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WWE(R) Secures Multi-Year Media Rights Deals with USA Network and Fox Sports
STAMFORD, Conn. -- WWE (NYSE:WWE) today announced that it has completed landmark agreements with USA Network and Fox Sports, effective October 1, 2019, for the U.S. distribution of WWE's flagship programs Raw and SmackDown. As part of these five-year agreements, Monday Night Raw will continue to air on USA Network; and Fox Sports will distribute SmackDown Live each Friday on Fox broadcast network. These agreements increase the average annual value (AAV) of WWE's U.S. distribution to 3.6 times that of the prior deal with NBCU.
"Key Content Agreements" - Top 7 Countries/ Regions (Exhibit 1)
Since the completion of its previous U.S. distribution agreement for Raw and SmackDown in 2014, the Company has discussed the deal's financial impact by describing the growth of WWE's seven largest television distribution agreements, of which that deal is a significant part. These "key content agreements"1, provided $105 million of contractual revenue growth from 2014 to 2018, increasing from $130 million in 2014 to approximately $235 million in 2018.
The monetization of content is a fundamental element of the Company's business model, and the new agreements with USA Network and Fox Sports will provide a sizeable increase in the average annual value of WWE's U.S. distribution. WWE management anticipates that revenue from "key content agreements" including the new U.S. deals, described as "Existing and New Agreements" revenue in Exhibit 1, will grow to approximately $311 million in 2019 and $462 million in 2021.2 The Company has other agreements that are subject to renewal in the 2019 - 2021 period, which are described as "To Be Negotiated," and their revenue subsequent to renewal is not ascertainable. For illustrative purposes, the related amounts in Exhibit 1 reflect no future change in annual revenue (i.e. all future years are held equal to the value of the last year in the current agreements). This approach, which indicates revenue of $3 million in 2019 and $80 million in 2021, does not quantify management expectations and is used solely to reflect future risk or opportunity. As shown in Exhibit 1, revenue from the Company's "key content agreements" would increase to $314 million in 2019 and $542 million in 2021.
Core Content Revenue - All Global Markets (Exhibit 2)
Core content revenue, as shown in the Company's reported financial statements, consists primarily of licensing revenues earned from the global distribution of its flagship programs, Raw and SmackDown. By definition, the Company's core content revenue includes the subset of license fees associated with its top 7 countries/ regions ("key content agreements") as described above. WWE management anticipates that revenue from its core content agreements that extend through 2019 and subsequent years, described as "Existing and New Agreements" revenue in Exhibit 2, will grow to approximately $331 million in 2019 and $462 million in 2021.2 The Company has other agreements that are subject to renewal in the 2019 - 2021 period, which are described as "To Be Negotiated," and their revenue subsequent to renewal is not ascertainable. For illustrative purposes, the related amounts in Exhibit 2 reflect no future change in annual revenue (i.e. all future years are held equal to the value of the last year in the current agreements). This approach, which indicates revenue of $17 million in 2019 and $114 million in 2021, does not quantify management expectations and is used solely to reflect future risk or opportunity. As shown in Exhibit 2, total revenue from the Company's core content agreements would increase to $348 million in 2019 and $576 million in 2021.
Financial Outlook 2019
The Company is in the early stages of developing its operating and financial plans for 2019 and subsequent years. Given the substantial revenue growth provided by its new U.S. deals, the Company is currently targeting Adjusted OIBDA of at least $200 million for 2019, during which the new deals' rates are effective for only three months.3
Management recognizes the transformative nature of these agreements and expects to provide additional long-term perspective on the Company's strategic and financial goals after its content distribution plans in the U.S., U.K. and India have been determined and its plans have further evolved. Management currently expects to reach agreement in the U.K. by year-end 2018; and in India during the first half of 2019. Although these agreements could be secured either before or after these dates, management believes that these ranges represent the most likely periods for such communication.
