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In response to
"Did the WWE address their stock situation today? Was the first bullet point on their corrective action: We'll stop trying to make Paige happen? -- nm"
by
Qale
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highlights
Posted by
Remlik (aka remlik)
May 19 '14, 11:25
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The call was hosted by WWE Chairman Vince McMahon, WWE CFO George Barrios, and WWE Investor Relations Michael Weitz.
-Weitz read through the legalities before turning things over to Vince McMahon.
-Vince said he hoped to give "a great deal of clarity" regarding where things are from a business standpoint. He noted that he was in London for Raw. He said the point of the call was to clear up any degree of misunderstanding and said they pride themselves in transparency.
-Vince said there was a "somewhat favorable outcome" in television deals. He admitted they were a bit disappointed in their NBCU deal, but they were able to nearly double their overall television rights revenue. "A good deal, not what we wanted," Vince said regarding the NBCU deal.
-Vince said the core business is "rock solid." He said they feel very strong and bullish in the WWE Network business model. Vince turned it over to Barrios.
-Barrios said they invested $75 million into the network in 2012 and 2013 and $40 million in staffing.
-Barrios said they have negotiated television distribution deals over the last six months and are still doing so in India. "Our analysis indicated that our content was undervalued in several of our key markets," he said. Barrios said that in three out of four markets they were correct. Barrios walked callers through a release regarding their financial outlook.
-Barrios said that if WWE Network produces one million subscribers by the end of 2014, it would yield a 12-month average of 650,000 subscribers for the year. The rate of adoption translates to a 2014 net loss ranging from $45 to $52 million.
-Barrios walked viewers through a 2015 potential outcome using a 1.5 million subscriber count while stressing that it's merely a scenario. He said they expect "a gradual ramp up over time" in network subscribers. He stressed that opening the network globally and expanding the platforms and marketing campaigns as keys.
-The opened up the phone lines for calls.
-A caller asked whether the launch of the network was an issue in television negotiations and whether they would delay the launch if they had to do it again. Vince said it was a fair question and he believes it did have an adverse effect, but waiting until after the negotiations would have delayed the network by another year.
-A caller asked about the NBCU deal. Barrios said they will not be greater than five years.
-Barrios said there is a $60 million cannibalization number in the United States for pay-per-view, and an additional $20 million worldwide.
-A caller noted that investors are concerned about the dividend. He asked whether investors can assume the dividend is safe. Barrios said that if they are successful executing the network strategy then they have the financial capacity to support the dividend, but that depends on successful execution.
-The caller noted that AT&T and DirecTV said they hope to invest in over the top distributors. He asked if WWE has had any talks about selling their content that way. Vince said he believes everyone will recognize that over the top distribution is the way of the future. He said there will be many opportunities that open up for WWE similar to the one mentioned by the caller.
-A caller was having cell issues and Vince McMahon could not understand his question (it was nearly impossible to make out). Vince turned it over to Barrios, but he disappeared from the call as well. "Shit," McMahon said. The conference call host put things on hold while they got Barrios back on the line. There was a few minute delay.
-A caller brought up the turnover with the network executive that was let go. Barrios said they are very comfortable with their current management team and would not get into specifics regarding the decision.
-A caller asked about the subscriber count. Barrios said they would get into that in their next conference call (on a quarterly basis).
-They brought back the caller with the bad phone connection and it flared up again. It was Brad Safalow, the man who was told by Vince that he could put him in a hammerlock if they failed to double their television revenue. Safalow resisted any temptation to bring that up and asked financial related questions.
-A caller said people are a little confused why total spending at a steady state would be higher during the ramp state. He mentioned content development as a possibility. Barrios said they are moving to a subscription business model that they don't have history in.
-Barrios said they are learning every day about the business side of the network. He said people want certainty, but he can't give it to them. A caller asked about what type of growth strategy they have for it. Barrios said they are promoters at their core and they have a team of marketers. He said he didn't want to let the cat out of the bag regarding plans. He mentioned his previous announcement of Tough Enough appearing on the network.
-A caller asked what type of growth numbers they have to see over the next 12 to 24 months from network growth. Barrios once again said he couldn't give an exact number. He said they need to see it and live it to get a perspective.
-The idea of the holiday season as a time for network subscriber growth since a lot of kids have to ask their mom and dad to order the pay-per-view. Barrios said he sees every single hour of every day as a time for new network subscribers.
-Barrios asked if there were additional calls. The host said no, then said there was another caller, then they wrapped up the call without taking the call.
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