WWE Q2 2020 Earnings Report Preview: Predictions & Suggested Questions

WWE’s Q2 earnings report is tomorrow, July 30, after the market closes for the day.

Expect documents to release around 4pm ET with a conference scheduled for 5pm.

The report will cover the period from April 1 to June 30. This will be the first quarter where the period took place entirely within WWE’s events being affected by COVID-19.

Since no traditional live events took place, expect revenues for that entire division and the venue merchandise segment to at or very close to zero. Lower costs associated with producing television out of the Performance Center in Orlando, however, makes those productions more profitable.

This will be the first quarter that includes revenues from WWE’s upgraded TV deal with Sony in India, which is now definitively the company’s #2 TV market, pulling ahead of the United Kingdom. The Sony deal is worth an average annual value of $50 million over the course of five years.

Along with U.S. TV fees related to Raw, Smackdown — and to some extent NXT — this should be the biggest quarter ever for core content rights fees.

The company will report an update on WWE Network subscribers, which have been down year-over-year for the last four quarters. During the previous earnings report, in April, WWE revealed that paid subscribers on the day after Wrestlemania were down from the year prior, although the total count including free subscribers was up. Free trials were nearly doubled.

Expect the advertising and sponsorship segment within WWE’s media division to take a hit due to a general decline in ad demand related to COVID.

The other media segment will be down from the year prior, only due the fact there was a major event in Saudi Arabia in Q2 2019, worth about $50 million in revenue. That segment this quarter will likely be carried by ten episodes of Total Bellas, which did well in viewership. This segment should contain revenue related to The Big Show Show, which released on Netflix in the quarter.

It’s evident from socialblade.com that WWE had its biggest quarter ever on YouTube. WWE probably only generates a few million in revenue from this area per quarter, however. Expect the surge in WWE YouTube views to be reflected in the company’s reporting of AVOD (ad-supported video on demand) views and viewing hours, reported in its Key Performance Indicators document. Related revenue is reported within the advertising and sponsorships segment of the media division.

It’ll be interesting to see whether WWE’s eCommerce and licensed product sales will be strongly affected by the pandemic.

A full table with revenue and key metrics predictions are at the bottom of this article.

An earnings release (8K), trending schedules, key performance indicators, an updated investor presentation, and a quarterly report (10-Q) will be published by the company at corporate.wwe.com.

Expect comments on the conference call from CEO Vince McMahon and the final full-time appearance of interim CFO Frank Riddick, who hands off duties to new CFO Kristina Salen effective August 3. It’s possible we’ll hear from Salen on the call, as well as EVP Paul Levesque. The later has frequently spoken on COVID-19 safety issues.

Anyone can login and listen to the call at this link.

The call normally opens with comments from McMahon and Riddick, followed by a Q&A session with financial analysts who cover WWE stock.

Suggested questions for WWE executives in Q&A

  • Top talent is aging. Some of WWE’s most well-known talent/IP (e.g., John Cena, Undertaker, Brock Lesnar, The Rock, Steve Austin, etc.) appears on core content infrequently. Creative vision hasn’t dramatically changed despite creation of executive director roles and personnel changes. CEO Vince McMahon holds the head of creative role currently for the core content and has for decades. Would WWE ever consider fully relieving Vince from his head of creative duties and replacing that role with new leadership while Vince focuses on other parts of business?
  • In February, a sale to a major streaming player of WWE’s “pay-per-view” content, currently primarily offered via the WWE Network, seemed imminent. Obviously, the pandemic interrupted those negotiations. When negotiations can fully resume, does the company feel the market for that content will be as strong as it was in February?
  • Is the company confident it can continue to grow broadcast values with viewership at its current level or is it essential that viewership improves before new deals are renegotiated in the a few years?
  • Related, how should investors view the ongoing decline in U.S. TV viewership for Raw and Smackdown? What are the metrics the company believes drive WWE’s core content rights? Viewership and key demos? Or are Raw and Smackdown’s ranking relative to other programming on the same night or network more important to driving rights value?
  • With the move in Italy away from long-time broadcast partner Sky and to Discovery, what were some of the key factors that played into that move? Was it similar to factors causing WWE’s move away from Sky in the UK earlier this year?
  • Related, are the economics in international markets significantly different than the TV industry in the U.S.? Is ad revenue and viewership more of a lever internationally? If so, what are WWE’s viewership trends like in major international markets?
  • Given the ongoing issues with race in the U.S. and the ongoing issues around women’s issues, particularly revealed in the wrestling industry recently, what policies does WWE enact to address racial and gender diversity, sexual misconduct, and discrimination? How diverse is the WWE creative team? What portion of the team are women? What portion are people of color?
  • Since the introduction of the free tier for the WWE Network on June 1, what kind of conversion rates is the company seeing?
  • Is there any update on the “global localization” strategy introduced by Paul Levesque a few years ago? Are there still plans to introduce localized NXT brands and Performance Centers in markets around the world? If so, what markets are likeliest to be next?
  • Are there international markets the company especially feels have growth opportunities?
  • Is there an update on the MENA TV rights deal? Is the completion of that deal being complicated by the broadcast of WWE content on pirate network beoutQ, supported by the government in Saudi Arabia?
  • Given issues with profitability of the Live Events division, post-COVID, does the company have a sense yet as to whether it will return to doing the normal 300 main roster events per year, including a large portion of non-televised events?
  • Does the company feel it was the right decision to begin testing in late June as opposed to beginning testing earlier?

