The following press release has been issued:
WWE® Reports 2014 Third Quarter Results
Exceeds Earnings Expectations and Raises 2014 Outlook
STAMFORD, CONN. — WWE (NYSE:WWE) today announced financial results for its third quarter ended September 30, 2014. For the quarter, the Company reported a Net loss of $5.9 million, or $0.08 per share, compared to Net income of $2.4 million, or $0.03 per share, in the third quarter last year. Excluding items affecting comparability, Adjusted OIBDA was $5.1 million and Adjusted Net loss was $0.6 million, or $0.01 per share in the current year quarter, compared to Adjusted OIBDA of $16.7 million and adjusted Net income of $7.0 million, or $0.09 per share, in the prior year quarter.
“During the quarter, we delivered stronger financial performance than anticipated and surpassed our guidance while making significant progress on the execution of our WWE Network strategy,” stated Vince McMahon, Chairman and Chief Executive Officer. “To capitalize on the substantial opportunity created by WWE Network, it’s time to remove all the barriers to those that want WWE. We are excited to introduce a new simplified price plan at $9.99 per month, and like Netflix with no commitment/cancel anytime. This reflects our belief in the broad appeal of WWE Network content. Additionally, we continue to develop the international platform for WWE Network and plan to make the network available in the U.K. on an OTT basis in November. WWE Network continues to be the single greatest opportunity to transform WWE’s business model and we remain optimistic about our potential to drive long-term growth.”
“As we expanded WWE Network to 731,000 subscribers, our Adjusted OIBDA of $5.1 million surpassed our guidance, which indicated an Adjusted OIBDA loss ranging from $10 million to $15 million with an average of 723,000 subscribers. Given our performance in the quarter, we have improved our 2014 Adjusted OIBDA outlook ranges by approximately $15 million to $20 million,” added George Barrios, Chief Strategy & Financial Officer. “Key metrics continued to show strength. Raw and SmackDown TV ratings increased 2% and 3%, respectively. WWE’s social media presence has increased 71% to over 420 million followers. In addition, revenue from the Company’s seven new key television agreements is expected to increase from approximately $130 million in 2014 to approximately $235 million in 2018, providing over $100 million of revenue growth subject to counterparty risks.”
WWE Network Update: Third Quarter Highlights
* Network segment revenues increased 68% from the prior year quarter and 26% on a year-to-date basis, reflecting the launch of WWE Network. Viewership of WWE Network’s most compelling content increased as evidenced by the Night of Champions in September. Domestic transactions related to that event, as measured by a combination of network subscribers and pay-per-view buys, was nearly 9 times the event’s 85,000 domestic pay-per-view buys in the prior year quarter.
* WWE Network added 31,000 subscribers in the quarter, representing a 4% increase from June 30, and reached 731,000 subscribers at quarter-end. Subscriber growth reflected the acquisition of 286,000 subscribers, which was 71% above the gross subscriber additions in the period between April 7 (the day after WrestleMania) and June 30 (WWE Network added 182,000 gross subscribers during the April 1- April 6 period, which included WrestleMania). Through September 30, WWE Network had attracted approximately 971,000 unique subscribers with 75% of these subscribers active as of that date.
* The U.S. version of WWE Network was made available in more than 170 countries and territories beginning August 12. Between that date and September 30, WWE Network acquired approximately 30,000 international subscribers, representing 10% of gross additions. Additionally, on August 12, the Company introduced a $12.99 (cancel at any time) plan, which reached 23,000 subscribers at quarter end.
* Viewer data continues to indicate that, on average, close to 90% of subscribers access WWE Network at least once per week and 99% access WWE Network at least once per month. Driving that engagement is WWE Network’s compelling live and new original content. Notably, the Company’s SummerSlam event, which aired live on WWE Network, ranked 1st on Nielsen’s Twitter TV Ratings1, achieving the largest social media presence of any series or special during the week of August 11, beating every program in this Nielsen category on U.S. cable and broadcast networks.
WWE Network Update: Future Plans
* New Simplified Price Plan: Beginning November 1, the Company will introduce a new simplified price plan at $9.99 per month with no commitment (cancel at any time). Current subscribers will benefit from this new simplified plan as they are migrated to this new plan beginning in December. The new pricing structure reflects management’s belief in the broad appeal of WWE Network content and is comparable to that of other subscription-based content platforms including Netflix and Hulu Plus. Additionally, all new subscribers who register for the network in November will receive the month of November for free, including the opportunity to watch Survivor Series live on Sunday, November 23rd.
* WWE Network to be available in the U.K.: The Company continues to develop the international platform for WWE Network and plans to make the U.S. version of WWE Network available in the U.K. on an over-the-top basis in November.
* New Content / Product Features: New content recently added to the network includes WWE Rivalries. The original series, which provides a documentary-style look at some of the greatest moments in WWE history, debuted on October 27. In addition to providing new live and original content, the network has increased access to the Company’s comprehensive video-on-demand library to more than 2,500 hours from more than 1,500 hours at launch. Also enhancing subscribers’ viewing experience, the Company plans to roll out new “resume play” and “watch list” features across WWE Network media platforms by the end of December.
* Limited advertising: WWE Network began including a limited amount of advertising on October 13 with Pepsi, Mattel, K-Mart, Take-Two Interactive, and Pure Talk USA as the network’s initial sponsors. The Company’s advertising strategy anticipates no commercial breaks during scheduled programming, limited advertising between shows, and occasional advertising before the network’s video-on-demand content.
(1) Nielsen’s Twitter TV Ratings rank programs by their unique audience on Twitter, i.e. the total number of Twitter accounts that accrue impressions ascribed to a related program episode.
Nick was born and raised in Detroit, Michigan, and lived there until the age of 18, when he decided to pack his flack jacket and move to New York City.
