WWE Q3 Investor Call Report: Company Praises Fox Deal, Calls AEW A ‘Competitor to Some Degree’, Won’t Comment on Bischoff’s Departure

WWE hosted their 2019 Q3 investor’s conference call today, Vince McMahon was not on the call as he was in Saudi Arabia for today’s Crown Jewel event; here are the highlights.

SVP of Financial Planning and Investor Relations Michael Weitz welcomes us to the call.

Co-President George Barrios takes over and gives the basic breakdown of the financials, and that is available already on the site. They hype he launch of NXT on USA and the expansion of content distribution. He frames the ratings declines as “improved” declines, and hypes Smackdown’s move to Fox and the big first week ratings. Revenue is down 1% following a 65% reduction in operating income. They will focus on evolving the WWE Network to increase subscribers.

Co-President Michelle Wilson focuses on Fox’s promotion of Smackdown and early success. She hypes NXT’s move o USA and the upcoming debut of WWE Backstage and today’s Crown Jewel event. Talk turns to the decline in live events business, but praise their large-scale events. She addresses the issues with WWE 2k20, and hopes that positive charges will be made.

Weitz hypes record revenues coming in Q4, thanks to the new TV deals in the US. He feels that heir value as a live sports property will grow, and digital growth will be important. They will take advantage of industry trends, and will drive growth and increase investor viability.

The Q&A starts and the first question is about the Saudi deal, and how it impacts business overall. The deal is incomplete, but they are invested in core content. They are also asked about NXT’s expansion impacting the network. The strategy is to create another touring brand in the US and expand content monetization.

Barrios is asked about revenue growth and expenses. Barrios says they are still evaluating things, and negative impact will be minimalized. Barrios won’t really comment on distribution deals with India, but expects new deals to be done by year’s end.

They are asked about the influx of new streaming services, and whether or not they will rethink the network price tag. He feels they are different from the rest and have passionate fans. They are asked about how much original content is on the network. Barrios says that there is actually more than ever, and adds in that the PPVs are the big driver of subscribers, plus they do an additional 200 hour of original content. They are excited about what they offer on the network and its value. He teases the tiered network again, but offers no real details. He won’t go into more details on the Saudi deal when asked.

Next they are asked about the Middle East & Saudi deals, and Barrios basically talks around it. When asked about the profitability of Crown Jewel with Fury & Cain involved, but Barrios won’t get into specifics. Barrios clarifies that MENA TV deal (which is not complete) and the KSA event deal are separate, but again, refuse to get into specifics or even hypotheticals.

They are asked about sponsorship opportunities through Fox, which Wilson says has opened more doors. Fox packaged WWE spots with other sports options, which led to even more deals.

Barrios is asked about ratings and digital hour growth. There have been some improvements, but it’s not where they want it to be as they focus on in ring content and storytelling. They feel better this quarter over last quarter. He won’t get into the economics of NXT, but they are in it for the long term.

Barrios is asked about Eric Bischoff’s hiring and firing. Barrios says that thy are looking to strengthen the process, which led to Bischoff & Heyman’s hiring. They are really happy right now, but he won’t individually discuss Bischoff. They feel good about the changes to the process they have made. “You try to recruit the best talent possible, so the creative writing process isn’t any different. I’m not gonna talk about any individual, either Eric or Paul.”

Barrios says that they are focused on 2020 and the value of their content in 2024-2025. They believe sponsorship and their content will be drivers for their growth. The international deals take time and can’t be measured in short periods. He said the NBA deal in China took 20 years to grow and his guess is some of those early years were at a loss.

They are asked again about 2020, and Barrios says they want to focus on this quarter. On the Fox deal, it’s too early to judge any impact. They do expect India & China to be big international needle movers.

The next question is about the impact of AEW on their business. Barrios says the landscape is competitive, and says “they are a competitor to some degree.” There is a lot of competition and they take it seriously. When asked about losing more stars like Jericho & Moxley, they are focused on talent retention. They have the biggest stage in all of wrestling and praise their social media reach, which he feels is important to talents. “Historically as the company has done better, our talent has done better. It’s a win-win virtuous cycle, one we always expect to continue. As far as individual talent, talent always has decisions to make. We have a platform 2 orders of magnitude bigger than anyone else. I would imagine as people are thinking about who to align with, all those things are really important. We think so.”

The call ends.