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WWE announced $297.6 of revenue and operating income of $53.1 million on Tuesday for the first quarter of 2023 — their first such report since the news of their hopeful merger with Endeavor to spin off into a new combat sports company with the UFC.
The previously announced details of the merger were listed in the release and discussed on Tuesday morning's investors call. It is still expected to close in the second half of the year.
The revenue number was down by 11% year-over-year (YOY) due to "to a shift in the timing of the staging of a large-scale international event, which occurred in the first quarter of 2022 but is expected to occur in the second quarter of 2023."
That event is their bi-annual show in Saudi Arabia. Believed to be recognized in the Other category in their Media revenue section, that number was $4.8 million this past quarter compared to $60.8 million in Q1 last year.
During the Q&A portion of the investors call, WWE CEO Nick Khan revealed that the exclusive media rights negotiating window for both Fox and NBCU for SmackDown & Raw was "about a month each."
As that window opened on April 1st, that would indicate more news could be coming soon as related to outside parties being able to bid. Khan said while talks have been productive, there's no timetable for when new deals could be done while remaining positive on the prospects for both.
When it comes to interest from outside parties, Khan reiterated "exclusive means exclusive" regarding the negotiating window.
Ticket revenue & attendance increases
The company touted Q1 North American ticket sales revenue as increasing by 52% year YOY thanks to a 37% increase in average attendance. Overall revenue was $32.6 million, up from $23.1 million in Q1 last year. $30.2 million of that revenue was attributed to North America, up from $19.9 million in Q1 last year.
There were 50 ticketed events in North America last quarter with attendance of 7850. Last year, they held 53 total events (52 domestic and one international) in the same quarter with North American attendance at 5710 average.
That revenue, plus contractually escalated media rights fees for Raw and SmackDown, helped offset the decrease. Those fees accounted for $153.9 million, up from $139.1 in Q1 of last year.
WWE incurred $1.7 million in expenses for Vince McMahon-related legal fees in connection with a dropped shareholder lawsuit.
McMahon made a payment of $17.4 million to reimburse WWE for costs related to the Board's Special Committee investigation into his scandal from last summer.
The success of WrestleMania
Per the norm, WrestleMania was a major focus even though it happened in Q2. As previously announced, 161,892 fans generated a gate of $21.6 million and the weekend was both their highest-grossing and most attended in company history. More than $20 million in sponsorship money was generated which doubled last year's record.
Domestic unique viewership on Peacock increased 31% YOY while global unique viewership increased by 29%.
Merchandise sales were also up 20% YOY, beating last year's record. On the call, Khan said sales were $7 million, breaking last year's record of $5.2 million.
WrestleMania sponsorship revenue exceeded $20 million, more than double the previous record set in the prior year.
Other quarterly highlights & release notes:
Seven percent viewership increases for both Raw and SmackDown, "significantly outperforming overall cable and broadcast television, which declined 15% and 6%, respectively"The previously announced expansion of their Fanatics deal which gives them on-site event merchandise management starting this month.Consumer product revenue increased to $39.3 million, up from last year's $32.2 million in Q1.
Khan, CFO Frank Riddick and Paul Levesque were guiding the call. Khan and Riddick gave presentations while Levesque did not.Riddick said they expect to save between $50-$100 million post-merger.Khan said the success of Elimination Chamber in Montreal was strategic as they are negotiating with Rogers on a renewal of TV rights in Canada that was first signed in 2014.Khan said the renewal on WWE media rights with Sony in India will be worked on following Sony's merger with Zee.Levesque attributed the higher viewership to assembling "the right team across the board" and how they are focused on character development. He specifically mentioned looking a year out and planning backward from where they want to be.Khan said WWE will be unaffected by the Writers Guild strike and that includes any A&E programming.When asked about potential international acquisitions, Khan said the three current focuses are closing the Endeavor deal, US media rights and building the existing business.Khan said he expects sales and sponsorship to grow post-merger, but there has been no reach-outs to UFC sponsors as of now.Khan said more sections are being opened up for SummerSlam at Detroit's Ford Field for ticket sales.Khan confirmed WWE received "a seven figure subsidy" for bringing Backlash to Puerto Rico this weekend. That was previously reported as $1.5 million by Brandon Thurston of Wrestlenomics.Click Here: Scotland Rugby Shirt