WWE Q2 2021 Earnings Call With Vince McMahon And Other WWE Executives
WWE Chairman & CEO Vince McMahon, Chief Revenue Officer & President Nick Khan, Chief Branding Officer Stephanie McMahon, Chief Financial Officer Kristina Salen, and SVP Financial Planning & Investor Relations Michael Weitz hosted a Second Quarter 2021 Earnings call today from WWE headquarters in Stamford, CT. You can check out coverage of today's press release at this link. Below are highlights from the call:
Weitz welcomes everyone and goes over the basics for the call. Vince took over and touted solid second quarter results from focusing on fan engagement, increased content production, and positive trends that are evident in live event sales, TV ratings, and digital consumption. He also mentioned excellent live event ticket advances, including for SummerSlam. He said this will be the largest SummerSlam ever held in the United States. He mentioned the return to touring in mid-July and said they were up in the 18-49 key demographics for RAW and SmackDown on the shows that marked the return to live crowds. Vince ended his opening statement by saying WWE will continue to take advantage of the evolving business environment as they always have.
Khan took over and touted how all WWE ratings have been up with the return to live fans in the crowd. He noted that 4 months into the Peacock deal, they are seeing the benefit of a streaming partnership with a platform that has broad distribution and room to grow. Backlash viewership was up 26%, Hell In a Cell up 25%, Money In the Bank up 46%, from the prior year performance on what was a stand-alone WWE Network platform. Khan said viewership numbers are also up considerably from pre-pandemic WWE Network numbers. He expects WWE viewership to increase as Peacock grows their numbers.
Khan wanted to be clear that WWE has not exactly made a return to live events as they continued to hold live events with fans in the crowd via video through the pandemic. He called this a return to live touring. He gave the following numbers for recent events:
* The July 16 SmackDown from the Toyota Center in Houston was sold out for the highest-grossing non-PPV event in WWE history in Houston. Merchandise sales were almost 50% greater than the last event in Houston
* Money In the Bank on July 18 from the Dickies Arena in Fort Worth was sold out, for the highest-grossing non-WrestleMania event in WWE history in the Dallas/Fort Worth area. Merchandise sales were almost 100% greater than the last event in the area. He touted how this was two sold out arenas before John Cena made his surprise return
* Last Monday's RAW from the American Airlines Center in Dallas drew the highest-paid attendance in Dallas in over 3 years. Merchandise sales were almost 50% greater than the last 2019 event in the Dallas/Fort Worth area
* Last Friday's SmackDown in Cleveland at the Rocket Mortgage FieldHouse was the highest-grossing non-PPV date in WWE history in Cleveland. Merchandise sales were over 60% greater than the last Cleveland event. That same night WWE had two matches at the Rolling Loud rap festival in Miami. He touted how the three-day festival had over 230,000 paid attendees with almost all under the age of 25. WWE also had strong merchandise sales there
* Last Saturday's first non-televised WWE live event since the return to touring was held in Pittsburgh, PA, for the highest-grossing non-televised live event in WWE history in Pittsburgh. 95% of tickets were sold, merchandise sales were more than 25% greater than the last Pittsburgh event
* Last Sunday's non-televised live event in Louisville, KY was the highest-grossing event at the KFC Yum Center in WWE history, for the highest-paid attendance for a non-televised WWE event in Louisville in over 5 years. Merchandise sales were 25% greater than the last WWE event in the area
* Monday's RAW in Kansas City, MO was the highest-grossing non-PPV WWE event in Kansas City in 14 years. Merchandise sales were 50% greater than the last Kansas City show
Khan touted how WWE also added, in this quarter, the ability to purchase merchandise in the WWE app, for in-venue pick-up or shipping to any location. He touted how WWE also announced SummerSlam for Allegiant Stadium in Las Vegas on Saturday, August 21. He said they sold over 40,000 of 45,000 tickets with no match or card announced. He said this will be a record gate for a non-WrestleMania event for WWE. He also said Saturday is a new day for WWE PPV events, mentioning the New Year's Day pay-per-view scheduled for Atlanta. The city plans for 300,000 people for the New Year's holiday and WWE saw an opening in the sports calendar in the city for that weekend, so they went with Saturday. WWE expects ticket sales and viewership for that event will be indicative.
