WWE Shareholder's Meeting Recap
Posted by David Damage on Wednesday, May 2, 2012
Under: News
WWE CEO Vince McMahon spoke with shareholders about the poor performances of WWE Studios last year, which was given the brunt of the blame for WWE's annual performance "not looking good" on paper. He discussed how the company plans to correct the problem and make money with the films division.
He said the TV Rights Revenue and movie division were the key areas to look at. Studios head Michael Luisi then attempted to sell the shareholders on why movies are still a worthwhile investment for the company, evne with numerous losses in 2011. The company previously invested $150 million in their last two films, which did not work out.
Luisi said the new plan is to focus on new content, a distribution strategy and a harder push to sell movies to not only WWE's audience, but non-fans. Part of the strategy will be to co-produce and co-finance PG-13 and R-rated movies in the action, crime, horror, sci-fi and thriller genres. WWE will still look at movies that match up with their current TV-PG product.
WWE CFO George Barrios said the company plans to invest $15-20 million in 4-8 projects this year. McMahon said that he thinks that WWE can do both quality and quantity in their films. He said they can't do one big-budget film but they can distribute the risk with production/financing partners and create more upside movies. For movies not featuring WWE stars, they will either produce a movie with a partner after WWE acquires it or help share the revenue and cost of an already completed movie.
Luisi said the goal is to take a non-WWE film, brand it as a WWE Studios movie and then introduce it to both WWE fans and non-fans, with the idea that even if it doesn't star a WWE wrestler, it will be pushed on WWE programming and other means of promoting products.
Here's the updated schedule announced:
-Aug. 17: The Day (part of 50/50 co-financing with Anchor Bay).
-2013: No One Lives (50/50 co-finance with Pathe).
-Dead Man Down began principal photography this week, a 50/50 co-financing split with IM Global.
-In Production: The next installment of The Marine begins filming in June.
-The Leprechaun franchise will be rebooted with Hornswoggle in the lead role as part of a 50/50 co-financing deal with Lionsgate. It will be the first of two movies partnering with Lionsgate, with an announcement on the second to come later.
* Triple H addressed the WWE developmental rumors and said the future has always been about making the best developmental territory possible. They are making plans to expand developmental but it’s doing what it’s designed to do – create and cultivate new talents.
* Vince McMahon said WWE content on TV will remain PG but movies will allow for content with stronger ratings. Vince talked about being proud of the Be A Star anti-bullying campaign. Vince said fighting bullying is something he really believes in and something that will be a huge initiative for WWE in the years to come.
* Vince was asked about a physical WWE Hall of Fame and said it’s still located in his head. Vince said they are not in a physical brick & mortar business but the entertainment business and added that Hall of Fames don’t make money usually. One day WWE will probably build something for the Hall of Fame but Vince said it needs to be in the right environment.
As part of the annual WWE shareholders meeting, Vince McMahon and WWE officials held a Q&A session where he answered many different questions, including the status of the WWE Network, the possibility of WrestleMania going on free TV, and much more. Here are some highlights:
On the WWE Network and the difference between this and Oprah's network: The company remains unsure when the network will officially launch. McMahon said that the company wants to make sure they "do it right" by exploring all options with a traditional cable TV model vs. a hybrid model incorporating new media. "We're close to closing - if we wish - a linear network. We can do that. We can also look at other opportunities at the same time that might be better for us, but, then again, it might not be."
When asked the difference between this network and Oprah Winfrey's failing network, McMahon said that her fatal flaw was not giving her audience what they expected. If Oprah is not being Oprah, why would they want to watch? Meanwhile, WWE can drive people to Pay-Per-View, live events, anywhere they want to go. The simple fact is that the fans want quality programming and he wants to give them what they want, not what they don't.
On alternatives to a traditional cable TV network: An investor suggested three different alternatives to a cable TV network: PPV event distribution through GFL.TV, a YouTube model alternative and an a la carte offering online. WWE CFO George Barrios mentioned that TV viewing behavior is still ahead of online consumption by a ratio of 5:1 hours. While smart phones and other devices add to the numbers, the TV viewing numbers are still at a higher rate, which is why they are pursuing a cable TV network model.
Will PPV events be offered on the Network?: McMahon was very vague about his response, saying the Network "may or may not include PPV's. It's certainly a factor that we are considering."
Another shareholder asked about a "season pass" plan for the Pay-Per-Views. McMahon simply said, "That's a possibility."
The fate of Classics on Demand: McMahon said it is very likely that Classics on Demand will close once the Network is launched.
Latest shows proposed for WWE Network: Two shows stressed for the Network were a WWE Countdown show, which the company is pushing in new DVD releases, and a show based on the Monday Night War.
