World Wrestling Entertainment, Inc. (WWE) Q1 2012 Earnings Call May 3, 2012, 11:00 a.m. ET Executives Michael Weitz – SVP, IR Vince McMahon – Chairman and CEO George Barrios – CFO Analysts Jamie Clements – Sidoti & Co. Michael Kupinski – Noble Financial Robert Ralph – Savings Partners Brad Safalow – PAA Research Presentation Operator My name is John and I will be your operator for today’s call. (Operator Instructions). I will now turn the call over to Michael Weitz, SVP of Investor Relations. Mr. Weitz, you may begin. Michael Weitz
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Vince McMahonGood morning everyone. As you will note, in terms of EBITDA, we’re above last year by 19%, some 20 million, which looks really, really good. However, it’s not as rosy as it appears, and George will make reference to all of that in a little bit more depth shortly. Nonetheless, our key metrics look pretty good as well, by the way I’d define them, would be television ratings and live events. If people are watching our product, then it’s up to us to drive them into areas where we can achieve significant growth as far as revenue is concerned, so television ratings are important in addition to the live events where it’s the most expensive form of enjoying our product, which has always been a barometer for me. As far as live events are concerned, we’ve increased our profits by a million bucks. Some of this by the way comes from expansion of our international platforms into Abu Dhabi, which is part of the Arab Emirates. We had our first event there, did extremely well. We’re scheduled to go back in about six months. Not in this quarter, but likewise we’re expanding, we just had our first event in Russia, in Moscow, which was very profitable as well. So we continue to expand in our international markets, and everyone looks pretty good. And by the way, since we’re talking about live events, again not in this quarter, but we’ll break the record as far as revenues and pay-per-view buys for Wrestlemania. In addition to that, getting back to the television ratings, as far as Raw and Smackdown are concerned, they continue to be the number one, number two actually in this quarter in terms of Raw in the U.S.A. Number one is Smackdown on Syfy. So again, television ratings are holding up very well, and our social media presence is extraordinary. With 62 million Facebook friends and growing exponentially, our Twitter followers, every form of social media we’re beginning to permeate in so many different ways, and we see that as a way of extraordinary growth of interest in our overall brand in so many different ways. So, the permutation of social media is something we’ve begun. People think that somewhat we’re on the cutting edge of all that, and doing it better than anyone else, I suppose we are, but we’re only going to scratch the surface as to where we are right now. We have our own channel, as it were, on YouTube, which is doing extremely well, things along those lines.
So as I mentioned in the international growth, we just had our first event in Russia, which will be related to the next quarter. We’ve also expanded our footprint as far as exposure is concerned in China, with the upcoming event that we have scheduled over there as well. As far as some of the other aspects of what makes this look pretty good in terms of the 19% above last year, home entertainment sales is up, which is a bit of a surprise, but again George will speak to that. As far as the movie business is concerned, under the old movie business model, we have reduced losses in terms of lower impairments, that’s under the old films business model.And then, we are continuing to develop our network launch of WWE Television Network in many, many different ways, hiring key hires. As far as content development is concerned, implementation and critical systems, our negotiations continue, so that’s moving along quite well, actually. So that’s, other than that, (inaudible) a new film model, which is something near and dear to everybody’s heart. Nonetheless, we have entered in with new partners, and with Fox, and again emphasizing the word partners, Fox Landscape, IM Global, studios such as those, and we think we have a great slate with a reduced amount of investment, but we’re going to get more in terms of return, maybe more than we even had budgeted for from my standpoint. So that’s about it for my generalities, and George let’s take it to you. Read the rest of this transcript for free on seekingalpha.com