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WWE Q2 Analysis, Would WWE Entertain A Sale Like UFC?, WrestleMania, Live Attendance Drops
- Updated: July 28, 2016
This morning, WWE reported record revenue of $199.0 million for the second quarter of 2016 (April-June). This included the impact of WrestleMania 32 which generated more than $21.5 million in live event revenue, $4.0 million from traditional pay-per-view sales and $3.9 million of venue merchandise sales. There were 1,517,000 average paid WWE Network subscribers during the quarter (firmly in line with WWE’s guidance of “approximately 1.5 million”) and as of June 30, 2016 there was 1,130,000 domestic subscribers and 381,000 international subscribers.
Because WrestleMania 31 was in the first quarter of 2015 and WrestleMania 32 was in the second quarter of 2016, the best way to compare financial results is to look at the combined year-to-date six month data.
For the first half of the year (H1), WWE net revenue has grown 13% compared to the prior year. More than half of the company’s growth has been driven by gains in the Network and Live Events segments. However, this $43.7 million increase in revenue only corresponded to a $900,000 increase in OIBDA (operating income before depreciation and amortization excluding feature film and television production amortization and related impairments – essentially how WWE measures “profit”). Notably, despite $14.4 million growth in the Network segment net revenue (WWE Network + PPV), the Network OIBDA on this segment actually declined by $5.6 million. The majority of the rise in Corporate & Other expenses was due to “global branding, data analytics, and certain talent initiatives, as well as increased legal expenses related to ongoing litigation” in Q2’16.
While non-WrestleMania live event attendance in North America has dropped about 5% this year (6,100/show for January-June 2015 compared to 5,800/show for January-June 2016), WWE has been successful at raising ticket prices (+6% in Q1’16, +12% in Q2’16). Despite WWE’s press release that WrestleMania drew 101,763 fans, the latest Key Performance Indicators slide suggests that actual paid live event attendance for WrestleMania was in the range of 74,000 to 86,000 people. In Q2’16, WWE had a very successful European tour where they averaged 8,000 fans over 19 events (compared to 6,900 fans over 21 events during Q2’15). Overall, WWE’s live event growth continues to come from increased monetization of the remaining domestic fans and growing business internationally.
Paid WWE Network subscribers are currently at an all-time high of 1,130,000 domestic and 381,000 international accounts as of June 30, 2016. Paid domestic subscribers have increased by 21,000 households since WrestleMania 32 while international paid WWE Network subscribers have increased by 36,000 households. Last year, paid domestic subscribers fell by 184,000 between WrestleMania 31 and June 30, 2015 while paid international subscribers increased by 25,000. Free trials on the WWE Network reached their peak at WrestleMania 32 with 281,000 domestic accounts and 89,000 international accounts. That number has returned to the usual levels of 36,000 domestic accounts and 13,000 …
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