Driven by their TV contracts, WWE’s 2020 third quarter revenue finished at $221.6 million, up 19% from 2019’s third quarter — part of an optimistic call and overall upward trend in numbers.
The company noted the increase was offset by the loss of both ticket and live merchandise sales due to the pandemic. On a similar vein, their ecommerce numbers grew to $9.1 million year-over-year, impressive considering they had 74 live events in the third quarter of 2019 in addition to online in which to sell merchandise.
Operating income was up to $63.4 million, an increase of 9x year-over-year, thanks to the content rights fees increase and a decrease in event-related production expenses. WWE noted they paid out $5.5 million in severance pay due to pandemic related layoffs.
On another positive note, average paid WWE Network subscriptions were up 6% year-over-year to 1.6 million.
The third quarter saw the creation of the ThunderDome structure, which will add “an incremental $22 – $27 million investment” which includes “increased personnel expenses as employees return from furlough” in the fourth quarter.
The company noted they have $638 million in cash and short-term investments — “substantial capital resources to manage challenges that may lie ahead and to deliver on key strategic initiatives.”
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Call Notes (audio below):
Vince McMahon opened the call by saying how confident he was in this group of executives. saying there is an optimism and “new spirit, new vibrance” with the group.
WWE president Nick Khan announced a multi-part Vince McMahon documentary has been sold to Netflix with WWE and Bill Simmons (The Ringer, Andre doc) as executive producers. Khan noted the financial investment will make the series one of Netflix’s most expensive on the documentary side. No release date was noted.
Khan said they are still exploring options for WWE Network to reach a wider audience, a callback to when McMahon said earlier this year they were exploring options and partners for the Network that were put on hold due to the pandemic. There is interest and they are talking to partners, both domestic and global, on a regular basis about licensing.
McMahon answered a question about ratings, saying they aren’t the only thing they look at. He said they have far more fans than they have ever had. “WWE ratings are what they are, but you just can’t hang a hat on ratings being down,” he said. He said that while their TV programming is a mothership, they are being seen on other platforms all the time. He said they are doing everything they can and that viewers have been coming back, pointing to the ThunderDome, better writing, and better execution.
Khan put over how strong WWE programming did head-to-head against the Stanley Cup Finals and an NBA playoff game featuring the Los Angeles Lakers and LeBron James. He discussed how linear TV has lost eyeballs, but that media consumption hasn’t and is confident their rights fees will continue to go up.
They are still negotiating the long-discussed Middle East TV deal with no timeline for completion. McMahon said it will get done.
They are partnering with Sony India on a 2021 event that will develop Indian stars. It will air domestically here, but they didn’t say on which platform.
Khan discussed how they are prepared for the future, and are paying attention to what the FAANGs (Facebook, Apple, Amazon, Netflix, Google) are doing with live TV.
On where ThunderDome could be moving to, CFO Kristina Salen said their assumption is they will be in “some kind of center for foreseeable future” into ’21 with “lots of places for them to go.” She didn’t confirm when the Amway deal is up or when they would be leaving.
Asked about NXT, Khan put over their ratings from Wednesday and didn’t comment on length of the USA deal but that Network subs have held without NXT there.
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