– WWE held an investor conference call today to discuss the third quarter numbers which were released this morning. Participating in the call were Chief Executive Officer Linda McMahon and Chief Financial officer George Barrios. Chief Operating officer Michael Sileck, who has been involved in past calls, was not present, on the heels of the announcement that he will be leaving the company at the end of this year.
Linda read a prepared statement, stating that the drop in this quarter is proof that WWE is “resilient, but not immune” to the weakening economy. Linda stated that they would be cutting costs in several areas to address this, then praised their television growth and the launch of Smackdown on MyNetworkTV. Linda then talked about their international television growth and expanded overseas licensing of products. She also mentioned the launch of the WWE Kids website and the connection to the WWE Kids magazine. Linda made a point to state that WWE would continue to meet their current dividend payouts. Linda then addressed Michael Sileck leaving the company, and praised Donna Goldsmith, Executive Vice President of Consumer Products, who will be taking over as Chief Operating Officer.
George Barrios then reviewed the financial numbers. Barrios mentioned a different international schedule and competition from the Olympics as part of the reason for the drop this quarter in PPV buys. He praised their success in DVD and video game sales, once again noting the international expansion of their products into new markets. He noted that higher production costs for events led to lower revenue from live events and PPVs.
A Question and Answer session was then held. Here are highlights from the session:
– WWE Films is now focusing on their DVD releases, with “Behind Enemy Lines 3”, a co-production with FOX, their focus now. Linda said there might be the “occasional” theatrical release, but their main focus was on DVD and “movie of the week” product.
– When asked about TNA as competition, Linda said they view their competition as all entertainment, and said TNA is just in their “particular genre”, but that they only see them as they do all entertainment products, as just another entity that they are competing against.
– Concerning live event attendance, Linda noted WWE was being careful not to “burn out” any areas that they are currently drawing well in.
– When asked about Genius, their video distributor, having issues, Barrios said that they were following the Genius situation, and would be doing “whatever is best for WWE” in terms of making sure there are no “hiccups” in their video distribution.
– Regarding cost cutting measures, Barrios said that it wasn’t just a matter of making cuts to save money, but that it was about “doing things as smart as we can”. He said they were committed to cutting out $20 million of costs while not weakening their business and the quality of their products.
– Barrios stated they are not committed to any further WWE Films projects with Steve Austin, despite reports to the contrary (prior to The Condemmed it was stated he had a three film deal with WWE). It wasn’t really clear if Barrios just meant that they aren’t doing anything “right now” with Austin.
– WWE is planning on hiring a new Executive Vice President of Consumer Products eventually to take over the position that is being vacated by Donna Goldsmith.