WWE Chairman and CEO Vince McMahon, Co-President George Barrios, Co-President Michelle Wilson and SVP Financial Planning & Investor Relations Michael Weitz are hosting a First Quarter 2019 Earnings call today from WWE headquarters in Stamford. You can check out coverage of this morning's press release at this link. Below are highlights from the call:
Weitz opened the call with the usual introduction and Vince took over the call, welcoming everyone. Vince said WrestleMania 35 was spectacular. He touted the crowd size of the Royal Rumble and WrestleMania. He said they are working on new documentaries, including the ones with A&E, and expanding that part of their business. He touted the success of their reality shows. He also mentioned the studio show coming on FS1 later this year. Vince said when you look at this quarter, they had an usual situation with 15 top and mid-card talents being out of action, and that leads to fewer storylines, which leads to other problems with the business. Vince is happy to say they have those talents back and they have new talents that have been brought in. They made new talents while the others were out as well. Vince said they have hired new writers that will really help with TV, TV ratings and digital/social numbers. They also have a new live events team that will help that business as the year goes on. Vince said coming in late September, they will have a whole new beginning as the promotional value alone in terms of Fox and NBCUniversal is something they've never seen before, they've never even close and it will be extraordinary. Vince said it's a "rising tide" situation that they're looking forward to carrying them through the year.
Barrios took over next and went over some of the numbers in the press release. He noted that the SmackDown premiere on Fox in October will mark the first time WWE will be available for live viewing 52 weeks a year on a major broadcast TV platform. Barrios mentioned digital media revenue being down due to lower advertising rates on YouTube. WWE signed a deal with the Endeavor streaming company for a new WWE Network platform later this year. Wilson also touted some of the number released today. Wilson touted the success of some of the WWE Network specials, with the most-viewed being pay-per-views, in-ring events, Takeover, WWE Chronicle and Halftime Heat. Wilson touted the success of the recent tryout in India. They are also looking forward to the upcoming tryouts in China. She mentioned their new partnerships with New Era for hats and the Roblox game. It was noted that live event merchandise sales are lower due to live event attendance being down. Barrios said they are finalizing distribution deals for RAW and SmackDown in key international markets and hope to wrap them late this year.
Weitz took over and introduced the Q&A with investors. Regarding talents coming and going, Barrios said they have a 35 year history of developing talent and they've done a good job going from one generation to the next, and they are confident in their abilities to develop talents and the storylines that go with them. Barrios said as Vince mentioned, they are happy with the talent base. Vince interrupted and added that Ronda Rousey did an extraordinary job for them and her challenge was to bring the entire women's division up, and the women headlined WrestleMania 35. Vince said Ronda's task, which was good for them, was to build the division and now they have stars and storylines coming out of WrestleMania. They knew Ronda was leaving and when you look at what happened with WrestleMania, with Becky Lynch and Charlotte Flair, the entire division is on the up. Vince stressed that Ronda did an awesome job.
Barrios was asked about talents once again. Barrios said talent is the core of what they do and talent drives everything. They've been working on the new WWE Network platform for over a year and they are excited for it. The new platform will bring features that fans have been asking for and they believe it will help growth. The launch will happen in 2019 and they are excited over how it will develop over the next few years. Barrios wouldn't confirm what quarter the re-launch will take place, but he said it will happen later this year.
They were asked about the WWE NXT UK brand, viewership and the UK Performance Center there. Vince handed the call over to Triple H because he's in charge of that brand. He said the NXT UK brand has been one of their most successful, and it's one of the most-watched on the WWE Network. He thinks viewership will go up when the Network re-launches and he sees it growing to a touring brand with more Takeover specials. He noted that social media has been a really big help for the brand and bringing exposure to it. He also noted that the UK Performance Center is there to increase the talent pipeline there.
A caller asked about a possible third hour of SmackDown and Barrios said there's no real update, but he didn't deny it will happen and indicated they do talk about it. Barrios would not comment on a possible event in Saudi Arabia for the second quarter, when asked multiple times. They were asked if Fox will be positioning the product for advertisers and the fans, in a way that changes how the WWE product has always been presented, and if they will be a part of the Fox Upfront presentation to advertisers next month. Wilson said they are very excited to be partnering with Fox, and Fox has already fully embraced WWE as a partner. They have actively been a part of Fox's pre-Upfront presentations. Wilson noted that USA Network and NBCUniversal made tremendous progress getting WWE over 200 advertisers in recent years, but it's important to remember that USA is a general entertainment network. They always talk about WWE being the best of both worlds, live content and live sports, and they believe Fox will be leaning heavily into the sport aspect of WWE. Wilson said it will be the same product but they do believe Fox will bring them to new advertisers and present them with just a slight tweak. Wilson said Fox will be presenting them on all of their programming, entertainment and sports. They are leaning heavily into Fox and excited about the Upfronts. She confirmed they will be a part of the NBC/USA Upfronts and the Fox Upfronts on Monday, May 13, and they will have a strong presence there. Wilson said they truly believe it will be a rising tide.
Vince was asked about talent aging or audiences getting tired of the product, and what metrics he looks at to see when it's time to bring in "a new winner" or a new Superstar to invigorate the storylines, and how long it takes to build a new John Cena or Roman Reigns. Vince asked Triple H to answer that question. Triple H said it's an interesting process and there's no exact timing on what it takes. He said they don't bring in Superstars, they create them, so there's no timing on how long it takes. Some are immediate and some take longer, he said. He said they are constantly bringing in talent and as Vince mentioned, when absences take place, new talents step in. He said an example would be Kofi Kingston recently stepping up to become the WWE Champion. He said as those things happen, performers rise to a new level, others come back and now it's a higher tide.
Triple H noted that they brought up over 15 talents to the main roster last year and some have already succeeded. He said they have brought up 10 already in 2019 and it's working very effectively. He said when you look at the main roster of Superstars, 80% have gone through the developmental system in WWE NXT. He said the main event players we see have come through that system. He said the system works very well and is very successful, plus as mentioned before, WWE has a 35 year track record of creating stars from generation to generation, icons that last generations. He reiterated that they have a good track record and they are very confident in that.
They took a few more callers and that was it for the call. The full audio will be posted later on WWE's website and we will have more highlights this afternoon.