WWE 2nd Quarter Earnings Call Report: Vince McMahon’s Leave, UFC-Merger, Media Rights

Welcome to Ringside News’s live and continuous coverage of WWE’s second-quarter earnings conference call.

Seth Zaslow extended a warm welcome to all the participants to open the call.

Following the introduction, Nick Khan expressed gratitude to everyone for joining the call. He proudly shared that the company’s second quarter results had exceeded the high end of their guidance. He further emphasized that WWE is well on track to achieve a record-breaking year.

Nick Khan provided an update on the TKO transaction, expressing their continued enthusiasm about the merging of UFC and WWE. He revealed that they anticipate the deal to be finalized during the second half.

Furthermore, he shared that WWE is presently engaged in negotiations for the media rights of their flagship shows, including Raw, Smackdown, and WWE NXT. These developments highlight WWE’s commitment to exploring new opportunities and securing partnerships to further expand their reach and impact in the world of sports entertainment.

Nick Khan discussed the ongoing negotiations for the media rights of WWE’s flagship shows, Raw, Smackdown, and WWE NXT. He praised the impressive viewership numbers of these shows during a time when overall viewership across the board has experienced a decline. Notably, Raw and Smackdown saw an increase in viewership, while the key demographic numbers for cable networks saw a double-digit decrease.

Khan specifically highlighted the positive reception of WWE NXT, describing it as “surging with younger audiences,” indicating the brand’s popularity among the younger demographic.

Furthermore, Nick Khan informed the participants that WWE Chairman and CEO Vince McMahon is currently on a medical leave of absence following major spinal surgery. In respect of his privacy, they will be supportive and understanding as he takes the necessary time to recover.

Nick Khan shared some impressive statistics regarding WWE’s recent pay-per-view events. He mentioned that Backlash achieved its highest-ever grossing and viewing numbers, making it the most successful Backlash in WWE history. Similarly, Night of Champions became the highest-viewed event from Saudi Arabia to date, indicating the growing popularity of WWE in that region. Additionally, Money in the Bank reached record-breaking levels in both viewership and revenue, solidifying its position as the most successful Money in the Bank event ever.

Looking ahead, Khan promoted this weekend’s highly anticipated Summerslam event, revealing that an impressive 43,000 tickets have been sold so far. With strong ticket sales, WWE is on track for a sellout at this major event.

He also highlighted the international appeal of WWE events, revealing that more than half of the attendees at WrestleMania 39 came from outside the local area, with 15% of the audience traveling from international markets. This global attraction reflects the widespread fanbase and international popularity of WWE.

WWE expresses enthusiasm in collaborating with local governments for hosting international events and plans to make future announcements in the coming months regarding these endeavors.

At present, their events in North America are drawing an average of 10,000 fans per event. WWE has observed a significant increase in fans purchasing tickets well in advance compared to traditional patterns.

Merchandise sales at Wrestlemania, Backlash, and MITB were notably successful.

Nick Khan expressed appreciation for the partnership with Fanatics, emphasizing the remarkable surge in merchandise sales through e-commerce.

Sponsorships have experienced substantial growth, with Elimination Chamber sponsorship reaching a 200% increase. WrestleMania set new records for sponsorships, while Backlash and MITB sponsorships also saw significant rises. MITB became the most successful international event in terms of sponsorships in WWE’s history.

By August, WWE has already achieved its most successful sponsorship year to date, marking a significant milestone in their business.

Frank Riddick expressed the company’s anticipation and eagerness to finalize the Endeavor transaction at the earliest opportunity.

He proceeded to provide a comprehensive review of the financial figures and key metrics that were previously announced in the press release for the quarter.

During the Q&A session, Brandon Ross inquired about the extended duration of media rights negotiations compared to previous times. Nick Khan explained that this time, the numbers involved in the talks are higher, leading to more detailed and comprehensive discussions. Despite the lengthier process, WWE remains positive about the outcome and is confident about securing the deals they desire.

Regarding the changing landscape of OTT (streaming) platforms, Khan discussed WWE’s approach to this aspect of their new deals. He highlighted WWE’s history of innovation, mentioning their launch of the WWE Network in 2014 as the third to enter the streaming market. They later transitioned to Peacock due to market conditions. Khan emphasized that OTT buyers have shown considerable interest in WWE’s flagship shows, Raw, Smackdown, and NXT. He stressed the significance of the OTT deal with Peacock, drawing inspiration from the NFL’s approach to securing deals when needed.

Despite WWE’s success and positive outlook, they have not raised any guidance yet, as the Endeavor transaction is not yet finalized.

When asked about any potential connection between NBA rights deals and WWE’s current negotiation status, Nick Khan stated that they do not believe there is a direct connection between the two.

Lastly, Nick Khan expressed concern and hope for a swift resolution to the SAG-AFTRA and WGA strikes, acknowledging the challenging situation and its impact on everyone involved.

WWE was questioned about the timing mismatch between Peacock and their media rights deals and whether they would consider a one-year extension to align everything for simultaneous free streaming. Nick Khan responded that the marketplace is not suggesting a one-year extension. He emphasized that digital players understand the value WWE content brings to Peacock and that they are actively engaging in discussions with all digital content partners.

Regarding the UK and India markets, Khan stated that WWE is well-positioned in the UK. In terms of India, he mentioned they are “two years out,” indicating a strategic plan in place. Khan expressed excitement about the upcoming September event in India and Sony’s enthusiasm for it as well.

WWE provided an update on the closing of the TKO deal, stating that they have consistently communicated that it is expected to be finalized in the second half of the year. They highlighted that the regulatory processes involved in such transactions can often be time-consuming. WWE has already provided all the necessary information to facilitate the approvals required for the deal. Importantly, they clarified that there are no undisclosed or hidden factors (“x” factor) involved that the general public is not aware of, indicating transparency in their communication with investors and stakeholders.