WWE's co-presidents George Barrios & Michelle Wilson have just been fired

[julesocean]

WWE beat fourth-quarter 2019 earnings estimates but missed on revenue expectations, despite reaching a record high thanks to its big “SmackDown” on Fox deal.

Wall Street forecast earnings per share (EPS) of 73 cents on $333.28 million in revenue, according to a consensus estimate compiled by Yahoo Finance. On Thursday, WWE actually reported EPS of 78 cents on $322.8 million in revenue for its 2019 Q4.

WWE Network’s average paid subscribers dropped 10% to 1.42 million during the company’s fourth quarter. That’s slightly lower than the company’s 1.43 million subscriber projection.

Fewer live events led to a decline in North American ticket sales, though there was a slight bump in international sales, primarily due to the increased average ticket price for those events. Consumer products also declined as video game “WWE 2K20” was very poorly received.

For 2019 as a whole, WWE reported EPS of 85 cents (down from $1.12 in 2018) on $960.4 million in revenue, which is a full-year revenue record for the company.

“During the fourth quarter, we expanded the reach of WWE’s live programming and further engaged with diverse audiences across platforms and formats,” WWE chairman and CEO Vince McMahon said. “We believe the value of live sports will continue to increase, particularly in today’s evolving media landscape, and we are well positioned to take advantage of this trend to maximize the value of our content.”

Frank Riddikk, interim chief financial officer, added: “For the year, we achieved record revenue and Adjusted OIBDA. However, with the delay in completing a Middle East distribution agreement as well as lower business performance than anticipated, our results were at the low-end of guidance. As we work to strengthen engagement in 2020, we are pursuing several strategic initiatives that could increase the monetization of our content, including the distribution of content in the Middle East and India as well as strategic alternatives for our direct-to-consumer service, WWE Network. Excluding the potential impact of these initiatives, we expect significant revenue growth based on the full year impact of our new content distribution agreements in the U.S. and anticipate Adjusted OIBDA of $250 to $300 million. Management believes it has the potential to exceed this range, but is unable to provide additional guidance at this time.”

WWE stock closed Wednesday afternoon at $49.00 per share, up $1.64. The regular trading day for the U.S. stock markets open at 9:30 a.m. ET.

Looking past Wednesday’s gains, it’s been a rough couple of days for WWE stock. Last Thursday, the company parted ways with co-presidents George Barrios and Michelle Wilson and shareholders in the publicly traded company panicked, with stock plummeting 20% in after-hours trading. At that time, shares were selling for less than $50 apiece — just four days after WWE’s Royal Rumble pay-per-view event.

McMahon and other WWE executives will host a conference call at 11 a.m. ET to discuss the quarter and full year in greater detail. Barrios and Wilson will not be part of the call, but their presence will undoubtedly loom.

 

[julesocean]

waiting for the comedy

 

[julesocean]

Vince sounding like he's had NO sleep the past week.

 

[Squirtle]

Vince sounding like he's had NO sleep the past week.

Yeah man, listening on my phone right now. Just hearing his voice, he sounds like someone I would NOT want to work for.

 

[JerseyBoy23]

Vince sounding like he's had NO sleep the past week.

I thought that too. Dude sounded like he was sick.

 

[julesocean]

-Michelle and Barrios were canned because they felt that although they did well to raise brand awareness, that their areas of focus were different than they wanted. (they went hard on social media engagement)
-juelz the SD ratings being higher (because they moved to a bigger network)
-one of the reasons for TV and network numbers down: Their FB deal that brought Mixed Match Challenge to viewers for free
-expect 1.4M in sub count on the network for Q1
-putting over their international deal successes
-putting over the miz and mrs show
-Actually juelzing the live events being down to less big event. reference AUSTRALIA SUPER SHOWDOWN as a huge factor (even tho it was international not domestic)

 

[Tommy Fits]

The network isn't a failure, they're losing viewers because they're losing viewers like me. Lifelong fans so turned off by how bad the past ten plus years have been that we don't even want to watch the old stuff we actually like. They have lost me for life unless my 5 year old son likes wrestling. But if he doesn't, they lost a lifelong fan. The network was fukking great though I'm just so turned off from the entire product

