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WWE Q2 earnings report & conference call focus on streaming success more than Vince exit

WWE.com

The first earnings report and investor conference call of the post-Vince McMahon era are in the books. While neither the accountants & lawyers who wrote the report nor the management team who handled the call (co-CEOs Nick Khan & Stephanie McMahon, Chief Financial Officer & Chief Administrative Officer Frank Riddick, and executive vice president for Talent Relations and head of creative Paul “Triple H” Levesque) could ignore Vince’s recent resignation, they all did their best to focus on other, more positive things.

Especially the strong television and streaming performance of their products, and how that bodes well for the future.

The growth in streaming numbers for Premium Live Events on Peacock was a particular point of emphasis; the earnings report led off with a quote from the co-CEOs mentioning it:

“We generated strong financial results in the quarter, highlighted by record revenue and Adjusted OIBDA for a second quarter,” said Stephanie McMahon and Nick Khan, WWE co-Chief Executive Officers. “We continued to effectively execute our strategy, including staging a record-setting WrestleMania in early April. WrestleMania, as well as our other premium live events (“PLEs”) including WrestleMania Backlash, Hell in a Cell, Money in the Bank and SummerSlam all delivered record viewership for their respective events. These PLEs, along with strong ratings for our flagship programs, Raw and SmackDown, continued to expand the reach of our brands and enhance the value of our content. We’re excited about the recently announced management structure, including the appointment of Paul Levesque as head of WWE creative and talent, as we look to continue to increase the monetization of our IP across various platforms through our media rights agreements, both domestically and abroad, as well as our inaugural NFT drops on Moonsault, WWE’s official NFT marketplace, and the recent launch of our new, enhanced e-commerce digital platform in connection with our partnership with Fanatics.”

Ratings and streams were also highlighted in the report’s bullet point overview:

Raises Full Year 2022 Outlook

Second Quarter 2022 Highlights

• Revenue was $328.2 million, an increase of 24%; Operating Income was $69.3 million, an increase of 50%; and Adjusted OIBDA1 was $91.5 million, an increase of 34%

• Returned capital to shareholders totaling $19.1 million, including share repurchases and dividends paid

• Each WWE premium live event (WrestleMania, WrestleMania Backlash and Hell in a Cell) was the most viewed event in its history with year-over-year increases of 60%, 49% and 45%, respectively, in domestic unique viewership on Peacock

• WWE, in connection with Fox’s Blockchain Creative Labs, launched its inaugural NFT sale on Moonsault, the Company’s official NFT marketplace. The limited-edition collection, which was tied to the Hell in a Cell event, sold out within 24 hours

• WWE announced its second “Next In Line” class of 15 college athletes, further enhancing the Company’s talent development program

• In July, WWE launched a new, enhanced digital platform for e-commerce and licensed merchandise in connection with its long-term partnership with Fanatics

2022 Business Outlook

In February, the Company issued Adjusted OIBDA guidance of $360 - $375 million for the full year 2022. Based on outperformance through the first six months of the year as well as management’s current expectations for the second half of the year, the Company is raising its guidance and now expects full year 2022 Adjusted OIBDA within a range of $370 - $385 million

On the call, Stephanie started by acknowledging the absence of her father, but didn’t really deviate from the standard company line about how he & her mother Linda grew they business from a regional company to a global corporation. She then transitioned to talking about what a great relationship she & her husband have with Khan.

Her fellow CEO touted consumer products and live events success stories, specifically moving WWE Shop to Fanatics, and trading card & NFT revenue. Khan touted WWE’s upcoming PLE in Cardiff, Wales — Clash at the Castle — as being a big revenue generator for the company. Riddick later teased another international event being added to the schedule.

Khan was especially bullish on the company’s next television/streaming contracts: “We remain as confident as ever on U.S. rights.” He believes there will be even more players for WWE content this time around, specifically mentioning Netflix’s recent bid for Formula 1 racing as evidence of tech and media company’s voracious appetite for live programming.

Levesque (aka Triple H) discussed the company’s talent acquisition strategy, with an emphasis on the NIL program. He repeated many of his same talking points about taking over creative: how it’s a huge responsibility to take over for Vince but that he feels he & his team are ready for it, he’s confident they can please the existing audience while being attractive to new viewers, and is applying “first day on the job thinking” to his new role — looking to see what works and what doesn’t.

Most of the discussion of the company’s investigation into unrecorded payments made by Vince McMahon over the years was handled by Riddick, who largely just reiterated talking points from the earnings report and yesterday’s 10-Q filing.

There were few questions about Vince or the scandal that brought him down, but Stephanie answered one from Brandon Ross of investment research firm LightShed where she reminded us that her father is still the controlling shareholder. While the current executive team will evaluate opportunities like a sale of the company, the elder McMahon would have to approve any such transaction:

“That being said, Vince McMahon, is still very much the controlling shareholder. He still has his eyes for what is best for our business in terms of maximizing return to our shareholders, of which he is the biggest shareholder. Nick, Paul, Frank, and I remain focused on delivering the maximum results to our shareholders. We will properly evaluate any opportunity that comes our way with that lens in mind.”

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