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

Jul 27, 2017 • 11:00 am ET


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


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Michelle Wilson

power of our brands to reach a broad global audience on multiple platforms has attracted an increasing level of new sponsors. We have new deals with blue-chip companies such as KFC, Nestle and AT&T and with gaming partners such as Psyonix, Square Enix and Activision. Those partners contributed to a 25% increase in our global sponsorship revenue in the first half of the year. As Vince also mentioned, we recently announced the selection of Lagardere Sports, which is a best-in-class sports marketing agency to further develop our WWE sponsorship business outside of the U.S. As I indicated last quarter, the development of new content and its increasing value to advertisers represent a critical strategic initiative for WWE. Importantly, our operating achievements also include continuing innovation across our other lines of business. For example, we have recently completed agreements to develop new mobile games with Glu Mobile, which is the maker of the successful Racing Rivals and Kim Kardashian Hollywood and also with SEGA. SEGA's WWE Tap Mania game was just launched last Thursday. And within the past week the game has been featured on the iTune's App Store and Google Play in 44 countries. And so far over 1 billion matches have been played on the mobile game thus far. All of this activity clearly demonstrates how we are developing unique content and diverse products that capitalize on our brand strength to drive long-term growth. I will turn the call back over to George to discuss our growth expectations.

George Barrios

Looking back over the quarter, our financial and operating results continued to reflect driving innovation and transforming our business. For the third quarter, we project average paid subscribers to WWE Network of 1.54 million, plus or minus 2%. We also estimate third quarter 2017 adjusted OIBDA of approximately $31 million to $35 million. This range represents an expected year-over-year increase, primarily due to the contractual escalation of our television rights fees and continued growth of WWE Network subscribers

For the full year 2017, we continue to target record adjusted OIBDA of $100 million, given that we generated adjusted OIBDA of $36.7 million in the first half of 2017 and projected adjusted OIBDA of $31 million to $35 million in the third quarter. Reaching our full year target implies a range of fourth quarter results of at least $28 million to $32 million. Our third quarter and fourth quarter projections represents significant year-over-year adjusted OIBDA growth. It's based on sustained revenue growth and more favorable year-over-year comparisons in our fixed cost base. Over the remainder of the year, we will continue to remain focused on creating new content across all platforms, strengthening our engagement with the broadening audience. As we continue our digital and direct-to-consumer transformation, we expect to achieve record revenue, record adjusted OIBDA and record subscriber levels.

That concludes this portion of the call and I will now turn it back to Michael.

Michael Weitz

Thank you, George. Michelle, we are ready now. Please open the lines for questions.