WWE Not Impacted By WGA Strike, CEO Nick Khan Says, But “Hopeful” For Deal Soon; Talks Rights Renewals, Endeavor Merger

WWE CEO Nick Khan said on Wednesday that the company is not affected by tWGA strike which started yesterday.

“Our writers are not guild members, so we are not affected. Of course we are supportive of writers who are guild members and their efforts, and we hope to have less time between them and the other side.” A deal could happen,” he said on a call after the quarterly results that focused on the key rights renewal and WWE’s upcoming merger. Attempt/UFC.

It’s earnings season and the numbers for the March quarter keep pouring in. world Wrestling Entertainment The latest contract between the writers and producers without a new deal is the first to be reported after it expired at midnight on Monday. In a walkout that’s already underway in media and entertainment, writers began picketing in New York and Los Angeles yesterday.

As Paramount Global reports earnings tomorrow morning and Warner Bros. Discovery reports earnings on Friday, investors will be on high alert for strike-related remarks from CEOs.

Khan also addressed the Endeavor deal when asked about the cultural fit of running an independent, family-owned company like WWE under a large corporate umbrella. “We are excited about everything that can and should happen with the UFC and the people of Endeavor. Mind you, we have known these people for a long time, so they are no strangers to us. Their style is not strange to us. This is something that we fully embrace and I can certainly constructively represent to you that there is no one at Endeavor or the UFC that would try to interfere with this in any way. Anyone interested in doing

“I think [UFC chief] Dana White will also represent you who never. My guess would be, have the people at Endeavor told him, ‘You should do this match, or do it this way.’ It’s not what they do, it’s not what they say they do, and it’s not what they’re going to do. All of the other things that we talked about, revenue continues to build a business internationally and domestically, I think they are experts and I look forward to getting into all of that and more.

WWE saw a decline in revenue and net profit in the March quarter, but topped estimates given a rise in ratings Raw And smack downRecord attendance at live events and strong sponsorship as Prepares to merge pending regulatory approval in the second half.

“We’re trying to close the deal as quickly as possible,” CFO Frank Riddick said on the call.

Meanwhile, WWE is focusing on renewing domestic media rights with Fox and NBCUniversal. Khan did not give a time frame for the talks but said the talks were “productive”.

“During this process, you can control a lot of things, but not when you will reach an agreement. But we are optimistic,” he said. The current partners have an exclusive negotiating window of one month.

Internationally, WWE is taking its live shows to London for the first time, where it is “open for business” and is keeping a careful eye on India.

WW said sales fell 11% to about $298 million due to a change in the timing of the massive international event (in Saudi Arabia), which would hit the first quarter of 2022 but move to the second quarter this year. was partially offset by higher revenue from the contractual increase in media rights fees Raw And smack downand higher North American ticket sales

Operating expenses reflect reductions in production costs related to live event timing, but also costs related to WWE’s strategic review that led to the deal with Endeavour.

WWE, controlled by Vince McMahon, and Endeavor under CEO Ari Emanuel announced their merger last month. Endeavor will own 51% and existing WWE shareholders will own 49% of the new publicly traded company. The deal values ​​the UFC at an enterprise value of $12.1 billion and the WWE at an enterprise value of $9.3 billion.

WWE said operating income margin declined from 28% to 18% and net income of $36.7 million, or $0.43 per diluted share, fell from $66.1 million, or $0.77. The company had negative free cash flow of $20.6 million, including $29.6 million for a new headquarters, compared to an inflow of $69.7 million a year ago on higher capex. (Excluding this, free cash flow for the three months was a positive $9 million.)

“We are off to a strong start in 2023. Operationally, we continue to effectively execute on our strategy, including the most successful staging. wrestlemania All the time in early April. wrestlemaniaas well as our other successful premium live events such as battle royal And elimination Chamberand strong viewership for our weekly flagship shows, Raw And smack downfurther expanded the reach of our brands and enhanced the value of our content,” said Khan.

CFO Frank Riddick said the Endeavor deal “will create a global sports and entertainment business that has the potential to unlock enormous growth opportunities for both businesses. We believe that bringing these two iconic and highly complementary brands together Bringing will allow us to rapidly capitalize on the rapidly expanding, global appetite for live sports events and premium entertainment content with the goal of maximizing value for our shareholders.