Full Year Business Outlook Reaffirmed While
Q1 2015 Currently Projected to Exceed Guidance
WWE® (NYSE:WWE) today announced that WWE Network surpassed 1.3
million subscribers following WrestleMania® 31, making it the most
viewed WrestleMania in history. WrestleMania was broadcast around
the world last night on WWE Network as well as on pay-per-view from
a sold-out Levi’s® Stadium in Santa Clara, CA. The results
represent a 97% increase from April 7, 2014 – the day after
WrestleMania last year and a 31% increase since January 27, 2015,
when the network surpassed the 1 million subscriber milestone.
Recent growth was driven by the success of our February free
promotion and the iconic attraction of the Company’s WrestleMania
event.
“We believe that exceeding 1.3 million subscribers reflects the
successful execution of our strategy and puts us on the path to
transformative growth through WWE Network,” said WWE Chairman &
CEO Vince McMahon. “We remain focused on driving subscriber value
by delivering the most compelling user experience and new content,
evidenced by our new original series and partnerships with Seth
Green, Jeff Tremaine and Jerry Springer.”
“We are pleased with our short-term results and, for the first
quarter, we currently project to exceed our most recent public
guidance associated with an estimated average of approximately
918,000 paid subscribers,” said George Barrios, WWE Chief Strategy
& Financial Officer. “We are also confident in the long-term
potential and understand subscriber growth could take
many different paths. For example, Network subscribers
might show consistent sequential quarterly gains or the quarterly
adoption curve could exhibit seasonality with year-over-year
growth. Regardless, over the long-term, we believe WWE Network has
the potential to drive significant economic returns.”
Based on data to date, WWE Network attracted an average of
approximately 918,000 paid subscribers over the first quarter 2015,
representing a 27% increase from the fourth quarter 2014 average.1
The network’s February free promotion contributed to that growth,
attracting approximately 201,000 trial subscribers, of which
154,000, or 77%, converted to paying subscribers in March. WWE
Network reached an average of 982,000 total subscribers during the
first quarter 2015, including both free trial and paid subscribers.
To date, WWE Network has attracted nearly 1.8 million unique
subscribers.
WWE Network: Growth
Strategy
To grow WWE Network, the Company is executing a five-part
strategy, including creating new content, implementing high impact
customer acquisition and retention programs, introducing new
features, expanding distribution platforms, and entering new
geographies. Over the coming year, the Company is focused on
expanding the network’s line-up of compelling original content as a
critical element of this strategy.
Programming: In addition to the premium monthly live
pay-per-view events, WWE Network unveiled new programming for the
remainder of 2015, which includes eight brand new original
series and partnerships with director Jeff Tremaine, Seth Green’s
Stoopid Buddy Stoodios and legendary talk show host Jerry Springer.
In addition, in the new show, Diva Search, WWE will span the globe
in search of the most beautiful, athletic and charismatic women in
the world to find the next stunning WWE Diva. WWE Network will also
produce compelling specials and short form content, while
continuing to add 1,000 hours to its robust video-on-demand
library, which currently has more than 3,000 hours of content. (For
more details of WWE Network’s programming line-up see the Company’s
March 30, 2015 press release).
Promotions: Based on the successful execution of the
network’s free trial offerings, all new subscribers who register
for the network in April will receive the network free in that
month, including Extreme Rules live on Sunday, April 26.
Features/Distribution: Other important elements of the
Company’s network strategy include improving the user experience
and content discovery across devices, while continuing to expand
distribution platforms.
Geographies: The Company is developing plans for
geographic expansion to India, China, Germany, Japan, Italy,
Thailand and Malaysia.
Paths to Potential Subscriber
Growth
The Company believes its strategy will facilitate long-term
subscriber growth of WWE Network. There are, however, different
paths that culminate in the realization of WWE Network’s subscriber
potential. For example, achieving consistent subscriber growth over
sequential quarters could result in a path that approximates an
upward sloping straight line. (See Exhibit 1)
Alternatively, it is possible that WWE Network subscriber growth
could follow the more seasonal pattern of the Company’s historic
pay-per-view business. The latter path could yield an upward
sloping trajectory over time, but could result in sequential
quarterly declines while still delivering year-over-year growth.
Any potential seasonal variations that might occur could be reduced
over time as the Company continues to bring compelling new content
to the network throughout the year. (See Exhibit 2)
The Company believes WWE Network will continue to make progress
toward its subscriber potential, and management is agnostic to the
pattern of growth.
Business Outlook
The level of WWE Network subscribers is a critical determinant
of the Company’s projected future financial performance.
In 2015, the Company expects year-over-year adjusted OIBDA
growth in every quarter, with growth driven by the performance of
WWE Network as well as the escalation of television rights fees,
and continued innovation across all of the Company’s businesses.
For the first quarter 2015, the Company currently projects its
adjusted OIBDA will exceed the high end of its most recent public
guidance associated with the quarter’s actual average of 918,000
paid subscribers.2 The most recent public guidance implied a range
of adjusted OIBDA of approximately $3 million to $8 million
associated with that average.
The table below outlines ranges of potential Company performance
for the full year 2015 at different subscriber levels. The Company
is maintaining its 2015 Business Outlook at various subscriber
levels as released on February 12, 2015. The 2015 Adjusted OIBDA
table (below) is consistent with the previously provided business
outlook. (The Company’s previous business outlook as well as
reconciliations of Operating Income to Adjusted OIBDA can be found
in the Company’s Q4 2014 Earnings Release – February 12, 2015).