Financial and key metrics predictions

WWE Annual Shareholder Meeting (7/16/2020) Summary

To my knowledge this is the first time the shareholders meeting, which was held virtually this year rather than in-person, has been made available to the public and accessible on WWE’s corporate website.

The annual shareholders meeting on July 16 opened with a sizzle reel highlighting WWE’s business success and brand presence, including many guest appearances of WWE talent on mainstream U.S. TV programs, celebrities putting over WWE, a sound bite of Natalya saying, “WWE is about putting smiles on people’s faces,” and closing with a clip of Becky Lynch hoisting both women’s championship belts. 

“WWE is about putting smiles on people’s faces.” – Natalya

General Counsel Brian Nurse opens the meeting

Beverages to wrestling: WWE puts Brian Nurse in the ring as ...
WWE General Counsel Brian Nurse

WWE General Counsel Brian Nurse opened the call with introductions and shareholder proposals.

Nurse mentioned who was present on the call: Chairman & CEO Vince McMahon, Chief Brand Officer Stephanie McMahon, EVP Paul Levesque, Interim CFO Frank A. Riddick III, independent directors (including Stuart Goldfarg, Laureen Ong, Jeffrey Speed, Man Jit Singh), other executives (including John Brody, Jayar Donlan, Brian Flinn, Jim Johnstone, James Rosenstock, incoming CFO (effective August 3) Kristina Salen, EVP Global Strategy Brian Stedman, SVP IR Michael Weitz)

There are 3 proposals to be approved by shareholders:

  • Election of directors
  • Ratification of Deloitte & Touche as auditor
  • Executive compensation program

By “overwhelming majority” shareholders approve of the recommended proposals.

*Brandon’s note: Vince McMahon controls the majority of voting power due to his ownership of class B shares which grant him 10x voting power over shares held by non-McMahon family members.

Nurse turns the meeting over to Vince McMahon.

  • Vince says WWE is staying “especially nimble and efficient” during the pandemic.
  • They are taking extensive precautions to protect the health and safety of performers and staff while WWE continues to create compelling content.
  • They also enacted cost reduction and cash flow improvement to mitigate impact of COVID19 and ensure long-term value of the company.
  • WWE has potential to take advantage to changes in the media environment.
  • Vince says he’s “so grateful” to WWE performers and the fan base. He thanks shareholders.
Asuka pictured. In 2019 WWE recorded revenue for the sixth consecutive year.
Roman Reigns pictured. 32% of WWE’s revenue in 2019 came from markets outside the U.S. It’s not clear whether this includes Canada.
Drew McIntyre pictured. WWE recorded record operating income in 2019.
Sasha Banks pictured. WWE broke its adjusted OIBDA (its preferred non-GAAP measure of profit) record in 2019.
Effective October 2019 new deals with NBCUniversal and Fox kicked in, representing a 3.6x raise over its previous 5-year deal in the U.S. for Raw and Smackdown.
WWE highlights platforms where its programming appears, some of its major sponsors, and its number of events (count includes main roster and NXT events)
With the addition of a 2-hour NXT program on USA Network, that brings the count of total weekly hours of content on linear TV to 7.
Major international broadcast partners: BT Sport and Channel 5 (United Kingdom), Fox Sports (Latin America), SuperSport (South Africa), PPTV (China), and Sony (India).
Endeavor now provides the backbone for the WWE Network, which launched a free tier on June 1.

Riddick noted WWE is working on offering the Network in “select geographies with local subscription fees offered in local currency”

WWE highlights that continues to expand its presence online.

Frank Riddick: We also increased our presence across other digital and social platforms, providing content for the first time to Twitch and expanding our footprint on Snapchat. We partnered with Netflix to launch a new feature film “The Main Event” which was watched by an estimated 25 million viewers, and a scripted series “The Big Show Show” that ranked among Netflix top 10 most viewed programs during its premiere week in April.