 

[julesocean]

-the schedule of producing SD into RAW into NXT has hired their production costs in that area
-long term strategy and overview for their company now that George and Michelle are gone, will be ready for next quarter
-discussed introducing a higher paid tier to help Network recover
-discussed another way to draw money in from the Network
-XFL is and will remain separate entity
-regulatory changes in India complicate deals over there
-lots of red tape around deals with Saudi, but they are confident to give them done

 

[julesocean]

VINCE laying down the law:

-bringing in new talent and developing current talent
-higher budget for shows
-no key talent injured atm
-actually said strong story writing atm will help them recover going into WM

 

[JerseyBoy23]

Lol no one is buying that the XFL is separate from WWE.

 

[Brehcepticon]

 

[julesocean]

-XFL has 400 of its' own employees. stressing that company will NEVER mix with WWE, in any way, financially.
-WWE does not need to push an edgy product, compared to AEW, they are competing with NXT and doing extremely well. AEW has not affected WWE at all outside of that
-talent income from merch sales etc is percentage based for every performer.
-the cannings again had nothing to do with XFL sentiment, but that they are changing the way they are going to do business and want a fresh approach

I missed what they said at the end about finding a replacement if anyone can fill me in.

 

[Dave24]

 

[julesocean]

Recap for people who want something properly written:

Michael Weiss welcomed everyone to the call. Vince McMahon and Frank Riddikk are also on the call.

Vince McMahon said they hit the low end of their advisement as they work towards additional international deals and engagment of their audience. He said the management change recently had no bearing on their strategies. The change was due to different views in the execution and areas of focus. Vince said he appreciated George Barrios and Michelle Wilson and everything they did, but WWE won't miss a beat. He noted they were working on very things including "strategic alternatives" to the WWE Network, saying, "Quite frankly, that could come in the next quarter."

McMahon said they are changing the WWE culture to be mroe collaborative and inclusive and bringing in more executives to assist with that. They are looking for ways to reshape and grow WWE. He has more confidence than ever in their abilities.

Riddikk noted that they saw marked improvement in attendance and ratings for Smackdown since the move to FOX.

They noted a 5% increase in Raw in December.

They reviewed the earnings call data.

They noted that due to the launch of other streaming services and the importance of live content, they are looking at alternative possibilities for their strategies for the WWE Network. That would indicate they are looking at the idea of licensing streaming WWE content outside of the WWE Network for the first time since its 2014 launch.

Survivor Series brought in nearly 40,000 fans over the course of the weekend.

They feel the company is in a great position for the future, specifically when it comes to live sports content.

They recapped some of the expenditures they will undertake in construction of the new HQ they are moving into, piece by piece, in Stamford, CT.

They hope to announce plans for their future strategies regarding streaming content, etc. by the end of the first quarter of 2020.

They were asked about TV rights in India and the Middle East. WWE’s uncertainty is about the timing of new deals, not that they will happen. They are currently on in India.

In regard to the WWE Network’s future, they were asked what sort of potential strategies they are looking at. Vince said they had a lot of options, including the planned tiered version. There’s no better time to potentially sell their content to the “majors” and there’s a lot of clamoring for their content.

They were asked if any current WWE Network content be off limits in terms of being licensed off to another platform.

Riddikk said there’s nothing that would stop them from doing a “different type of transaction” for the Network.

They were asked if WWE will be merging or working with the XFL.

Vince said the XFL is completely separate and currently has about 400 employees.

When asked about the clamoring of rights, Vince said he's speaking about Over the Top programming, not network. He said there are lots of majors who are interesting in potential programming.

If the Network continues on as it currently is, they are considering adding advertising, but if they partner with someone else, they will go by what's best for the partner. If they partner with someone else, they will be announcing that in the first quarter of 2020, "that's how far along" they are in talks.

When asked why the Middle East and India deals are taking so long, there have been some regulatory changes in India that has led to delays. Dealing with the Saudi Arabian government is a unique situation. The issue isn't that the deals will be done, but when.

They don't believe their capital structure will change as they like having cash on hand for additional projects and strategies.

