WWE held their first quarter 2014 conference call with shareholders on Thursday morning. Here are the highlights from the call:

Vince McMahon portion

Noted that how they report their earnings is going to change with the advent of the WWE Network. All PPV business for WWE now goes under the Network’s umbrella. 

* TV ratings and live events were flat. 

* Licensing was down due to situation with their videogames over the last year. 

* Pushed the 667,000 Network subscribers and the 400,000 US buys for Wrestlemania 30, noting that it was the best that he can recall Wrestlemania has ever done in the US. 

* Is confident WWE can hit over 1 million subscribers for the WWE Network. 

* Touted WWE Network recently launching on XBOX One & on Amazon Fire and Smart TVs shortly. 

* Hopes to have TV deals done in India and the US in the next few weeks.

* Noted WWE has renewed partnerships with General Mills and Pepsi. 

* WWE Studios’ releases of Scooby Doo and Oculus are within what they expected. 

George Barrios portion

Noted that WWE will make $80 million annually with the current 667,000 subscribers they currently have for the WWE Network, $30 million more than with the traditional PPV business model. 

* WWE expects to get in the millions with subscribers once they go internationally. 

* Noted that the Monday Night War, a second season of WWE Countdown and the revival of WWE Tough Enough will be coming soon to the WWE Network. 

* New features, including bookmarking, will be added soon to the Network. 

* Network generated $4 million in this quarter with 440,000 subscribers by the time the first quarter ended. So, WWE added 227,000 subscribers in the month of March heading into Wrestlemania 30. 

* PPV revenue was down 9 percent due to low international buys for the Royal Rumble and Elimination Chamber. 

* TV revenue went up due to the second season of Total Divas and new contractual deals. 

* WWE Studios did very well due to the success of “The Call.” They expect to make more than what WWE has currently invested in that division going forward. 

* Noted that Take-Two would be giving WWE royalties on a quarterly basis going forward, instead of one lump payment in their previous deal with THQ. 

* Noted WWE has a $90 million line of credit. 

* Noted WWE would not take caller questions about their current TV negotiations. 

* WWE intends to announce their current number of subscribers to the WWE Network on a quarterly basis. 

Caller portion

1. What will be the revenue guidance for the second quarter? 

Not gonna give official guidance, but will be similar to last year. Fixed costs for Network are already there, only other costs for Network going forward are for marketing and customer service. Biggest cost for the Network in the second quarter will be the production costs for Wrestlemania 30, since that now falls under the Network’s umbrella. Marketing costs won’t have a seasonal impact, but the Wrestlemania production costs will be shown annually in the second quarter. 

2. What are your expectations for Network subscribers in 2015?

* Decline to have expectations, but they hope to have 2-3 million subscribers. 

3. What will be the international roll-out of the WWE Network?

* By early 2015, they will be in the UK, Hong Kong, Canada, Singapore and the Nordics. For WWE to break-even, they would need 250,000 subscribers. They researched the models of HBO Go and Netflix for the Network and need a good 6 months to see where they need to go, but it is lumpy day-by-day. They feel they can get 500,000 to 750,000 subscribers internationally at a steady state. McMahon noted that those numbers are conservative. Barrios noted that the subscriber numbers they have pointed out for the Network as “break-even” numbers are with the idea they do zero traditional PPV buys going forward. 

* Barrios noted that WWE doesn’t know who will or will not be carrying their PPVs going forward. When people call up Dish Network, they are referred to the WWE Network. 

4. Will WWE use advertising for revenue on the Network?

* We are looking into it, but are taking our customers into mind.

5. What does WWE plan to spend on non-wrestling content on the Network?

* Barrios wouldn’t talk specfically about costs for Legends House, but noted Legends House has gotten national media attention and made the impression that Legends House could be syndicated after its initial airing on the Network.

6. How should investors look at WWE?

* All of the different metrics with our company currently show some value. 

7. Would WWE be willing to sell equity to the Network for someone wanting to buy a minority stake?

* We would consider anything if makes sense business-wise, but we have a high value on the WWE Network. 

8. Would talent related costs change with the WWE Network?

They remain unchanged and we have no comment on if PPV royalties change with the Network. 

That ended the conference call.