This morning the WWE is holding a conference call to discuss their recently announced television deal with NBCUniversal and things related to WWE. Today’s call was hosted by WWE Chairman Vince McMahon, WWE CFO George Barrios, and WWE Investor Relations Michael Weitz.
-Vince McMahon said he hoped to give “a great deal of clarity” regarding where things are from a business standpoint. McMahon said the point of the call was to clear up any degree of misunderstanding and said they pride themselves in transparency.
-McMahon said there was a “somewhat favorable outcome” in television deals. He said they were a bit disappointed in their NBCU deal, but they almost doubled their overall TV rights revenue. “A good deal, not what we wanted.”
-McMahon said the WWE core business is “rock solid” and feel very confident about the business model. McMahon turns the call over to Barrios.
-Barrios states WWE has invested $75 million into the WWE Network in 2013 and 2014, $40 million in having a staff.
-Barrios states that WWE is still working on a television deal in India. He said that their analysts “indicated that our content was undervalued in several of our key markets.” He said that WWE was correct in three out of four markets.
-Barrios said that if the WWE Network does achieve one million subscribers by the end of 2014, the 12 month average would be 650,000 subscribers for the year. Rate of adoption translates to a 2014 net loss ranging from $45 to $52 million.
-Barrios said there is a $60 million cannibalization number in the United States for pay-per-view, and an additional $20 million worldwide.
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-WWE started taking calls. An investor stated that investors are worried about the dividend. The investor wanted to know if the dividend was going to be ok. Barrios said that if they are successful executing the WWE Network strategy then they have the financial capacity to support the dividend, but that depends on successful execution.
-A caller brought the executive that was let go last week and if any other changes in staff would be taking place. Barrios said they were fine with their current management structure, but would not get into anything.
-A caller brought up how current subscribers have the Network. Barrios said WWE will only be announcing Network numbers during their quarterly calls.
-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 the Network. Barrios stated they are promoters at thecore and they have a team of marketers. He said he didn’t want to let the cat out of the bag regarding any future plans for the Network.
-A caller asked what type of growth they have to see over the next 12 to 24 months from network growth. Barrios once again said he can’t give an exact number.
That was the end of the call.