On their investments into the product, Vince McMahon said their investments into production and talents have been paramount and you could see the growth of late. They had a lot of talents that were injured and they don't have that issue right now. They have to put talents into the right storylines and going into Wrestlemania, they feel they are there and will be there beyond Mania. Vince was also asked specifically about the power Paul Heyman and Bruce Prichard had on the product but didn't respond.

VInce said that if any one of the deals they are talking for the Network about take place, its going to be transformative. Vince said if they successfully achieve what they are trying to do with the majors and their desire for WWE's OTT.

They were asked about current profitability for the Network. They said they don't comment on that.

They declined to get into whether the UK, China or Latin America TV deals grew.

They were asked how the test version of the free WWE Network tier has done. They said it's been toThey eo early to discuss that data and when they have good data to share, they will.

They are still pursuing the new TV agreements in India and the Middle East. The existing India rights are currently included in their TV guidance.

They were asked about factors that make investors worried about buying into the stock, mentioning the XFL and whether they can count on the FOX/Comcast deals being guaranteed money. Vince said the deals are what they are but that's not to say WWE couldn't do more programming (for more money). He said that the XFL is run by itself and there is no investment whatsoever from WWE. There is no plan to put it back into the WWE system at all.

They were asking about money being spent on developing new revenue streams and what they could mean. The cost increases are production, including doing Smackdown four days later than they used to do. The increase in talent expenses, developing new content and costs related to that as well.

They were asked about the AEW launch and their using more edgy content. How has AEW changed WWE content and business? Vince says AEW hasn't changed their business. They are about characters and creating storylines that lead to a resolution. They don't need to be edgy He said they are one of the few programs out there that are truly PG. NXT is competing with AEW and is doing extremely well and they feel NXT will continue to be a success.

On the management change, Vince said he's currently getting a few more direct reports but that will change when they lock in new execs. He said he has broad shoulders and can deal with it.

On attendance being down internationally, they said it depends on what country, how many events, what venue they are in. There's nothing fundamentally different between the United States and international at this point.

They were asked about Vince's ideas on the transition of leadership. He said they are going to be far more inclusive and they are going to attract more world class individuals. He joked who didn't want to work with WWE? Vince said it won't take long for them to implement the changes.

They were asked to be specific about the strategy issues with the departed members of management. Vince said it was focus and execution related. Looking at the way they do business, its going to be different and more successful going forward.

On potentially acquiring other investments, they will make small investments but in terms of acquiring things that could be brought into the WWE organizaation, they don't believe there will be anything beyond a modest level.

Vince made it clear again the XFL is a totally separate entity.

They were asked who will fill the roles for Barrios and Wilson and how their spots will be filled. They are searching for an exceptional talent who can come in but have faith in the current management team.

 

[Dave24]

Recap for people who want something properly written:

Michael Weiss welcomed everyone to the call. Vince McMahon and Frank Riddikk are also on the call.

Vince McMahon said they hit the low end of their advisement as they work towards additional international deals and engagment of their audience. He said the management change recently had no bearing on their strategies. The change was due to different views in the execution and areas of focus. Vince said he appreciated George Barrios and Michelle Wilson and everything they did, but WWE won't miss a beat. He noted they were working on very things including "strategic alternatives" to the WWE Network, saying, "Quite frankly, that could come in the next quarter."

McMahon said they are changing the WWE culture to be mroe collaborative and inclusive and bringing in more executives to assist with that. They are looking for ways to reshape and grow WWE. He has more confidence than ever in their abilities.

Riddikk noted that they saw marked improvement in attendance and ratings for Smackdown since the move to FOX.

They noted a 5% increase in Raw in December.

They reviewed the earnings call data.

They noted that due to the launch of other streaming services and the importance of live content, they are looking at alternative possibilities for their strategies for the WWE Network. That would indicate they are looking at the idea of licensing streaming WWE content outside of the WWE Network for the first time since its 2014 launch.

Survivor Series brought in nearly 40,000 fans over the course of the weekend.

They feel the company is in a great position for the future, specifically when it comes to live sports content.

They recapped some of the expenditures they will undertake in construction of the new HQ they are moving into, piece by piece, in Stamford, CT.

