Thursday, 01 May 2014 09:20
While a loss of $8 million for the quarter would in general not be considered good news, the WWE beat its own expectations which were $12-15 million in losses for the first quarter.
For the most part, losses until late this year should be thrown out because 2013 and 2014 were always set as transitional years, with the expectation that the WWE Network and new TV deals would transform WWE as a business by 2015.
WWE offered no substantial information about a new domestic TV deal, not even hints. They felt they were on track to 1 million subscribers to the network by year's end, with goals of settling in at 2 million to 3 million in the U.S. and another 500,000 to 750,000 worldwide when things level off, which would be 2015 or 2016.
Investor Laura Martin was actually unhappy since she had anticipated much higher numbers based on the idea that there are 120 million homes worldwide with wrestling fans (a ridiculous number) and they told her they are being conservative.
However, even adding $4.4 million to revenues from March network subscriptions, overall gross income only increased from $124 million to $125.6 million. After-tax profits went from $3 million in the first quarter of 2013 to an $8 million loss. Pre-tax those numbers were $4.8 million in 2013 and a loss of $12.5 million in 2014.
Live event revenue was essentially the same as last year (up from $21.0 million to $21.7 million) and due to The Call, the movie division was up by $2.4 million from last year. Consumer Products were hard hit, mostly due to much lower video game royalties, which explains Mick Foley's comment recently about wrestlers being disappointed by their checks for the game.
In the Q&A, there was a direct question about the wrestler payoffs for PPV shows gonig forward since actual PPV revenue is down, and they were told the company has not made a public statement on that question, so wrestlers still won't know how payoffs for Mania will compare with last year.
Worldwide buys for Royal Rumble right now are 467,000 and Elimination Chamber (which was not a PPV in the U.K.) did 183,000. Both are down from last year, but that was expected with no Dwayne Johnson on either show. However, the shows may end up more profitable.
About the only new info is that in March, they took in 88.9% of the revenue from the $9.99 network price, a higher figure than antiicpated. They said going forward the number will be 80 to 90 percent.
They are filming a new season of Tough Enough for the network, as well as introducing the Monday Night War show that they talked about at the presentation, and doing a second season of WWE Countdown.
They also noted that the actual profit margni for Total Divas is small, because of the costs involved with the show that they bear, but that it's more ownership of content that can be utilized forever.
Web site merchandise sales were up a solid 20 percent compared to the first quarter last year.
WrestleMania, which took place in early April, is not figured into any of these numbers.
A complete breakdown of the business numbeers and what they mean will be in the next issue of the Observer.