wrestling / News

WWE Q3 Earnings Call: Triple H Touts White Rabbit Success, Talks International PCs, More

November 2, 2022 | Posted by Jeremy Thomas
Triple H - Mae Young Classic WWE NXT Image Credit: WWE

WWE had their Q3 financial results call on Wednesday with Stephanie McMahon, Nick Khan, Triple H and Frank Riddick discussing their performance, the success of the White Rabbit Project, their international Performance Center plans and more. You can see a recap below:

* The call gets started with Stephanie McMahon, Nick Khan, Triple H, and Frank Riddick all announced as being on the call, and the usual legal disclaimers are given.

* Stephanie takes over and says Q3 was another record-setting quarter for the third quarter, and she says they’re on track for record revenue for the full year. She puts over the “increased energy” in response to their creative changes and talks about how ratings are up year-over-year while networks as a whole are down. She says the September 23rd episode of Smackdown had its biggest audience since 2020 and credits “The White Rabbit Project” for the boost. She said Triple H will talk more about it and said that the PPVs are up 38% in viewership year-over-year. She says that Clash of the Castle was the most viewed international PLE and the highest-grossing European event.

* Stephanie puts over the relaunch of WWE Shop with Fanatics and says that product will be scaled by 25%. Panini has delivered as well. She said the success is due in large part to a focused effort on putting merch in storylines and an expansion of their partnerships, naming the partnership with MLB for custom championship titles as an example. They also are bullish on sales and sponsorships and are optimistic about their performance in 2023. She said they’re all excited for opportunities ahead with a focus on five areas: their media rights, international Performance Centers, monetization of IP, digital and Web3/Metaverse, and “potential MNA that aligns with our core competencies.”

* She then turns over the call to Nick Khan, who reiterated that it’s been another strong segment, focusing on live event gross. Extreme Rules 2022 was the highest grossing of that event, and he notes sales spiked when the White Rabbit Project began. He says looking ahead to 2023, they’re going to San Antonio for the Rumble and ticket sales have already surpassed this year’s Rumble. The gross gate revenue thus far already exceeds $4.8 million and puts them on track for the highest-grossing Rumble. Elimination Chamber in Montreal is the first PLE there in 14 years and they anticipate high demand. They’ve sold almost 100,000 tickets already for WrestleMania next year. He notes that they worked closely with the Cardiff government to secure a site fee for Clash at the Castle. He puts over the live events being a boon to the local cities’ economies and points out WM’s impact on Dallas this year.

* Regarding media and international, he points out several international expansions including Foxtel in Australia and Binge being their streaming home there. He also points out their new deal in the Caribbean in CNW, and announces a new rights deal in Sub-Saharan Africa where they’ve extened and grown their partnership with Multi-Choice Group. Their content will be bow be available on ShowMax there. The deal also involves the introduction of new, locallized content including a talent search in Africa. Their recruiting team will head to Nigeria to start the search.

* He then puts over Crown Jewel taking place this weekend and says they’re seeing early success internationally with local language Originals from WWE Studios such as Contra Las Cuerdas about an aspiring luchadora which debuts on Netflix in Q1 2023. Also in 2023, WWE Studios debuts a new series on Hulu with Bianca Belair and Montez Ford that will run eight episodes and is in production. They recently extended their Raw re-air rights with Hulu. He put over the A&E content and said they’re up 15% in ratings year-over-year in the timeslot.

* Khan said they’re confident as ever about their media rights and are seeing increased viewership across content and think they’re well-positioned as they begin media rights talks next year. He noted that they’re watching Amazon moving toward live sports programming such as their deal with Amazon and are confident going into the new year.

* Triple H then took over the call and said that they have strong viewership across programming because the creative is working and resonating with fans. He put over the growth over their social channels and are outpacing the #2 sports league on video views online by over double. They are also exceeding their own records, noting that their Instagram and Twitter accounts are seeing record numbers for themselves which includes increased ad revenue. WWE is the eighth most-viewed channel on YouTube and surpassed 70 billion lifetime views, one of only seven channels ever to do so. They are the most followed sports league on TikTok by a wide margin.

* Triple H then talks about the White Rabbit Project and how it impacted viewership, doing a brief overview of the viral nature of the project and the use of QR codes and breadcrumbs, ARGs and the like to decipher. He puts over how the project drove viewership on the 9/23 Smackdown at 9 PM by a 20% increase.

* He says Bray Wyatt’s return had a 30% viewership increase for Extreme Rules and boosted Raw as well. It also drove sales, with Wyatt’s new shirt becoming the top selling shirt across all Fanatics’ sites. He said they plan to do similar content across non-traditional means.

