WWE Q1 2021 Earnings Report Estimate and Preview

WWE releases its first quarter 2021 earnings today. Financial details will be disclosed covering the period of January 1 to March 31.

An earnings report and other documents are expected to be released soon after the market closes at 4pm ET. A conference call will be streamed live at 5pm ET on WWE’s corporate website with comments from CEO Vince McMahon, president and chief revenue officer Nick Khan, chief financial officer Kristina Salen, and chief brand officer Stephanie McMahon.

At 8pm ET tonight I’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.

Keep in mind Wrestlemania happened in April, so details related to those events may be limited. The two-day event generated $6.2 million in ticket revenue, according to records we obtained through the Tampa Sports Authority. Information related to ticket or merchandise sales for Wrestlemania would be included in reporting for Q2 (April 1 to June 30). Earnings for that period will come out in the next quarterly report, in July or August.

The average stock analyst covering WWE estimates the company will report an earnings per share ratio of $0.22 for Q1, according to Seeking Alpha. That implies an expectation of about $18 million in net income. The consensus revenue estimate is $257.5 million. The market will be closed for trading for the day, but WWE’s stock price might move accordingly if WWE reports figures lower or higher than those estimates.

For the quarter, my estimates are $231.5 million in revenue, an EPS of $0.20, operating income of $31.2 million, and net income of $16.9 million.

Cells shaded in green for Q4 assume there is a major event held in Saudi Arabia during that period. Categories shaded in pink are profit metrics.

Here are a few subjects and questions that might be addressed in the earnings report or that stock analysts might ask about in the Q&A session on the conference call.

Revenue structure of the Peacock deal

On the last earnings call, in February, CFO Kristina Salen indicated 2021 would be the biggest revenue year in the five-year lifetime of the new Peacock deal. Salen said:

2021 will be the biggest year in the deal from an incremental revenue and adjusted OIBDA perspective, because upon delivery of the deal, so to speak, upon the onset, we have to value the subscribers that we’re transferring over and we have to value any IP that we’re transferring over. And that will be all recognized in 2021. And then in 2022, you’ll have the regular revenue recognition of the ongoing deal.

Details reported or other new guidance related to the WWE Network segment might shed some light on how the company was compensated by NBCUniversal for the Network content in Q1. It’s important to remember Peacock launched WWE Network content on March 18, with just under two weeks remaining in the reporting period, so Peacock payments might be prorated into only a small fraction of the quarter. The Network segment might also be affected by cancellations of U.S. subscriptions for the final days of domestic version of the Network.

Measuring WWE Network success going forward

How do investors measure success for WWE on Peacock? Nick Khan said in a recent interview (before Wrestlemania) that the Fastlane pay-per-view, the first monthly peak event on Peacock was a success, but that NBCUniversal had asked WWE not to disclose numbers. I would be mildly surprised if WWE is able to quantify any information related to the performance of WWE content on Peacock going forward. That said, WWE might still continue to disclose subscriber counts for its international markets, as it has in the past. If so, that will be a way to track engagement in Network content

In that case, how did international subs perform in Q1? Do we get any news on what the international sub count was immediately after Wrestlemania?

Growth opportunities in licensing

The Other media segment (when it doesn’t contain Saudi event revenue), which contains WWE Studios, is increasingly driven by licensed content, including from A&E programs, E! reality series. There’s a Netflix document on Vince McMahon announced. What other licensing opportunities does WWE think are possible there?

What other areas of growth is WWE going to focus on? With perhaps a return to live events and normal life in the foreseeable future, is there an opportunity to license WWE content to a major theme park? Universal Studios seems like an obvious candidate, since NBCUniversal is by far WWE’s biggest customer. Perhaps the lesson learned early in the pandemic about how much money can be saved by producing Raw and Smackdown at a fixed location could be adopted in short-terms as part of a theme park agreement.

What did WWE learn from its release of its first NFTs (featuring The Undertaker) earlier this month? Does the company feel this is a product its fan base will continue to have interest in? Are there more NFT sales on the horizon? Is this yet another licensing opportunity?

