WWE Q1 Surprise: Home Entertainment Revenue Surges

Vince McMahon’s World Wrestling Entertainment (WWE) reported $62.5 million in “other” media revenue for the first quarter (ended March 31) — a category that includes disc sales. That compared to $9.4 million in revenue during the previous-year period. The revenue surge was largely due to the favorable timing of the company’s large-scale international event “Super ShowDown,” in addition to theatrical and direct-to-home video DVDs sold at Walmart, Target, Best Buy and other big-box retailers.

Separately, WWE Network, the company’s subscription streaming video platform, saw average paid subscribers decrease 8% to about 1.46 million, consistent with company’s guidance. McMahon and senior management are attempting to restructure the $9.99 monthly SVOD, including expanding distribution internationally.

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McMahon said the quarter’s financial performance was largely unimpacted by the COVID-19 outbreak, but added the situation could change going forward.

“We are in the midst of unprecedented times, which require us to be especially nimble, creative and efficient in order to ensure the long-term value of WWE,” McMahon said in a statement.

Indeed, the executive earlier this month permanently shuttered his pet pro football project, the XFL, for the second time with no plans to bring the league back in 2021. Featuring former college football players and NFL rejects, the XFL lasted halfway through a 10-game season before being shut down due to concerns about COVID-19.

The WWE also relocated its annual Wrestlemania event, slated for late March, to its Orlando training center, holding matches without any crowds.

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Interim CFO Frank Riddick said that ongoing uncertainties of the potential impacts of COVID-19 on the business have resulted in reduced employee, talent and other costs and delayed approximately $140 million in capital spending related to the WWE’s new headquarters.

“This was done to strengthen our financial performance going forward and to ensure we have the resources necessary to execute our value creation strategy,” Riddick said.

XFL Cancels Remaining 2020 Season

As expected, Vince McMahon’s alternative reboot of professional football, the XFL, March 20 formally canceled the remaining half of its season due to concerns about the spread of the coronavirus in the United States.

In a statement, league CEO Oliver Luck (father of former NFL QB Andrew Luck) and COO Jeffrey Pollack said they had little choice but canceling the season with COVID-19 infections topping 19,000 in the United States.

“This decision has been made with the health and safety of the entire XFL family as our top priority,” Luck and Pollack wrote.

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A mainstay on ESPN and Fox Sports for football-crazy consumers, the XFL featured eight teams in Dallas, St. Louis, Houston, Los Angeles, New York, Seattle, Tampa Bay and Washington D.C., a 10-week season that was half completed when the coronavirus emerged in the United States, prompting the league to suspend the season.

The league, which WWE founder McMahon last operated in 2001, had averaged more than 18,000 fans per game this year, with 1.9 million average viewers across ABC Sports, ESPN, ESPN2, Fox Sports and FS1.

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XFL 2020 Season to Stream Abroad on ESPN Player

The Xtreme Football League (XFL), established in 2001 for one season only by WWE founder Vince McMahon, is slated to return with a 10-game regular season Feb. 8, 2020, on ABC and Fox.

Disney-owned ESPN announced it would stream the entire XFL season on its ESPN Player, the standalone service only available outside the United States.

The eight-team league is divided into two four-team divisions (East and West). The XFL East features the DC Defenders, New York Guardians, St. Louis Battle Hawks and Tampa Bay Vipers. The Dallas Renegades, Houston Roughnecks, Los Angeles Wildcats and Seattle Dragons comprise the XFL West.

While the league will likely field NFL rejects and wannabes, former marquee players such as ex-Super Bowl QB Colin Kaepernick have reportedly met with the league.

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McMahon has made it clear players in the XFL would not be permitted to kneel during the national anthem, the protest act that contributed to Kaepernick being blacklisted from the NFL.

Eric Reid and Colin Kaepernick kneeling during a San Francisco 49ers game.

“People don’t want social and political issues coming into play when they are trying to be entertained,” McMahon said in a press interview last year. “We want someone who wants to take a knee to do their version of that on their personal time.”

Both Kaepernick and fellow protester Eric Reid — who repeatedly kneeled during playing of the anthem as protest regarding alleged police brutality toward African American men — settled their grievances against the NFL last year.

