Thursday, July 31, 2014

WWE Quarterly Report: WWE Network Still Struggling and 7% of Cuts To Staff

So the big day that people had been waiting for was today and the number is hit the drum roll ……700,000 WWE Network subscribers. Yeah that is all for a net gain that is only roughly 33,000. Terrible would be a massive understatement. WWE has responded to this by announcing that WWE Network will be going international sooner than planned with a many countries being able to get the WWE Network on August 12th in a couple weeks. The odd thing is both Canada and the U.K have more complicated paths to getting the network. U.K will not be getting the network till it looks like in October and in Canada it will be available on that date with no problems if you are a Rogers’ customer.

WWE announced a 10 year deal with Rogers to distribute the WWE Network and continue on as their Television partner for Raw, Smackdown and it would appear NXT will be available on normal television on Sportsnet 360 as it has been in the past. The network itself and if it can be accessed by non-Rogers customers remains a bit of a mystery.

Here is the bottom line for me on a day in which WWE should be in full the Network is coming to Canada mode it is more a state of confusion for most Canadians. I will try to explain without getting into to much boring detail about cable distribution in Canada. Rogers basically controls a majority of the eastern part of Canada. Cities like Toronto, Montreal and other markets. However in the west of the country Rogers has next to no presences as Telus, Bell and Shaw are the major providers. So people in places like Calgary, Edmonton and Vancouver who do not for the most part have access to Rogers. If you’re not from Canada Rogers is widely considered the evil empire by most Canadians. They own a piece of all of the Toronto based sports franchises. Blue Jays on their own and in a partnership own the Leafs, Raptors and TFC of the MLS. They also recently took firm control of the broadcast rights for the NHL in this country for the next dozen years. They are the evil Vince McMahon in reality of broadcasting and cable in this country for a lot of folks.

Aside from the traditionally losses of the WWE Studios which lost money for yet another quarter the other big highlight or low light of the day was the WWE talking about cutting 7% of staff in their efforts to "in their words," be more efficient. This makes it unclear if that includes talent but implies it would not as they are independent contractors but who knows. WWE seems committed to making Wall Street happy by looking to reduce cost where ever they can. The fact they lost 14.5 million this quarter was actually good news believe it or not. Estimates had them set to lose 15-18 million dollars this quarter. Clearly getting that dead weight of JTG’s salary off the books made an impact. I joke but in pure business terms Wall Street is happy with what they heard to a point. While the subscriber number was a huge disaster by any standards the reason the stock dropped so violently was more about their network T.V rights deal that failed to double or triple as was forecast. In the short term the network is not going to affect the stock. Long term is another matter.

WWE Stock is remaining stable so far opening at 12.33 and currently is up to 12.63 which are well below the daily high when markets first opened at 13.40. The stock remained stable and has dipped slightly since the conference call at 11 am where it was hovering just over the 13 dollar mark.

If you are in the WWE currently best advice is don’t look at Vince McMahon the wrong way or you may hear the famous words YOU’RE FIRED. WWE yesterday parted ways with Ricardo Rodriguez but this seemed more about Rodriguez not being happy with his role in the company in a non-wresting capacity.

The sun will still come up tomorrow but to say the WWE has a ton of work to do in terms of the WWE Network would be the most obvious thing that comes out of all this. I still firmly believe they will eventually figure it out and get on the right path. They just have the luxury of having a lot of money to make up for a lot of bonehead mistakes that in my view are still continuing in terms of the Network.

Here is a complete breakdown of how WWE did this quarter for those who like numbers and business.

Will have our Video Podcast later tonight at 7:30 going into all of this with myself and Chris Walder join us than that is eastern standard time.

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