International strategy

Nick Khan made clear he sees Latin America and specifically Mexico as a region where WWE could grow revenues. Does WWE see that region as a destination for a performance center and an NXT brand. Given how different the wrestling culture is in Mexico compared to the U.S. and western environment where WWE dominates, what’s the company doing to ensure it’s ready to execute effectively in that market?

Is EVP Paul Levesque “global localization” strategy still a vision the company intends on executing in the way Levesque presented it at the WWE Business Partner Summit in 2018? What other regions, possibly including India and Japan, does WWE see opportunities for expansion?

The Thunderdome is expensive

Media operating expenses should reveal another round of hints about expenses related to the Thunderdome and Capital Wrestling Center, although it’s been made pretty clear at this point by executives’ comments and company filings that the current production setting, with fans watching remotely on screens, is more expensive than a live touring model would be.

Stock buyback program

Is WWE resuming its stock repurchase program that it put on hold at the beginning of the pandemic? The company ended 2020 with more cash on hand than at any time in at least the last 15 years by a 2x multiple, so can likely afford to buyback shares again as a way to return value to investors. If WWE is not resuming the program, what’s the argument to shareholders for doing so given the cash-rich state of WWE’s finances and guaranteed nature of much of the company’s revenues?

Reporting methods

This is the first quarter for the new year and with a new CFO in place. Will WWE’s reporting methods change? Is the current segment detail structure (seen in the table above) the way Salen and WWE want to report going forward?

Brandon Thurston has written about wrestling business since 2015. He’s also worked as an independent wrestler and trainer.

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Final evaluation of the WWE Network

For anyone in the U.S., Peacock Premium becomes the exclusive home for WWE Network content, beginning April 4. It will be the end of an era of business for Vince McMahon’s company, which seven years ago boldly launched its own streaming service.

So let’s reflect. Did it work out? Is WWE more or less profitable today because of the Network? Is the sale of the domestic rights a sign of failure? Could it have turned out differently? I’ll try to answer those questions here.

There are a few signs the WWE Network was a disappointment, including:

The WWE Network, as implemented, has not produced an obvious positive return on the investment, in my estimation. I will explain further in this article.
Subscriptions plateaued around 1.6 million by 2019, well short of WWE’s public goal of 3 million.
Former co-presidents, George Barrios and Michelle Wilson, the architects of the Network strategy were abruptly terminated in January 2020, at the same time WWE made clear it was interested in selling the rights to the Network content and discarding the direct-to-consumer model.

What we need to know about WWE Network profitability

Figuring out whether WWE is more or less profitable today because of the Network is ultimately hypothetical. To do so, we have to conceive of at least one alternate scenario and compare it to WWE’s actual financial performance during the years in which the Network existed.

It’s important to understand a few points when thinking about the WWE Network, which makes concluding the company made a positive return on this investment more difficult:

The WWE Network cannibalized the pay-per-view business, as many people are aware.
It also cannibalized DVD/Bluray, digital VOD sales, and internet pay-per-view sales.
An issue often overlooked: The timing of the WWE Network launch negatively affected WWE’s TV rights negotiations that were ongoing in early 2014. Vince McMahon confirmed this publicly.
The WWE Network required around $66 million in start-up expenses. These expenses were incurred beginning as early as 2011, according to company public filings, which raises the financial benchmark for a positive return on investment.
But there were benefits too. The Network allowed the company to sell more ad inventory and increased the number of viewers who saw sponsors on monthly peak events.
A vast amount of data was collected since millions of user accounts were created, which allowed for targeted marketing. However WWE’s attempts at selling wrestling fans’ data to third parties was disappointing, I’ve been told.
And you could write a whole other article on the potential opportunity WWE may have had in growing a video streaming business (much like its shuttered WWE 24/7 and Classics On-Demand business) that attempted to monetize the company’s video library but didn’t include live broadcasts of monthly PPV events.

