WWE Q3 Analysis: Why TV Revenue Is Down, SmackDown Ratings, 2017 Outlook, Attendance Notes, Network

The WWE quarterly earnings announcement today was a humdrum affair. There was no blockbuster announcements or stunning revelations.

For the third quarter of this year (July 1 to September 30, 2016), WWE announced revenue of $164.2 million and OIBDA of $24.5 million. (OIBDA is WWE’s principal profit measure.) Compared to the prior year, revenue was down slightly ($166.2m in Q3’15) and OIBDA was up ($23.4m in Q3’15).

Considering how much Television rights has grown in recent years, it may be surprising to see that TV revenues were actually down year-over-year. This was noted as a timing issue based on when 21 episodes of Total Divas and Tough Enough aired in 2015. Those two shows contributed nearly $14m in TV rights revenue for Q3’15 and neither show had comparable airings in Q3’16. Licensing also is down year-over-year “due to a lower effective royalty rate for our franchise video game, WWE 2K16, and lower sales of our toy products.”

During the Q&A, analysts prodded CEO Vince McMahon and CFO George Barrios with questions on the possibility of selling the company (Vince remained unsure and gave the usual vague “we’re open for business” answer), the recent Fan Council survey (Barrios said not to read too much into it) and bundling the WWE Network with other streaming services (Barrios emphasized that economics, viewership and engagement metrics are key to deciding whether something like that would make sense for the brand in the short-term and long-term).

The WWE Network had 1,444,000 paid subscribers as of September 30, 2016. This number was on the low-end of the projections that WWE had shared with investors during last quarter’s conference call. The worldwide split was 1,071,000 domestic subscribers (74%) and 373,000 international subscribers (26%). The WWE Network subscriber number is down from last quarter (1,511,000) with 388,000 subscriber gross additions offset by churn of 455,000 subscribers. The average number of total subscribers over the past quarter was 1,458,000 which is down from the Q2’16 WrestleMania quarter at 1,517,000. For Q4’16, WWE is projecting that the average number of subscribers over the quarter would continue to drop to 1,400,000 (+/- 2%). That means despite the big push for Goldberg versus Brock Lesnar, WWE is still expecting the overall number of subscribers throughout the rest of the year. Internationally, there are no other marketplaces to expand the WWE Network into besides China. WWE had no update on when they would be penetrating the Chinese marketplace with the WWE Network though they remained generally optimistic about the prospect. Ultimately, WWE’s Chief Strategy Officer George Barrios pointed to WrestleMania as the …

continue reading in source www.WrestlingInc.com