WWE held their 2019 first quarter earnings conference call today. Before the call officially started, it was noted that Vince McMahon, George Barrios, Michelle Wilson and Michael Weiss were on the call.

Vince McMahon opened the call and said that he wanted to address a number of things, noting that WrestleMania was spectacular and that the Royal Rumble also was an excellent show. Vince said that they are doing some documentaries that they have never done before with A&E, while they have studio shows coming on FS1 and have all sorts of reality shows coming, but that when you look at this quarter, they had 15 top to mid-card talents out and when those talents are out, you do not have storylines and things cascade. Vince said that they have those talents back and that they have new talents on the main rosters, while they made new talents when they others were out. Vince said that they have hired new people for the writing team that will help with the television and creative and that they have a new team working on the WWE live events, which will turn things around on that front. Vince said that in the latter part of September, they are going to have a whole new metamorphosis as the promotion that they will have on FOX will be like something that they have never seen before and that is going to be a rising tide that they really are looking forward to and it will carry them on through the end of the year and that the Fox debut will mark the first time that the WWE will be available live, 52 weeks a year, on such a major broadcast platform.

George Barrios said that their digital media revenue was down in part due to softer advertising rates on YouTube, while the WWE Network will launch a new platform later this year, in conjunction with Endeavor. Barrios said that the FOX Sports 1 studio show will debut this Fall, while the most-seen content on the WWE Network were pay-per-views, in-ring events and original series including NXT Takeover, Halftime Heat and WWE Chronicles. Barrios put over the success of the Royal Rumble and WrestleMania pay-per-views as well as their international tryout in India and noted that they had lower merchandise sales at live events due to lower live event attendance. Barrios put over their new relationships with Roblox and New Era for licensing before running down additional items from the earnings release. The lines were then opened for questioning.

The first caller asked about the engagement metrics and how they can be confident about a rebound when talents like Ronda Rousey are leaving. Barrios said that they believe their numbers being down is related to the talents being all out at the same time and that they saw the trends drop at the same time that those talents disappeared. Barrios said that the broad historical context is that they have a 35-year history in creating talent and that they have a success in creating the next generation of talent, noting that they have done it in the past and continue to do so. Vince said that Ronda Rousey did an extraordinary job in bringing up the women’s division, which headlined WrestleMania 35 and made the talents have more of a spotlight. Vince said that they knew when she was leaving, per her contract, but that she did a great job and the goal was to get the women’s division to the next level, which was accomplished.

The next caller asked about talent contract discussions, however the company declined to comment on that topic. The company were then asked about their next major international show, but also refused to comment further on that. The next caller asked about a big picture idea of what is causing the WWE Network subscriber churn and pressure and whether the reboot of the WWE Network will help the subscriber front. George Barrios said that the talent is the core of what they do and when it goes great, the company excels and said that they had issues and it it had a cascading effect and what happens in a month trickles down. Barrios said that they have been working on the design and the build of the WWE Network which will be unveiled later in the year and that it will create the underpinnings of what they can do to re-accelerate growth going past 2019. Barrios was asked about a launch date again, but refused to comment, only noting that it will happen later in the year.

The next caller asked if the quarters will re-align with the new television deals kicking in towards the end of the year. Barrios said that they began to make investments at the end of last year, so those costs are being seen now and that it is too early to talk about 2020, but their expectations of growth over the rest of 2019 will show the direction that they expect to be in and that they have to decide how much growth and profitability do they re-invest in the company and that is something that they work on daily. The next caller asked what they expected in terms of viewership on FOX and how the promotion for the debut could help them overall. Barrios said that they have a 33% increase on homes from the USA Network and believes that FOX’s plan to promote them will over-deliver and that will lead to a rising tide for their partners on the USA Network as well as the numbers they do now are in the company’s favor.

The next caller asked about the development process in the UK, its viewership levels and whether the series plans to go live. Vince McMahon said that he would be bringing Triple H in on the call for this one. HHH said that it has been very successful and has been one of their most-watched series on the WWE Network and that when you see the relaunch, you will see it grow into a touring brand with Takeover specials and put over that the social media exposure is massive for the UK brand and that the show is seen on a global basis. HHH said that taking the UK series and feeding it into the global WWE pipeline helps the overall talent pipeline as well, as it does to the UK Performance Center. The next caller asked if FOX is going to position SmackDown Live differently for advertisers and fans versus how the series has been presented on the USA Network. Michelle Wilson said that they have already fully embraced the WWE as a partner with their key advertisers and pre-upfront events and that it is important to remember the USA Network as a general entertainment network. Wilson said that they believe that FOX will lean into the sports aspect of what WWE does and will present them to their advertising base with a slight tweak. Wilson said that they will be promoted throughout NFL, MLB and NASCAR broadcast on FOX and that they will be part of both the USA Network and FOX upfronts on May 13th in New York City

The next caller asked about another Saudi Arabia event. Barrios said that they were going to stay away from guidance of the second quarter of 2019. The next caller asked about the idea of talents aging or audiences becoming tired of them and how the company recognizes that it is time to build a new main event character. Triple H said that there is no exact timing on what it takes as they don’t bring in superstars, they create them. HHH said that they constantly bring in talents and noted how Kofi Kingston stepped into a role this year and became the WWE Champion due to absences and that now, when the talents return, it’s a rising tide. HHH said that they have had 15 people come up this year from their talent development system and that 80% of the current WWE roster came through the developmental system, while they have a decades-long track record in helping to create icons over generations. The next caller noted that the company has been outspoken on the talent issues, but have not provided any details on licensees being down as well. George Barrios said that it is hard to parse at that level and that they have had a bend at the curve at the same time on different levels, which were sudden and abrupt and that they think it was a unique moment in time, while there may have been larger macro factors, but they believe that it was talent-driven.

The next caller asked about how long of a drag there is in fan engagement after the talents come back on television. George Barrios said that it is a little hard to track over a length of time and that it was not talent absences, but the magnitude of it all happening at the same time, mentioning that something similar happened in the Summer of 2010, but that they did not have 70% of their revenue coming from media and also did not have the deep metrics that they have access to now, as back then, it took around 6-9 months to turn things around. The next caller asked about big events in the second quarter, however the company declined to comment, stating that the annual European tour would fall around that date. That wrapped up the call.