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WWE Q4/full 2019 financial results & audio: Revenue, Network subs, more

This post was updated at 12 PM Eastern.

Prior to their investors' call Thursday morning, WWE released their 2019 Q4 numbers, showing 18% revenue growth to $322.8 million, good for their highest quarterly revenue in company history.

The reason for the increase was revenue from their new TV deals, offsetting lower revenue from their live events. Quarterly net revenue in Media increased to $264.6 million, up from Q3's $205.3 million. Year over year, Media net revenue increased to $743.1 million, up from 2018's $683.4 million.

Despite the increase, Wall Street didn't respond favorably as the stock was trading at $42.34 as of this writing, down $6.62 from Wednesday.

Notes and audio from the investors call can be found below by clicking the red button 'Right Click Save.'

A few quarterly notes from their release:

  • An increase in operating income of 87% to $99.8 million due to the increase in TV rights fees.
  • $107.6 million adjusted OIBDA, an increase of 67%.
  • WWE Network subscriptions dropped by 10% to 1.42 million. They are predicting a slight increase to 1.47 million for Q1 of 2020.

Some key highlights for 2019:

  • Yearly revenue was $960.4 million, a record high for WWE.
  • Operating income was $116.5 million.
  • Their adjusted OIBDA was $180 million, the third straight year it has increased.
  • $120.8 million back to shareholders by way of share repurchases and dividends, a company record.
  • New and renewed content distribution deals with BT Sport and Channel 5 (UK); Fox Sports (Latin America); PP Sports (China), and SuperSport (Africa)
  • Video views increased by 10% to 34.5 billion with hours consumed increasing to 1.3 billion across both digital/social media platforms, up 7%.
  • There was an interesting note regarding their 'Cash flows generated by operating activities' decreasing to $121.7 million (down from $186.7 million) "driven by unfavorable changes in working capital primarily related to our fourth quarter event in Saudi Arabia and the payment of the prior year’s accrued management incentive compensation."

Quarterly and yearly notes for Live Events/Consumer Products/Network

  • Quarterly live event revenue increased to $27.4 million, but was down from last year's $34.4 million. The lack of a supershow in Australia was blamed as well as less events.
  • Excluding NXT, WWE held 70 shows in Q4 (50 North America and 20 International). That's down from 2017's 87 Q4 events (64 North America and 23 International).
  • Year over year, live event revenue fell to $125.6 million, down from $144.2 million in 2018. That was attributed to 56 fewer shows, lower average attendance, and the lack of an Australian supershow. 
  • Average North American attendance increased by 15% to 5800 with an average ticket price of $57.13.
  • Average International attendance decreased to 4100 with a 30% average ticket price increase to $84.26.
  • Quarterly consumer product revenue increased to $30.8 million, but was down from last year's $32.8 million. Year over year, it was down to $91.7 million from 2018's $102.6 million. Lower video game royalties were to blame.
  • The loss of Mixed Match Challenge on Facebook Watch contributed to a $7 million decrease in the Other category for Revenue. 
  • Yearly Network revenue was down to $184.6 million, down from $199.3 million in 2018.
  • WWE entered into agreements for slot machines and ice cream sandwiches, inspired by the classic sandwiches from the 1980s.

Here are what they are looking at for 2020:

  • An estimated 2020 OIBDA of between $250-300 million due to the full year of revenue from their TV deals with Fox and NBCUniversal
  • Content distribution deals in the Middle East and India which has been discussed in previous quarters.
  • The "evaluation of strategic alternatives" for WWE Network, something that has been discussed for a year.

Call Notes

  • In the most intruiging and game-changing part of the call, Vince McMahon says that the "selling of our rights to the majors" could be a significant revenue increase for the company, adding there is very strong interest in it. At this point, there's nothing that would stop the company from selling the rights to their major shows like WrestleMania, Royal Rumble, or other entities, according to interim CFO Frank Riddick. That would indicate big changes to the Network are coming and coming soon.
  • McMahon said Barrios and Wilson leaving was due to differences in the vision of the execution of plans going forward, but that the company won't miss a beat.
  • They are confident the content deals in MENA and India will be done, but the timing and finances are what is uncertain. MENA would be a new deal while the India deal would be incremental money as they already have an existing deal. Regulatory and government matters are what have held things up.
  • McMahon was asked if AEW has changed anything for them. He said it hasn't as WWE's focus remains on storylines and resolutions. NXT continues to compete against them.
  • They were asked repeatedly about the XFL, forcing McMahon to reiterate several times that WWE and XFL are two separate entities completely.
  • Talent costs have increased as revenue as increased as they get a percentage, something McMahon says he's quite proud of.
  • Even though McMahon has a few more direct reports, he said he can handle it. "I've got broad shoulders and I can handle a lot."

Click below to listen free:

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