Thread by @BrandonThurston

In this thread I'll be tweeting about the $WWE Q1 2020 earnings release. Documents release after 4pm ET. Conference call at 5pm.

Also, I'm making the 48-page @Wrestlenomics Pro Wrestling Industry Report 2019 is available again today only for just $5. payhip.com/b/qICi

Consensus analyst EPS estimate is $0.23. Based on 88.6mm diluted shares, implies a net income of $22mm.
seekingalpha.com/symbol/WWE/ear…

Some questions WWE might answer or analysts might want to ask today:

*Do Raw & Smackdown TV contracts require live programming? Is there a limit on taped broadcasts? Would library content (e.g. replaying PPVs) suffice?

*What's the outlook on a 2nd Saudi show in 2020?

*Is a deal to sell Network content (PPV rights) to a major streaming player off the table due to COVID? Is this something WWE will attempt to complete in the near future?

*Any news on the MENA TV rights deal? Are there other markets that are in renegotiation?

*Has there been an impact to media sponsorships related to COVID19 economic impact?

*To reassure public and investors that talent and crew are protected, should WWE be doing more to explain precautions around COVID19 prevent in production of TV?

*Will the WWE2K video game be delayed or cancelled?

*Is there any plan to reschedule international events that will be missed due to COVID19?

*Will a new CFO and CMO (replacing Barrios and Wilson) be hired soon or is this something more likely to happen after COVID19 crisis?

*Considering the issues with profitability with the Live Events division, are non-televised events something WWE will resume after COVID19?

*How many WWE Network subscribers were there the day after Wrestlemania? If not this quarter, will we learn this in the Q2 report?

*What was the purpose of Vince's stock agreement with Morgan Stanley for 3.5mm shares?

*WWE spent $83 million in 2019 on stock buybacks. Considering cost cutting recently, are buybacks something views differently now?

*There were reports WWE may be considering bringing an NXT brand to Japan as the next step in Paul Levesque's "global localization" strategy. Is this something the company plans to do? What other markets is WWE considering?

*Does WWE have any reaction to speculation that the company used government influence to be deemed an essential service in Florida?

*The XFL bankruptcy filing shows Alpha doesn't owe WWE for support services. Is there any reason why XFL bankruptcy or other actives will impact WWE?

*In talent releases, apparently no NXT UK wrestlers were cut. Is there a difference between UK and US contracts? Is it more difficult legally to release UK wrestlers?

*Will reality TV programs or WWE Studios projects be impacted by interruption in production due to COVID restrictions?

The market is about to close for the day. Not much movement on WWE's share price today.

Refreshing corporate.wwe.com ... Expecting documents to be released any minute now.

Documents have dropped!

Press release: corporate.wwe.com/~/media/Files/…

Trending schedules: corporate.wwe.com/~/media/Files/…

KPIs: corporate.wwe.com/~/media/Files/…

WWE outperforms consensus analyst estimates on revenue and net income.

Remember cost-cutting happened after Q1.

(I had estimated $288mm on revenue. Operating income of $53.3mm is way over what I estimated.)

Despite withdrawing its earlier Q1 guidance, after COVID19 was recognized as a crisis, WWE's adjusted OIBDA (WWE's preferred non-GAAP profit metric) still exceeded the Feb guidance for Q1 of $60mm-$65mm.

WWE reports $77.3mm in adjusted OIBDA for Q1.
corporate.wwe.com/~/media/Files/…

WWE is touting that Network subscribers for Wrestlemania this year exceed last year's Mania. On a closer look, that includes more than twice as many free subs as last year. Paid subs for Wrestlemania were down from Mania last year and the year before.
corporate.wwe.com/~/media/Files/…

KPIs show North American (US & Canada) avg att in Q1 was up from previous Q1s, but that's with less than half the number of events. Only 41, versus 90 and 99 in previous Q1s.

No int'l att... except for a KSA event. Not saying what att was.
corporate.wwe.com/~/media/Files/…

Bullet points in the earnings release about COVID-19 largely restate the information in the April 15 press release about cost cutting.
corporate.wwe.com/~/media/Files/…

Quotes in the earnings release from CEO Vince McMahon and intern CFO Frank Riddick, on the company's response to COVID19.
corporate.wwe.com/~/media/Files/…

Due to economic uncertainty WWE temporarily suspends its stock buyback program. In 2019, WWE spent $83mm on a stock repurchases.

Cash flow in Q1 greatly exceeds last year's Q1.
corporate.wwe.com/~/media
/Files/W/WWE/press-releases/2020/1q20-earnings-pr.pdf

WWE shares appear to be jumping in after-market trading.

