This morning, WWE held its latest quarterly conference call for investors, in the case covering the second quarter of 2013. A stream is available on WWE's corporate website (h/t Wrestling News World's thorough recap).
Let's take a look at the key points from the call:
Vince McMahon said they took in a little less than what they projected, but it wasn't worth dwelling on in part because WrestleMania 29 was their biggest grossing event ever, and the addition of Total Divas to their TV package would greatly expand their female audience.
He noted that Raw and SmackDown ratings were about the same as the prior quarter, but TV viewership was up overall. It's a little unclear what he meant there, whether he was factoring in the Total Divas premiere (which took place in the third quarter), talking about how the rating percentage varies by the number of viewers per home or something else.
Licensing and sponsorship deals were pushed fairly heavily, with a new toy deal (The Bridge Direct signing on to produced WWE-themed construction sets), John Cena's new "Never Give Up" apparel line that's exclusive to K-Mart, the renewal of the Cena/Fruity Pebbles deal with Post Cereals and sponsorships from both Kraft and Frito Lay.
McMahon put over the success of the current overseas tour that's been through South Africa, Australia and China. He pushed their various partnerships in the UK and negotiations that are ongoing in India.
With the WWE Performance Center having opened a few weeks ago, it was pushed as a recruiting tool. McMahon noted how the large number of wrestlers they can train there helps since it takes time to develop talent.
Does the WWE App keep you more engaged in WWE programming?
He heavily pushed the WWE App (which has passed the 7 million downloads mark). The idea is that there's so much viewer interaction that nobody changes the channel. He said there is a re-education process going on in teaching viewers how to watch TV and that nobody can do it better than WWE. I'd say there's some validity to that, as they combine the aspects of scripted TV that engage viewers and the, "Wow, did you see that?" aspects of live sporting events.
Overall, McMahon urged investors to consider all of these metrics when assessing the disappointing quarter and then handed the call off to Chief Financial Officer George Barrios, who mostly discussed raw numbers.
He was vague about the WWE Network, repeatedly referring to "a potential network" before moving into the question and answer session...which started with a question about the network. McMahon said they're exploring all possible options for the "potential network."
Obviously, "all possible options" covers a lot; it could mean the plan to include all non-WrestleMania pay-per-view events have been scrapped, that it will be online or any number of other things. The original announced launch date was the day of WrestleMania 28 last year, and they've been hesitant to announce a date since then, so I see the vagueness as an indication that the launch is still a ways away.
When asked what they learned about making movies, McMahon said that the success of "The Call" ($58.9 million worldwide gross with a $13 million budget) shows they found the right model. Presumably that means that they'll be producers on more major star vehicles that aren't made in-house.
Do you expect WWE programming to command increased rights fees when their deals are up?
The domestic TV deals for Raw and SmackDown are up soon. The new deals are separate issues from WWE Network plans. McMahon was incredibly optimistic about rights fees increasing because what he feels are less valuable sports properties are getting big money. He said they have a better shot of getting double or "who knows" how much more of an increase over their current deals than anyone else. McMahon even offered to let the caller hammerlock him if they don't double the money.
Barrios expects the company's video games to do better and better each year with 2K Sports now having the license. From a fan standpoint, I'd say the big question mark there is if next year, with the next generation of game consoles hitting the market this fall and more development time (WWE 2K14 is built on what THQ was doing with WWE '14 before filing bankruptcy), is if the games will get a long-anticipated overhaul.
Finally, Barrios would not get specific about what The Rock was paid, but WrestleMania profit was down about $1 million from last year due to increased production and talent costs. This is presumably thanks to the addition of Brock Lesnar as well as the fancier set with the giant Statue of Liberty replica.
So, what do you think of the results? Do you think WWE has a real shot of cashing in on the rights fee craze in sports? Where do you think the WWE Network is going? Do you agree with the assessment of the WWE App? Let us know in the comments.