Additional Information
WWE will host a conference call at 8:00 a.m. ET on June 27 to discuss the contents of this release. All interested parties are welcome to listen to a live web cast that will be hosted through the Company's web site at corporate.wwe.com/investors. Participants can access the conference call by dialing 1-855-200-4993 (toll free) or 1-323-794-2092 from outside the U.S. (conference ID for both lines: 1980819). Please reserve a line approximately 10 minutes prior to the start time of the conference call.
The presentation referenced during the call will be made available on June 27, 2018 at corporate.wwe.com/investors. A replay of the call will be available approximately two hours after the conference call concludes, and can be accessed on the Company's web site.
About WWE
WWE, a publicly traded company (NYSE: WWE), is an integrated media organization and recognized leader in global entertainment. The Company consists of a portfolio of businesses that create and deliver original content 52 weeks a year to a global audience. WWE is committed to family friendly entertainment on its television programming, pay-per-view, digital media and publishing platforms. WWE's TV-PG, family-friendly programming can be seen in more than 800 million homes worldwide in 24 languages. WWE Network, the first-ever 24/7 over-the-top premium network that includes all live pay-per-views, scheduled programming and a massive video-on-demand library, is currently available in more than 180 countries. The Company is headquartered in Stamford, Conn., with offices in New York, Los Angeles, London, Mexico City, Mumbai, Shanghai, Singapore, Dubai, Munich and Tokyo.
Additional information on WWE (NYSE: WWE) can be found at wwe.com and corporate.wwe.com. For information on our global activities, go to http://www.wwe.com/worldwide/.
Notes
1 WWE's "key content agreements" reflect the licensing of WWE's flagship programs, Raw and SmackDown in certain markets and, as such are a subset of the Company's core content deals. These markets include the U.S., U.K., India, Canada, LATAM, Middle East and South Africa.
2 Revenue derived from "Existing and New Agreements" is subject to normal risks related to maintaining agreements and counterparty risks.
3 WWE is unable to provide a reconciliation of 2018 and 2019 guidance to GAAP measures as, at this time, WWE cannot accurately determine all of the adjustments that would be required.
Trademarks: All WWE programming, talent names, images, likenesses, slogans, wrestling moves, trademarks, logos and copyrights are the exclusive property of WWE and its subsidiaries. All other trademarks, logos and copyrights are the property of their respective owners.
Forward-Looking Statements: This press release contains forward-looking statements pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties. These risks and uncertainties include, without limitation, risks relating to: entering, maintaining and renewing major distribution agreements; WWE Network (including the risk that we are unable to attract, retain and renew subscribers); our need to continue to develop creative and entertaining programs and events; the possibility of a decline in the popularity of our brand of sports entertainment; the continued importance of key performers and the services of Vincent K. McMahon; possible adverse changes in the regulatory atmosphere and related private sector initiatives; the highly competitive, rapidly changing and increasingly fragmented nature of the markets in which we operate and greater financial resources or marketplace presence of many of our competitors; uncertainties associated with international markets; our difficulty or inability to promote and conduct our live events and/or other businesses if we do not comply with applicable regulations; our dependence on our intellectual property rights, our need to protect those rights, and the risks of our infringement of others' intellectual property rights; the complexity of our rights agreements across distribution mechanisms and geographical areas; potential substantial liability in the event of accidents or injuries occurring during our physically demanding events including, without limitation, claims relating to CTE; large public events as well as travel to and from such events; our feature film business; our expansion into new or complementary businesses and/or strategic investments; our computer systems and online operations; privacy norms and regulations; a possible decline in general economic conditions and disruption in financial markets; our accounts receivable; our indebtedness; litigation; our potential failure to meet market expectations for our financial performance, which could adversely affect our stock; Vincent K. McMahon exercises control over our affairs, and his interests may conflict with the holders of our Class A common stock; a substantial number of shares are eligible for sale by the McMahons and the sale, or the perception of possible sales, of those shares could lower our stock price; and the relatively small public "float" of our Class A common stock. In addition, our dividend is dependent on a number of factors, including, among other things, our liquidity and historical and projected cash flow, strategic plan (including alternative uses of capital), our financial results and condition, contractual and legal restrictions on the payment of dividends (including under our revolving credit facility), general economic and competitive conditions and such other factors as our Board of Directors may consider relevant. Forward-looking statements made by the Company speak only as of the date made and are subject to change without any obligation on the part of the Company to update or revise them. Undue reliance should not be placed on these statements. For more information about risks and uncertainties associated with the Company's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's SEC filings, including, but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q.
