WWE Q3 2021 earnings report and conference call with executives

Tonight we’ll do a livestream review of the WWE earnings report exclusively for patrons at patreon.com/wrestlenomics. Video and audio will also be available for patrons on-demand afterward.


WWE reports net income of $43.5 million for Q3 and $255.8 million in revenue.

Net income report means an EPS of $0.52, greatly beating analysts expectations (as I anticipated).

https://corporate.wwe.com/investors/news/press-releases/2021/11-04-2021-201251973

WWE is now willing to say they’re expecting a more profitable year than earlier anticipated.

WWE is now raising its adjusted OIBDA (the company preferred non-GAAP measure of profit) projection for full year 2021 from $270M – $305M to $305M to $315M.

With the return to touring, WWE reports average North America attendance in Q3 (Jul to Sep) of 8,300 paid attendees over 38 events.

I believe this is the highest since at least 2010.

And an average of 7,400 paid for 4 int’l events (all in the UK).

Despite beating on EPS and a narrow miss on revenue, WWE is down 4% currently in after market trading.

The quarterly report (10-Q) later will clarify but WWE is reporting $23.8 million in North American ticket sales, which, judging by the average attendance they reported and count of events, it looks like average ticket price was about $75.

In 2019 average NA ticket was $64.

International average ticket price (for the events in the UK), looks like about $81. The 10-Q will also clarify. It will probably come out sometime between now and tomorrow.

WWE KPI slides show Raw total viewership up 1% from the same period last year. Though USA was up 11% and top 25 cable down 24%.

Smackdown is up 6%, compared to Fox up 13% and the top 4 broadcast networks up 18%.

Counting viewing across practically every major social media platform, WWE’s digital video viewing continues to rise both in time spent and view counts.

WWE sold $5.3 million in venue merchandise for the first quarter back on the road.

10-Q should reveal NA merch per capita.

eCommerce, which increased in early Covid and somewhat offset no venue merch, settled back down to $8.2 million for the quarter.

WWE Network revenue for Q3 was $43.1 million, the lowest for a quarter since Q4 2019.

This is surprising, at least to me. Q2 was a full quarter under the Peacock deal and was at $61.5 million.

Conference call starts in a few minutes. Anyone can listen.
https://streaming.webcasts.com/starthere.jsp?ei=1415046&tp_key=a0e5d24919

The slides are hardcore financial column charts.

The call begins now. SVP Michael Weitz opens the call and introduces Vince McMahon, Nick Khan, Stephanie McMahon, and Kristina Salen.

He turns the call over to Vince.

Vince on the return to touring: “This is where the WWE brand really comes alive in so many respects”

Vince mentions new ways to monetize IP in the “evolution of sports entertainment”. His comments are brief as usual lately and he hands it over to Nick Khan with prepared remarks.

Nick discusses Hulu and hypes the “battle” for next-day rights to WWE’s flagship programs, which is likely being negotiated with multiple possible suitors currently.

The 10-Q drops:

https://otp.tools.investis.com/clients/us/wwe/SEC/sec-show.aspx?FilingId=15329419&Cik=0001091907&Type=PDF&hasPdf=1

Nick is giving his usual master class on the recent history of media rights.

He calls cuts of the Netflix documentary on Vince “out of this world. Wait until you see it.”

Nick goes over the PPV schedule, the strategic timing of events, and stadium events.

He highlights the new trading card deal with Panini, calling it “a significant step up from our previous deal” with Topps.

Nick says they’ve spent significant in-person time with Fox executives lately.

He turns over to CBO Stephanie McMahon.

“I have to start with some bad news. WWE superstar the Miz was eliminated from Dancing With the Stars this week.”

Stephanie mentions, as Nick did, Summerslam 2021 at Allegiant Stadium had a gate more than 4x greater than the gate of 2019 Summerslam.

She highlights John Cena’s return and mentions the returns of Becky Lynch, and Brock Lesnar.

WWE’s ad & sponsorships strategy has shifted from transactional to contractual, just as WWE’s business overall has, Stephanie says.

Would you ever see Patrick Mahomes spray players down in water after a touchdown, or zombies replace the offensive line? Steph questions. Well you can in WWE. (paraphrasing, but yes she really said this)

Xavier Woods’ Up Up Down Down gets a mention.

“A slight increase in ratings from both Raw and Smackdown” despite strong competition from sports.

“We are the #1 sports brand on TikTok over the NBA with 14.5 million followers.”

WWE will be creating AR experiences with Snapchat at upcoming events.

Stephanie turns the call over the CFO Kristina Salen, who speaks on the investor presentation slides.

Salen talks about the live events reporting. WWE reported $9.1 million in operating income on its live events division.

My note, the division struggled in pre-Covid non-Wrestlemania quarters to profit, so this is especially remarkable.

Salen discusses WWE raising its adjusted OIBDA guidance.

“Large-scale international event” continues to be the preferred euphemism for Saudi Arabia events. It’s apparent from executive comments today there won’t be another until 2022, as expected. The next is probably Feb.

Q&A begins now. Note for wrestling news sites: these are stock analysts, not callers or investors.

Laura Martin from Needham asks if WWE ad revenue was affected by iOS 14.5 upgrade. Salen answers they weren’t affected.

Martin asks about NFTs, the role of the metaverse. How big do you think NFTs are as a part of metaverse?

Nick thinks it’s “robust now” and will become even more so, here to stay.

Brandon Ross from Lightshed asks about turn over at mid and upper level management. What are org goals with new personnel.

Nick says we want the most efficient business model possible. It’s about having right people in place. It seems to be working, we raised guidance.

Ross asks about NXT changes. How do you feel about progress.

Nick says we think it’s all started the way we wanted it to start. Already seeing some talent elevated to main roster. Recruiting efforts, spearheaded by Paul Levesque and Bruce Prichard are focused on young athletes

…athletes may not be in the quote unquote wrestling space.

Analyst (missed name) filling in for Ben Swinburne of Morgan Stanley asks about international rights.

In the MENA region we continue to work on it. Something we remain optimistic and bullish on.

Curry Baker from Guggenheim asks about sponsorship opportunity size, believes WWE is undermonetized relative to other sports.

Stephanie says no reason why 3-5 years they can’t be in hundreds of millions of dollars (seems to mean annual revenue ad & sponsors).

David Joyce from Barclays asks if there’s going to be more volatility in licensing comparability going forward? 2nd, stadium model, what does it do to event volume?

Nick says no stadium events aren’t going to impact volume of Raw, SD, NXT events. These PPV events are separate.

Salen says a Wrestlemania quarter has the greatest allocation of revenue for Peacock. My note, which possibly explains the difference in revenue in the Network line for this quarter compared to the previous quarter.

SVP Michael Weitz ends the call.

Thanks for following along!

I’ll be going live on YouTube with Live TV Ratings Talk at 7pm ET: https://youtu.be/ALh0Laj2MvI

Then at 8pm ET we do WWE Q3 Earnings talk for patrons only:

https://www.patreon.com/posts/58292276


Jason Ounpraseuth has covered pro wrestling since 2019. He co-hosts the Gentlemen’s Wrestling Podcast.

Brandon Thurston has written about wrestling business since 2015. He’s also an independent pro wrestler and trainer. For more, see our About page.


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