* He then talked about the WWE Campus Rush recruitment tour, running through the basics of that, as well as putting over the WWE NIL program, and expect to see more top college athletes in the development system.

* Triple H then turned to the “increased excitement” in regard to creative and that has allowed them to bring in more celebrities, and put over Logan Paul vs. Roman Reigns at Crown Jewel. He hinted at the idea of Jake Paul being there as well. And then he put over Survivor Series: WarGames.

* Frank Riddick then ran through the slides of the financial report.

* Riddick noted that the investigation into Vince McMahon and “another executive,” noting that it is now complete and disbanded. They’re working with the committee to implement the recommendations from that investigation. The Q3 results include an $18 million expense associated with the investigation’s costs. Going forward they expect additional costs and said Vince has agreed to pay reasonable costs for the investigation not covered by insurance.

* They then went to the Q&A and the first caller asked Riddick about how the cost structure grows in the coming year, and how they think about strategic reinvestment. Riddick said that they see the need to invest in content creation as they head into WrestleMania. They haven’t determined margin guidance for 2023 yet, but they’re trying to strike a balance to maximize their rights.

* The caller then asked Triple H about what the core tenets of the creative philosophy are and how they plan to manage it over a year. Triple H said that looking at the year-long cycle over that year and pick places you want to go to, put them into your “creative GPS system” and how you want to get there. He said they’re looking further ahead than they ever have and said he’s already looking ahead to later next year.

He said the further they can get ahead of it the better and acknowledge that things like injuries and the like can impact that, but pointed out that they’re doing what they’re doing without Charlotte Flair, Becky Lynch, Cody Rhodes and Randy Orton. He also talked about focusing on character development and bringing starts up from NXT and developing them so that fans are invested in them. And it’s about keeping things fresh, doing outside the box things and some will work while some won’t. He said he isn’t afraid of the losses and that’s where they learn, and it’s about moving forward to have a plan of where you want to go.

* The next caller asked Nick about the US renewal prospects and what metrics they’re looking at and why they’re so positive. Khan said they look at the “three Rs” — ratings, relevancy, and revenue — and that they’re firing on all cylinders as is the marketplace regarding how they’re paying for that. The caller also asked if there will be one or more subsidies like Cardiff and Khan said they expect there will be more there, there’s an offer for a PLE that they like already and expect more coming.

* The next caller asked Triple H about the change from NXT UK to NXT Europe, and what the timeline is for other expansions. He said that when they starred NXT UK, the hope was to replicate what they were doing in the US and they had to rethink it after COVID hit. He said it’s hard to rebrand/reboot while you’re running it which is why it went on hiatus. He said when it comes back it will be more like what happens in the US with recruitment and development. They’ll partner with people and bring talent in to train and develop, making it a feeder system for WWE. He believes that localized band globalized brand is very attractive to partners. He said Europe is an interesting hub for other markets, making it a closer place for outreach to places like India. He said once Europe is established, they’ll look into branching to other markets.

* The caller asked what they think their timeline is for NIL athletes to develop and get to NXT or the main roster. Triple H said that the difference with collegiate athletes from NIL is that they’re used to being trained at a high level and they’ve gotten good at predicting a short window for them. He said they have some talent now appearing on NXT programming that have only been in for six to eight months. He said they’re picking it up very fast and the future is bright.

* The next caller asked Stephanie about acquisitions. She said that they are looking at smaller strategic opportunities short term, and long term who knows? The caller also asked Khan about the rights fees in Canada expiring soon. Khan said the market there is strong for them, especially with the number of US-based companies that have gone international. They love their relationship with Rogers and will see what the future brings.

* The next question was for Khan about cord cutting and revenue concerns regarding that, and whether packaging linear and broadcast is the goal or to separate to broadcast and streaming, as well as asking Riddick about the Hulu rights. Khan said that they believe nights of the week matter in terms of ROI and that Raw on cable, Smackdown on broadcast and PLEs on streaming has worked well because they can test out all the different platforms. They’re happy with all of them and acknowledged that there will be fewer basic cable opportunities. He said that streaming is best for scripted and linear (broadcast) is best for live and they like the way it’s heading. Riddick then said that the Hulu rights doesn’t say anything about their rights value and acknowledged that they chose a shorter deal because it was better for them.

* The last caller asked about the importance of markets outside of the United States and how they rank. Khan said the live events and the rights deals are one in the same now and talked about how their international PLEs are tied into selling the local markets on their value. He said UK matters, Canada matters, APAC matters, Australia, saying they shoot for a global localized product. He mentioned the Africa talent search and how it can be a big win for them.