FOX Sports Becomes New Home of SmackDown(R) Live
NEW YORK & STAMFORD, Conn. -- For the first time, every Friday night beginning October 4, 2019, FOX broadcast network will air WWE(R)'s flagship program SmackDown Live as part of a new five-year agreement with FOX Sports. The weekly, two-hour live event will air 52 weeks a year and captivate fans with a unique combination of edge-of-your-seat action, unpredictable drama and world-class athleticism.
"At FOX we are thrilled to welcome WWE to the FOX Sports family and bring SmackDown Live to broadcast television," said Eric Shanks, President, COO and Executive Producer FOX Sports. "We are huge fans and know that together FOX Sports will be the leader in live events for the foreseeable future."
"WWE and FOX are a perfect match," said Vince McMahon, WWE Chairman & CEO. "Moving SmackDown Live to broadcast TV and having the ability to leverage FOX's extensive portfolio of world-class sporting events will expand the reach of our flagship programming."
SmackDown Live is a consistent winner on television, currently averaging1 1.3M P18-49, 1.3M P25-54 and 3M total viewers P2+.
On air for almost 20 years and nearly 1,000 episodes, SmackDown Live is the second-longest running weekly episodic cable television show in U.S. primetime history, only behind Monday Night Raw(R). SmackDown Live is currently among the most-watched, regularly scheduled programs on primetime cable and delivers more viewers in primetime than any cable network in the U.S. (2.9 million average viewers).
SmackDown Live has also helped launch the careers of pop-culture icons including Dwayne "The Rock(R)" Johnson, John Cena(R), Undertaker(R), Triple H(R), "Stone Cold(R)" Steve Austin and The Bella Twins(TM).
1: Source: Nielsen NNTV, 2018 YTD through April (1/1/18-4/30/18), Live+7 Average Viewers for selected demographics (P18-49, P25-54, P2+).
About FOX Sports
FOX Sports is the umbrella entity representing 21st Century FOX's wide array of multi-platform US-based sports assets. Built with brands capable of reaching more than 100 million viewers in a single weekend, FOX Sports includes ownership and interests in linear television networks, digital and mobile programming, broadband platforms, multiple web sites, joint-venture businesses and several licensing partnerships. FOX Sports includes the sports television arm of the FOX Broadcasting Company; FS1, FS2; FOX Sports Regional Networks, their affiliated regional web sites and national programming; FOX Soccer Plus; FOX Deportes and FOX College Sports. In addition, FOX Sports also encompasses FOX Sports Digital, including FOXSports.com and the FOX Sports app. Also included in the Group are FOX's interests in joint-venture businesses Big Ten Network and BTN 2Go, as well as a licensing agreement that established the FOX Sports Radio Network.
About WWE
WWE, a publicly traded company (NYSE:WWE), is an integrated media organization and recognized leader in global entertainment. The company consists of a portfolio of businesses that create and deliver original content 52 weeks a year to a global audience. WWE is committed to family friendly entertainment on its television programming, pay-per-view, digital media and publishing platforms. WWE's TV-PG, family-friendly programming can be seen in more than 800 million homes worldwide in 24 languages. WWE Network, the first-ever 24/7 over-the-top premium network that includes all live pay-per-views, scheduled programming and a massive video-on-demand library, is currently available in more than 180 countries. The company is headquartered in Stamford, Conn., with offices in New York, Los Angeles, London, Mexico City, Mumbai, Shanghai, Singapore, Dubai, Munich and Tokyo. Additional information on WWE (NYSE: WWE) can be found at wwe.com and corporate.wwe.com. For information on our global activities, go to http://www.wwe.com/worldwide/.
