WWE held their fourth quarter and full year 2016 results conference call today. Michael Weiss opened the call and welcomed everyone to the call and noted that Vince McMahon and George Barrios are on the call.

Vince McMahon said that he was happy about the record setting revenue for the WWE and noted that they are super-servicing WWE Network subscribers with new live events and programming such as the WWE United Kingdom Championship Tournament and 205 Live and said that 205 Live would create new revenue for live revenue, merchandising and licensing and said that they have a lot plans for the fans in the United Kingdom also, but gave no timetable for either. Vince then discussed some of the numbers from the earnings results and put over the company’s social media numbers, the amount of content that fans are watching on the WWE Network and said that they are grabbing more land. Vince then noted that they had 101,000 plus at WrestleMania 32, but when you include ushers and ticket takers, it was not the 101,000 paid. Vince noted that he is satisfied with their 2016 performance and that they are looking forward to the growth in 2017.

George Barrios then began to read highlights from the earnings release and noted that the WWE Network is the fifth largest streaming service, while the revenue leap was due to WWE Network subscribers and additional TV rights fees, including the debut of Total Bellas. Barrios said that they have added 15 new blue chip advertisers over the last 2 years, while Snickers will be the official sponsor of WrestleMania 33. Barrios noted that their digital metrics grew and that they had 15 billion video views over social media platforms. Barrios then went on to note that 40% of their new recruits for talent came from outside of the United States and that they had over 500 events on 5 continents in 2016, while they were the second best selling action figure property in the United States, behind only Star Wars. Barrios said that they had 1.5 million paid WWE Network subscribers at the end of January 2017 and that they do not expect a huge surge in subscribers until WrestleMania 33 and that they will provide a new subscriber number the day after WrestleMania 33. Barrios noted that they had a 29% rise in WWEShop orders and that they have $267 million in cash reserves and investments and that they raised $193 million in their recent offerings to investors. Barrios then noted that the floor was open for the Q&A session.

The first caller asked if they could talk about the metrics around the WWE United Kingdom Championship Tournament and what sort of momentum they received from subscriptions, whether there was an uplift from other parts of the world, if there is an update on the WWE UK brand and how soon will they continue building towards a weekly series either on the WWE Network or on Sky Sports. George Barrios said that it did well with subscriber and engagement metrics and that they saw an uptick in the United Kingdom and had good consumption around the world for the tournament and that it was a case of them super-serving their most passionate fans as Vince said earlier. Vince then stepped in and said that in regards to them capitalizing on the momentum that they already have and said that they have integrated talent from the tournament on other areas of WWE programming and said that they are thinking about a weekly show, but that it is not something that they have announced yet and said that there might be other Europeans who might join in the future.

The next question asked about the promotion for 3 months free of the WWE Network for returning subscribers and whether they were included in the current numbers. Barrios said that you will see different promotions as experiments to bring people to or back to the WWE Network and said that the current numbers include some of the free-to-paid subscription conversions. The next question asked about their strategic investments over the year. George Barrios said that they have timing elements to it, so the first quarter has a little more yearover year and said that they are always working to balance their short-term results with investing in the future.

The next question asked if they were going to continue growing live events in 2017 and if so, what markets they plan to tour and why there were more live events in the last quarter yet they were less profitable compared to previous quarters. George Barrios said that there would be an increase in events because of the brand split and said that they increased spending in marketing for events for the end of 2016 and early 2017, so some of the timing, including the Royal Rumble push, come up as expenditures for the final quarter of 2016. The next question noted that they accurately predicted their subscriber growth for 2016 well in advance and asked for their guidance on subscriber growth in 2017. George Barrios said that they did not predict the levels, but gave hypocritical scenarios and it turned out that subscribers came within that range, but that they will not take credit for being that accurate and that this year, they feel more and more comfortable with giving subscriber growth and that they will not give subscriber guidance beyond that and that they aren’t being conservative by not giving guidance for February and March, but know that big events like WrestleMania drive the machine.

The next question asked about the idea of having the WWE Network bundled by another service, similar to what Amazon Prime does with others, charging as an additional fee. George Barrios said that their perspective on deals like that come down to the economics, sharing of the customer information and the sharing of consumption of the content and that as they grow towards direct-to-customer via the WWE Network, they don’t want to do a deal like that across other platforms and said that they are getting lots of data content and details and that they don’t want to make moves that would prevent them having that knowledge. The next question asked why they are holding so much money in the war chest, to which George Barrios noted that potential expenditures, such as the building that they acquired that houses their production facility is one of the reasons and said that they have found that having a balance sheet with significant cash on it helps them as they work with larger companies to show that they have the strength needed. The next question asked where the strongest growth from international markets were, however both declined to comment on that. Barrios noted that the service is an English language product for the most part and that they do not offer downloadable content and noted that they are starting to offer more localized content such as pay-per-views with other languages the next day, as well as the recent UK content. The next caller asked about the potential federal tax charges from the federal guidance, however Barrios declined to comment.

The next question specifically asked Vince about the WWE United Kingdom Championship Tournament and how many different markets he believes that they could do this in and whether this means that the UK talent could appear on WrestleMania similar to other outside talent in the past. Vince said that the WWE United Kingdom Championship Tournament allows them to capitalize on both specific and larger pools of talents and that it may eventually morph into more of a European-style show and that they could do more live events and have more growth in those markets with those talents and that it is their first attempt to do such a thing. Vince then put over Triple H, noting that he has done a great job tapping international talent, but that this is the first time that they are moving back into those markets with specific talents.

The next question asked about advertising on the WWE Network. George Barrios said that their best path to monetization is continuing to grow subscribers for the WWE Network and that they will continue to have light ads on the platform at this time. The next question asked if they were going to do anything special to get people to WrestleMania to help the overall Network to which Barrios said that they will keep the model of 30 days free for new subscribers and that they will be trying different strategies and experiments. The next question asked if they have a gauge of fan interest going into WrestleMania 33 compared to last year with so many injuries and discussed Goldberg returning and his momentum. Vince McMahon said that there is no one talent that keeps this big wheel turning, but that they have more momentum this year compared to last year since there are fewer injuries and more players and storylines to use this time around. Vince said that the brand extension is working extremely well and that they are seeing new viewers coming on board for SmackDown, which is what they wanted and are doing and if more watch one, then they will watch the other and said that they have fresh talent when one shifts from RAW to SmackDown and vice versa and said that the intellectual property and the creative way that they use talents are fresher thanks to the brand extension and that it makes them develop new talents as opposed to keeping the same names on top all the time and that it allows for more tours and that SmackDown being a live show now means that the ratings have been extraordinarily good. The final question asked was about the international language versions of pay-per-view events. George Barrios noted that they put them up as soon as possible after the pay-per-views finish and that they have some surprises coming and that fans will probably see more localization in some form. Michael Weiss then noted that was the end of the Q&A session as Vince McMahon and George Barrios thanked everyone for their questions.