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WWE Q4 Earnings Call Recap – Vince, Stephanie & Others Comment On WWE/Peacock Deal



Following their Q4 financial report, WWE held a conference call with their investors. Vince McMahon, Stephanie McMahon, WWE President Nick Khan, CFO Kristina Salen and others all spoke during it. You can check out some highlights from the call below:

* McMahon put over the company’s results in a challenging environment, noting that they haven’t missed a week in creating new content and said that they’ve shown their product’s flexibility across several different venues and praised the branding of the ThunderDome.

* Vince said that he wanted to point out the Peacock deal, and said that it’s the only major deal like that announced since the pandemic started. He said it was a great value for fans and talked about how they get the content of the WWE Network plus more with Peacock for the same $9.99 price.

* McMahon noted that the company expects a gradual return to shows with audiences, but neither they nor anyone else can say what the live event landscape will look like including how many fans can attend. He noted that WWE has the ability, once they can, to turn around a live event and run it within six weeks.

* Nick Khan took over and talked about the WWE Network deal with Peacock. He said that there’s no upcharge for WWE PPVs and pointed out how they discussed on the Q3 financial call how NBC and Disney had made streaming a priority. They had already been in discussions with potential partners before that, and ultimately decided to go with NBC as they were right for the company.

* Khan said that the Superstar Spectacle had a record level of engagement with over 20 million viewers on Sony platforms in India which was five times what Raw and Smackdown typically does in the country. He noted that they’re still waiting for the Live+7 numbers in the market and said they will be doing more such events.

* Khan talked about Bad Bunny appearing at the Royal Rumble, saying it was a specific decision to appeal to Latin markets. He talked about the success of the performance and Bad Bunny’s getting involved physically both at the Rumble and his appearance on Raw, which brought in a lot of mainstream media reporting and strong viewing numbers on social media and YouTube.

* Khan then moved on to WWE Studios content, which they are licensing now. Khan noted that they’ve sold a new multi-episode series that is created by and voiced by John Cena to narrate, and have also closed a deal to join NBC’s Young Rock by integrating content there. Khan also said that a deal has been signed to create WWE Championship replicas that will use the branding of many top sports teams.

* Stephanie McMahon then took over and talked about how she learned how to be ahead of the curve by her father, and how they have done so throughout the years whether WrestleMania, joining YouTube early, and jumping on social media. She said they’re doing that again with their deal to license the Network to Peacock.

* Stephanie said that with the changes in the media landscape, which was accelerated by the pandemic, there is a need for branded content. WWE recognized that they needed to pivot and have partnered with NBCUniversal to create content. Stephanie touted the company’s long-term relationship with NBCU and noted that it brings WWE more viewers through Peacock as well as integration between WWE and NBCUniversal’s properties.

* Stephanie also talked about how the WWE shows have held steady, with Raw viewership “essentially unchanged” while Smackdown is up 8% (Ed. Note: these are very carefully chosen numbers; Raw viewership was down 29% from 2019 to 2020 and Smackdown viewership was down 13%).

* Stephanie also praised WWE’s visibility through Sasha Banks’ appearance in The Mandalorian.

* WWE CFO Kristina Salen ran through the reported numbers.

* Salen noted that the company will return to working on the new WWE Headquarters and other technological infrastructure spending in the middle of the year, with reports on that to be handled once they finish calculating those numbers. Due to the pandemic, they’re not reinstating quarterly guidance yet.

* The Q&A portion came in and a caller asked about the costs of moving to Peacock. Salen said that they will have some expenditures in the first quarter of 2021 due to the migration, and will have some technology savings but it will be offset by overdue technology investments.

* The next caller was also wanting to know about the financial impact of the Peacock deal, asking if there were revenue offsets to the aside from subscriber revenue going away. He also asked about how sponsorship may change and how Peacock’s team may help with sponsorship sales. Stephanie said they can’t comment on specifics of the deal, but they’re looking forward to amplifying the partnership. As to the revenue side, Salen said it was embedded in their guidance and it’s incremental with no other offsets besides that.

* The caller also wanted to know if there was an ability to move higher-profile content off PPVs and onto Raw to help with ratings. Khan said they’re always looking for ratings growth and it’s about exceeding NBCU’s expectations, and if both parties agree they can do that. However, for now it’s about helping Peacock increase their subscriber base.

* The next caller was asking about international Network plans and he said they’re always looking at options, and are open to the idea of licensing internationally the way that they now are in Canada and the US. It is something that they are looking into.

* The next caller asked new revenue opportunities from here with the Network rights done and TV deals in place. Khan said that their international plan is just getting started and they see a lot of room for growth. He added that they’ve already seen an uptick in

licensing and sponsorships. In terms of scripted and unscripted they are also just getting started and ran down a lot of what he said in his prepared comments about the replica titles and such.

* The caller also asked about reversing rating trends and what’s being done to enhance that. Khan said he doesn’t believe they’ve lost eyeballs, which have just moved to digital platforms. He said they’re always looking to grow ratings and with the focus off the presidential race which had a lot of attention, the eyeballs are there and they and their network partners feel that way.

* The next caller asked if the industry will move the way they did to licensing rights instead of operating their own platforms. Khan said that is NBC is unique in their reach among media conglomerates and pointed out how their announcement of the next three WrestleManias was able to go viral during the NFL game. They feel very good about how that played out and at that time, it was a bit of a tease because they already had the deal with Peacock complete. Khan said that they’re finalizing their PPV calendar for 2021 and will be able to promote them via big NBC events.

* Salen again pointed out that there will be no upcharge WWE special events like PPVs on Peacock, and they are still doing the accounting to make sure it is properly reviewed. Khan added that FOX noted that the FOX Sports 1 Royal Rumble special brought in over one million viewers.

* Asked how NBC will value their deal with WWE, Khan said that it came down to three things: Rating, R and Revenue in terms of partner satisfaction.

* Khan was asked how NBCSN’s shutdown may affect things like NXT scheduling and if they’ve considered moving NXT to Peacock. Khan said that they believe NBCSN’s shutdown will have no impact on them and this is just a case of media streamlining.

* Asked how the Peacock deal might influence future TV deals and if they’d license Raw and Smackdown to digital platforms. Khan said they would look to their current partners first in all situations, but said they’re open to anything. He pointed out how Amazon has tested live sports in the UK and elsewhere and they’ll see how that shakes out, but he thinks they have their finger on the pulse of what networks want.

* They expect a significant year-over-year expense increase due to higher production costs for Raw and Smackdown, with TV production expense currently up 25% per episodes as well as the return of furloughed employees. And the biggest X factor is the return of live events, which a lot is still not known about and is anyone’s guess in the live events world.
Healthy George

* The last caller asked about the profitability of the Saudi events and the OBIDA impact of them. Salen said that looking at the Q4 report will give a good baseline about what the absence of a big event like that does, which was a major impact that they’re seeing very starkly in the results. Asked if multiple such events in a year have the same stacking profitably increase, she noted that there are so many factors that it would be a highly theoretical conversation.

* They closed out the call at that point.

(h/t – 411 Wrestling)

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