Later on in this article I’ll show the results of my estimates about what WWE’s profitability could’ve been, in an alternate timeline, if the WWE Network was never launched, compared to my estimates of the company’s profitability in our actual timeline. Profitability is here measured as OIBDA (operating income before depreciation and amortization).

This estimate is somewhat further complicated by the fact WWE changed its financial reporting method after 2017, requiring me to do estimates on the actual timeline as well as the hypothetical “alternate” timelines.

To come up with a likely scenario where the WWE Network is a financial winner, I have to imagine a “bear case” alternate timeline in which pay-per-view demand from 2014 to 2020 severely declines.

Alright, let’s try to do the math

Following these graphs are the key assumptions behind them.

For the “actual” timeline, we have actual OIBDA details in the segments shown in the above column graph reported by WWE for the years 2011 to 2017. Because WWE changed its reporting method thereafter, estimates had to be made for the years 2018 to 2020. The key assumptions for those later years were:

WWE Network OIBDA margin of ~33%
Digital Media OIBDA margin of ~30%
Digital Media revenue equivalent to ~67% of media ads & sponsors revenue.
Home Entertainment OIBDA margin of ~13%. Revenues less than $2 million, beginning 2019.

For “Base case” alternate timeline, the key assumptions were:

Traditional PPV generates ~$44 million in incremental annual OIBDA, 2013 to 2020
Internet PPV generates ~$4 million in incremental annual OIBDA, 2014 to 2020.
Home Entertainment OIBDA at a rate of ~1.5x of actual timeline, beginning 2015.

For “Bear case” alternate timeline, the key assumptions were:

PPV and internet PPV sales and profitability decline over time, consistent with worldwide Google search trends, resulting in $63 million less (-14%) lower OIBDA from pay-per-view.
Same Home Entertainment assumption as “Base case”.

Below are revenue and OIBDA estimates tables for the three relevant scenarios: “actual”, “base alternate”, and “bear alternate”.

You’ll notice I didn’t deal with the benefits of ad revenue or the value of user data, mentioned earlier, in these models. WWE’s filings don’t give us much clue on how to calculate those values. I tend to believe those factors’ accretive OIBDA is relatively low on the scale of the calculations made here, but maybe it makes the difference of a few million in OIBDA.

If we accept the “bear case” conclusion that the WWE Network added about $42 million in OIBDA for the company, that would mean the WWE Network meant, at best, a 5% increase in OIBDA over the entire Network era. WWE generated about $915 million in total company OIBDA in the years from 2011 to 2020.

In this generous “bear case”, the Network provides a small incremental increase in profitability, but not the kind of “transformational” change that was hyped at the product’s launch.

So why didn’t things turn out better?

The $9.99 price point was too low, possibly because WWE executives misunderstood the product’s place in media In pricing the Network, WWE placed itself nearer to scripted entertainment pricing than sports. In hindsight, $15 or $20 monthly would’ve been more appropriate.

At the time of the Network’s launch as well as today, sports leagues charge their fans higher prices for access to out-of-market games. That’s especially evident if you average the annual cost only over the months in which the league operates its regular season, as shown in the “Standard price point” chart above.

Per month of its regular season, MLB charged $18 in 2014. The NFL went as high as $60, and higher today. Yet in its domestic market WWE in 2014 and until it transfers rights to NBCU in 2021, charged subscribers just $10 monthly — more along the lines of the monthly fee for services like Netflix or Hulu.

So why did WWE price its service at $10, more like a scripted entertainment service and less like a sports streaming service?

Since Vince McMahon took control of the company in the 1980s, he’s worked hard to move his wrestling product toward being seen as “show business”, entertainment rather than sport. I think one of the core impediments for WWE growing its consumer revenues is McMahon’s unwillingness to embrace his product for the simulated sport that it is. Usually, that flaw only manifests in onscreen creative. McMahon is normally an effective corporate leader, eager to bet on new media like cable TV, pay-per-view, social media, or streaming. But in this case, his philosophy of imagining WWE “not as sport but as family-oriented sports entertainment” may have been a detriment to corporate strategy, too.

