The following are highlights from WWE's conference call earlier today talking about their stock drop this past Friday (5/16) after announcing their new TV rights deal with NBC Universal.
Vince McMahon portion
* Vince said he hopes to give a "great deal of clarity" to the callers about the Network and their TV rights deal.
* McMahon added that perhaps they failed by giving so much transparency on the TV rights deal and hope to clear up any misconceptions.
* He said WWE was "somewhat disappointed" with the new TV rights deal with NBC Universal, but they nearly doubled their TV deals overall. They hit their goals internationally, but not domestically on what their research showed them. Its not what they wanted, but were happy overall.
* McMahon closed saying that they have invested greatly in the WWE Network and their core business is "rock solid." They are blazing new trails and with that comes some uncertainity. They are trying to "clearly communicate" the impact of these changes on their business model.
George Barrios portion
* Said WWE has spent $75 million on the creation of the WWE Network and $40 million on staffing to create TV & digital content.
* Said their research provided support on the estimates of their new TV deals and in three of the four markets they made new TV deals in, the research was correct. They believe those deals will average around $200 million.
* Mentioned that if they get 2.5 million subscribers to the WWE Network, they can bring in more money than what they did with their old PPV model.
Caller Q&A portion
1. What is the operating expense for the WWE Network if it hits 1.5 million subscribers?
* Barrios: "Around $49 million."
2. Did the launch of the WWE Network hurt their TV rights negotiations?
* McMahon: "Fair question. It had some negative feedback on the TV deals, but they were in a chicken & egg situation where if they didn't launch the WWE Network when they did, they would have to wait a year to launch it, since Wrestlemania season was the best time to launch the Network."
3. How long are the new TV deals?
* Barrios: "None of them are longer than five years, some are shorter."
4. Is the future of the dividend safe going forward?
* Barrios: "If we are successful executing our strategy with the WWE Network, we feel comfortable maintaining our dividend."
5. Has WWE had any discussions about bringing the WWE Network to tradtional distributors?
* McMahon: "There are a lot of potential possiblities for the future, but it won't be their way or the highway."
6. What's with the high-end turnover of WWE Network personnel since the launch?
* Barrios: "Won't get into specifics, but we are very happy with the management team and with our relationship with MLBAM."
7. What's the current number of subscribers to the WWE Network?
* Barrios: "We are going to stick to giving out subscriber numbers on a quarterly basis, but those numbers will be released on the next conference call."
8. What happens if the WWE Network under-performs WWE's expectations?
* Barrios: "We have an idea what the next 18 months for the WWE Network will be, but we are learning a lot everyday and have new learnings. We wish we can give you certainity, but we can't."
9. What else does WWE have to help subscriber growth of the WWE Network?
Barrios: "At our core, we have a team on working on things to help subscriber growth. We just announced Tough Enough and are in the beginning of planning new things for different segments."
Barrios thanked everyone for being on the call and the caller questions. Said that the purpose of the call was to bring clarity and hopes it helped the entire community. That ended the call.