World Wrestling Entertainment Inc. (NYSE:WWE) Q2 2017 Earnings Conference Call - Final Transcript

Jul 27, 2017 • 11:00 am ET

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World Wrestling Entertainment Inc. (NYSE:WWE) Q2 2017 Earnings Conference Call - Final Transcript

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Presentation
Executive
Vince McMahon

tremendous indication in the overall interest in our product. That's always been one of my big barometers.

Global sponsorship looked pretty good. It's revenue grew about 25%. It's been more blue-chip advertisers have joined us, KFC, Nestle, AT&T and some gaming partners as well. We have selected Lagardere in terms of our best-in-class marketing agency to help us develop our global sponsorship business. Other notable things going on, we have a live event in Shenzhen and over in China on September 17, which is going well and just part of our strategy in China, which looks good to-date. And we localized some of our weekly television shows, which is working out well for us in India and the Middle East. We will probably continue to do more of that going forward in other markets. I speak of other markets, we completed a multi-year agreement to televise Raw and SmackDown on SuperSport, which is definitely the way to go, that's Africa's premier sports broadcaster. Those are some of the things that we have got going on among others.

Executive
George Barrios

Thanks, Vince. There are several key topics, which Michelle and I would like to review today. These include our discussion of our financial performance, the progress of key strategic initiatives and our business outlook. For the second quarter, we generated an 8% increase in revenue to a record $215 million, and our adjusted OIBDA of $18.1 million was essentially in line with our guidance of $13 million to $17 million. Our revenue and earnings growth reflected the increased monetization of content across our three core platforms, pay-television, direct-to-consumer, and social and digital.

Supporting the successful execution of our strategy, our key operating brand metric continued to grow during the quarter. WWE Network averaged over 1.63 million paid subscribers over the quarter, in line with guidance and represented an 8% increase from the second quarter last year. In the quarter, WrestleMania reached a record 1.95 million global households on WWE Network alone, yielding more than 5 million interactions on Facebook and Twitter, making it the most watched and most social WrestleMania in our history.

Through the first 6 months of the year, consumption of WWE content increased 18% to 9.1 billion video views across YouTube, Facebook, wwe.com and our social media followers increased 19%, now exceed 800 million. These outcomes continue to demonstrate the ongoing strength of the brand and our potential to capitalize on the strength to drive continued growth. Referencing our presentation, I would like to highlight the performance of our media division, including our network and television segments, which were the primary drivers of adjusted OIBDA growth during the quarter.

As shown on Page 6, network segment OIBDA increased $8.7 million, primarily due to the growth in network subscription revenue and its anticipated lower programming expenses. Network subscription revenue increased $3.2 million based on the 8% increase in average paid subscribers. Program expenses declined approximately $6 million reflecting the timing of the original programming. As we have said before, we continue