A selection of WWE business partners, mostly advertisers & sponsors

Riddick: As examples of other important achievements, we further developed our consumer products portfolio with new partnerships and deepened the penetration of our mobile games. We grew our advertising partnerships with blue chip brand brands, including deals with Hyundai, Mars, Coca-Cola, Unilever, Microsoft, and KFC, and are prepared to develop new sponsorship opportunities.

Riddick: As we began 2020, we were prepared to leverage our expanded reach, new products and partners, to drive our growth. Beginning in late March however the spread of COVID-19 resulted in government mandates, calling for the cancellation, postponement, or relocation of live events, including our premier event Wrestlemania in April. Understanding that the potential impact of COVID-19 ultimately may not be limited to the sale of live event tickets and merchandise, we rescinded our financial guidance for the first quarter until the full year of 2020.

Revenue and adjusted OIBDA results for Q1 (Jan-Mar 2020). WWE exceeded its rescinded Q1 guidance.

Riddick: Our first quarter 2020 results demonstrate that we delivered solid performance in a challenging environment. Our revenue increased 60 percent to $291 million, fueled by the growth in our domestic content rights fees. Our adjusted OIBDA increased to approximately $77 million, based on the escalation of these right fees and the timing of our live events in Saudi Arabia. Additionally, our results exceeded our rescinded guidance of $60 million to $65 million, in part reflecting the acceleration of cost saving initiatives.

WWE’s operating and financial measures in response to COVID19

Riddick: Our response to COVID has been highlighted by our tremendous creativity. Importantly, we adapted our business to continue to safely stage in-ring performances, produce other content for our global markets, and multiple distribution channels, as well as to market our brands. Supporting these achievements, we established extensive safety measures to protect the health and well-being of our talent and employees.

To mitigate the potential risk to our performers, we evaluated our operations and cost structure and developed extensive contingency plans. As a result we implemented a comprehensive mix of various short-term cost reductions and cash flow improvement actions. These included reducing executive and board member compensation, increasing operating expenses, third-party staffing, consulting, and talent costs, and reducing employee head count by way of a furlough.

An important outcome of our efforts is that we have been able to substantially offset the loss of live event ticket revenue and merchandise revenue with lower production costs and reduction in other expenses. To enhance liquidity we also deferred spending on our new headquarters, directly reducing 2020 capital expenditures by approximately $140 million. We temporarily suspended the repurchase of stock under our repurchase program, and withdrew $200 million from our revolving credit facility in early April. As such we believe we have sufficient liquidity, which totaled approximately $500 million at the end of the first quarter, to manage the challenges ahead.

WWE growth potential strategy

Riddick: Currently we’re giving careful consideration to the ongoing changes in the media industry, how the economy and consumers will recover, and how we will manage and adjust our business model. Under various scenarios we’re in the process of developing these plans and related financial projections. We expect to leverage our creativity and talent to optimize performance notwithstanding ongoing restrictions, as well as to develop content for social platforms, our Network, our current rights partners, and new platforms to expand our brand.

We continue to believe that our fundamental growth prospects remain strong in our view. We are well positioned and can take advantage of the changing media landscape and the rising value of live content over the longer term.


WWE SVP of Investor Relations, Michael Weitz


Michael Weitz: We received several questions on this topic specifically: What are the safety precautions we are taking to protect our talent and employees? To answer that question we’ll turn to Paul.


Paul Levesque: Thank you, Michael. Obviously, as Vince mentioned earlier, the health and safety of our performers, employees, and crew are the company’s top priorities. And since the beginning of this around mid-March we have been producing content on closed sets with only essential personnel in attendance and following guidelines set forth by our medical team in conjunction with state and local officials and the CDC. The protocol for these closed sets are extraordinary and include heightened safety and sanitizing during use, long duration electrostatic and anti-microbial sprays and coatings, pandemic level cleanings, and disinfecting between and after our events.

As it relates to our talent, production, crew, and employees, we conduct COVID-19 testing in advance of any TV or content production, using polymerase chain reaction, or PCR, testing, which is the most statistically valid, highest level of accuracy test available today. No one is allowed to enter a WWE closed set without a negative COVID-19 test. Once on set individuals must wear masks when talent are not performing social distancing and sanitize where appropriate. In the event of a positive test result, individuals must self-quarantine for a minimum of 14 days, will not be cleared to work until they are symptom-free and test negative. Extensive contact tracing is done following any positive test. Individuals possibly exposed are identified in quarantine appropriately.

And this process is constantly being updated. We’re looking at this every day. Our medical staff working with state and local officials, as I mentioned, and the CDC, to reflect the most current data and medical recommendations available.

*Brandon’s note: WWE began testing in late June, after multiple people who were present at the Performance Center contracted the virus.