Notably, ESPN Player is also streaming  “This Was the XFL,” ESPN’s “30 for 30” documentary on the upstart league’s promising but short existence 18 years ago. The doc looks at how the league impacted how professional team sports are broadcast today.

WWE Streaming Video Service Losing Subs, Pins Hopes on Linear TV

World Wrestling Entertainment (WWE) has new TV broadcast deals with Fox and Comcast, which couldn’t come at a better time for the showbiz promoter.

That’s because WWE’s forays into subscription-based over-the-top video to supplant waning packaged-media sales are flatlining.

The company’s flagship WWE Network averaged 1.51 million paid subscribers the third quarter (ended Sept.30), consistent with downward guidance through the first nine months of the fiscal year.

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Average paid subs decreased 9% primarily driven by the impact of lower subscriber additions earlier in the year. For the fourth quarter, WWE projects average paid subscribers of approximately 1.43 million, representing a year-over-year decline of 10%.

Digital video views increased 12% on a year-over-year basis to 25.6 billion and hours consumed increased 14% to 957 million hours across digital and social platforms.

Media revenue increased to $146.1 million from $142.1 million in the prior year quarter, primarily due to the contractual escalation of core content rights fees, including license fees from the distribution of flagship programs “Raw” and “SmackDown,” as well as the timing and performance of WWE Studios’ portfolio releases.

That’s music to the ears of WWE founder/CEO Vince McMahon.

“With our flagship programming now spanning both broadcast and cable throughout the week in the U.S. and our expanding roster of international distribution partners, we remain excited about our ability to deepen the engagement with our fans around the world,” McMahon said.

 

WWE Streaming Video Service Tops 1.59 Million Subscribers

World Wrestling Entertainment (WWE) Feb. 7 reported a 7% (110,000) increase in fourth-quarter (ended Dec. 31, 2018) subscribers to its WWE Network over-the-top video streaming service. The platform ended the period with 1.59 million subs.

Media revenue grew 40% to a quarterly record of $205.3 million, primarily due to the distribution of certain live, in-ring programming content in international markets, which was partially offset by the timing and performance of the company’s portfolio of original movies.

Additionally, media revenue reflected the contractual escalation of core content rights fees, including license fees from the distribution of WWE’s flagship programs “Raw” and “SmackDown,” as well as increased sales of advertising and sponsorship across platforms and the continued growth of WWE Network.

“In 2018, WWE generated the highest level of revenue and earnings in the company’s history by leveraging our brand strength to increase the monetization of our content worldwide,” CEO Vince McMahon said in a statement. “Our long-term growth strategy will continue to focus on content creation, digitization and international development.”

 

World Wrestling Entertainment Ups Q2 SVOD Subs 10%

World Wrestling Entertainment (WWE) said second-quarter (ended June 30) over-the-top video subscriptions of WWE Network increased 10% to 1.8 million from 1.62 million during the previous period.

Digital engagement continued to grow through the first six months of 2018, with video views up 58% to 14.4 billion and hours consumed up 71% to 509 million across digital and social media platforms.

The staged wrestling entertainment promotor completed agreements with USA Network and Fox Sports, effective Oct. 1, 2019, which increase the average annual value of WWE’s U.S. distribution 3.6 times that of the prior deal with NBC Universal.

Revenueincreased 31% to $281.6 million from $214.6 million, driven by the increased monetization of content as reflected in the media segment.

Operating incomenearly doubled to $21.2 million from $10.7 million in the prior-year quarter, reflecting increased profit from the media segment, which was partially offset by an increase in management incentive compensation based on anticipated strong full-year results and the rise in the company’s stock price.

Operating income margin was 8% as compared to 5% in the prior year quarter.

Through the first six months, operating income ballooned 192% to $43 million from $14.7 million on revenue of $469.3 million, which was up 16.5% from $403 million last year.

“We’re pleased with our continued success in increasing the monetization of WWE content globally,” chairman/CEO Vince McMahon said in a statement. “This success is evidenced by the completion of our new U.S. distribution agreements with USA Network and Fox Sports, the staging of another record-breaking WrestleMania, and the development of a 10-year strategic partnership with the Saudi General Sports Authority.”

Indeed, WWE produced more than 165 hours of content in the quarter, including versions of its “Best of WWE”series in Spanish, Portuguese, and German, and plans to launch a new series, “WWE Now”in Arabic.