WWE held their 2020 fourth quarter and year end conference call today. Michael Weiss opened the call and wished everyone a good morning, noting that WWE Chairman and CEO Vince McMahon, WWE President and Chief Revenue Officer Nick Khan, WWE Chief Brand Officer Stephanie McMahon and WWE Chief Financial Officer Kristina Salen would be on the call.
Vince opened the call, joking that it was the evening time and said that they generated some strong results in what is a challenging environment and that they have not missed a week in creating content. Vince said that they have showed the flexibility of their product to the audience across the different venues and put over the WWE ThunderDome. Vince then mentioned the deal with NBCUniversal’s Peacock streaming service and said that he does not believe that any really big deals have been announced anywhere since COVID-19 and that it was a great deal and of great value for the fans, as for the same $9.99, they get the WWE Network and more great entertainment that is available on Peacock. Vince said that they expect a return, gradually, to ticketed events, but that no one can say what the entire live event world will be and how many fans will be permitted to attend each event, but put over the company as the most versatile, flexible entertainment company today and said that they can turn around a live event and run within 6 weeks.
Nick Khan put over the Peacock deal himself and said that there would be no upcharge when it comes to WWE pay-per-view events and said that back in October, they noted that NBCUniversal and Disney had made streaming their top priority and noted that they had entered discussions with potential partners in the months before they announced the WWE Network/Peacock deal and that they finally landed upon NBCUniversal as the right partner. Khan then put over the WWE and Vince McMahon’s moves over the years, noting that they moved from closed circuit, to pay-per-view, to OTT, to partnering with a major streaming service. Khan then discussed their recent WWE Superstar Spectacle event for Sony in India that also aired on the WWE Network and said that they had record engagement and that the show was viewed by over 20 million on Sony platforms in India, five times what WWE RAW and WWE SmackDown do in the country and noted that they are waiting for the +7 numbers for the market, but that they will be doing more events for sure. Khan said that the partnership with musician Bad Bunny was specifically to appeal to the Latin market and pointed out the success of the mainstream media reporting, as well as the online numbers for the cross-over. Khan noted that the company are licensing scripted and unscripted content and have sold a multi-episode series for John Cena to narrate, while they have closed a deal to integrate WWE content into NBC’s Young Rock series and that deals have been closed for WWE replica belts using the branding of top sports teams.
Stephanie McMahon said that her father taught her to be ahead of the curve and that they were able to be ahead of the curve with WrestleMania, YouTube and social media and that they are ahead of the curve again when it comes to licensing their content to NBCUniversal’s Peacock streaming service. Stephanie said that the landscape has changed and that change was pushed faster by quarantine and COVID-19 and that everyone has a need for branded content. Stephanie noted that they need to pivot and create content, production and storytelling to partner with NBCUniversal and put over their relationship over the last 30 years, noting that the deal with Peacock brings WWE more eyeballs via their 33 million subscribers and integration between WWE and NBCUniversal properties, noting that they believe in the power of the brand. Stephanie said that the audience held steady enough through all the changes this year, claiming that the WWE RAW viewership was essentially unchanged, while SmackDown is up 8%. Stephanie also put over their online viewing numbers and plugged Sasha Banks’ appearance in The Mandalorian as Koska Reeves.
Kristina Salen then began to run down the official numbers, with one of the key things of note being the Salen estimates that the company lost upwards of $90 million as a result of COVID-19 restrictions despite the record results they revealed. Salen revealed that they will return to working on the new WWE headquarters, as well as spending money on technological infrastructure in mid-2021 and will report back as they finish crunching the numbers and noted that they are not reinstating quarterly guidance at this time due to COVID-19. It was then announced that they would be turning things over to the Q&A session.
The first question asked about the NBCUniversal/Peacock deal. Nick Khan said that they will have expenditures in the first quarter of 2021, due in part to migration and that they will have some savings in technology, but that will be offset by investments into technology that are overdue. Khan said that they don’t expect any loss of revenue, beyond subscribers to Network who move to Peacock, but declined to comment about specific revenue and how they might offer Network ad buys into programming. The next question asked about how they intended to grow WWE/Peacock together with content to help WWE RAW. Khan said that they are confident that they can grow the Peacock subscriber base, but that they could always bring pay-per-view content to the ‘linear’ programming, but would have to discuss that and come up with an agreement.
The next question asked whether they will still operate the WWE Network themselves internationally, versus licensing it as they have done so in Canada and the United States. Nick Khan said that they are open to doing the same in other markets and that it is something that they are looking into. The next question asked about sponsorship potential for the company in the future. Stephanie McMahon noted that she took over that side of the business around six months ago and that they have seen a big uptick in that and are confident in their opportunities, noting that they are just getting started in scripted and unscripted programming and are just locking in the first deal with replica belts, with one sports league.
The next question asked about reversing backwards ratings trends and bringing audiences back to the shows. Nick Khan said that they do not believe that they have lost eyeballs, as they have shifted from platform to platform and that based on the revenues and the numbers, they believe that they eyeballs were there and they believe that a great continued in-ring product will see the eyeballs grow and that as COVID-19 and the Presidential Race passes, they will see the linear shows grow. The next question asked if fans are losing anything as part of the new changes with the Peacock announcement and how the mechanics will change for the new deal, specifically with pay-per-view events. Nick Khan said that if you look at the big media conglomerates, there’s not any that is as unique as NBCUniversal right now. Khan said that just a few weeks ago, they announced the locations of the next three WrestleMania events and just that creative output went viral during a football game, noting that they felt great about how that worked and that at the time, the Peacock deal was already done. Khan said that they are finalizing their 2021 pay-per-view calendar and that they can piggy-back promotion onto the big NBC events. Khan said that there will be no upcharge for special WWE events on Peacock, as everything is $4.99 across the board, or $9.99 with no advertisements and that they are still working through the accounting to make sure that it is properly reviewed and that 2021 will see them have to oversee the network subscribers and IP that shifts over and that by 2022, they will have a more standard accounting. Khan said that even outside of the Peacock announcement their deal with FOX saw their FS1 Rumble special viewed by more than one million during its availability.
The next question asked how NBCUniversal will factor the success of the WWE Network on Peacock. Nick Khan said to make the answer short, it comes down to three simple things, ratings, relevancy and revenue. The next question asked how NBCSN shutting down will impact WWE RAW and WWE NXT. Khan said that they believe it will have no impact on them and believe that it is just a case of the lesser strong platforms shutting down and moving to the better platforms, but that it will have no impact on them.
The next question asked about how the live streaming services could change plans on how they license WWE RAW and WWE SmackDown in the future. Nick Khan said that they have their finger on the pulse of what buyers are looking for down the road and that they are open for business, as long as FOX and NBCUniversal are taken care of, as they are their primary partners. The next question asked about the impact of the shows in Saudi Arabia not taking place. Khan said that can be seen in the most recent numbers in the effect of having or not having them shows. Khan said that in a hyper-theoretical world, it is impossible to say what the restrictions and reality will be domestically, much less internationally and that there are too many factors that go in to make it anything but a theoretical discussion. That wrapped up the call.