1 Average paid subscribers are calculated based on the
arithmetic daily mean over the relevant period, and may differ
substantially from paid subscribers at the end of any period due to
the timing of paid subscriber additions. Trial subscribers acquired
during a promotional period are not counted as paying subscribers
until they convert after the end of the free period. 2 These
projections are preliminary and are subject to change based on the
completion of the Company’s quarter-end financial reporting
process.
Total Company -
Adjusted OIBDA (in millions)
Average Paid
Subscribers 3,4
2015E 500 ($10) - $10 1,000
$45 - $65 1,500 $100 - $120 2,000
$155 - $175 2,500 $210 - $230 (3)
Average paid subscribers shown in thousands. The average
number of paid subscribers over the 12-months of 2014 was
approximately 567,000. This 12-month average is below the average
for the 2014 period in which WWE Network was operative (WWE Network
was launched on February 24, 2014). (4) The average paid
subscribers the Company will achieve over the full year 2015 is
unknown. The range of average subscribers over the full year 2015
has been provided for illustrative purposes rather than as
guidance, and has not been updated or changed since it was
initially presented (July 31, 2014).
About WWE Network
WWE Network launched on February 24, 2014 in the U.S., was
subsequently made available in more than 170 countries and secured
broad distribution across web, mobile, streaming devices, gaming
consoles and Smart TVs. Like other digital subscription services,
such as Netflix and Hulu Plus, fans are able to sign up for WWE
Network online by going to WWE.com and can watch WWE Network on
their TVs through connected devices such as Sony PlayStation 3,
Sony PlayStation 4, Xbox One, Xbox 360, Amazon Fire TV, Apple TV
and Roku streaming devices as well as Smart TVs including Sony and
Samsung. WWE Network’s one-of-a-kind programming includes all 12
WWE pay-per-view events LIVE at no additional charge plus
groundbreaking original series, reality shows, documentaries,
classic matches, exclusive coverage of special events and more than
3,000 titles in its video-on-demand library.
About WWE
WWE, a publicly traded company (NYSE: WWE), is an integrated
media organization and recognized leader in global entertainment.
The company consists of a portfolio of businesses that create and
deliver original content 52 weeks a year to a global audience. WWE
is committed to family friendly entertainment on its television
programming, pay-per-view, digital media and publishing platforms.
WWE programming reaches more than 650 million homes worldwide in 35
languages. WWE Network, the first-ever 24/7 over-the-top premium
network that includes all 12 live pay-per-views, scheduled
programming and a massive video-on-demand library, is currently
available in more than 170 countries. The company is headquartered
in Stamford, Conn., with offices in New York, Los Angeles, London,
Mexico City, Mumbai, Shanghai, Singapore, Dubai, Munich and
Tokyo.
Additional information on WWE (NYSE: WWE) can be found at
wwe.com and corporate.wwe.com. For information on our global
activities, go to http://www.wwe.com/worldwide/.
Trademarks: All WWE programming,
talent names, images, likenesses, slogans, wrestling moves,
trademarks, logos and copyrights are the exclusive property of WWE
and its subsidiaries. All other trademarks, logos and copyrights
are the property of their respective owners.
Forward-Looking Statements: This
press release contains forward-looking statements pursuant to the
safe harbor provisions of the Securities Litigation Reform Act of
1995, which are subject to various risks and uncertainties. These
risks and uncertainties include, without limitation, risks relating
to: WWE Network; major distribution agreements; our need to
continue to develop creative and entertaining programs and events;
a decline in the popularity of our brand of sports entertainment;
the continued importance of key performers and the services of
Vincent K. McMahon; possible adverse changes in the regulatory
atmosphere and related private sector initiatives; the highly
competitive, rapidly changing and increasingly fragmented nature of
the markets in which we operate and greater financial resources or
marketplace presence of many of our competitors; uncertainties
associated with international markets; our difficulty or inability
to promote and conduct our live events and/or other businesses if
we do not comply with applicable regulations; our dependence on our
intellectual property rights, our need to protect those rights, and
the risks of our infringement of others’ intellectual property
rights; the complexity of our rights agreements across distribution
mechanisms and geographical areas; potential substantial liability
in the event of accidents or injuries occurring during our
physically demanding events including, without limitation, claims
relating to CTE; large public events as well as travel to and from
such events; our feature film business; our expansion into new or
complementary businesses and/or strategic investments; our computer
systems and online operations; a possible decline in general
economic conditions and disruption in financial markets; our
accounts receivable; our revolving credit facility; litigation; our
potential failure to meet market expectations for our financial
performance, which could adversely affect our stock; Vincent K.
McMahon exercising control over our affairs, and his interests may
conflict with the holders of our Class A common stock; a
substantial number of shares which are eligible for sale by the
McMahons and the sale, or the perception of possible sales, of
those shares could lower our stock price; and the relatively small
public “float” of our Class A common stock. In addition, our
dividend is dependent on a number of factors, including, among
other things, our liquidity and cash flow, strategic plan
(including alternative uses of capital), our financial results and
condition, contractual and legal restrictions on the payment of
dividends (including under our revolving credit facility), general
economic and competitive conditions and such other factors as our
Board of Directors may consider relevant. Forward-looking
statements made by the Company speak only as of the date made, are
subject to change without any obligation on the part of the Company
to update or revise them, and undue reliance should not be placed
on these statements.
Photos/Multimedia Gallery Available:
http://www.businesswire.com/multimedia/home/20150330005628/en/
WWEInvestors:Laura Kiernan,
203-328-2519laura.kiernan@wwecorp.comorMedia:Matt Altman,
203-352-1177matthew.altman@wwecorp.com
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