Despite higher North American average attendance, Royal Rumble in a stadium, and fewer events, the Live Events division was still unprofitable, losing $3.2 million in operating income, worse then the loss of $200,000 in last year's Q1.
corporate.wwe.com/~/media/Files/…

Core content fees (Raw, Smackdown and NXT) were at $133.2mm, slightly lower than Q4, which is surprising to me since fees are believed to be escalating over time.

Network revenue down from last year's Q1 due to average paid subs being down (1,461,000)
corporate.wwe.com/~/media/Files/…

The 10-Q (quarterly report) has just posted:
otp.tools.investis.com/clients/us/wwe…

Seeking Alpha reporting after market trading for WWE stock is up 7.5% seekingalpha.com/news/3563934-w…

Revenues in the Consumer Products division was down due to lower sales. Venue merchandise sales would be affected by fewer events, but eCommerce and product licensing is down also.
corporate.wwe.com/~/media/Files/…

Last page of the release, WWE gives outlook and comments on COVID19 effects.
corporate.wwe.com/~/media/Files/…

"the company has been able to substantially offset the loss of ticket and merchandise sales at its live events by reducing operating expenses. These efforts were highlighted by the introduction of a new model for producing content."

WWE declines to give Q2 or full year 2020 guidance.

"The Company believes, however, that the potential impact of COVID-19 may not be limited to the sale of live event tickets and merchandise and the adverse impacts on other areas of operation are not known at this time. "

The conference call is starting now here streaming.webcasts.com/starthere.jsp?…

Here's KPIs. Video views. Social media followers. TV ratings.
corporate.wwe.com/~/media/Files/…

The call has started, WWE IR Michael Weitz introduces the call as normal. The investor presentation is here: corporate.wwe.com/~/media/Files/…

Vince McMahon takes over. He's going over this slide.

"Generally speaking we're very family oriented. We think that's going to help us considerably."

Vince on TV viewership since moving to the Performance Center: "There really wasn't, especially on Smackdown, that much difference in terms of where we were and in terms of where we are now."

"Wrestlemania was off the chart... It was the most social event in our history... And on the Network over the course of the weekend, subscriber additions were the highest in our history."

WWE interim CFO Frank Riddick takes over. Sounds like he's on a phone and not in the room with Vince.

Riddick is largely reviewing the earnings release.

On PPV rights prospects and "transformative" deal hyped last quarter.

"Currently we are unable to estimate" when PPV rights can be sold, interrupted by COVID effects. "But we continue to believe it is possible"

Riddick and McMahon mentioned that Raw and Smackdown viewership held up despite PC empty building shows. Maybe in March in Q1. Not so sure April agrees. docs.google.com/spreadsheets/d…

Questions opening up now.

Guggenheim: Ratings for Raw and SD have appeared soft, which is surprising since only sports. Any idea why this is the case? Steps the reverse this?

VKM: It's goes back to product itself. We're the only sports but again it's a different feel completely than in front of a live audience... But we're doing really well beyond anyone's expectations. Everything we do is about the audience...

VKM: There are advantages and we can go outside of the environment too. We're figuring that out... It's brand new for us. It's a different show... We're going to get there and alreaady turn it into somewhat of a positive. SD has virtually been no change.

VKM: Raw has suffered but not necessarily because of the environment. But we've brought in a lot of new talent. It takes time with new talent... I'm convinced Raw's ratings are gonna bounce back considerably.

Q: Any update on MENA deal?

VKM: They would love to have another event... They're under the same constraints with the pandemic... Not sure they can give us the okay in Nov or Dec...

VKM: So if we don't perform we'll tack that on to the back side of our contract. We're not gonna lose our money. As far as the MENA [media] rights... Still working on that... Things move slowly.

Q: Did Q1 core content rights include India money? Media and sponsorship trends in second half of March and now?

Riddick: The first quarter had India at the old deal terms [before 1.8x increase]... Sponsorship we saw good performance there.

Riddick: As we get into the second quarter... Wrestlemania did very well... But today most of our revenue there is transactional in nature.

Q: When will India payments be upgraded Q2?
Riddick: Yes.

Q: If there's a scenario where FL shuts down production, do you have backup plans and location?

VKM: Yes, we do. A number of them. And a number of states would welcome us.

Q: Is there a scenario where you could move to Full Sail and shoot with a live audience with social distancing?

VKM: Yes we're looking at that... And I don't know what looks like... I don't know if it's six feet apart and everyone is tested before hand... If anyone can know how to do it it's us.

Q: Are media partners reevaluating partnerships? (this might be referring to PPV rights or core content)

Riddick: They have their own issues to deal with in responding to COVID19... It's not that they have a lack of interest in the product, that's not the case.

VKM: I think COVID19 stuff caught everybody with their pants down... Just when you think you were getting close, the bottom fell out... We continue to invest in a free tier (for WWE Network).

Q: What does WWE look on the other side of this? One or two things to highlight today as you work through this experience?

VKM: I don't know that we're going to be in the "live event business" as we were before. We're ready if it's allowed...

