WWE CEO Nick Khan held a telecast presentation on Thursday for the MoffettNathanson’s Inaugural Technology, Media, and Telecom Conference. Some of the topics discussed included Khan’s thoughts on the initial rumors of WWE’s sale plans being just Vince McMahon’s way to return to the company,
On the topic of the initial rumors of WWE’s sale process, Khan stated that he had a private talk with McMahon over if there was any truth to the sale rumors and if this was just his way of returning to the company instead.
“Can’t discuss that. Kidding. Can discuss that, don’t worry (Khan said when asked what drove WWE to the agreement with Endeavor/merger with UFC). There’s a couple things on it. When he (Vince McMahon) came back, again, the term was ‘first strategic alternatives’ and he and I had a private conversation which he’s certainly comfortable with me sharing today where I said, ‘Hey, just tell me is this real because there’s some scuttlebutt out there that maybe this is just your way to come back in to your company,’ which again, he would have the right to do also and he said, ‘No, I’m committed to it. I give you my word.’ Raine (Group) was the lead banker on the transaction. Vince said, ‘I wanna make sure WWE has a strong banker on it.’ That’s gonna be management’s decision and then the Board of course would need to have some sort of representation as well so he gave me his word that he was serious about the process. Lo and behold, he was serious about the process and the deal was finalized April 1st and announced the morning of April 3rd before the market opened.”
Khan also gave his thoughts about WWE’s negotiations for their next television contracts and his preference on wanting to continue to do business with FOX and NBC Universal.
“So, lot of conversation (over) the past couple of days about the U.S. media rights so let’s talk about that first if that’s okay, and by the way, in terms of the next 12 months, it’s U.S. and U.K. and then everything internationally is beyond the next 12 months so that’s the hyperfocus for now. So, FOX and NBCU have obviously been great partners to us. I think Lachlan Murdoch was here yesterday, talked about the partnership. Like any negotiation, they wanna pay as little as they can, same for NBCU. We want as much as they can. So our preference would be to stay in business with both of those partners on Raw and SmackDown. That being said, in terms of live content that delivers, we have to make sure — it’s always been my mantra even when I was an agent at C.A.A., to underpromise and overdeliver. So there’s obviously a lot of documents that have been filed with the transaction, with projections and all of these things. The hope is to have a material increase in the way there was a material increase last time. The reality of it is that we’re going to get a really good increase for both of these properties. It’s too early yet to say is it 1.5 x? Is it greater than 1.5 x? But if you’re in the underpromise and overdeliver category, I’d rather go on the low end and we’ll see in 6-12 months exactly how it plays out.”
Khan also gave his thoughts about the possibility of WWE holding another event in Australia in the future.
“So look, they’ve (UFC) done a number of successful shows in Australia. We did an Australian stadium show that wasn’t televised pre-pandemic. So we didn’t monetize it properly. So, a government subsidy for that show is something that folks are working on. So to get that, which obviously decreases our cost risks on that and to do a show in Australia where we have what we think is a pretty big, new deal with Foxtel which is a FOX/News Corp company. To do a show there on a date or a month that is good for them, it’ll kickstart that relationship off the right way.”
Khan also gave his thoughts about WWE’s current merchandise deal with Fanatics.
“So Scott Zanghellini and Alex Varga… are heads of revenue at WWE. They were also agents with me at C.A.A. and the good folks at C.A.A. were gracious enough to let them come with me to WWE. So when the conversation was about the China tariffs, if you remember that, literally Scott and Alex came in one day and they said, ‘Instead of us figuring out how we’re gonna make WWE Championship belts in India which none of us know how to do, what if we just outsourced this whole thing?’ Because again, to the point of we’re not trying to be the best technology company with WWE Network. We’re not trying to be the best merchandise company. We want our merchandise to appeal to our fans, but the quality of the t-shirts, the cost of those, that’s not what we focus on. So Michael Rubin is as dynamic and as brilliant as people believe him to be. So we did a deal that we thought was equitable to both sides with a minimum guarantee that protected our downside for our e-commerce. E-commerce up significantly since we did that deal. They’re penetration is just farther-reaching than we had on our own. So that worked quite well. As the relationship continued to progress, the guys who, again, run new revenue did a deal to expand that into our venue merchandise. So that kicked in a month or so ago and by the way, one thing that they paid, our guys paid close attention to and that we all paid attention to is that the people whose jobs would be eliminated at WWE because of this outsourcing to Fanatics, each and every one of those individuals were offered a job at Fanatics for same or more money without having to relocate and I think 90-to-95 percent of them took that so it’s the small things too that matter. It helps with the partnership.”
Khan also gave his thoughts about the potential of WWE added more weekly programming content in the future. Khan stated that one idea could involve a new Lucha themed weekly show for the company in the future.
“Ideally for us, we would go every day of the week, as long as there is a unique product we can put on the air and resonate. Something we’ve discussed internally; lucha libre, which is big in Mexico and Latin America, to start something like that down the road. This would be well after US and UK media rights are settled, the synergies are all in place and we have our legs under us with [TKO Group], that’s something that’s interesting to us, especially with the growing Hispanic audience in the US. We over-index in the Hispanic community already with our English content. To target that is something of interest for us.”
Transcript h/t: PostWrestling.com 1 & 2, Fightful.com