Trademarks: All WWE programming, talent names, images, likenesses, slogans, wrestling moves, trademarks, logos and copyrights are the exclusive property of WWE and its subsidiaries. All other trademarks, logos and copyrights are the property of their respective owners.
Forward-Looking Statements: This press release contains forward-looking statements pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties. These risks and uncertainties include, without limitation, risks relating to: WWE Network; major distribution agreements; our need to continue to develop creative and entertaining programs and events; a decline in the popularity of our brand of sports entertainment; the continued importance of key performers and the services of Vincent K. McMahon; possible adverse changes in the regulatory atmosphere and related private sector initiatives; the highly competitive, rapidly changing and increasingly fragmented nature of the markets in which we operate and greater financial resources or marketplace presence of many of our competitors; uncertainties associated with international markets; our difficulty or inability to promote and conduct our live events and/or other businesses if we do not comply with applicable regulations; our dependence on our intellectual property rights, our need to protect those rights, and the risks of our infringement of others' intellectual property rights; the complexity of our rights agreements across distribution mechanisms and geographical areas; potential substantial liability in the event of accidents or injuries occurring during our physically demanding events including, without limitation, claims relating to CTE; large public events as well as travel to and from such events; our feature film business; our expansion into new or complementary businesses and/or strategic investments; our computer systems and online operations; a possible decline in general economic conditions and disruption in financial markets; our accounts receivable; our revolving credit facility; litigation; our potential failure to meet market expectations for our financial performance, which could adversely affect our stock; Vincent K. McMahon exercising control over our affairs, and his interests may conflict with the holders of our Class A common stock; a substantial number of shares which are eligible for sale by the McMahons and the sale, or the perception of possible sales, of those shares could lower our stock price; and the relatively small public "float" of our Class A common stock. In addition, our dividend is dependent on a number of factors, including, among other things, our liquidity and cash flow, strategic plan (including alternative uses of capital), our financial results and condition, contractual and legal restrictions on the payment of dividends (including under our revolving credit facility), general economic and competitive conditions and such other factors as our Board of Directors may consider relevant. Forward-looking statements made by the Company speak only as of the date made, are subject to change without any obligation on the part of the Company to update or revise them, and undue reliance should not be placed on these statements.
USA Network and WWE(R) Monday Night Raw(R) Extend Long-Standing Partnership
Three-Hour Live Programming Block to Continue Weekly on Cable's #1 Entertainment Network
NEW YORK & STAMFORD, Conn. -- USA Network and WWE (NYSE: WWE) today announced a five-year extension for WWE's flagship program Monday Night Raw. The new agreement for the live, weekly three-hour block which commences in October 2019 continues WWE and USA's nearly three decade-long relationship. Monday Night Raw, the #1 show on USA Network, delivers action, drama, compelling storylines and unmatched athleticism, 52 weeks per year.
"Monday Night Raw and USA Network have dominated Monday nights during a truly historic run," says Chris McCumber, President, Entertainment Networks for NBCUniversal Cable Entertainment. "Our partnership with WWE is one of the strongest and most successful in the business, and together we'll take Raw to even greater heights."
"We look forward to continuing our long-standing partnership with NBCUniversal and USA Network," said Vince McMahon, WWE Chairman & CEO. "Monday Night Raw has been synonymous with USA Network and we are excited about what the future holds for WWE's flagship program."
On the air for 25 years and more than 1,300 episodes, Monday Night Raw is the longest-running weekly episodic television show in U.S. primetime history and consistently a ratings juggernaut. Among the most-watched, regularly scheduled programs on primetime cable, Raw delivers more viewers in the U.S. than all sports other than the NFL. On USA Network, the weekly block is currently averaging 1.7M P18-49, 1.7M P25-54 and 3.6M total viewers P2+1.
Since its debut in 1993 on USA, Raw has been watched nearly 6 billion times in the U.S. alone. In its 25-year history, Raw has helped launch the careers of pop-culture icons including Dwayne "The Rock(R)" Johnson, John Cena(R), Undertaker(R), Triple H(R), "Stone Cold(R)" Steve Austin and The Bella Twins(TM).
