On Thursday, WWE releases its second-quarter earnings report that was highlighted by the enormous profit they were able to manage amidst the pandemic.
For the quarter covering April 1st through June 30th, the company brought in revenues of $223.4 million, which was down from $268.9 million last year with a net income of $43.8 million, which is way up from $10.4 million from the second quarter of 2019.
The company was greatly assisted by its ability to continue to deliver its television content to its broadcast partners that yielded $132.9 million in core content rights for the quarter reflecting the escalation with their news rights deals with NBC Universal and Fox.
On top of maintaining its rights fees during the pandemic, WWE has also saved an enormous amount by shooting all their content in Florida at the WWE Performance Center and Full Sail University.
Its media division brought in $200.1 million in rights fees, which is up from $197 million in 2019 and is broken down with the network, core content rights, and advertising/sponsorships.
Live events were obviously a dead sector this quarter with zero live events, although $1 million was recognized in revenue. They were forced to cancel 53 domestic shows and 23 international events. As we have seen over the past year, there have been quarters where the live events sector lost money, so it’s unknown if the lack of live events may have propped up their business slightly with the elimination of expenses in stages all those events.
For the quarter, the WWE Network had 1,690,000 worldwide paid subscribers, which includes the two-day WrestleMania in April. Throughout the quarter, they relied on cinematic themed matches as the hook for their monthly pay-per-views and have also introduced the free tier of the network to engage people to sample the network in the hope of converting them, which will be reflected in future quarters.
The total number of subscribers is broken down to 1,229,000 U.S. subscribers and 461,000 international subscribers. Year over year, this year’s figures were higher than the Q2 2019 paid subscribers, which is a positive sign given WrestleMania occurred in the second quarter for both years.
Television ratings didn’t paint a great picture with Raw down 24% this year but correlate with the USA Network being down 26% while the top 25 cable networks only experienced a 1% drop.
For SmackDown, despite the added exposure moving from the USA Network to Fox, numbers are only up 4% while Fox is down 4% and the top four broadcast networks are down 12%.
On the earnings call, Vince McMahon and interim CFO Frank Riddick III handled most of the questions as well as Jayar Donlan, who is their SVP of Digital & Social Content.
The subject of television ratings was brought up numerous times with McMahon emphasizing the lack of fans hurting their product more than others but also acknowledged the need for better stories, characters and outlined the possibility of newer characters along with more non-wrestling content shot outside of the ring.
The subject of AEW and NXT’s numbers holding up better than Raw and SmackDown was explained by McMahon as due to the former products being “new” but said they need to build characters better and didn’t dismiss that there were issues with Raw and SmackDown.
A question was asked about the purchase of EVOLVE, which was described as “very small in size” in terms of the investment and they are not actively seeking any merger & acquisition opportunities.
While not completely ruled out, McMahon doubts there will be another show in Saudi Arabia in 2020. Previously they had stated that if they miss a show in Saudi Arabia, it will get tacked onto the end of the deal and they’ll make it up on the backend.
There was a question regarding shooting any shows outdoors with a crowd and McMahon said they are looking at alternatives but didn’t divulge specifics.
The after-hours trading of the WWE stock indicates the earnings report was met favorably with a near 6% increase in the after-hours listing price, as of 8 pm Eastern Thursday evening.
On Friday, we will be joined by Brandon Thurston Wrestlenomics to discuss the earnings report and Q&A in-depth and that show will be released in the afternoon on the main POST Wrestling feed.
