World Wrestling Entertainment Inc. (NYSE:WWE) Q2 2017 Earnings Conference Call - Final Transcript
Jul 27, 2017 • 11:00 am ET
[Operator Instructions] Our first question comes from Dan Moore of CJS Securities. Please go ahead.
Good morning. Thanks for taking the questions.
Taking a step back over the last couple of years clearly ramps your investment spend materially and paying dividends in both the network and international, at this stage, are there any projects where you may or may not be seeing the returns you had hoped, I guess the question is, is there pockets of opportunity to either reduce cost or shift cost over to other areas or growth initiatives as we look out to 2018 and beyond? And I have one quick follow-up.
Yes. Dan, so we are always looking at the return. You got to remember lot of these investments. We expect the returns to come over a longer period of time. But we look at what's working and if it's working, we go a little bit deeper. And if it's not working, we shift it. But we certainly aren't looking to take costs out, as we sit here, we probably have more areas to invest in than not. So really the tension we are managing is let's keep driving growth, let's keep reinvesting to drive even greater future growth, but let's deliver growth to OIBDA as well. So that's the tension we are managing. But we are not at a loss for opportunities to invest.
Very helpful. The Q3 guide, just shifting gears, it implies a modest sequential tick down in average paid subs, probably as expected maybe a bit of acceleration in net sub churn, any reason that might be the case, timing of more key events or is that generally in line with your expectations?
Yes. It's generally in line. We don't get too caught off in one quarter. The direct-to-consumer transformation, which the tip of the spear is the network, but there is other elements of it, our shop business, for example. We think the long tail strategic play and so we don't get really too excited one way or the other with one quarter.
Got it. And lastly, you are clearly seeing an up-tick in sponsorship revenue, maybe just talk globally about the increased comfort levels from more traditional blue-chip customer, blue-chip corporations in tying their brand to the WWE brand?
Yes. So first as you know, we don't give -- we don't report sponsorship, the secular advertising revenues. It's not a public number, but as Michelle can definitely give you some color on the opportunity.
So obviously, I will talk first domestically and then kind of the global opportunity. So domestically we, as most of you know we have been hard at work around educating the marketplace if you will and key decision-makers around the WWE, not only the scale and the reach of our brand, which obviously is clear to indicate that to partners, but also about the brand itself and the family friendly nature of our product. Really the marketplace was not as educated about that as we