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WWE Q3 Earnings Call: Nick Khan On NXT 2.0 Relaunch Progress, 2022 PPV Schedule, More

November 4, 2021 | Posted by Jeremy Thomas
Ariel Helwani meets Nick Khan _ WWE releases, the future of NXT, and his role in the company 2-49 screenshot Image Credit: BT Sport

WWE had their Q3 Financial Results call on Thursday with Vince and Stephanie McMahon, Nick Khan and Kristina Salen discussing their performance, their upcoming PPV calendar, the progress of NXT 2.0 and and more. You can see a recap below:

* Vince McMahon, Nick Khan, Stephanie McMahon, and Kristina Salen are on the call.

* Vince said their solid financial results are pretty strong as a result of all things globally WWE including their live event results, which he said is where things come alive for them. He said as a result they are raising their guidance for 2020. He says they saw a lot of positive trends, and in their strong recovery they saw a lot of ways to open their IP up further.

* Khan took over and began with looking at their media segment. In terms of near-turn media rights opportunities, they have two in their sights. The first is their rights for Raw on Hulu, which expire at the end of 2022, and the second is their licensing of WWE Network in international markets. He noted that a “competitive landscape” has already formed around both, and they know there is a standard, recurring audience that watches the show on Hulu. At the time of their deal in 2018, NBC was still an active owner in Hulu and Peacock “was just a nascent dream.” He put over Disney’s running of Hulu now that they have FOX’s ownership stake, and said “the battle for Raw’s rights will be intense and fun.”

* As for WWE Network, they’re continuing to executive on a strategy to optimize across international markets, and have a model that buyers are responding to and should continue to bring great results.

* Khan moved on to note that they are continuing to expand their original programming, and mentioned Miz & Mrs.’ renewal, as well as Escape the Undertaker on Netflix. He said that they recently finished a children’s animated scripted project with a streaming service, and will be announcing number of new scripted and unscripted projects soon. He added that this will continue to be a priority for them and they recognize they are both profitable and expand their brand, establishing new relationship and keeping their audience young and diverse.

* Khan said that they’re as bullish about their next TV rights negotiations as they were for the last deals, which were very lucrative. He noted that deals for other sports media rights have seen big interest and are also drawing interest from new buyers and noted that the Premier League is looking at doubling their rights to $300 million thanks to new bidders in the streaming market.

* Khan said that they’ve seen early cuts of the Netflix docuseries on Vince McMahon and said they are “out of this workld.” He also talked about the company’s new deal with Spotify as their podcast provider and that they’re excited about it.

* Khan then talked about new business with creating new revenue streams and building their existing lines, noting that they’ve looked at all aspects of their PPV business and making adjustments to tweak things by making each PPV special events. They’ve announced their PPV calendar for 2022 which include at least four in stadiums for the first time ever.

* He pointed out how they’re doing the Royal Rumble on a Saturday as opposed to the usual Sunday in order to avoid competitive programming, and a week earlier than usual to avoid competition with the Winter Olympics. He put over ticket sales as tracking well over this year’s SummerSlam, and talked about the plans for WrestleMania and Money in the Bank, which is now part of their “Big Five” PPVs as opposed to the traditional “Big Four,” and then talked about SummerSlam taking place in Nashville.

And finally, he talked about the New Year’s Day show in Atlanta and noted there is no NFL competition and that 350,000 people are expected in Atlanta that weekend. They will be doing a lot of integration like Trae Young did.

* Khan then talked about their trading card deal with Panini which is a step up from their last card deal, and their multi-year deal with FOX on NFTs and digital merchandise.

* Stephanie then took over and joked about the “bad news” that Miz was eliminated from Dancing With the Stars, then pointed out how many people he brought the brand in front of with his appearance.

* She talked about their move from arenas to stadiums for PPV events, putting over SummerSlam as the most-seen in WWE history and huge in merchandise sales. She talked about the value of the “Summer of Cena” campaign and how it brought numbers across social media. She then talked about the return of Brock and Becky Lynch’s returns and how they were huge for the company.

