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WWE shows earnings for Q4
By JON WALDMAN -- SLAM! Wrestling


World Wrestling Entertainment has once again reported high earnings in their quarterly reports, though they are down from the previous year.

Earlier today, the Stamford, CT.-based organization released their fourth quarter earnings report, which showed a $10.6 million (all numbers in USD) net income. The number, however, is down from Q4 in 2005, which showed a net gain of $16.1 million.

Part of the decrease can be attributed to lost revenue in live and televised entertainment. The number fell by approximately 10 percent, from $102.2 million in Q4 2005 to $92.3 million this year. Though pay-per-view revenue was up, primarily thanks to the added broadcast of Backlash in the quarter and live event revenue also increased (by nearly $2 million), the big hit came in TV advertising revenue, where the company lost $10.3 million. This is due to the structure of the new agreement with NBC, where the Fed does not get any advertising sales money.

In the PPV stream, WWE reported a total of 2,143 million buys, most of which were for WrestleMania XXII, which drew an audience of 925,000 purchases for the live event. Though the Fed predicted that the show would eclipse the 1,000,000 plateau, it fell short of that mark and also was well below the rate for WrestleMania XXI, which garnered 983,000 pick-ups.

Elsewhere in the report, WWE noted that DVD purchases were once again up, with an increased revenue of $2 million ($7.1 million in 2006, $5.1 million in 2005). The higher number was due in part to the success of the WrestleMania Anthology box set, which helped raise the average DVD sales price by $4.20. Across the board, the best seller among DVDs released in Q4 was Blood Sport ECW: The Most Violent Matches with sales of approximately 87,000 units. Elsewhere in merchandise, licensing revenue, including THQ's Smackdown vs. Raw 2006, were $6 million, a marked increase from $3.7 million in 2005. WWE-produced magazines, however, were down from $3.6 million to $2.9 million.

2006 totals up

Though the quarter's earnings decreased, WWE's annual profit was up.

For the fiscal year ending April 30, 2006, WWE reported a revenue of $400.1 million and a net income of $47 million, compared to $39.1 million in 2005.

Through its varied sectors, PPV, Venue Merchandise, Television Rights Fees and WWE 24/7 all reported gains over the previous year, while Live Events and Television Advertising were down. In Consumer Products, WWE Home Video more than doubled its revenue from $20.1 million to $42.6 million. Licensing increased by $11.1 million, while Magazine Publishing was off by $1.1 million compared to last year. In Digital Media, WWE saw marked increases both through wwe.com and WWE Shop.

Conference Call Highlights

Shortly after releasing their Q4 numbers, WWE held a conference call with their investors. Here are some of the highlights of the call, conducted by WWE CEO Linda McMahon:

  • Smackdown will retain its current timeslot on UPN when the network moves to the CW Network.
  • McMahon noted that there is a "modest rights fee" associated with the ECW run on the Sci-Fi Newtwork. The initial run will be 12 weeks long. McMahon believes it can be as big a brand as Raw or Smackdown, and pointed to the ratings success of the WWE vs. ECW special last week as an indication of its strength. McMahon also noted that there is an increased overhead for the brand.
  • McMahon noted that characters will move between ECW, Raw and Smackdown. There will also be another ECW PPV in December.
  • McMahon sees the audience for ECW being primarily male but getting younger than the previous ECW audience.
  • McMahon noted that the WWE is still in contact with The Rock, and noted that he will, "pop in and out," with the Fed.
  • See No Evil has garnered $14 million in revenue, in line with what was expected by management. It is expected to make a profit from international distribution, TV platforms and DVD sales.
  • The Marine will release in October (target date being the 13th) with partner Fox. McMahon mentioned Cena as being a top-seller in merchandise and has gained more popularity through rap and international streams.
  • The Undertaker and Bret Hart DVDs combined for approximately 400,000 sales during the 2006 fiscal year.
  • Live event attendance has grown in each of the last five quarters.
  • Seven subscription packages will be announced during the summer for WWE Mobile.
  • Smackdown vs. Raw 2006 has sold nearly 2.6 million units.
  • 125,000 fans attended the last European tour, which ran across five countries.
  • There will be four PPVs in the July quarter and three in the October Quarter. Starting in January '07, quarters will be measured in line with the calendar (ie. first quarter will be January through March etc.). There are four PPVs scheduled at this time for Q1 in 2007.
  • WM XXII sales have been "encouraging", according to WWE Vice President of Investor Relations Michael White. White also highlighted that compilations featuring Vince McMahon and Hulk Hogan will be released in the next year.
  • There is no trial date set for the Jakks/Pacific legal action.

    Jon Waldman has been with SLAM! since 2000.