Pay-per-views were sold at a variety of price points for many years and it didn’t seem to have a strong effect on sales. The PPV price of the biggest show of the year, Wrestlemania, nearly doubled in price from 2005 to 2013, gradually increasing from $35 to $60. It’s not clear price increases affected demand.

It’s much more likely, in my view, whatever affected the change in Wrestlemania PPV sales from year-to-year had much more to do with the hype around the matches on the event. It was a good business decision to raise the PPV price on Wrestlemania (and on PPVs generally).

To illustrate a point, if the worldwide monthly WWE Network price was about $20, paid subscribers could have been half of the actual achieved number (about 1.5 million) and generated similar revenue.

1.3 million subscribers at $15 monthly would generate $234 million annual revenue, almost 30% more than the actual performance of the Network in 2020, and edging out the average annual value of the new Peacock deal ($200 million). This hypothetical $234 million, though, is far short of WWE’s original goal of 3 million worldwide subscribers at $10, generating about $360 million in revenue.

In retrospect, as we explored earlier, it’s likely value was lost by essentially underpricing $60 PPVs at $10 for seven years. That lost value can hardly be regained. The Peacock deal (worth an average of about $200 million per year) salvaged the value remaining in PPV events by guaranteeing incremental revenue over a direct-to-consumer subscriber business (generating around $132 million domestically per year) that fell stagnant. Trying to put the genie back in the bottle and revert to a la carte sales of monthly events at a high price point would likely be met with resistance. I think it would present a massive friction point for a significant number of regular customers. WWE and NBCUniversal apparently recognize the old model can’t be reverted to at this point, given the decision to keep monthly PPVs as part of a low monthly fee.

Disenfranchised wrestling fans who would like to see WWE face economic consequences for perceived bad creative, is a sentence this media economy, with its need for live sports, never serves. Better developed stars and creative would’ve helped Network subscriptions, for sure, but the Network disappointed more due to strategy than creative.

The fault of the WWE Network was that executives didn’t recognize that wrestling is maybe the only medium on Earth that so overlaps sports and scripted entertainment. And if you understand that peculiarity, you’ll better understand wrestling price points, DVR viewing, linear viewership, broadcast rights, and probably more.

Final answers

Is WWE more profitable today because of the Network?

It’s a hypothetical question, but the answer isn’t an obvious ‘yes’. The Network as a business was more profitable than the previous pay-per-view business in isolated years, but the Network’s startup costs and cannibalization of other businesses offset much of the financial benefits for the duration of of the service’s run as a mainly direct-to-consumer product.

Is the sale of domestic rights a sign that the Network failed?

It’s a sign that it didn’t work out the way it was expected to. Executives had lofty subscriber goals that the Network fell well short of. By 2020, subscribers didn’t look like they were poised to grow much further. Raising the monthly fee would be risky. Selling rights to the content to a larger media company looking to invest in streaming at a higher scale is likely the better way to grow revenues related to the content.

Could it have turned out differently?

Certainly. In hindsight, I think the Network was obviously underpriced. I think a lower but not-that-much-lower number of subscribers could’ve been captured at $15 or even $20 monthly. Or access to the full library could’ve been part of a higher-priced premium tier. Or the most popular pay-per-views could’ve been left off the service and continued to be sold for $60 while still monetizing the library and other new content via streaming, which might’ve generated greater profitability.

Brandon Thurston has written about wrestling business since 2015. He’s also worked as an independent wrestler and trainer.

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Live coverage: WWE Q4 2020 earnings results and conference call

This post will be updated throughout the day. You can also follow along @BrandonThurston.

Today I’ll be covering WWE’s Q4 earnings report. Much discussion of the new Peacock deal, plus annual records in profit and revenues are expected.

Documents release around 4:30pm ET at corporate.wwe.com. Conference call at 5pm.

