* International Availability: The Company plans to make the U.S. version of WWE Network available on an over-the-top basis starting August 12th in over 170 countries and territories, including Australia, New Zealand, Hong Kong, Singapore, Mexico, Spain and the Nordics, among others. The network is expected to be live in the U.K. by October 2014. Plans for the network in Italy, UAE, Germany, Japan, India, China, Thailand and Malaysia will be communicated at a later date.
* Canada: The Company has entered into a new 10-year partnership with Rogers Communications, a leading media enterprise in Canada, under a landmark television programming and WWE Network agreement. The partnership facilitates the launch of WWE Network as a traditional a-la-carte Pay-TV channel in Rogers' cable systems with a preview beginning August 12 and thereafter through other Pay-TV providers outside Rogers' footprint. The partnership also renews Rogers' license of the Raw and SmackDown television programs, and grants Rogers distribution rights to the Company's pay-per-views.
* Consumer Marketing: To enhance awareness, additional marketing investment is planned around the popular SummerSlam pay-per-view event in August. The Company will also introduce new payment plans in August, including a $19.99 monthly plan (with no commitment) and an upfront one-time payment option for its existing $9.99 per month offering (with six month commitment).
* Other Developments: Content coming to WWE Network includes The Monday Night War andWWE Rivalries, the most recent addition to the network's program schedule, both of which provide a documentary-style look at some of the greatest moments in WWE history. Expanding current distribution, WWE Network is launching on several smart TVs and Blu-ray players in mid-August. The Company also plans to deliver a new "resume play" feature later this year.
2014 and 2015 Business Outlook
Compared to its May 15 Business Outlook release, the Company has improved its 2015 OIBDA outlook by $30 million on a net basis at all WWE Network subscriber levels. The improvement primarily reflects a comprehensive evaluation of the Company's operations, which identified measures to reduce costs across all of its business units, including a 7% reduction in staffing levels. As a result, the Company anticipates recording a one-time, pre-tax restructuring charge of approximately $4.5 million in the third quarter of 2014, comprised of severance and other costs. The Company also estimates a $10 million reduction in 2014 expenses (on an adjusted basis), and a corresponding increase in its 2014 Adjusted OIBDA.
The rate of WWE Network subscriber adoption is a critical determinant of the Company's projected future financial performance. The table below outlines ranges of potential Company performance at different subscriber levels in both 2014 and 2015 (Reconciliation of Operating Income to Adjusted OIBDA can be found in the Supplemental Information included in this release).
Basis of Presentation
During the first quarter of 2014, the Company launched WWE Network, which changed the way that certain content is delivered to our customers. In conjunction with this change, management reevaluated the way it manages and reports the business. The launch of WWE Network coupled with the continued convergence within the media landscape, has resulted in a change in the Company's management reporting to its chief operating decision maker. These changes necessitated a change in the Company's segment reporting to align with management's operational view. The Company now classifies its operations into ten reportable segments, which include the following: Network (which includes our pay-per-view business), Television, Home Entertainment and Digital Media, individual segments that comprise the Media Division; Live Events; Licensing, Venue Merchandise, WWEShop, individual segments that comprise the Consumer Products Division; WWE Studios and Corporate and Other.
Read more at http://www.wrestlinginc.com/wi/news/2014/0731/579544/wwe-reports-2014-second-quarter-results/#rcMiQByTLM8G2RWo.99
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