1Source: Nielsen NNTV, 2018 YTD through May (1/1/18-5/31/18), Live+7 Average Viewers for selected demographics (P18-49, P25-54, P2+).
About USA Network
USA Network, the leader in cable entertainment, offers a powerful stable of dramatic, comedic and unscripted originals in more than 102 million U.S. homes. The network also features spectacular live television, a dynamic portfolio of acquired series and the best in blockbuster theatrical films and entertainment events. A trailblazer in digital innovation and storytelling, USA is defining, driving and setting the industry standard for Social TV. USA is a program service of NBCUniversal Cable Entertainment, a division of NBCUniversal. USA's award-winning website is located at http://www.usanetwork.com. Watch USA Network anywhere: On Demand, online or across mobile and connected TVs.
About WWE
WWE, a publicly traded company (NYSE: WWE), is an integrated media organization and recognized leader in global entertainment. The company consists of a portfolio of businesses that create and deliver original content 52 weeks a year to a global audience. WWE is committed to family friendly entertainment on its television programming, pay-per-view, digital media and publishing platforms. WWE's TV-PG, family-friendly programming can be seen in more than 800 million homes worldwide in 24 languages. WWE Network, the first-ever 24/7 over-the-top premium network that includes all live pay-per-views, scheduled programming and a massive video-on-demand library, is currently available in more than 180 countries. The company is headquartered in Stamford, Conn., with offices in New York, Los Angeles, London, Mexico City, Mumbai, Shanghai, Singapore, Dubai, Munich and Tokyo.
Additional information on WWE (NYSE: WWE) can be found at wwe.com and corporate.wwe.com. For information on our global activities, go to http://www.wwe.com/worldwide/.
Trademarks: All WWE programming, talent names, images, likenesses, slogans, wrestling moves, trademarks, logos and copyrights are the exclusive property of WWE and its subsidiaries. All other trademarks, logos and copyrights are the property of their respective owners.
Forward-Looking Statements: This press release contains forward-looking statements pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties. These risks and uncertainties include, without limitation, risks relating to: WWE Network; major distribution agreements; our need to continue to develop creative and entertaining programs and events; a decline in the popularity of our brand of sports entertainment; the continued importance of key performers and the services of Vincent K. McMahon; possible adverse changes in the regulatory atmosphere and related private sector initiatives; the highly competitive, rapidly changing and increasingly fragmented nature of the markets in which we operate and greater financial resources or marketplace presence of many of our competitors; uncertainties associated with international markets; our difficulty or inability to promote and conduct our live events and/or other businesses if we do not comply with applicable regulations; our dependence on our intellectual property rights, our need to protect those rights, and the risks of our infringement of others' intellectual property rights; the complexity of our rights agreements across distribution mechanisms and geographical areas; potential substantial liability in the event of accidents or injuries occurring during our physically demanding events including, without limitation, claims relating to CTE; large public events as well as travel to and from such events; our feature film business; our expansion into new or complementary businesses and/or strategic investments; our computer systems and online operations; a possible decline in general economic conditions and disruption in financial markets; our accounts receivable; our revolving credit facility; litigation; our potential failure to meet market expectations for our financial performance, which could adversely affect our stock; Vincent K. McMahon exercising control over our affairs, and his interests may conflict with the holders of our Class A common stock; a substantial number of shares which are eligible for sale by the McMahons and the sale, or the perception of possible sales, of those shares could lower our stock price; and the relatively small public "float" of our Class A common stock. In addition, our dividend is dependent on a number of factors, including, among other things, our liquidity and cash flow, strategic plan (including alternative uses of capital), our financial results and condition, contractual and legal restrictions on the payment of dividends (including under our revolving credit facility), general economic and competitive conditions and such other factors as our Board of Directors may consider relevant. Forward-looking statements made by the Company speak only as of the date made, are subject to change without any obligation on the part of the Company to update or revise them, and undue reliance should not be placed on these statements.
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