Vince McMahon Praises the Miz, Talks WWE Financial Year

From Buck Woodward –

“WWE held a conference call with investors today to discuss the company’s 2010 fourth quarter results, which you can check out at this link, as well as the entire 2010 financial year. Taking part in the call were Chairman and Chief Executive Officer Vince McMahon and Chief Financial Officer George Barrios.

Vince open the call by praising their performance over the year, but noted some “trends” in the fourth quarter that they were not happy with, particularly the decline in live event attendance and the huge 40% drop in home video. Vince talked about their continued international expansion, noting they just ran their first show in China, and they have signed new TV deals in Brazil and Russia. He talked about them “turning the corner” in terms of talent development, and how we would be seeing older stars mixed in with new ones at Wrestlemania, stressing we would see talent in main events that had never been in Wrestlemania before. Regarding the WWE Network, Vince said they have been in discussions with Verizon, with many more to come. Vince said that the company is continuing to expand, not just internationally, but by “clipping the model” and moving into new areas.

George reviewed the financial numbers, which you can check out at the link above. He mentioned retail declines as being the issue with home video, and talent development as the cause of the live event drop. Addressing the drop in PPV buys, it was noted that the increase in the price of PPV events helped offset the decline. Increase in TV revenue was put over, and the move of Smackdown to SyFy was mentioned. Mattel was praised for an increase in toy sales, while video game sales went down, with them noting an overall drop in the video game industry. They feel the new Superstars video game will bring sales back up. The revamped WWE Films model was discussed, with them stressing that they see their direct-to-DVD releases bringing in money over time. They said they would continue to monitor the new film model, and stated they feel it brings WWE to a new audience and builds the WWE brand. Barrios, while reviewing overall numbers, again stressed the increase in TV revenue, the success of the toys, and their own “financial discipline.”

A question and answer session was then held. Here are highlights of the session:

– Vince said they are on an “upswing” in terms of the talent cycle. He said that early indications from the Royal Rumble are that it is already happening, but he sees Wrestlemania as a major launching point for the new talent.

– It was noted that Mexico is now the second largest market for PPV buys outside the U.S. for the company. Last year, there were no PPV events in Mexico.

– The first quarter of 2011 will show the results of their first holiday toy sales since joining with Mattel.

– Regarding weather issues causing problems with shows, it was noted how they had to deal with the volcano issue in Europe last year, and that “going forward the weather will be better” here in the U.S. Vince said that he feels next year they will have about the same number of live events, but will have more international events. There may be more overall.

– Vince was asked about the dividend policy and whether it will be revised. He said that they look at it from a quarter to quarter basis.

– They were asked about managing costs going forward and their long term earning growth strategy. Barrios said they feel good on what they are doing on the cost side and that they did the “heavy lifting” to get leaner in 2008 and 2009.

– The WWE Network was brought up, and Vince said that they are going forward. They just had their first meeting with Verizon. He said that they have meetings set up with all the carriers. He also mentioned that they have a good relationship with Comcast, due to them buying NBC Universal. They are going forward to the network, and he doesn’t think there will be a lot of costs to WWE with it. He noted there were a “lot of moving parts” and that they do television shows more efficiently than anyone else in the business.

– Barrios was asked about a capital expenditures range and he said it was 8 to 12 million dollars for their maintenance capital expenditures.

– The construction of a new WWE Media Center (which was planned at one point) was brought up, and they said it should be expected. Vince noted it was a matter of costs, and that the one they have is good enough for now, and that they are waiting on the network before they move forward with expansion of the studio. George added that the capital expenditures won’t include the media center.

– When asked if the fans were “buying into the new characters” yet, and Vince felt the new talents were “really getting over, and I’m proud of that” and noted the fans reactions at live events are a barometer for them.

– When asked who the next “big star or John Cena” would be, Vince joked about talents possibly listening to the call. Vince praised The Miz, noting he has been with the company a long time and fought his way to the top. Vince also named Randy Orton (yes, as a “new” character) and Alberto Del Rio.

– Vince said that because the Atlanta market is more affluent than Phoenix, the revenue for Wrestlemania this year will be higher.

– Going forward, Vince noted that they would be using celebrities on a more “selective basis” and that going weekly with stars forced them to go with secondary stars. Vince also mentioned that using celebrities every week took time away from their own stars. He said when they do bring in celebrities, they would be bigger names.”

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Source: PWInsider Elite

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