Weitz: The next question is, “How is the free version of the [WWE] Network being used to drive future revenues for the business, and what impact will that have on future Network deals?” To answer that we’ll turn to Frank.

Frank Riddick: The free version of the Network was launched June 1st as a platform that was designed to effectively convert viewers to subscribers while preserving the value of our premium content. Given this was just launched in June, we have positive early results, but nothing definitive. Given where we are and we believe that, ultimately, by enhancing engagement we’ll enhance the value of the Network, as well as the economic potential we may be able to realize in a future transaction.


Weitz: Next question is, “How will documentaries such as ‘The Last Ride’ be monetized further and when can we expect to see different payment tiers for the network?” We’ll also turn to frank for that as well.

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Riddick: So starting with the first question, Undertaker’s ‘Last Ride’ was a huge creative success that generated an extraordinary level of viewership on the WWE Network and is one example of how we can capitalize on the documentary genre. We create value for our company and our shareholders by creating documentaries that feature our superstar talent — The Undertaker, Roman Reigns, Charlotte, and others — and distributing them on multiple platforms, including our own Network. So we see that continuing, and continuing to drive value.

Now turning to the second part of the question on payment: Payment tiers at this time, we do not believe the development of a premium tiered content strategy is the optimum approach for maximizing Network subscription value. In the near term, we’re focused on leveraging the free version that we just spoke about to enable subscribers to sample our content more easily, develop local currency pricing in select international markets in global currency, as we said, and further develop our advertising capability.


Weitz: The next question is, “Are there other interactive fan experiences being discussed to help circumvent the lack of crowd or event revenues?” To answer this question we’ll turn to Jayar Donlan.

Jayar Donlan, WWE EVP of Advanced Media Group

Jayar Donlan: During these unprecedented times we’re doing more to engage our fans in an interactive manner, especially on digital and social platforms. This includes everything from live interactive video with our superstars on things like Instagram to expanding our presence on platforms like Twitch or TikTok. The early results have been very positive for us. In addition to that interactive content, we’re also exploring virtual fan meetings and other unique experiences.


Weitz: The next question is, “With the continued downturn in [television] ratings, what is management’s plans on improving ratings in the long-term?” 


Vince McMahon: We have a 30-plus year track record of creating compelling characters and engaging a variety of audiences, and we obviously remain confident we can continue that with our collective ability, even in the most challenging environments with no live audience.

The media echo system obviously has changed. We change with it. Our engagement metrics across platforms are understandably and obviously — however, the importance of linear programming is paramount in all of our businesses — we consistently have seen year-over-year increases in a variety of digital metrics and engagement. And positive trends have continued, even during COVID.

Conversely, TV viewership trends have been negatively impacted by COVID, obviously, and the lack of a live audience. We are still nonetheless the number-one television show on USA [Network] and consistently the number-one broadcast show on Fridays among key demos.

We expect a combination of valuable promotional inventory from our TV partners with the return of sports events programming. And a deep roster of charismatic talent will have a positive impact on viewership over the long-term.


Weitz: We received some questions about the volatility of WWE stock, referencing multiple sources of volatility, including management transition. One such question added, do we care about our shareholders?

Riddick: Well, first I’d like to say that all the board of directors members and all members of senior management are significant shareholders in the company, and we are very focused on creating value for the shareholders over the long-term. And towards that objective, we’ve achieved some significant financial and operating objectives, financially, in the first quarter, as we just discussed in my comments, the Q1 financial [results] were extraordinary in a challenging environment.

We worked on extensive cost reduction programs to offset the loss of revenue, and we’ve enhanced our liquidity. Operationally, we’ve been one of the few live production companies producing content throughout the crisis at our Performance Center. We’ve expanded the production of our content from multiple platforms and markets for our partners, including, as I mentioned in my remarks, “The Big Show Show” and “Main Event” on Netflix performed extremely well. And we successfully launched the free version of the Network.

In terms of management transition [*Brandon’s note: “Management transition” refers to the firing of former co-presidents George Barrios and Michelle Wilson on January 30] we recently announced that we’ve hired Kristina Salen as our CFO, effective August 3. Kristina was the first CFO of Etsy and comes to us with meaningful telecommunications media and technology experience.

We believe the sources of our long-term growth remain strong. We’re managing our business effectively and more than ever have the right executive leadership team to deliver value for our shareholders.

Vince McMahon: Just one thing to add to that. Obviously as far as “Do we care or do we not care about our stockholders and shareholders?” Obviously I’m by far the largest shareholder and I really care.


Weitz: The next question is, “Why does WWE not have a WWE channel on SiriusXM satellite radio?” 

Vince McMahon: Well, we will probably get there. It depends on the return on investment, quite frankly. Of all the forms [of media] and all devices and what have you, we fit everywhere. And no doubt we’d fit on Sirius, if it works well for us, just like we explore every other avenue.


