notes from Meltzer
Some major news coming out of the WWE today
*WWE network will offer a $19.99 per month price for those who don't want to commit to the six month period. It's clear from the number of people who dropped the network even with the commitment in place that it will be much easier to just order at $9.99 and stop paying.
*A one-time payment plan has been offered. Currently subscribers are billed $9.99 per month, but now they can sign up for $59.94 and be billed all at once. The hope is that people will sign up to be billed all at once which saves money for people who decide to drop.
*The network has 700,000 subscribers as of 6/30. They didn't give an updated number. Between 4/7 and 6/30 they added 161,000 subscribers, but had 128,000 cancellations. They wouldn't give details but this is likely shortly after WrestleMania when they had the big jump in subscribers.
*The cancellation number is the huge story here.
*The network will be available in 170 countries on August 12. The key countries that affects are Australia, New Zealand, Hong Kong, Singapore, Mexico, Spain, Norway, Sweden and Finland.
*They are targeting October for the U.K.
*Countries like Italy, UAE, Germany, Japan, China, Thailand and Malaysia would be available at a date to be announced
*WWE signed a ten year deal with Rogers Communications for exclusivity in Canada through 2024. This will include all current programming. The WWE Network will be offered as a traditional television PPV channel in Canada starting August 12. That explains the recent Observer report of WWE purchasing transponder time and testing out the network feed, as a prelude to a television availability. Rogers will own not only the broadcast rights but the digital rights to all the major WWE television shows.
*There wll be massive cost cutting internally. These costs will save the company $10 million this year and $30 million in 2015.
*The cutting wasn't specified past a seven percent reduction in the workforce. It was noted that with the reduction in the work force, there will be a one-time loss of $4.5 million for severance packages taken during the current third quarter.
*They will add Monday Night War and WWE Rivalries to the program schedule shortly.
*If they average 650,000 subscribers in the third quarter, they estimate OIBDA losses of $12 to $17 million in the next quarter, but with the cost cutbacks, annual OIBDA losses would be $25 million to $35 million. Previously they had estimated annual losses (not OIBDA, but total losses) at $45 million to $52 million.
*The network itself lost $15.5 million in OIBDA.
*The cutbacks are so significant that they now feel they can break even on 500,000 subscribers in 2015 as opposed to 1.4 million subscribers and at 1.5 million subscribers they will have OIBDA of $100 million to $120 million, which is more than they had pre-network.
*For the quarter, the company recorded $156.3 million in revenues and lost $14.5 million.
*The WrestleMania quarter last year took in $152.3 million in revenues and had $5.2 million in profits.
*On a world wide basis, WrestleMania did 690,000 buys, Extreme Rules did 108,000, Payback did 67,000 and Money in the Bank did 122,000. For 2013, those shows did 1,104,000; 245,000, 198,000 and 223,000 last year. Keep in mind U.S. totals for all shows were way down, but in theory (not fact), international should be the same. It's not, due to the number of international subscribers to the network.
*TV revenue was up from $38.7 million to $43.8 million due to Total Divas and some international contract gains.
*Digital media was down from $7.4 million to $5.2 million due to less Internet PPV purchases of WrestleMania and the other shows.
*House show attendance was up 13% domestically, misleading because they had 11 fewer shows, meaning the higher attended TV tapings make the average look higher. Because of fewer events and smaller overall attendance, arena merchandise was down 7%. This doesn't include WrestleMania, which was down this year due to a lower attendance and gate. International was down 8%
*Licensing was down due to lower video game sales.
*WWE shop revenues increased 33% from $3 million to $4 million because of an increase in orders. A lot of that increase was due to a new distribution model in the U.K. utilizing Amazon.