How much money is being spent on WWE Studios?: Barrios said that the money for WWE Studios is down due to a significant amount being "the return of capital" via their dividend process. They have invested south of $150 million in the business, and that the first $100 million went to their first six films. They expected those films to do better than they did. $50 million was invested on the other projects and they made back about half of that.
The company expects to invest $15-$20 million over eight films going forward, and that they have been successful creating content on every platform. They want to reach non-WWE fans on that level.
Will WrestleMania ever be on free TV?: A shareholder suggested that McMahon make WrestleMania free and charge advertising, just like the Super Bowl. McMahon said that if the NFL could put the Super Bowl on PPV, they would make more money and that he didn't know of a network that would pay them the rights fees that they could make in profits from PPV.
The status of a Hall of Fame building: McMahon said that he had the location of a physical WWE Hall of Fame building in his head, but that once you own a location, it is owned by the touring. He also said that Hall of Fame buildings don't usually make money and that they are in the entertainment business, not the brick-and-mortar business. It may happen at some point, but it would have to be the right environment.
Vince McMahon discussed why the company lost $40 million in revenue in 2011 after having a record year in 2010, what steps will be taken to ensure a stronger 2012 and more. Here are some highlights:
McMahon's guarantee for 2012: There are two things you can't avoid in the world: death and taxes. McMahon said a third will be added, and that was a guarantee that the company will be in stronger shape by this time next year. He said that Raw ratings were up 3%, Smackdown ratings were up 15%, and Raw will be celebrating its 1000th episode this July.
McMahon also noted that there are more opportunities for growth than ever before because of the superstars fitting in various social media platforms better than anything else out there.
WWE CFO George Barrios on why the company lost $40 million in 2011: Barrios claims that $30 million of the $40 million was losses from the film division. The remainder was holding off rights fees of shows outside of Raw and Smackdown. The core business was solid, but those two items hurt them.
Content has also been expanded in 2011, including Tough Enough on USA and exclusive content on their YouTube channel. They will continue to use their library to produce new DVDs and create new shows like Monday Night Wars and WWE Countdown. They currently have over a billion views of their YouTube channel.
WWE's international business: The company broadcasts TV from Mexico and they did events for the first time in Russia and U.A.E. They have secured TV deals in Russia and Brazil and they are looking forward to going to Brazil for the first time.
The action figure brand: WWE was the #2 action figure brand in 2011, with the new video game and the WWE Rumblers action figures attracting younger fans
He said the TV Rights Revenue and movie division were the key areas to look at. Studios head Michael Luisi then attempted to sell the shareholders on why movies are still a worthwhile investment for the company, evne with numerous losses in 2011. The company previously invested $150 million in their last two films, which did not work out.
Luisi said the new plan is to focus on new content, a distribution strategy and a harder push to sell movies to not only WWE's audience, but non-fans. Part of the strategy will be to co-produce and co-finance PG-13 and R-rated movies in the action, crime, horror, sci-fi and thriller genres. WWE will still look at movies that match up with their current TV-PG product.
WWE CFO George Barrios said the company plans to invest $15-20 million in 4-8 projects this year. McMahon said that he thinks that WWE can do both quality and quantity in their films. He said they can't do one big-budget film but they can distribute the risk with production/financing partners and create more upside movies. For movies not featuring WWE stars, they will either produce a movie with a partner after WWE acquires it or help share the revenue and cost of an already completed movie.
Luisi said the goal is to take a non-WWE film, brand it as a WWE Studios movie and then introduce it to both WWE fans and non-fans, with the idea that even if it doesn't star a WWE wrestler, it will be pushed on WWE programming and other means of promoting products.
Here's the updated schedule announced:
-Aug. 17: The Day (part of 50/50 co-financing with Anchor Bay).
-2013: No One Lives (50/50 co-finance with Pathe).
-Dead Man Down began principal photography this week, a 50/50 co-financing split with IM Global.
-In Production: The next installment of The Marine begins filming in June.
-The Leprechaun franchise will be rebooted with Hornswoggle in the lead role as part of a 50/50 co-financing deal with Lionsgate. It will be the first of two movies partnering with Lionsgate, with an announcement on the second to come later.
* Triple H addressed the WWE developmental rumors and said the future has always been about making the best developmental territory possible. They are making plans to expand developmental but it’s doing what it’s designed to do – create and cultivate new talents.
* Vince McMahon said WWE content on TV will remain PG but movies will allow for content with stronger ratings. Vince talked about being proud of the Be A Star anti-bullying campaign. Vince said fighting bullying is something he really believes in and something that will be a huge initiative for WWE in the years to come.
