Vince McMahon and George Barrios are hosting a Business Outlook conference call with investors today at 11am EST. Below are highlights:
Michael Weitz opened the call by reading a prepared statement to open the conference call. He announced Vince McMahon.
* Vince McMahon thanks the listeners for tuning in. He mentions that he is in London for Raw, so he apologizes for any audio problems. He said he tried – he isn’t sure as to whether he failed – to provide transparency in regards to WWE Network. He says WWE has always prided itself on being transparent, which is why this call is taking place. He said he was disappointed in the NBCU deal but, when you look at worldwide TV deals, WWE nearly doubled their deals. It’s less than what he wanted, but still a good deal.
* He calls WWE Network the most important initiative in the company. WWE has invested significantly in it and has seen significant growth in it. Ratings and live event attendance are solid. He says WWE is blazing a new trail, and wants to be entirely transparent with this new business model. He then hands the call over to George Barrios.
* George Barrios recaps the timeline of the creation of WWE Network. Their business analysis had come to the conclusion that their content was undervalued. He goes over how their worldwide deals will result in a significant increase in revenue. The global expansion of WWE Network will be a profitable step. If their goal of 1.3-1.4 million worldwide WWE Network subscribers is reached by 2015, it would generate approximately $40 million, which would be equal to the company’s pay-per-view business in 2012. If WWE Network were to surpass 2 million subscribers by 2015, the company would see income in the range of $125-$200 million. Additional company investments include increasing international presence, costs related to the WWE Performance Center, and other costs.
* He reiterates that having reached nearly 670,000 WWE Network subscribers around WrestleMania season, they foresee a steady increase over the rest of the year. He outlines WWE’s 5-part strategy to gain subscribers: creating new compelling content, opening the Network globally, expanding the distribution platforms, developing new features, and developing high-impact marketing campaigns.
The Q&A with investors is up next.
* A caller asked about how WWE had previously said that the launch of the WWE Network would not negatively affect television deals. Vince says that the Network certainly affected the deals negatively. He said that if he had waited until the television deals were completed, however, he would have had to wait another year to launch the Network, as the goal was to release the Network around the strongest part of the year, WrestleMania season. He called it a “chicken or the egg” situation.
* A caller asked if investors should assume the dividend is safe. Barrios says that if WWE is successful with its business strategy, they have support to protect the dividend. It just requires successful execution over the next 12 months. Vince says that over-the-top content is the future, and we will likely be seeing more and more of it as time goes on.
It was also noted that none of WWE’s current TV deals with NBC Universal or otherwise are more than 5 years in length.