Here are some things to inform you for the day ahead:

Last night I wrote a preview on possible topics to be discussed:

WWE Q4 2020 Earnings Report Preview: Suggested questions ahead of report of record profits

In November I wrote an estimate of results:

Q4 2020 Estimate: WWE will double its annual net income from 2019

Earlier this week I completed a 63-page PDF report on the entire industry in 2020:

Documents have dropped!

Earnings press release: https://corporate.wwe.com/~/media/Files/W/WWE/press-releases/2021/4q20-earnings-pr.pdf

KPIs:

Click to access q4-2020-kpi.pdf

WWE reports Q4 net income of $13.6 million and a total of $131.8 million for full year 2020, a new company record.

Q4 revenue is $238.2m and $974m for 2020.

WWE reports EPS of $0.15 for Q4. Average EPS estimate was 0.32, so Q4 was about half as profitable as analysts expected.

Key Performance Indicator slides show Smackdown holding up better in Q4 on broadcast than Raw on cable.

WWE Network average paid subscribers for the period were up for the second consecutive quarter.

Online video consumption continued to grow in Q4.

Click to access q4-2020-kpi.pdf

WWE today records its highest annual net income in history, adjusted for inflation.

WWE records its highest annual revenue ever, adjusted for inflation, just short of $1 billion.

If operating income (before taxes and other adjustments) is your preferred profit metric, we don’t have as deep records on that but WWE appears to have shattered that record as well in 2020.

The annual report (10-K) has already posted:

https://otp.tools.investis.com/clients/us/wwe/SEC/sec-show.aspx?FilingId=14672396&Cik=0001091907&Type=PDF&hasPdf=1

The annual report (10-K) has already posted:

https://otp.tools.investis.com/clients/us/wwe/SEC/sec-show.aspx?FilingId=14672396&Cik=0001091907&Type=PDF&hasPdf=1

WWE had a strong year for online merch in 2020, generating $41 million, the most ever in a year. This somewhat offset the lack of venue merch sales since March. Orders were up from the prior year and the average revenue per order was the highest in at least 13 years, at $56.72.

There isn’t a ton of new information in the earnings release on outlook since WWE gave guidance last week when it announced the Peacock deal. WWE projects adjusted OIBDA (their preferred non-GAAP profit measure) for 2021 that’s within the range of what’s recorded for 2020.

As we wait for Vince McMahon, Nick Khan, Kristina Salen, and Stephanie McMahon to begin the conference call.

WWE was low on profitability in Q4 relative to analyst expectations. Not to an alarming degree, but the stock is adjusting down 4% currently in after hours trading.

Conference call on http://corporate.wwe.com finally beings. Sounds like we join in progress and there may’ve been issues with the audio stream. WWE president Nick Khan is talking, putting over the Superstar Spectacle and now Bad Bunny’s appearance at Royal Rumble.

Normally Vince opens the call. Sounds like we might’ve missed that on the corporate site web stream.

Khan talks about WWE targeting LATAM and India regions. In China, WWE launch on Tencent video.

You will see WWE championship belts using team logos.

He hands over to Stephanie.

I will now try to summarize and/or quote WWE execs. These may in some cases be paraphrases. Stephanie narrates WWE Network history and the next steps with licensing to Peacock.

Steph puts over talent appearing outside content, celebrities appearing inside. Matthew McConaughey. Yes Steph does mention Sasha Banks on Mandalorian. Rey Mysterio wearing the Victoria brand on his mask and posted on social media to his followers in Spanish how proud he was.

WWE CFO Kristina Salen begins. She reviews WWE’s record revenue and record profit. “Large-scale international event” is code of Saudi events.

Salen says Thunderdome increase production costs by approximately 25% per episode. Unclear if that’s relative to PC production or pre-Covid production costs.

Salen mentions Wrestlemania but urges WWE doesn’t anticipate the return to ticket live events until at least the second half of 2021.

