Recap of WWE CFO George Barrios’ UBS Conference Presentation Discussing The WWE Network

Dec 12, 2013 - by staff


On Tuesday 12/10, WWE’s Chief Financial Officer/Chief Strategy Officer George Barrios made a presentation on behalf of the company at the UBS’ 41st Annual Global Media and Communications Conference.

Barrios began the presentation by discussing some of the deals and moves WWE has made since the last year’s presentation to grow their company, noting that they’ve evolved to six hours of programming (3 hour Raws, Total Divas, etc.), signing deals with Hulu Plus for digital content and new toy deals, including the WWE Stackdown construction style toys that are hitting shelves this month at retail.

He then presented WWE as a very unique entity similar to live sporting events because like major sports teams, most of their content is viewed live by the audience (Barrios claimed 90%) and that unlike others who have to purchase or license content, WWE owns all of their material completely with no partners involved. He pushed their library at being over 120,000 of original, unique content. He also pushed that live material puts them into a position where their original content means more to partners and advertisers, pointing out how the recent NBC “Sound of Music Live” special did a good rating and good advertising numbers because of the live nature of the show. He also presented the company as having strong demographics across the board, no matter what age, ethnicity or gender the audience be – there are WWE fans across the board.

Barrios then talked about the company’s priorities over the next year. He noted that the Network is the company’s top priority as they want to take existing PPVs and bundle them with live and existing content and have it one place. He noted they wanted to have a “large video on demand component” to the network. Barrios said that just the PPVs along today are worth $600-$700 but the Network would be priced in the $10-$15 range.

Barrios noted that thanks to current online streaming trends, they believe the audience is at the point where they could support WWE content being rolled out to them via streaming (i.e. Netflix). He noted that two years ago, they didn’t have the research into the market to show that but the way trends have changed in the last few years for streaming content via phone, computer, tablet, Roku etc. show that it’s possible now.

Barrios also admitted while they’ve had conversations about converting the PPV content into content for the WWE Networks with cable and satellite providers, those providers have been dragging their feet when it comes to wanting to make that transition and carry the Network.  What Barrios pretty much said here, if you read between the lines, is that the current cable/satellite distributors aren’t too excited about WWE taking away the cable/satellite companies’ cut of the PPV pie. That is going to be one of the major battles the company will face when it comes to converting that material from PPV to content that falls under the umbrella of the Network’s subscription.  WWE will be able to have more control and a bigger piece of the pie.  Cable and Satellite providers (not to mention PPV distributors) are in no hurry to lose that regular income.

Barrios did say they are continuing to try and lock a deal in for a traditional, network roll out with cable and satellite providers, so that aspect of the Network is not one they have given up on, at least in the public eye. It could be they are hoping to do a strong online rollout first as a way to force some leverage against the traditional distributors, so they admit they need to carry the service to keep their own customers happy.

Barrios also discussed the difference between doing an online rollout themselves and having a traditional network that would be carried by cable/satellite providers, noting that the former would require WWE to handle things like customer service and credit card processing, as well as handling the cloud bandwidth needed to carry out the Video on Demand aspect of the Network.  He noted they would need a million subscribers to cover those costs.

On the TV front, they hope to have their new deals for Raw and Smackdown completed by April 2014, well in advance of the current TV licensing agreements expiring in January 2015. They also have deals in the UK and India coming up and hope to have them done in a similar timeframe. Barrios said that altogether, the deals are worth $100 million of their current TV licensing revenue and they expect that they will get larger fees.

Barrios noted that other than the National Basketball Association, WWE is the only live sports/entertainment content provider that will be up for grabs and that puts them in the catbird seat.  The numbers NASCAR recently signed for have WWE hopeful for similar numbers.

Barrios also discussed that they currently have over 200 million fans/followers via different social media platforms (the numbers are probably at least somewhat lower as you will have some crossover in fans that like the Facebook page and also follow on Twitter, etc.) and they intend to roll out mobile content that those fans can purchase in the future. Barrios said they aren’t doing a good job of monetizing the social media audience right now.

That said, at the same time, they haven’t really attempted to, either – they just provide a free App and some free online games starring Rock and John Cena. The only real digital product out there is the digital version of WWE Magazine if you throw out music and video product released via iTunes.  So, this is an area WWE hasn’t even started to scratch the surface of yet.

Barrios them took part in a Q&A:

He was asked by WWE doesn’t have major advertisers similar to NASCAR and other sports leagues. Barrios said that they didn’t have any data that explains why. The answer could be “because it’s pro wrestling” but that’s not going to be stated by a WWE official.

Barrios was then asked about potential cable deals. He said that from his POV, he doesn’t understand why the providers aren’t getting on board with converting the PPVs into a subscription network service and pretty much said it’s a case where no one wants to blink first.

Barrios was asked about WWE using their content in different markets. He said they specifically tailor the show to meet the local markets’ needs (he noted they have to specifically edit the Middle Eastern content) and they have announcers doing voiceovers in the native languages. He said they want to create content that feels more localized and specific for each area as they continue to evolve and shape the TV for those markets.

Tout (remember that?) was brought up. Barrios noted that the company invested in it and believed that by promoting it through their shows, fans would download it and it would become more popular and raise the worth of the company. He pretty much admitted that it didn’t happen (Vine launching REALLY bit into Tout’s market share as it had a better following and took off really fast, so the WWE plan was a sound one, but they strategically went with the wrong company).  Barrios did push that Tout has been used by those publishing content in news circles.

Barrios also noted that the company has invested in the parent company of the new Marvel comics touring company, Hero Ventures.  That’s the big touring entity that is supposed to immerse you into the Marvel Universe.

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