Weitz: We received several questions about our executive leadership and CEO, as well as suggestions of how to reorganize and modify responsibilities.

Riddick: Over the last several years we’ve added several new executives to our leadership team and regularly look at our organizational design and level of responsibilities across the team. As I mentioned on an answer to a previous question, Kristina Salen has joined us as our new CFO, and the compensation and human capital committee of our board reviews the CEO performance annually, and regularly reviews succession plans for all key executive positions, including the CEO.


WeitzTurning back just a question earlier, “What is the plan for physical capital moving forward? It appears that WWE has discussed a larger footprint. Can you provide an update on this topic?”

Riddick: Due to the uncertainty, as we just discusse,d because of the COVID-19 outbreak, we decided to delay the construction of our new global headquarters to increase cash flow over the near term. And we disclosed this in our Q1 earnings materials. For the rest of 2020, capital expenditures include the maintenance of our production and technology infrastructure, as well as continued enhancements to the WWE network. And our range of capital spending, for the years we’re now projecting, are somewhere around the range of $30 to $40 million. This is in line with historical spending levels. We anticipate that in 2021 as we finalize the plans and start construction on the new headquarters, we will experience an increase in capital spending, but we are not giving guidance on those amounts at this time.


Weitz: The next question is, “Why not add fans and shareholders to your board to add diversity and outside perspective?

Riddick: As I mentioned earlier, all of our existing board members are shareholders in the company, and in meaningful amounts in some cases. We believe our current board composition includes individuals with diverse backgrounds and meaningful experiences, including in media and non-media businesses, as well as having financial and other expertise that are required for the board. The nominating and governance committee of our board, along with the CEO regularly review the composition of the board, evaluating experiences expertise and diversity, and always look for opportunities to increase the quality of the board.


Weitz: The next question is, “What is the current status of the company’s Performance Center near London during this pandemic? Is it operational? Closed down? What is the status?

Levesque: The London Performance Center has been inactive since March, thereabouts, due to the COVID-19 issues. We work with local and government officials they’re all the time and are monitoring constantly, and are looking forward to when talent can get back to training. I know they’re all anxious to do it, and hopefully that’ll be in the near future.

We’re also working with our partners there on solutions and ways that we can get back to creating fresh in-ring content as soon as possible for the NXT UK brand. Again, all of that relies on us being able to do that safely — as the safety and health of our talent come first and foremost. But as soon as that is something that we can safely do, we will be back up and running.


Weitz: Next question is, “What is the strategy for the NXT brand? To be a minor league AAA equivalent or flagship brand? And how are NXT ratings relative to competition affecting our marketing?


Levesque: So I think if you were to look at the NXT brand, it would be both. While it is, as Frank mentioned earlier, a third global brand, along with Raw and Smackdown, and our partners at USA, it is also the place where we make new stars and increase our talent and stars for the future, of both Raw and Smackdown. So that is the pipeline, and that is the — if you wanted to say, ‘the feeder system’, it is that, but it also has become its own third brand.

As far as the ratings go, I’m very happy with them, especially in the current circumstances. Everything is going well. We look at the long-term of that, not the short-term of that. And the long term is very exciting. We have a lot of stars. There are a lot of hungry young athletes, and the pipeline to bring in more as they continue to train and get better is very exciting. The future is very bright in that regard.


Weitz: The next question is, “With fans not in the arena, Brock Lesnar out, and ratings declining, will Vince and new head writer Bruce Prichard use this time to build up new stars?”


Vince McMahon: Sure, I mean you want to continue to build stars no matter what time. It is so, as Paul just mentioned about NXT talent. He has done an extraordinary job of creating new stars, and as they continue to evolve, they’ll continue to come up to Raw and Smackdown. So there’s this influence of new superstars coming into both Raw and Smackdown, and in addition to that, the ways that we now promote talent in a more effective way, [with] digital and social media, as opposed to the normal way.

We do not have a live audience and of course that to us is paramount. They’re like the third performer in the ring, in terms of our interaction with our audience. So nonetheless it is a good time to continue with the digital and social imprint and this land grab that we have, which is substantial. We continue that. And again new stars coming up.


Weitz: We’re now getting a quite a few comments, a few of them concern the potential return of live events with fans in attendance. So i’m gonna raise that question and perhaps we can give some perspective on our views.

Vince McMahon: Sure, we obviously have to follow what’s going on and sometimes you think you have the answer and then “uh oh”, COVID-19 makes a more severe impact than you had imagined to begin with. We’re working with arenas. We have any number of tentative dates. Those tentative dates keep moving back sometimes. But again with our form of entertainment, it’s imperative that we have fans to interact with. And we continue to look forward. Pinpointing exactly when we’re going to return, it’s a whole different atmosphere than has been in the past and we’ll capitalize on it.


