Wednesday, February 24, 2016

WWE Q4 Results, podcasts, odds & ends

I've done several podcasts about WWE Q4/CY 2015 results:

I wrote a "primer" on WWE revenue for Seeking Alpha that was published right before WWE Q4 results:

I also wrote a full report on the WWE Q4 results for F4Wonline that was published right after WWE Q4 results:

Assorted odds & ends from the Annual Report and my Twitter

"Our creative team develops compelling&complex characters&weaves them into dynamic storylines that combine physical&emotional elements." pg5

"NXT has produced current main roster stars such as Seth Rollins, Bray Wyatt, Kevin Owens, and Sasha Banks." (2015 WWE 10-K, page 7)
"As of Feb-2016,we had approx 840 employees.Headcount excludes our Superstars&Divas,who are independent contractors." (pg8) Feb-2014 was 761

Our failure to retain or continue to recruit key performers could lead to a decline in the appeal of our storylines and the popularity of our brand of entertainment, which could adversely affect our operating results.
Our success depends, in large part, upon our ability to recruit, train and retain athletic performers who have the physical presence, acting ability and charisma to portray characters in our live events, video programming (including our television, WWE Network and other programming) and films. We cannot guarantee that we will be able to continue to identify, train and retain these performers. Additionally, throughout our history, performers from time to time have stopped working for us for any number of reasons, and we cannot guarantee that we will be able to retain our current performers either during the terms of their contracts or when their contracts expire. Our failure to attract and retain key performers, an increase in the costs required to attract and retain such performers, or a serious or untimely injury to, or the death of, or unexpected or premature loss or retirement for any reason of, any of our key performers could lead to a decline in the appeal of our storylines and the popularity of our brand of entertainment.  Scheduling conflicts for talent services may also affect certain productions.  Any of the foregoing issues could adversely affect our operating results.

"For instance, as television delivery moves to 4K technology, the Company could face higher costs of delivering its televised content."
Our businesses entail certain risks relating to privacy norms and regulations.    
We and our partners collect certain data supplied by our fans including WWE Network subscribers.  We utilize this data in certain ways including our marketing efforts. We face complex legal obligations internationally regarding the manner in which we treat and use such information.  Unintentional noncompliance by us or our partners of these regulations could have an adverse effect on our business. If we were to disclose or use data about our fans in a manner that is objectionable to them or is contrary to applicable law, our business reputation could be adversely affected.  We could also face potential legal claims that could impact our operating results.  We expect this risk to continue as our business evolves and as we expand internationally.

Corporate & Other:
Revenues consist of amounts earned from talent appearances.  Expenses are categorized and presented into two categories comprised of Corporate Support and Business Support. Corporate Support expenses primarily include our corporate general and administrative functions.  Business Support expenses include our sales and marketing functions, include our international sales offices, and talent development function, including the costs associated with our WWE Performance Center, as well as business strategy and data analytics support. Additionally, Corporate and Other includes all intersegment eliminations recorded in consolidation.
 Only places where WWE Network isn't OTT service is Canada, Malaysia (Astro) & Middle East (OSN) so I think those countries.

Television revenues, which include revenues generated from television rights fees and advertising, increased by $54.4 million, or 31%, in 2015 as compared to 2014.  Television rights fees in 2015 include approximately $42.8 million in incremental revenues associated with certain key television distribution agreements, which became effective in the fourth quarter of 2014 or the first quarter of 2015.  The increase in revenue was also attributable to the relaunch of Tough Enough, which aired 10 episodes during 2015 and did not take place in 2014.  The Company also recognized incremental revenues in 2015 associated with our streaming service offerings on Hulu.  Television OIBDA as a percentage of revenues increased to 42% in 2015 as compared to 35% in 2014, primarily driven by higher revenues, partially offset by an increase in the costs incurred to produce television programming.

In 2015, WWE spent $36.2M for "non-live programming" (Total Divas, Tough Enough, WWE Network shows). 2014: $20.9M. 2016 range: $35M-$45M.

Net Revenues – Cost of Revenues = Profit Contribution
Profit Contribution  -  SG&A – D&A = Operating Income
Operating Income + D&A = OIBDA

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