Salen says sales for championship belts grew more than 100% in 2020. Seems this is likely a big part of what’s driving the increase in revenue per eCommerce order.

Salen notes 2022 and future years will be impact by variety of factors. Contractual escalation of core content rights fees will drive growth. Other factors may temper growth. We expect highest incremental impact of Peacock in 2021.

TV production costs after Covid may be lower than Thunderdome, but higher than 2019 due to Monday to Friday TV production.

Will want to carefully relisten to this guidance later.

This ends prepared remarks. Q&A begins!

Paraphrasing!

Q: More color on costs for Peacock deal? One-time migration expenses?

Salen: Migration costs in Q1, embedded in guidance already. Tech infrastructure savings will be offset “by investing in systems that are long overdue.”

Q: On revenue side of Peacock deal. Any offsets there besides subscriber revenue going away? Stephanie, sponsorship opportunity following deal going to NBCU?

Steph: We can comment on specific deal terms but NBCU is industry leader in sales & spons space.

Salen: Revenue impact is embedded in guidance. And no other offsets besides subscription revenue.

Q: Is there ability to move higher profile content off PPVs and into Raw to bring Raw ratings up?

Khan takes Q, not Vince. Khan seems to tactfully answer no, focusing on Peacock.

Laura Martin of Needham tries to ask Vince a question. Nick takes this one too. It doesn’t seem Vince is in the room.

Khan says international plan just getting started, a lot of room for growth. Stephanie took over sales and sponsorship area. With NBCU partnership you’ll see more ad/spons opportunities. Championship belt deal “with just one of the major sports leagues”, doesn’t say which.

Q: What’s WWE doing to drive viewers back to Raw and Smackdown?

Khan: We don’t believe we’ve lost eyeballs. We believe eyeballs shift from linear to digital. Now that we’re out of presidential race, virus still focused on. With great in-ring product, there’ll be growth.

Q: Is the rest of media industry move to off load rights to bigger platforms? What’s given up by leaving DTC? Data?

Khan says to look for WWE events to big piggyback onto NBC events.

Salen assures there is no upcharge around special content (PPVs) so there won’t be volatility.

Q: How will NBCU evaluate success of WWE content on Peacock? Sub adds, ad sales?

Khan explains the three Rs: ratings, relevancy, and revenue. Ratings based on subs. Relevancy, as excited as they are about it. And revenue it’s an opportunity for them to sell against it.

Khan: “We think it has no impact on us, the departure of NBC Sports Network… There’ll be no affect on Raw or NXT.”

Very direct answer that seems to say Raw and more interestingly NXT won’t be affected by NBC Sports Network content potentially moving to USA Network.

Q: Can you help us understand profitability of Saudi events?

Salen says looking at Q4 2020 should give you an idea of the absence of a KSA event has.

Q: Do both KSA events in a given year have same profitability?

Salen: Talking about live events is hyper theoretical right now.

The call has ended.

Clarifying: Vince McMahon was in fact on the call at least at the beginning. Full audio replay is up at https://streaming.webcasts.com/starthere.jsp?ei=1278679&tp_key=5afce1de54

Brandon Thurston has written about wrestling business since 2015. He’s also worked as an independent wrestler and trainer.

This article is available for everyone because of support from our subscribers.

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WWE Q4 2020 Earnings Report Preview: Suggested questions ahead of report of record profits

WWE is expected to report 2020 was the company’s most profitable year ever tomorrow (Thursday). Fourth quarter and therefore full-year 2020 results will be reported just after the market closes.

Below we’ll look at some questions that might be (and some that almost certainly some won’t be) discussed during the call. The Q&A session in which stock analysts get to ask questions to WWE executives is of particular interest here.

I’ll be covering the report and earnings call as it happens, on Twitter (@BrandonThurston) and here on wrestlenomics.com.

WWE officers scheduled to be on the call are the same as the Q3 call in October: WWE chairman and CEO Vince McMahon, president and chief revenue officer Nick Khan, chief financial officer Kristina Salen, and chief brand officer Stephanie McMahon. As always, anyone can listen to the conference call live on corporate.wwe.com at 5:00pm ET.