Weitz: Following up on that question, there’s a follow-up on the potential for an event in Saudi Arabia. Is there a more current update on that?

Vince McMahon: Oh, that’s a possibility. Obviously, Saudi has been going through what we in America have been going through. As far as COVID’S concerned. Right now, I think they’re doing a little bit better than we are [in the U.S.], considerably better. So there’s a possibility that we’ll will still get a show in before the end of the year, as was scheduled. But we’re not certain because, you know, who can be certain about what COVID-19 is going to do.


Weitz: There are a few questions about the status of our new headquarters. Is there any further that you’d like to provide at this time, Frank?

Riddick: Well, we’re we’re analyzing right now our physical space requirements for both our office workers as well as television, and our advanced media group in light of the learnings that we had out of our adaptations to the COVID environment. Clearly like everybody else we have a number of people working from home. We have people out on furlough, and so we’re working through the new requirements for the space. And also our television production has been able to produce remotely and unique venues and these things may have long-term effects on our requirements. So we’re in the process of analyzing all that now and working on a plan as to how we will develop the headquarters. But we don’t have the exact answer at this point in time.


Weitz: We have a question that came in about women in our content. The question was targeted towards Stephanie, in terms of what our thoughts are, given the success of our women’s evolution pay-per-view, and other thoughts about other content targeted at women. 

Stephanie McMahon: Absolutely. We’ve been so incredibly proud of the women’s evolution that has happened in WWE, providing a lot of unique opportunities professionally for our female superstars. That has actually expanded our brand, including Total Divas, Total Bellas. The Bellas’ YouTube channel is now well over a million subscribers. There are a number of different shows that are coming out: “Rumble”, which we’ve discussed in partnership with Paramount. Any number of opportunities. So the women’s evolution only continues to rise, and every opportunity that they are given they’re knocking it out of the park.


Weitz: Here’s a perennial favorite question: “Will we ever develop a physical WWE hall of fame?” And then, “… once COVID is behind us.”

Vince McMahon: Bricks and mortar is something that, generally speaking, we, other than office buildings and office space of course, that we’re not necessarily fond of, but nonetheless, again the interest in that continues to build and it’s still a possibility somewhere down the line.


Weitz: There’s a question about “Will we ever expand to Hispanic channels, such as Univision or Fox Deportes or Telemundo or TV Azteca?”

Vince McMahon: “Yes” is the answer to that.


Weitz: There’s a question here that’s come up about AEW taking some of our market share. Can we comment on some of the ratings trends related to AEW?


Levesque: To me, there’s a moment in time when you begin something and it’s very exciting and it’s fresh and there’s some interest in it, certainly. But it’s a big world. We continue to be focused on our product, continue to be focused on the development of our stars and our performers. And as Vince said earlier, we have a very long track record of doing this incredibly successfully for many, many, many years, and we will continue to do so.


Weitz: There’s a question up coming up about COVID, our activities in Florida, and if we have plans if something were to happen to our ability to perform in that area.

Vince McMahon: Let me just say there’s always a “B-plan” I have. I don’t want to say right now exactly what that would be, but yes there is a “B-plan”.


Weitz: And then kind of along the lines of our future planning, what are other cities considered for Wrestlemania next year if it can’t take place in California?

Vince McMahon: Again, we, it wouldn’t be fair to mention that now because we’re following the COVID-19 aspect. So many cities are obviously interested in Wrestlemania and many have bid for it, and what have you. This somewhat changes from time to time, again, depending upon the severity of COVID, but we haven’t announced anything yet.


Weitz: Also we received a question about whether recent cost reduction related to WWE’s partial investment in the XFL.

Riddick: No. The answer to that’s, “no”. As we mentioned earlier, there are cost reduction efforts, including our response to COVID, have been driven by the WWE’s results. It has nothing to do with the XFL.


Weitz suggests that if there are any other questions not covered on the call, shareholders may contact WWE investor relations.

You can listen to the entire call yourself via WWE’s corporate website, at: https://central.virtualshareholdermeeting.com/vsm/web?pvskey=WWE2020

Key demo and total audience: What are they and how much do they matter?

The metrics we’ve followed throughout the last few decades of wrestling television history have changed. In the “Monday Night War” era, amid the competition ultimately won by WWF Raw over WCW Nitro, reports dwelled on TV ratings: a number with one or two decimal places. Those numbers measured a program’s total audience.

But around the end of the WWF vs. WCW competition in 2001, the television advertising business changed.