* Stephanie talked about how their new sponsor partnerships were a boost for them and talked about moving from transactional to contractual, pivoting to multi-year ad partner details. She said that growth sponsorship sales are up and laid out the four key areas of growth here: content integration, superstar brands, digital/social, and international, and talked about how they used those deals and how things like the zombies and Old Spice integrations gave new opportunities to their partnership which had good results.

* Stephanie then compared WWE to the MCU, listing each superstar as their own brand or franchise. She mentioned Xavier Woods’ UpUpDownDown as an example, as well as Miz’s reality show. They plan to expand localization of such strategies.

* Stephanie said engagement metrics are strong for WWE, noting slight increases in TV ratings for Raw and Smackdown despite competition and a focus on content on younger platforms like SnapChat and TikTok, the latter of which has them as the #1 brand over the NBA.

* She then said they’re excited for the launch of WWE 2K22 in March and are pleased with their performance for the quarter.

* Salen then took over and went over the financial results, calling them “solid” and pointing out the focus on return to live revenue. You can see the financial results here.

* The Q&A portion began, with the first question being about the streaming rights to Raw and international rights, and when they’d like to have those done by. Khan said that the deal for Day two rights will be done by the time they expire which is in the latter half of 2022. As for WWE Network negotiations, their inability to travel during the pandemic slowed down the process, but its sped back up and negotiations should be “in short order.”

* Asked about whether profitability for scripted and unscripted content, Khan said that it’s a flip of the model; and instead of self-financing films, they’re licensing to other studios which means no expense to them and profit. He said that have a lot going on and a lot of deals they haven’t announced soon.

* Asked about if social media was hurt by iOS 14.5 upgrade, Salen said that they weren’t affected by that and there’s been no negative impact on their advertising revenue and revenue continued to grow. The caller asked about NFTs and how they feel about the “role of the Metaverse and the digital online world,” and if Metaverse will be a big deal to them. Khan said he thinks it is robust for them now and will continue to be, and it’s here to stay.

* The next caller asked about the amount of mid- to upper-level management turnover, and what their organizational goals with that are, and whether there are additional changes. Khan said they want the most efficient business model that produces the most high-end content, and they’ve all looked to make sure they have the right people focused on the right things. For now they’re seeing that it works and they’re happy with how it’s going.

* The caller asked about NXT’s changes and how they felt about the progress and if they’re achieving the goals of the revamp. Khan said they wanted a younger, fresher in-ring approach and feel like they have it. He said some talent from the new NXT will be elevated to the main roster and their recruiting efforts as spearheaded by Triple H, Pritchard, and others are focused on young athletes not necessarily in the wrestling space. NXT will continue to build the way it’s building.

* Asked about their international content rights expectations in India and the UK, as well as MENA (Middle East/North Africa). Khan said that their deal with India with Sony is an all-encompassing deal, and BT is their partner in the UK and they’re having conversations about the Network there. They are making progress in MENA.

* Asked about WWE Network vs. linear such as NXT’s move, Khan said it’s a fine line and something they’re always talking about. It’s all about eyeballs, exposure, and delivering for their partners.

* Asked about sponsorship opportunities going forward, Stephanie said that there’s no reason why in the next three to five years they couldn’t be in the hundreds of millions. In terms of the strategy it’s about the four buckets she mentioned: talent, digital, social and international partnerships.

* Asked about live events, Salen said that the driver for 3Q to 4Q from a topline perspective will be live events, and they will have fewer PPVs due to the December PPV moving to New Year’s Day which is Q1. Live event optics will fall in line with that, and their demand continues to be at least at par with 2019 terms of ticket sales and per-event profitability. She also noted that network revenue is directly correlated with the # of PPVs they have in a quarter, and their adjusted guidance indicates strong growth.

* The next question asked if there will be more volatility in licensing and moving to the stadium volume, what that will do to weekly frequency of shows. Khan said that the amount stadium PPVs will have no impact on Raw, Smackdown, and NXT, nor touring. Salen said that in terms of licensing, their NFTs, partnership, Panini partnership, toy licensing and the like will have a positive contribution.

That ended the call.

If you use any of this recap, please credit 411mania.com.

article topics :

WWE, WWE NXT, Jeremy Thomas