If you’re reading this, you probably know who Vince and Stephanie are. Khan and Salen are relatively new to WWE. They were hired by the company in 2020. Both started around August of last year. When he was with CAA (Creative Artists Agency) Khan negotiated WWE’s current U.S. television deals with NBCUniversal and Fox. Salen is a former CFO at Etsy and Moda Operandi.

The new deal with Peacock, granting the NBCU streaming service U.S. rights to all WWE Network content is Khan’s first major deal as WWE president. Expect information about the Peacock deal to be a frequent topic of conversation on the conference call.

1. Future of the WWE Network on Peacock

How does the Peacock deal affect WWE’s expenses? Does the Peacock deal entail employee reductions? Are there commitments to data that WWE (including employee positions) no longer needs to invest in? Are there other expenses NBCU will absorb? Will Endeavor continue to provide CDN for WWE Network?

What are some key lessons the company learned from the seven-year WWE Network project? It may have been a challenge for a company that has a long history of producing content to tackle a tech-heavy project like this. How much of a factor does WWE feel that was in the Network not driving more revenue on a purely direct-to-consumer model in the U.S.?

How seriously was selling select events like Wrestlemania as a standalone pay-per-view event (like ESPN+ does with UFC) considered? Wrestlemania is clearly included in Peacock Premium this year. Is that something that’s off the table now?

Other than the reported $1 billion in fees over five years, how does the deal affect WWE’s revenues? What does the deal mean for WWE’s media advertising and sponsorship revenues? Does NBCU now get a portion of revenues from WWE’s major advertisers like Snickers’ official sponsorship of Wrestlemania?

There’s a vast library of content currently available on the WWE Network. Should subscribers expect that 100% of the content they had access to on the WWE Network will be available on Peacock Premium?

Are there incentives in place encouraging WWE to produce monthly pay-per-view events that drive people to subscribe to Peacock? The new deal with Peacock has a five-year term, so there is the incentive that WWE wants its content to perform well so that there’s a better deal waiting at the end of this one. That’s a kind of incentive. But is any part of WWE’s compensation based on performance? Are there an incentives based on subscriber activity or viewership on Peacock?

2. Does the Peacock deal bring WWE closer to being acquired by NBCU/Comcast?

There will be no straight answers here, but NBCU now owns U.S. rights to Raw and the Network content, paying WWE somewhere around $465 million annually ($265 million for Raw and $200 million for Network content). Over the course of both of those agreements, NBCU will have paid WWE more than $2 billion, nearly half the market capital of WWE. Does the latest deal get NBCUniversal closer to acquisition? Is acquisition on the table when Raw rights are renegotiated, likely beginning some time next year? This might be a question for Comcast’s (NBCU’s parent) executives as well.

3. How does WWE see NBCU folding NBC Sports and moving sports content to USA Network (and other NBCU platforms) affecting WWE content? NXT in particular.

It likely is, but can investors have some reassurance Raw is safe Monday nights in primetime? Will there be an preemptions of Raw in the future due to sports programming?

Are there cross-promotional opportunities between WWE and other sports programming? Granted, WWE’s matches are predetermined, but with USA Network taking on more sports content, is there any consideration into categorizing Raw and NXT as sports like how Fox categorizes Smackdown and how TNT categorizes AEW?

NXT is currently on Wednesday nights where it runs head-to-head with AEW Dynamite. It seems possible if NBCU retains NHL rights that hockey could take precedent on Wednesday nights on USA. NXT hasn’t beaten AEW in viewership in months and hasn’t led with viewers 18-49 in more than a year. Is it better for building the NXT brand to move the program to another night? How important does the company view directly competing with AEW? Does higher viewership for AEW pose a risk to WWE’s own future media rights value?

