in programming and technology for the Network.

* Licensing was up due to receiving a higher royally rate for the 2K15 video game.

* This month they received a $50 million advance for a new TV deal that is not reported in this quarter but will be recognized over the term of that deal.

* As for the company’s key TV deals in Q3 2014, WWE finalized TV distribution agreements in the U.S., U.K, India, Thailand, Canada, Mexico and UAE. With the completion of these and previous deals in the UK and Thailand, management has greater clarity about the timing and magnitude of TV rights revenue through 2018. Revenue from the Company’s seven key TV distribution agreements is expected to increase from approximately $130 million to approximately $235 million, providing over $100 million of revenue growth.

* They were asked about feedback they’ve received from Network subscribers who have stopped subscribing. Barrios totally dodged the question, noting that they are thrilled with how they engage the audience and that the viewership for PPVs are more equal for secondary shows compared to the major shows.

* Barrios said that the International subscriber base was expected to have a slow start.

* In regards to the free subscribers for November, those who maintain the subscriptions will be counted as new subscribers for the next quarter.

* Barrios stated that Rogers Communication was working on getting other distributors in Canada for the Network. At this time, they currently only have 20% clearances in Canada

* Going back to the TV deals discussed above, Barrios said that the deals are not for longer than five years.

* They were asked about what percentage of subscribers were watching specific programming. Barrios didn’t want to get into specifics, but indicated that the live programming does well.

* Barrios praised the VOD library and noted that people like to binge watch these days. They may want to add more content and make sure what they have is complete instead of skipping episodes like in the WCCW episodes.

* Someone actually asked if creative is the reason for subscribers leaving. Barrios claimed churn is 8% and they expected 4-8% and that’s just part of a subscription driven business and totally dodged the creative portion of the question.

* Once again, Barrios used the “we don’t want to get into specifics” and dodged several questions.

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