They hope to announce plans for their future strategies regarding streaming content, etc. by the end of the first quarter of 2020.

They were asked about TV rights in India and the Middle East. WWE’s uncertainty is about the timing of new deals, not that they will happen. They are currently on in India.

In regard to the WWE Network’s future, they were asked what sort of potential strategies they are looking at. Vince said they had a lot of options, including the planned tiered version. There’s no better time to potentially sell their content to the “majors” and there’s a lot of clamoring for their content.

They were asked if any current WWE Network content be off limits in terms of being licensed off to another platform.

Riddikk said there’s nothing that would stop them from doing a “different type of transaction” for the Network.

They were asked if WWE will be merging or working with the XFL.

Vince said the XFL is completely separate and currently has about 400 employees.

When asked about the clamoring of rights, Vince said he's speaking about Over the Top programming, not network. He said there are lots of majors who are interesting in potential programming.

If the Network continues on as it currently is, they are considering adding advertising, but if they partner with someone else, they will go by what's best for the partner. If they partner with someone else, they will be announcing that in the first quarter of 2020, "that's how far along" they are in talks.

When asked why the Middle East and India deals are taking so long, there have been some regulatory changes in India that has led to delays. Dealing with the Saudi Arabian government is a unique situation. The issue isn't that the deals will be done, but when.

They don't believe their capital structure will change as they like having cash on hand for additional projects and strategies.

On their investments into the product, Vince McMahon said their investments into production and talents have been paramount and you could see the growth of late. They had a lot of talents that were injured and they don't have that issue right now. They have to put talents into the right storylines and going into Wrestlemania, they feel they are there and will be there beyond Mania. Vince was also asked specifically about the power Paul Heyman and Bruce Prichard had on the product but didn't respond.

VInce said that if any one of the deals they are talking for the Network about take place, its going to be transformative. Vince said if they successfully achieve what they are trying to do with the majors and their desire for WWE's OTT.

They were asked about current profitability for the Network. They said they don't comment on that.

They declined to get into whether the UK, China or Latin America TV deals grew.

They were asked how the test version of the free WWE Network tier has done. They said it's been toThey eo early to discuss that data and when they have good data to share, they will.

They are still pursuing the new TV agreements in India and the Middle East. The existing India rights are currently included in their TV guidance.

They were asked about factors that make investors worried about buying into the stock, mentioning the XFL and whether they can count on the FOX/Comcast deals being guaranteed money. Vince said the deals are what they are but that's not to say WWE couldn't do more programming (for more money). He said that the XFL is run by itself and there is no investment whatsoever from WWE. There is no plan to put it back into the WWE system at all.

They were asking about money being spent on developing new revenue streams and what they could mean. The cost increases are production, including doing Smackdown four days later than they used to do. The increase in talent expenses, developing new content and costs related to that as well.

They were asked about the AEW launch and their using more edgy content. How has AEW changed WWE content and business? Vince says AEW hasn't changed their business. They are about characters and creating storylines that lead to a resolution. They don't need to be edgy He said they are one of the few programs out there that are truly PG. NXT is competing with AEW and is doing extremely well and they feel NXT will continue to be a success.

On the management change, Vince said he's currently getting a few more direct reports but that will change when they lock in new execs. He said he has broad shoulders and can deal with it.

On attendance being down internationally, they said it depends on what country, how many events, what venue they are in. There's nothing fundamentally different between the United States and international at this point.

They were asked about Vince's ideas on the transition of leadership. He said they are going to be far more inclusive and they are going to attract more world class individuals. He joked who didn't want to work with WWE? Vince said it won't take long for them to implement the changes.

They were asked to be specific about the strategy issues with the departed members of management. Vince said it was focus and execution related. Looking at the way they do business, its going to be different and more successful going forward.

On potentially acquiring other investments, they will make small investments but in terms of acquiring things that could be brought into the WWE organizaation, they don't believe there will be anything beyond a modest level.

Vince made it clear again the XFL is a totally separate entity.

They were asked who will fill the roles for Barrios and Wilson and how their spots will be filled. They are searching for an exceptional talent who can come in but have faith in the current management team.

Appreciate the write up breh!