Is there any update the company can give on NXT negotiations? Will the company publicly confirm the NXT deal with NBCU expires in the fall? Under prior management, WWE stated part of the reason for moving NXT off of the WWE Network and on to linear TV was to grow media rights value of a third weekly brand. Two years later, does the company feel that’s been a success? Furthermore, is Peacock a possible future home for NXT?

4. Hiring of Christine Lubrano as SVP of Creative Writing Operations

The former IFC executive joins WWE, where she’ll work with Bruce Prichard. The press release states Lubrano will work under EVP of operations Brad Blum, but it sounds like Lubrano and Prichard are now the key people on the creative team under Vince. What skills does Lubrano bring that will be especially additive to WWE’s programming? WWE’s talent roster of women and obviously the company’s focus on female talent as serious athletes have grown tremendously in recent years. What percentage of the company’s creative team are women?

5. What’s the company’s latest analysis of Raw and Smackdown ratings? Why are AEW and NXT not seeing similar trends?

Raw and Smackdown have stabilized since the addition of the Thunderdome. Both programs are actually seeing an upward trend in recent weeks. Raw is boosted by lack of competition from the NFL since its season recently ended. Both programs still are not back to where they were before the pandemic, while NXT and AEW held up more consistently since full live audiences were restricted.

This is especially noticeable in trends among younger viewers like those in the 18-34 category. In fact, the majority of viewers for WWE’s programs are 50 or older. It seems wrestlers, too, (at least those on flagships Raw and Smackdown) on average are getting older. What’s WWE doing to address this?

Source: Wrestlenomics Pro Wrestling Industry Report 2020

6. Why was it important to announce locations for Wrestlemania this far in advance? Will Wrestlemania be a two-day event going forward?

WWE usually doesn’t announce the Wrestlemania location for the event two years ahead. Was this simply due to the Tampa postponement reordering the schedule? Or were there other factors?

Wrestlemania events for 2022 and 2023 are referred to in the press release as one day only, yet this year’s event and last year’s are two-day events. Is the company considering making this a permanent feature going forward? Might that be the best way to monetize the company’s peak annual event? Seems there would be further opportunity to generate ticket and merchandise revenue, and the company has a growing roster of talent. One-day Wrestlemania events in previous years were several hours long.

7. Is WWE trying to integrate talent and advertisers?

Stephanie McMahon has spoken in interviews about the value of integrating advertising opportunities within the programming itself. Was Rey Mysterio’s Victoria Beer wrestling attire an early example of things to come? How does WWE feel this benefits advertisers and the talent?

8. What’s the latest with NXT’s “Global Localization” strategy?

WWE recently aired its “Superstar Spectacle” event aimed at India. Are there more localized programs like this in the works? Will an NXT India brand be launched in the near future? Would that mean a Performance Center would be established in the region as well? Are there other regions that are closer to being developed? How has Covid affected this strategy overall?

A docket showing WWE involved in litigation in Connecticut against the U.S. Citizenship and Immigration Services appeared in public legal resources recently. Does the company foresee any issues with obtaining visas for international talent? Are travel restrictions enacted by the new presidential administration seen as obstacle?

9. What are the company’s plans for the Twitch platform? Cameo?

In September WWE talent were ordered to stop using third-party video platforms like Twitch and Cameo. What opportunities does WWE see there?

10. Has WWE made any decisions about the future of live events?

In the most recent pre-Covid quarters, the live events division struggled to report positive operating income. Losses on live events were particularly evident in quarters not containing Wrestlemania. An increasing amount of WWE’s revenue is coming from media sources. What value does the company see in running house shows (non-televised events)? Is it safe to say, post-Covid, WWE will run a reduced touring schedule?

11. Are there any decisions on the stock buyback program?

WWE stated in July it was considering restarting its stock buyback program that was put on hold at the beginning of the pandemic. Shares have been climbing since the last earnings report. Many analysts have raised their stock price targets recently. It seems this is a subject CFO Kristina Salen would be the key person to hear from on.

Brandon Thurston has written about wrestling business since 2015. He’s also worked as an independent wrestler and trainer.

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