McMahon denies any ties with UFC in company earnings call

August 6, 2011

WWE announced its 2nd quarter earnings on Thursday as it beat analyst expectations. In its earnings call, Vince McMahon dismissed any partnership with the UFC for a television network.The question came as a result of Dana White’s recent visit to WWE headquarters. White was vague about the reason for his visit while McMahon indicated that the UFC head’s visit was purely social.

The second quarter ended June 30th and included this year’s Wrestlemania, which contributed to the financial success for the company this quarter. Among the other findings:

  • Wrestlemania was big for the WWE this year as it offset some of its losses (mostly in its home video sales unit). Its likely that the return of the Rock was the single factor behind that.
  • The WWE All-Stars video game was another key positive for the WWE revenue as sales of the game have been strong.
  • July’s WWE PPV “Money in the Bank” was 20% above its initial projections. The CM Punk factor probably contributed to the numbers. McMahon indicated that overall PPV revenue for the WWE is on the upswing.
  • RAW TV ratings are up 3% from 2010. The WWE will begin a one hour WWE program prior to RAW which McMahon believes will contribute to revenue.
  • Although live event attendance is down for 2011, there are positive signs of fans coming back.

McMahon spoke about the WWE Network (via Seeking Alpha):

From a content strategy, finally we’re rolling out the WWE Network after all these many years. In terms of putting it all together, we have I think the most compelling startup network in the history, which is saying a great deal, because I understand what other networks have started out as, we have an extraordinary leverage with all the content distributors.

And again, we’re finally rolling that out. And with meetings coming up actually this week and next, so we’re very proud of that. And we think again that’s going to be a significant bottomline number to us going forward.

McMahon was asked about whether he cared about the potential of the UFC having its own television network (via Seeking Alpha):

No, frankly I think they fell on their butt recently, trying to do network with NBCU Comcast. I don’t know if it makes any sense for them. I can’t speak to that, but it makes a great deal of sense for us. Again, they’re totally different than we are. We are in the entertainment business, which gives us formal leverage as far as networks are concerned.

He also dismissed any partnership with the UFC as he distinguished the UFC as sports and the WWE as entertainment. This mantra was stated both times when questioned about the UFC and it was said during the WWE’s feature on Bloomberg TV.

Most analysts list the WWE stock as most list it as a hold.

For those interested, the transcript of the earnings call is here.

Payout Perspective:

The WWE’s earnings announcement came on the worst financial day since 2008. Its easy to see that the addition of The Rock at Wrestlemania and its new WWE All-Star game, which features new and old WWE wrestlers, were big reasons for its earnings success this quarter.  Also, RAW ratings continue to impress. It was interesting to note that while McMahon may respect the UFC, there is no way that it partners with the UFC on a network.

McMahon made some interesting comments about the UFC as he  questioned whether a network would be the right direction for its business. He noted the UFC “falling on its butt” with “trying to do network with NBCU Comcast.” An interesting take and we will see what will happen with the UFC’s next television deal. With the news of the UFC-Fox Latin America television distribution agreement, there is speculation that Fox may be the new leader for the UFC television deal. Stay tuned.

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