[T]he weight placed on absolute household eyeballs during the 1980s and 1990s has given way to a more narrowly defined, demographic-oriented focus. Networks now try to convince advertisers that they’re reaching viewers that can draw premium CPMs (costs per thousand), and no demographic is more desirable than 18-to-49-year-old adults.

Multichannel.com, 2/24/2002

In recent years Showbuzzdaily.com has become a reliant source for wrestling news aggregators and more influential sources like the Wrestling Observer Newsletter. Showbuzzdaily, launched in 2014, reports cable and broadcast viewership data tables most afternoons for the programming that aired the night before. It’s the longest-running active and most consistent public source of TV viewership data I’m aware of. But Showbuzzdaily doesn’t report an overall TV rating of the kind that were so honed in on by WWF and WCW observers from 1995 to 2001.

By the way, what is a TV rating? All TV ratings (including the demo ratings we see today from SBD) are essentially percentages. The denominator — what the rating is actually a percentage of — may vary. In other words, there are different kinds of ratings, depending on the denominator being used.

  • A national rating is essentially a percentage of the national population that’s viewing.
  • A coverage rating is a percentage of the population viewing who has access to the program’s channel.
  • A household rating is a percentage of the households viewing.

What does Showbuzzdaily.com report?

Even after trying to reconcile them against Census Bureau data on the U.S. population by age, I honestly don’t know what kind of ratings are being represented in the demographics data Showbuzzdaily reports. If they are national ratings, Showbuzzdaily’s report that, for example AEW Dynamite did a 0.28 in the coveted P18-49 demo, means that 0.28% of people in the U.S. between the ages of 18 and 49 were watching Dynamite.

Most of the data published in Showbuzzdaily tables are demographic ratings. However in the rightmost column (seen above in Tony Khan’s tweet), SBD reports a metric we sometimes call “total viewership” or “total audience” or “P2+”. That number isn’t a rating, but rather the total number of people watching who are age 2 or older. SBD lists the number in thousands (with the last three zeroes cut off).

Wrestling companies, likely via their broadcast partners, get U.S. viewership reports generated directly from Nielsen data. At least some of this data, broken down by demographics, is reported in the form of viewers, not ratings. In other words, wrestling media aggregators and readers who rely on Showbuzzdaily are largely looking at ratings; those inside wrestling companies may be largely looking at viewers. Nonetheless, both parties are looking at similar demographic breakdowns that correlate strongly. For example:

With a new head-to-head competition for wrestling viewership underway since October 2019 between WWE NXT and AEW Dynamite, many have emphasized that P18-49 viewership is more important than that of the total audience, which is particularly true for attracting advertisers to the programs’ networks.

This distinction has caused debate because, paradoxically, some weeks — including the last two — AEW lead in the demo (P18-49) while NXT lead in total audience (P2+).

It seems the importance of the P18-49 demographic above the total audience is particularly important to AEW’s broadcaster TNT and the network’s parent company WarnerMedia.

It’s not clear WWE NXT and Raw broadcaster USA Network takes the same approach with advertisers and thus values the P18-49 to the degree TNT does. Some USA Network press releases celebrate both P18-49 and P25-54 performance, although it’s not like NXT is beating AEW in the latter demographic either.

Outside of advertiser-supported media business, the wrestling business is still partly a consumer business as well. It stands to reason any age consumer could buy (or compel parents to buy) a pay-per-view or streaming subscription, merchandise, licensed products, or — in a time not marred by a pandemic — event tickets.

Total audience and P18-49 viewership for WWE Raw however have declined worse than some wider TV trends for years. Smackdown has been a different story as it moved across networks and time-slots.

WWE Raw and Smackdown quarterly & annual trends

1. WWE Raw total audience (P2+) quarterly and annual trends, compared to top 100 broadcast & cable channels. “P2+” refers to all viewers age 2 and older. [Open data]
2. WWE Smackdown total audience (P2+) quarterly and annual trends.
3. WWE Raw P18-49 demographic quarterly and annual trends, compared to top 50 broadcast & cable. “P18-49” refers to viewers between ages 18 and 49.
4. WWE Smackdown P18-49 demographic quarterly and annual trends.

Note (3) above compares Raw P18-49 rating to Top 50 broadcast & cable P18-49 viewers. This isn’t an ideal comparison, but it’s the best data I’ve been able to find. Such an imperfect comparison, however, if anything, should favor Raw in a TV universe with declining traditional cable or satellite access.

For several years WWE has published similar comparisons. WWE matches up national TV ratings for Raw and Smackdown against that of an average of the top 25 cable networks in the Key Performance Indicators PDF posted on WWE’s corporate website. From 2016 to 2019, all of which are archived by Wrestlenomics, this was shown in the form of national TV ratings. These tables below derive their data from those KPI documents.

