Member access

4-Traders Homepage  >  News  >  Videos

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

As they plan to launch a new TV network, World Wrestling Entertainment CFO George Barrios says pay-per-view customers will shift to WWE TV subscriber base

03/20/2013 | 01:35pm US/Eastern
Recommend:
0




ANCHOR (OFF-CAMERA) ENGLISH SAYING:

You're meeting with analysts and investors and you're telling your story. It's fascinating, it's intriguing, it's probably a tough business overall in terms of content. You had said in the last earnings call that you're going to significantly increase earnings. The potential is there. From what area of your business will that growth come from?

GEORGE BARRIOS, CFO, WWE (ENGLISH) SAYING:

Sure. Well, over the last few years our core business has been performing well. We generate $75 million to $95 million of EBITDA. Those EBITDA margins have been 16% to 19% so the core business performed well. We have invested a lot in the last couple of years to take advantage some of that growth that we see. And the big strategic thesis for us is the value of content. There is more and more distribution alternatives available. Netflix is one everyone talks about. YouTube not being part of just social video but now real original content. So there's more and more distribution alternatives and it's on a global basis. As a content creator and owner, which makes us unique, we own 100% of the rights of our content. We license them out, we'll license windows but we own it all. And that's a unique position to be in. We think the rising distribution opportunity is driving up the valley of content. In fact, you look at what HBO does to produce Game of Thrones, right? You're talking $10 million to $20 million an episode for 13 hours, right. So now you're in the $150 million to $200 million. That's incredible value. Raw and SmackDown are two franchised programs, average more viewers than any cable network average of prime time. So USA is a number one cable network in the US. It averages about 3 million viewers a week in prime time. Raw and SmackDown, our two top programs, averages more than that. We create a lot of value with the content. That's going to be a big driver for growth.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

So you're launching a television network, probably another distribution channel. I know there's been a lot of questions about the timing and you don't want get to the timing but how does it get monetized? I mean, how many subscribers do you need until you make a profit?

GEORGE BARRIOS, CFO, WWE (ENGLISH) SAYING:

Sure. So on the first part, continuing on with our core products, we're going to keep them fully distributed. We think that's a great platform for a network. And we think there's a lot of value as those shows come up for renewal. Our four biggest contracts will be renewed over the next three years. We think that's a great opportunity for us because of the value we deliver. Then to the network, we said we're going to take our pay-per-views. We're one of the preeminent pay-per-view providers today and our pay-per-views are priced anywhere between $49.95 and $59.95 today and we're going to make that the core of a value proposition with a lot of other new content and put it on a premium network so that our fans can subscribe. We said the price will be somewhere between $12.99 or $40.99, to be determined as we go to market but we think that's a real great opportunity. And to your question about breakeven, about a million subscribers because the pay-per-view buyers will migrate over to the network. That's our belief. About a million subscribers, we breakeven at 2 million, it's a really good business; at 3 million to 4 million, for us it's transformative.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

So then, does pay-per-view essentially go away?

GEORGE BARRIOS, CFO, WWE (ENGLISH) SAYING:

We believe over time. We believe the value proposition will be much more powerful to subscribe to a network at $12.99 to $40.99, 24/7, you have the pay-per-views, a lot of great content, our library, a lot of retrospective programming that we're doing that's testing really, really well, we're producing it right now so over time, I think the pay-per-view does go away.

Recommend :
0
React to this article
Latest news "Videos"
Date Title
2h ago Som-lok Leung, executive director of the Intl. Association of Credit Portfolio managers says investors are well-prepared for rising rates
3h ago Som-lok Leung, executive director of the Intl. Association of Credit Portfolio managers says investors don't think credit spreads can get much tighter from here
14h ago Geopolitical concerns start to hit EU stocks - Hewin
17h ago ANZ's Li-Gang Liu explains why the latest private survey results of factory sentiment in China are not too much of a surprise, and what to expect in terms of stimulus in the year ahead.
1d ago RidgeWorth Investments' Alan Gayle says that valuations in utility stocks have been very high and that better economic growth could lead to more opportunities in high-yeild markets
1d ago RidgeWorth Investments' Alan Gayle says, while tensions in Russia and Gaza have caused some investors to look for safety in bonds, their concerns will be temporary and create opportunities in stocks.
1d ago Ernie Cecilia, CIO of Bryn Mawr Trust says the new CEO at Microsoft is making a push into mobile and cloud computing and thinks Mindray will benefit from an improving healthcare backdrop in China.
1d ago GSK dark cloud with silver lining - Erlam
1d ago EU Foreign Ministers are paper tigers - Hewson
1d ago Economic issues such as fuel subsidies are the most urgent priorities that the new Indonesian president needs to tackle, says Anthony Nafte of CLSA.
Latest news "Videos"
Advertisement
Latest Videos
USA - SOMLOK LEUNG
Som-lok Leung, executive director of the Intl. Association of Credit Portfolio managers says investors are wel...
USA - SOMLOK LEUNG
Som-lok Leung, executive director of the Intl. Association of Credit Portfolio managers says investors don't t...
UK - HEWIN
Geopolitical concerns start to hit EU stocks - Hewin
CHINA - LI GANG LIU
ANZ's Li-Gang Liu explains why the latest private survey results of factory sentiment in China are not too muc...
USA - ALAN GAYLE
RidgeWorth Investments' Alan Gayle says that valuations in utility stocks have been very high and that better ...
USA - ALAN GAYLE
RidgeWorth Investments' Alan Gayle says, while tensions in Russia and Gaza have caused some investors to look ...
USA - ERNIE CECILIA
Ernie Cecilia, CIO of Bryn Mawr Trust says the new CEO at Microsoft is making a push into mobile and cloud com...
Dynamic quotes  
ON
| OFF