VKM: I think it's going to take a while for consumer to come forward and want to be put 70,000 people in MetLife stadium... If anyone can figure it out, we will... I think it's going to be more content oriented... Not in terms of live events, more social and digital media...

Q: Is there any risk we need to think about that your broadcast partners say, 'this isn't the product I paid for' with there being no live audience?

VKM: Our partners are not doing as well as they'd like to, nor are we. In terms of the content they totally get it.

VKM: They're lauding what we're doing... We have a great relationship with both partners. They have our backs, as we do theirs.

Q: Considering no WM in front of fans, that typically represents about $15mm of EBITDA... Should we think Q2 will be profitable?

Riddick: Yeah I believe so... We're not in a position to give gudiance... But based on cost reductions it should be profitable.

Q: Assuming you have a second Saudi event, live events comeback later in the year.

Riddick: We're not in a position to give guidance... It's too early to go out on a limb.

Q: Is your cost structure lower now in this new environment and cash flow higher?

VKM: I think we're going to adapt very quickly. We need to be flexible. We are. And I'd rather not comment on what the future holds for the country. I just know that we're gonna do well.

Q: Do you think sub growth is COVID dependent or do you think you can hold on to that?

VKM: I think new content is always a driver... It could very well be they're tired of watching Netflix... We have a product that's very unique... That's an advantage we have...

Q: Is there a good way to think about the net impact change to Raw and SD on a per show OIBDA basis? Just in Orlando at the PC relative to live event losses along with merchandise?

VKM: The cost is no where near... We barely have to change anything...

VKM: Not moving anything in or out. That saves a lot of money... At the same time we need an audience... You don't want to just continue to produce in a studio environment. It's certainly more costly on a remote [location]... I have to give kudos to all our performers...

Q: Timing of the free tier of WWE Network?

Riddick: Current thinking is sometime in the 4th quarter.

Q: Vince any guess when you'll have your next live event. Theaters are talking late June or July?

VKM: No, not really. We have holds on buildings naturally... I have no idea quite frankly... I don't think anyone does.

Q: Cost cutting seems aggressive... Something more dour ready to happen?

Riddick: Overall we are concerned about uncertainty and impacts of gov't regulations and societal behavior around COVID. Since we don't know that we felt we need to be overly cautious...

VKM: And the old expression is 'cash is king'... We're just making certain that we're being conservative, and as Frank says, being overly cautious.

Q: Paid subs on WM were down a little bit. You were up on free subs. What drove that delta?

Weitz: There were a lot of creative things we did to drive growth around WM... We expanded access to free tier, partnered with Fox... gave content to ESPN...

Weitz: Netflix, Quibi all contributed to

Q: Could you talk about talent morale? Players and unions have wanted safety restrictions and hwo you're thinking about COVID testing.

VKM: As far as testing, we do everything imaginable... We have this whole form you have to fill out in terms of if you've been exposed. Not only monitoring our talent, but also our employees... We put talent in a sequestered hotel...

VKM: We have changed the turnbuckles and ropes in between matches... We have a pandemic level cleaning... Paul tell us what the new stuff is that you've done..

Levesque: They have a spray that makes it clean to surface. The surfaces, once it's coated with this, it acts like a sword that punctures the cell wall of the virus, and that lasts 90 to 120 days... PC, training facility, warehouse and production trucks have been treated.

VKM: And when testing becomes more prevelant, we'll be rijght there. Our talent have taken this as a challenge... which has alaways happen with us... They realize people are sitting home bored... Talent has really risen to the challenge.

Q: Do you have a perspective on your fans' relative exposure to the pandemic?

Riddick: We don't have the details of that in granular form... Historically our business has not been all that affected by economic downturns...

VKM: Our fans, any conceivable way they can consume the product, they will... So when you go to an arena, are they gonna charge you same amount of rent? Probably not... They have to come down and whatever it is, likewise, you need to lower your cost as well, as a ticket...

Q: Do you have any sense on your fans, their willingness to pay for the Network if they're unemployed? Is that the biggest economic concern you'd have on your business?

VKM: That may be one of them... We're just ready for action. I don't think anyone has that crystal ball.

Q: WWE 2K is that in your budget this year?

Riddick: No there's not going to be an annual launch this year.

The conference call has ended! Thanks for following along. I will look at the 10-Q soon and tweet additional notes.

WWE has disclosed the separation agreements for former co-presidents George Barrios and Michelle Wilson, attached to the end of the 10-Q. Their agreements seem to be identical.
otp.tools.investis.com/clients/us/wwe…

Paragraph 6 reads: "you will not criticize or disparage
any of the WWE Parties, or, to the maximum extent permitted by law, issue any communication, written or
otherwise, that reflects adversely on any of the WWE Parties, except if testifying truthfully under oath..."