WWE Conference Call Report: Smackdown, WWE Films, HD Costs, PPV Buys, More

Credit: PWInsider.com

Earlier today WWE released their financial results for the final quarter of 2007. WWE Chief Executive Officer Linda McMahon hosted a conference call to the media along with Chief Operating Officer Michael Sileck and Chief Financial Officer Frank Serpe.

Here is a recap of the conference call:

– 4th Quarter Overview: Linda McMahon read a prepared statement touting WWE’s successful fourth quarter. She praised their international expansion in the quarter, specifically mentioning the UK and Australian tours and their opening of several overseas offices. Linda talked about how the groundwork for their move to HD was done in the fourth quarter, and that they switched to HD in January.

– Concerning Smackdown: Linda said that the CW Network and WWE have agreed to part ways, and that WWE was contacted by other networks once CW’s exclusive negotiation period had expired. She noted that Smackdown will finish this season on the CW, and that they were certain it would have a new network home.

– Merchandise: Frank Serpe praised the success of the Shawn Michaels and John Cena DVD releases. He also noted the huge growth in overseas sales of action figures and T-shirts. WWE Magazine is currently producing 300,000 copies per issue.

A Q&A session was then held. Here are the highlights:

– Recession Fears: Concerning the impending recession and lack of discretionary spending, Linda noted that the company has “weathered these storms” before, and that while no company is “recession proof” they are confident they will be fine.

– The CW Dropping SmackDown:: When asked why CW is walking away from Smackdown, Linda said “I really don’t know”. She said she couldn’t speak for them, and that they didn’t go into their reasons for not picking up the option on the show. When asked if it was a financial decision, she said CW would have to answer that. She again reiterated that they have been contacted by other networks who want the show.

– More on SmackDown: WWE is hopeful to get a higher fee for Smackdown from a new broadcast network, and Linda said early stages of negotiations are pointing in that direction. She said they will see how it “pans out” but they are optimistic. When asked about streaming Smackdown on WWE.com, Sileck stated that they are concentrating on getting a new broadcast home for it. He said perhaps in the future there will be a WWE.com exclusive from that brand, but right now they are working on keeping it as a broadcast show.

– PPV Buys: It was emphasized that WWE has “turned a corner” when it comes to Pay-Per-View buys, noting good early results for the Royal Rumble, and that WWE is working to make each PPV more unique from each other.

– HD Costs: As previously reported, WWE spent $20 million to transition to High Definition. $10 million came from this past quarter, and $10 million is coming from the current quarter.

– International PPVs: Linda noted that in many markets, PPV events were paid for by a television distributor and shown as “specials” for years and now they are in a transition period where fans are now being asked to pay for what they used to see for “free”.

– Regarding WWE Films: They are focusing on direct-to-DVD projects, of which they have several in the works. They noted one of the projects is a “co-finance” deal with the studio that is producing it. They are currently working on one theatrical project, however there will be no releases from WWE Films in 2008. All work at this time is being done for 2009 releases. They stated the direct-to-video projects have a $4-5 million cost, while the theatrical project has a $20 million cost.

– The JAKKS-THQ lawsuit: Linda simply said that it continues “slowly”.