WWE Q2 financials: Record revenue, big Network churn

WWE announced Thursday that they set a record for revenue of $214.6 million for the WrestleMania quarter, finishing with $5.1 million in profits as compared to $199 million in revenue and $800,000 in profits for the same quarter last year

The big key was less spending on the WWE Network. With fewer original non-wrestling shows, the profit margin for Network and pay-per-view was $1.2 million for the quarter instead of $8.3 million in losses for the same period one year ago. Actual subscribers were up four percent as of June 30th, but the number of people who canceled was also the largest in the history of the Network.

Television, based on new deals and escalating deals, also increased in profitability and when it comes to overall profitability, it is still television and live shows that carry things. Live event profitability was down even though business was steady. North American shows were slightly up in attendance when you factor out WrestleManias each year (with WrestleMania, things were down based on the larger venue capacity last year).

North American non-Mania attendance went from 5400 to 5500 due to the increased number of pay-per-views that draw a larger attendance. Including WrestleMania in the average, it would be a decline from 6600 to 6400. Overseas shows fell from an average of 8000 to an average of 6300, but the drop was partially due to adding a lot more events in new markets.

As compared to previous calls, the company provided significantly less information past the numbers themselves with Vince McMahon praising Paul Levesque’s work in the women’s division and how quarter hour numbers show fans are responding better to the women.

They also pushed their new localized versions of WWE shows in the Middle East and India as helping to build popularity.

Q&A

– A question regarding moving Raw and SmackDown to Facebook came up and George Barrios noted that Raw and SmackDown is the company’s biggest revenue stream and felt that at some point, social media platforms will mean as much as television does which is why they are working on their social media following.

– When asked about the much-discussed weekly UK television show, Barrios really didn’t answer or give a timetable. As noted before, WWE had contacted venues for monthly tapings that would have started in June, but then backed off with no announcements.

The Network Numbers

Aside from television revenue, which is a fixed contractual number, the biggest number is the WWE Network number. On June 30th, the WWE Network grew slightly to 1,568,000 subscribers as compared to 1,511,000 at the same point last year.

In the second quarter of 2016, the Network gained 625,000 new paying subscribers while losing 471,000 (people who let their subs lapse after WrestleMania). This year, during the second quarter, the company gained 598,000 new paying subscribers while losing 604,000.

Last year, it was the second quarter that gained the most subscribers of any quarter while this year they actually lost subscribers during the same period even with producing more PPVs in the quarter than the year before.

As far as the other divisions, Home Entertainment was down 10 percent in profits, digital media had a stronger quarter with $1.4 million in profits, and while venue merchandise was down significantly, licensing and WWE Shop revenue were up.

For more on WWE financials, check our Twitter feed and listen to Chris Harrington on today’s edition of Wrestling Observer Live.