WWE held a conference call to discuss their first quarter numbers. Linda McMahon, Chief Executive Officer and Michael Sileck, Chief Financial Officer, read prepared statements on the state of the company, then took questions from investors.
– Linda McMahon’s statement put a positive spin on just about everything, particularly concentrating on DVD sales and overseas business..this is nothing new. In an interesting reference to the last conference call, where investors angrily went after WWE for sitting on huge cash reserves, Linda said that WWE were currently examining the possibilities regarding the reserves, and would let stockholders know when they had finished their “strategic review” of the situation and determined a course of action.
Here are your highlights;
– The lawsuit with Jakks Pacific is “slowly progressing” through the courts, and they are looking at setting timetables for discovery in the case.
– Linda said the five-year relationship with SpikeTV was “good for us”, but stated that USA has “deeper penetration” and that USA Network is preparing an “awesome” launch for them, with the push starting next week. Linda said going to USA Network was “going home” for them.
– They expect The Marine, starring John Cena, to be released in the first six months of 2006. They are in final editing now, and shot a few additional scenes recently, since scenes had to be replaced in order to get the PG-13 rating they wanted for the film.
– Linda put over that WWE 24/7 has done very well on Rogers Cable in Canada, and they are seeing an increase in subscribers on all cable systems in which WWE 24/7 is available. WWE currently is in discussions with all major cable companies to carry the service.
– Linda put over the merchandise sales via the Internet, crediting the improved look of the site, better merchandise packages, and the overly popularity of their characters.
– They are in final negotiations for a distributor for The Condemned, the movie that will star Steve Austin.
– Regarding the lift in buyrate for Vengeance this year versus last, Linda credited the appeal of “veterans vs. younger stars” and the draw of the Hell In A Cell match.
– It was discussed how baseball hurt Taboo Tuesday last October, since it was a “hot series” and drew away from their events.
– Linda talked about having the first hour of Smackdown on the web, due to the hurricane telethon shortening them to one hour on UPN for their Friday debut. Linda noted that she wished they were not debuting on a new night in such a fashion, but it was out of their hands. She praised the networks for having the telethon.
– Linda admitted that due to baseball preemptions in major markets, the Smackdown brand will have a difficult first month in bringing their audience to Fridays, but she felt that they can make the audience grow in that slot.
– If there is a dramatic increase in ratings while on USA during the course of the three-year deal, it does not change the financial terms of their contract with USA Network. WWE will make the same amount off the deal. Linda noted that increased ratings will lead to increases in other revenue streams for the company (merchandise, PPV buys, live attendance).
– Linda put over the increase in live event attendance.
– WWE is still in negotiations for several more available wrestling tape libraries, both large and small. Linda said they have only scratched the surface of what they can do with the classic footage. She said around 65 former stars have been signed for the “Legends” initiative.
– When asked, Linda actually didn’t know how many hours they were reducing their programming by on cable with the move from Spike to USA. She said three, then two (which is right) then said she wasn’t sure. She said that they are producing a two hour Raw, and a one-hour Saturday morning Raw-brand weekend show for USA Network.
– Nobody asked, nor was the information volunteered, as to whether the decrease in shows would hurt revenues, which it probably will. The decrease should be minimal, with the majority of lost revenue coming from advertising.
– She said there were over 75,000 known hours of programming in their current tape library, with more being added.