WWE Network on Shaky Ground, Triggering Drastic Changes
NEW YORK ( TheStreet) -- World Wrestling Entertainment's
At the end of the second quarter, the WWE Network had 700,000 subscribers, a net add of just 33,000 since Wrestlemania 30 in April. The company announced a plan to make the network a pay-per-view a-la-carte channel in Canada with Rogers Communications
WWE has said previously that 1.4 million subscribers gets the network to a breakeven point.
WWE said it expects the network will be live in the U.K. by October, but plans "for the network in Italy, UAE, Germany, Japan, India, China, Thailand and Malaysia will be communicated at a later date." WWE also plans to make the U.S. version of the network available on an over-the-top Internet basis starting Aug. 12 in over 170 countries, including Australia, New Zealand, Hong Kong, Singapore, Mexico, Spain, the Nordic countries and others.
"We are very pleased with the performance of the WWE Network," CFO George Barrios said on the conference call.
WWE announced a new pricing structure for the network, which had previously been $9.99 a month with a six-month commitment. Starting in August, it will cost $19.99 a month with no commitment, and an upfront one-time payment option for its existing $9.99-per-month offering, which still requires users to subscribe for six months.
On the conference call, CEO Vince McMahon said the new pricing options will help evolve the network, as will its marketing and awareness.
Shares were soaring in Thursday trading, gaining 6.9% to $12.92 as of noon.
During the second quarter, the Stamford, CT.-based WWE lost 19 cents a share on $156.3 million in sales, led by its media division, which saw a 7% year-over-year increase in revenue to $97.7 million, thanks to the WWE Network and increased television licensing fees. Analysts surveyed by Capital IQ were expecting a loss of 20 cents a share on $154.7 million in sales.
The company updated its 2015 OIBDA outlook, saying it has improved by $30 million, due in large part to a 7% staff reduction, helping the company cut costs. WWE will tax a one-time charge of $4.5 million in the third-quarter of 2014 to reflect the reductions.
--Written by Chris Ciaccia in New York
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