MCMAHON EXPLAINS WHY ECW HOUSE SHOWS WERE STOPPED, STATES THAT WWE HAS CREATED THREE DISTINCT BRANDS AND MORE
WWE held an investor's conference call this morning to discuss the second quarter numbers that were released earlier today. Chief Financial Officer Michael Sileck and Chief Executive Officer Linda McMahon were involved in the call. Here are the highlights from the call and the question and answer session that followed:
- The drop in net income was explained as being the result of the loss of cable advertising revenue, new investments made by the company, and the fact that last year WWE received a large amount of cash from a legal settlement in the quarter. They stressed repeatedly early in the call that they are in a "transitional" period and are positioning themselves for the future.
- The contract for ECW on SciFi runs to December 2007.
- WWE felt ECW running smaller venues for live events, while a "unique experience" for fans, was not going to help them in building the brand, and that is why they have decided to cancel the ECW events and instead pair up ECW and Smackdown, with the idea that ECW will have their own shows again down the road in larger venues.
- WWE put over the growth of the home video division, noting it was up 22% with 1.2 million DVD units sold in the quarter. WWE praised their relationships with retailers and the success of the Ultimate Hulk Hogan Anthology for the growth. They also put over the huge increase in sales on WWEShop.com.
- They shipped over a million units of the See No Evil DVD this week to retailers for the nationwide release.
- WWE is currently averaging 5,200 fans at domestic live events (not including ECW). WWE has seen growth in attendance for seven straight quarters, and feels that it will continue to grow. WWE is also "experimenting" with how many times they can visit foreign markets and keep the strong attendance in those markets.
- The most interesting question of the day came from an investor who asked why WWE isn't running the three brands as separate companies, each with their own budget and management. The caller noted that he sees no difference in the three brands, and the crossovers make it seem like one large product, not three distinct brands. Linda said that they originally split the brands to create separate touring groups. She said that WWE having separate brands has resulted in them creating more stars and has also resulted in licensing growth. Linda said (and boy, was this one a stretch) that WWE has created distinct brands, and that the crossovers enable them to have more interesting storylines and create a greater sense of competition between the brands. She didn't acknowledge the part of the question that brought up the idea of the brands being run independently of each other.
- They are happy with the growth of WWE 24/7 and the fact that they've reached a deal with Cablevision. The next major cable company they are working on is Time Warner Cable.
- When asked about UFC and IFL (which went public this week), Linda said they feel the MMA companies are interesting forms of competition in the marketplace, and mentioned that they had a meeting with Pride and are looking into that form of entertainment as well.
The call lasted less than 40 minutes, with the question and answer session taking up maybe 20 minutes. As you can see, there were no questions about Paul Heyman, nor were their questions about The Rock possibly coming back (usually a staple of these calls) or any discussion of WWE heading to Iraq this week.
Source: PWInsider