* Vince was asked about a physical WWE Hall of Fame and said it’s still located in his head. Vince said they are not in a physical brick & mortar business but the entertainment business and added that Hall of Fames don’t make money usually. One day WWE will probably build something for the Hall of Fame but Vince said it needs to be in the right environment.
As part of the annual WWE shareholders meeting, Vince McMahon and WWE officials held a Q&A session where he answered many different questions, including the status of the WWE Network, the possibility of WrestleMania going on free TV, and much more. Here are some highlights:
On the WWE Network and the difference between this and Oprah's network: The company remains unsure when the network will officially launch. McMahon said that the company wants to make sure they "do it right" by exploring all options with a traditional cable TV model vs. a hybrid model incorporating new media. "We're close to closing - if we wish - a linear network. We can do that. We can also look at other opportunities at the same time that might be better for us, but, then again, it might not be."
When asked the difference between this network and Oprah Winfrey's failing network, McMahon said that her fatal flaw was not giving her audience what they expected. If Oprah is not being Oprah, why would they want to watch? Meanwhile, WWE can drive people to Pay-Per-View, live events, anywhere they want to go. The simple fact is that the fans want quality programming and he wants to give them what they want, not what they don't.
On alternatives to a traditional cable TV network: An investor suggested three different alternatives to a cable TV network: PPV event distribution through GFL.TV, a YouTube model alternative and an a la carte offering online. WWE CFO George Barrios mentioned that TV viewing behavior is still ahead of online consumption by a ratio of 5:1 hours. While smart phones and other devices add to the numbers, the TV viewing numbers are still at a higher rate, which is why they are pursuing a cable TV network model.
Will PPV events be offered on the Network?: McMahon was very vague about his response, saying the Network "may or may not include PPV's. It's certainly a factor that we are considering."
Another shareholder asked about a "season pass" plan for the Pay-Per-Views. McMahon simply said, "That's a possibility."
The fate of Classics on Demand: McMahon said it is very likely that Classics on Demand will close once the Network is launched.
Latest shows proposed for WWE Network: Two shows stressed for the Network were a WWE Countdown show, which the company is pushing in new DVD releases, and a show based on the Monday Night War.
How much money is being spent on WWE Studios?: Barrios said that the money for WWE Studios is down due to a significant amount being "the return of capital" via their dividend process. They have invested south of $150 million in the business, and that the first $100 million went to their first six films. They expected those films to do better than they did. $50 million was invested on the other projects and they made back about half of that.
The company expects to invest $15-$20 million over eight films going forward, and that they have been successful creating content on every platform. They want to reach non-WWE fans on that level.
Will WrestleMania ever be on free TV?: A shareholder suggested that McMahon make WrestleMania free and charge advertising, just like the Super Bowl. McMahon said that if the NFL could put the Super Bowl on PPV, they would make more money and that he didn't know of a network that would pay them the rights fees that they could make in profits from PPV.
The status of a Hall of Fame building: McMahon said that he had the location of a physical WWE Hall of Fame building in his head, but that once you own a location, it is owned by the touring. He also said that Hall of Fame buildings don't usually make money and that they are in the entertainment business, not the brick-and-mortar business. It may happen at some point, but it would have to be the right environment.
Vince McMahon discussed why the company lost $40 million in revenue in 2011 after having a record year in 2010, what steps will be taken to ensure a stronger 2012 and more. Here are some highlights:
McMahon's guarantee for 2012: There are two things you can't avoid in the world: death and taxes. McMahon said a third will be added, and that was a guarantee that the company will be in stronger shape by this time next year. He said that Raw ratings were up 3%, Smackdown ratings were up 15%, and Raw will be celebrating its 1000th episode this July.
McMahon also noted that there are more opportunities for growth than ever before because of the superstars fitting in various social media platforms better than anything else out there.
WWE CFO George Barrios on why the company lost $40 million in 2011: Barrios claims that $30 million of the $40 million was losses from the film division. The remainder was holding off rights fees of shows outside of Raw and Smackdown. The core business was solid, but those two items hurt them.
Content has also been expanded in 2011, including Tough Enough on USA and exclusive content on their YouTube channel. They will continue to use their library to produce new DVDs and create new shows like Monday Night Wars and WWE Countdown. They currently have over a billion views of their YouTube channel.
WWE's international business: The company broadcasts TV from Mexico and they did events for the first time in Russia and U.A.E. They have secured TV deals in Russia and Brazil and they are looking forward to going to Brazil for the first time.
The action figure brand: WWE was the #2 action figure brand in 2011, with the new video game and the WWE Rumblers action figures attracting younger fans
In : News