Khan said another area WWE is growing in is the sponsorship business. They landed over 20 new and existing sponsors in 2021 so far, many of them blue-chip companies. They believe content brands will continue to seek WWE out based on their record of success, as they look for unique ways to reach consumers. Khan also mentioned WWE will do their second NFT drop for SummerSlam. This will be for John Cena NFTs, and comes after the successful NFTs for The Undertaker at WrestleMania. He also touted the "United States of America vs. Vince McMahon" series in the works.
Stephanie took over now. She said it's an exciting time for the business. She said they don't know what the future holds, but they are excited to return to toouring. She talked about fans returning to events and how she and Triple H greeted fans outside of the Toyota Center at SmackDown. She praised the return of John Cena and the Summer of Cena. FOX and NBCU have supported the return to touring. She noted how WWE has upgraded production for entrances and are using a wide variety of technologies. The associated costs are on par with 2019 costs, but they are seeing an increase in linear viewers to go with that.
Stephanie touted how RAW and SmackDown ratings are up, especially with the 18-49 key demographic. Mobile video views are up, especially on Facebook and YouTube. She touted the success of their Biography and Most Wanted Treasures shows on A&E, which brought a 20% increase in viewership and a 90% increase in the 18-49 demo. WWE continues to make a positive impact for their partners, and brands are looking for unique ways to interact with consumers, and they come to WWE because WWE can create customized ways to reach. She mentioned the WrestleMania Backlash zombies that were a part of the partnership for the "Army of the Dead" film on Netflix, starring Batista, as an example of this. She touted the social media buzz that was generated from the promotion, and how 3 of the 14 trending topics that night were related to the promotion. She said WWE's results for their partners speak for themselves. Stephanie also touted the new WWE credit card from Credit One Bank, and the new deal with Pure Life Water. She said WWE is well positioned to continue to grow their brand, and serve their audience. She also touted their WWE Community work with partners.
Salen took over next and went over some of the numbers in the press release linked above. It's time for the Q&A with investors now. They were asked about international events and Salen said they haven't released the number of total 2021 events but guidance does include large-scale international events. She said they have 35 events on sale through the end of September, and then they will announce the second half of the 2021 schedule shortly.
Stephanie took a question on what kind of increased sponsorship opportunities they see over the next 2-3 years. She said they believe there is significant upside. They also have the chance to work with Peacock to monetize various things. They were asked about the Middle East TV rights deal. Khan said he, Vince and others on the team are "deep into" the negotiations and they hope to have an announcement shortly.
They were asked bout out-of-ring TV production and Khan touted the ratings success with the two series on A&E. He said they are looking to do more of that kind of content, more unscripted shows and dramatic shows, such as the "USA vs. Vince" series with Blumhouse. They were asked about property in Stamford, CT and it was noted that they hope to be in their new company HQ by the fourth quarter of 2022. They also plan to sell some of their current properties.
Vince was asked about AEW. The caller noted how AEW seems to be making roster moves and are gaining in viewership, especially in the key demographic. The caller wondered how WWE currently looks at AEW, if they see them as competition, and if they feel the need to counter AEW's investment with additional investments on WWE's own roster as they could be competing with AEW one day for media rights, or a "rising tides" situation like we saw back in the day with WCW. Vince said it's certainly not a "rising tides" situation where Ted Turner came at WWE with all of his assets. Vince said it's a different situation and AEW is "where they are." Vince said he doesn't know what AEW's plans or investments are, but WWE is focused on their own plans. He said it's "not even close" to the situation with WCW back in the day. Khan added that everyone is WWE's competition. He said it's like a horse race with a horse having blinders on – WWE is going straight ahead in their own lane, making sure they stay in the front of the pack, but at the same time everything is their competition, even sleep. He said if it were up to WWE and other content providers, people would be awake 24 hours a day watching content. He said they don't look at any organization as being competition, but they view everything as competition for eyeballs on content.
They were asked about internal corporate changes. They noted that the digital, network and TV departments had redundancies, so they put them together and we'll see the impact of that change in Q3. Salen confirmed again that current guidance calls for a large-scale international event, which is likely the return to the Kingdom of Saudi Arabia. Khan was asked about the next big opportunity for WWE. He said that will be international media rights, sponsorships, and unscripted content deals. That's it for the call. Stay tuned for more.