On Thursday, WWE reported their 2015 fourth quarter results. During a conference call, Vince McMahon and other key executives spoke on their yearly and quarterly grown.
Here are some key bullet points and takeaways from their fourth quarter report:
The Good:
- WWE recorded a net revenue of $166.2 million (+18% year-over-year quarterly growth).
- As for net revenue, the company recorded $658.8 million (+21% year-over-year annual growth), which is the largest total net revenue in WWE’s history.
- Live events were up due to higher domestic ticket prices and had higher international attendance, which includes the NXT tour in London.
- Television rights continue to grow due to built-in contract escalators which ensure that key agreements pay more quarter-over-quarter regardless of any declines in ratings (timing for certain programs, such as Total Divas, can cause some quarterly fluctuations).
- WWEShop had a big fourth quarter this year, with $10 million earned from 214,000 thousand online merchandise sales (compared to 172,000 in Q4 2014).
- WWE Network subscriptions are currently at a total of 1,237,00 million, which helped in a monster $37.2 million quarter.
The Bad:
- After WWE released their fourth quarter report, WWE stock tumbled as the day continued and seems to trading about 7% off for the day.
- WWE took a hit as they wrote off $7.1 million dollars, which was the value of costs related to stalled media center expansion project dating back several years.
- Domestic (within the US) WWE Network subscribers as of December 31, 2015 had dropped by 50,000 compared to September 30, 2015.
Other highlights and talking points:
- When asked about WrestleMania 32 and the recent plague of injuries, Vince McMahon stated, “We’ll have an awesome WrestleMania,” and he ensured that the show will be “very attractive” to the fan base.
- During the conference call, CFO and Chief Strategy officer George Barrios answered most of the questions and fielded almost all of the questions.
- When asked to go into specifics on certain numbers, Barrios at times flat-out refused and declined to go into detailed numbers (keep in mind, this is common in the business world.)
- Barrios and McMahon really touted their “total ecosystem,” which includes YouTube and Social Media.
- Barrios and McMahon fielded some questions about the drop in TV ratings, to which McMahon responded, “Our audience is consuming our product when they want to and how they to.“
- Regarding the WWE Network in Japan, Barrios did note that while the country remained a great place from a talent perspective, WWE didn’t see Japan in the same group as a strategic focus such as India, China, the Middle East or Latin America.
- The remaining large markets not yet launched for the WWE Network are China, Thailand and the Philippines and Barrios noted that investors would probably hear about plans for at least one or two of those markets in 2016.
- Some asked Barrios about the possibility of licensing NXT to a TV station like USA Network, etc., to which he stated that he wasn’t going to talk about specific product lines, but noting that NXT “has a great social presence and is able to trend globally on Twitter.” He then stated that WWE is always looking at those possibilities.
- Barrios and McMahon really harped on the WWE Network; when asked whether WWE would consider partnering with another over-the-top service, Barrios stated, “We’re open to all ideas as long as they make sense for our audience and our shareholders.”
Overall, the conference call was about an hour long, with little from Vince McMahon. As stated above, George Barrios did most of the talking, and got annoyed at times by the lines of questioning. In the end, WWE did have a really good 2015, even though some fans would say that they have the worst year in company history creatively.
Thanks for reading, everyone.
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