Thursday, 31 October 2013 07:46
A relatively quiet earnings call this morning with the big news really being no big news, as nothing substantial was announced regarding the network or a launch date past the point they are exploring options in both traditional and over-the-top means.
While no time frame was even hinted at, Stephanie McMahon did an interview today in Broadcast & Cable and listed a planned first quarter 2014 launch.
Company revenue for the quarter increased from $104.2 million in the third quarter of 2012 to $113.3 million, but profits declined from $3.5 million to $2.4 million.
But that is misleading because they put on the books a $7 million impairment charge based on losses heavier than inititallly projected in the movie division for films released between 2010 and 2012 under the former distribution model.
It was made clear that they expect huge growth even without the network, based on negotiations of new television deals next year for Raw and Smackdown in the U.S., U.K. and India. When it comes to late 2014 and 2015, the biggest thing for the company will be how much they can negotiate the new deals.
In the U.S., USA and Syfy have periods of exclusive negotiations. Vince McMahon estimated it would be around April when the new deals, which would go into effect in September/October would be completed. Currently, WWE receives far less for rights fees for its two main shows than most anything on television that draws comparable viewership. That is the key in expecting the ability to grow revenue significantly, as all the major sports have done in recent contracts.
The company made several references to compare their product with NASCAR, which has tremendous broadcast deals and has achieved huge growth in recent contracts.
If you throw out the movie division losses, the profit would have been $7.0 million so the wrestling is doing better financially largely due to increased rights fees from Total Divas and Main Event being added, as well as better live event attendance in the U.S. and internationally.
The key metric was television revenue was up from $34.0 million to $44.1 million for the quarter worldwide. There were some incrimentla increases in deals that helped, but most of that increase was rights fees for the new programming.
Worldwide buys for the three PPV events were 199,000 for Money in the Bank, 296,000 for SummerSlam and 175,000 for Night of Champions. PPV revenue was down 10%, a decline offset by more late reported buys from previous events.
Vince McMahon said PPV is attraction driven.
"SummerSlam was not the right attraction. You don't knock them all out of the park. That one was a swing and a miss."
A complete analysis will be in the Observer after the more detailed filings on the quarter come out likely in about a week.