That said, two important takeaways sometimes misunderstood:

  1. This tells us about WWE’s linear TV consumption — and maybe the company’s popularity, or maybe we should call it, “brand strength”.
  2. This data alone doesn’t necessarily tell us much about WWE’s TV rights value, indeed it may mislead us.

How could WWE get an increase in TV rights fees when its viewership trends are declining?

During the timeline the above tables cover and in the market this data pertains to (the U.S.) WWE negotiated an upgrade to its TV rights fees for Raw and Smackdown. In spring 2018, WWE finalized a 3.6x increase in U.S. TV rights fees for Raw & Smackdown when WWE completed separate deals with NBCU and Fox.

[T]he new [Smackdown] deal is worth $205 million annually, and $1.025 billion over the life of the pact… Also on Tuesday, NBC announced that is has closed a new five-year pact to keep the Monday night showcase Raw on USA Network. Sources previously told THR that deal is worth $265 million annually.

The Hollywood Reporter, 6/26/2018

Part of the reason for this is because, despite declining TV audiences in the key demo and overall, Raw and Smackdown were still highly ranked versus other original programs airing on cable on the same night.

WWE Raw’s average P18-49 ranking versus other programs airing on cable on the same night, quarterly and annual trends
WWE Smackdown’s average P18-49 ranking versus other programs airing on cable on the same night, quarterly and annual trends. Smackdown moved from cable to broadcast beginning Q4 2019.

Consider too Raw is still by far USA Network’s leading show in both key demo and total audience. Smackdown when it was on USA was right there with it. NXT viewership is more in line with a normal USA scripted original.


Smackdown moved from cable to network when it moved to Fox in October. Even this past Friday night: while Smackdown was watched by less than two million viewers, it led in P18-49 among primetime broadcast TV. Dateline NBC equaled Smackdown in the demo, only after Smackdown went off the air, 10-11.

Nonetheless these two things can be simultaneously true:

  1. The quality of WWE programming is turning people off. No excuses. There aren’t sufficient external or cyclical factors to fully explain away the various declines in multiple areas for WWE.
  2. Linear TV Raw & Smackdown audiences are still big enough for WWE to benefit from exploding live TV value in an environment with fewer large, live audiences.

Linear TV is a real-time television service that broadcasts scheduled programs, conventionally over the air or through satellite/cable, not streamed to a specific user. Nearly, all broadcast television services count as linear TV.


Economic justice

This is frustrating for many wrestling fans. There’s not just anecdotal, but some survey data (to be shared in coming months) to show there’s at least a niche of fans increasingly disengaged with main roster programming in particular, a phenomenon less present a few years ago.

There are falling consumer trends to back that up as well, which are tied to revenue, and predate COVID.

WWE has enormous guaranteed revenue sources, largely in the form of multi-year contracts for Raw & Smackdown TV rights fees in the U.S. ($470 million, average annual value) and in many international markets like India ($50 million) and the U.K (~$15-30 million); plus $100 million annually for events in Saudi Arabia.

None of that money, as far as we know, is tied to viewership metrics or any measurement of engagement or popularity.

Decades ago WWE was primarily a ticket-selling business. In a sense, the company has never been less incentivized to grow its audience, much less appease it.

The U.S. TV deal is good through Q3 2024; the India deal, a quarter or two beyond that; the Saudi deal, through 2027. And (I remember saying this before the current round of deals were made) there’s no sign yet those deals won’t be renewed at equal or higher value when the margin between Raw and Smackdown live viewership and that of the rest of TV is so wide.


In wrestling, in a worked business, the economics are the only real scoreboard. Some fans want economic justice for what they perceive as the terrible content WWE has been putting out for years. But the old single scoreboard is bifurcating into two.

WWE is losing on the popularity scoreboard, but winning big on the financial scoreboard. The company could be winning on both, thereby winning even bigger on the latter. But ego (i.e., justifying the creative intuitions of the CEO) overrides even finances in this case.

Neither do any other economic forces — stock analysts, major institutional investors, business media — much distinguish the difference between good wrestling and bad; they mainly distinguish the difference between profit and loss.

And the coming years will be a more profitable time for WWE than even its highest peaks in popularity, coronavirus or not.

2020 and 2021 estimates based on mean analyst estimate of EPS via Refinitiv Stock Report

The longer WWE goes without repairing its resentful relationship with its consumer base — to which there is no end in sight — the greater opportunity there will be for others in the wrestling marketplace to serve the unserved base. That’s been the story of the wrestling industry for the last few years.

Another possibility too — and something that might be underway — is that the descent of WWE, which has for so long been so far ahead as the industry leader, may simply contribute to a decline in the popularity of not just its brand but of pro-wrestling in general.