World Wrestling Entertainment, Inc. (NYSE: WWE) Third Quarter 2022 Results Conference Call November 2, 2022 5:00 p. m. Eastern Time
Corporate Participants
Seth Zaslow, Senior Vice President and Director of Investor Relations
Stephanie McMahon – President and Co-CEO
Nick Khan – Co-CEO
Paul Levesque – Chief Content Officer
Frank Riddick – President and Chief Financial Officer
Conference Call Participants
Brandon Ross – LightShed Partners
Curry Baker – Guggenheim Partners
Eric Handler – MKM Partners
David Karnovsky – JPMorgan
Steven Cahall – Wells Fargo
David Joyce – Barclays
Operator
Good morning and welcome to WWE’s third quarter earnings conference call. There will be a response session. [Operator Instructions]. I will now pass the floor to Seth Zaslow, executive vice president and director of investor relations. Please go, Seth.
Seth Zaslow
Thank you and late everyone. Welcome to WWE’s Third Quarter 2022 earnings conference call. Today’s discussions are led by WWE President and Co-CEO Stephanie McMahon, WWE Co-CEO Nick Khan; Paul Levesque, Chief Content Officer of WWE; and Frank Riddick, WWE President and Chief Financial Officer. Your comments will be followed by a question and answer session.
We issued our earnings release about an hour ago and have posted the press release, earnings presentation and other supporting documents on our website. Today’s discussion will include forward-looking statements. These statements reflect our existing views, are based on assumptions, and are subject to the dangers and uncertainties disclosed in our SEC filings. The actual effects may differ materially and should not be unduly relied upon.
In addition, the issues we’ll be talking about today are likely to come with non-GAAP monetary measures. Non-GAAP data reconciliations to GAAP data are provided in our press release and earnings presentation, which can be found on our website.
As a reminder, today’s convention call is being recorded and there will be a replay on our website.
Now I would like to pass on to Stephanie.
Stéphanie Mc Mahon
Thank you, Seth, and thank you all for joining us. The 3. er quarter, another record quarter for a 3. er quarter, generated $305 million in earnings and adjusted OIBDA of $91 million, representing year-over-year increases of 19% and 17%, respectively. And we stood firm on track to achieve record profit and adjusted OIBDA for the full year.
Against the backdrop of the quarter’s strong monetary performance. The renewed power around our creation has stimulated it on all platforms. In a world where television ratings are declining, WWE is growing.
Monday Night Raw on USA Network is up nearly 5% year-over-year, while the 25 most sensitive cable networks are down 12%. SmackDown on Fox is up 1%, while TV networks are down more than 15% year-over-year. -year. In fact, SmackDown attracts more than 2 million viewers and ranks number one in the coveted 18-49 demo among all Friday night shows. Just before the end of the third quarter, the September 23 episode of SmackDown had its highest ratings since 2020. .
This specific score is directly attributable to such an early multimedia crusade called Project White Rabbit, which was designed to have interaction and intrigue the audience through a series of clues and tracks from a host of platforms and technologies, one of which led to SmackDown. Our Chief Content Officer, Paul Levesque, will be communicating more about this in a moment.
So far this year, viewership for our premium live events on Peacock has grown to 38% for the same era in 2021. Most watched international event in the U. S. It is in the U. S. on Peacock and in the UK, with a 39% audience year-over-year.
In fact, Clash has the most successful European event, setting product records and price ticket sales, as strong intellectual assets and greater storytelling drive all industries. In the third quarter, we also saw the successful relaunch of WWE Shop in partnership with Fanatics. As we head into the holiday shopping season, Fanatics plans to expand WWE’s product offering by 25% compared to last year, and our partnership with Panini has been particularly effective.
This good fortune is largely due to a specific effort to integrate the product into the situation and adopt a new technique with partners, opening doors that in the past were closed. Take, for example, our partnership with Major League Baseball. As we discussed on a previous call, WWE created traditional championship belts for MLB teams, we accelerated the production and distribution of Yankees names in reaction to the excitement around Aaron Judge’s pursuit of the house career record. The orders were replaced by Yankee Stadium as well as the Fans, and we promptly exhausted the initial inventory.
We are also positive about sales and sponsorship. While existing market situations have affected our effects this year, we have already reached some attractive deals that make us positive about our functionality in 2023.
Speaking of the future, Nick, Paul, Frank and I are excited about the opportunities ahead and focus on five key areas. Of course, the escalation of our media and content rights, foreign PCs and local IP globalization across industries, the monetization of our intellectual property, adding logo moats around our superstars, Digital and Web 3, and anything that happens in the metaverse, and potential mergers and acquisitions that align with our core competencies. We are just getting started and hope to share more as we expand our plans.
And with that, I’m going to pass the message on to my co-CEO, Nick Kahn.
Nick Khan
Thank you, Steph. And thank you all for the call.
As Stephen said, this is another quarter of strong expansion for us, and the live events segment is a key driving force of that expansion. In October, Extreme Rules also set smart records as the most successful Extreme Rules of all time. Ticket sales price at all times, however, sales began to climb when Paul Levesque and the art groups of the White Rabbit Project began, which Paul will talk about later on this call.
Looking ahead to 2023, in January we will head to San Antonio for the Royal Rumble. Ticket sales for this Royal Rumble have already surpassed the ticket sale price for our highest-grossing Royal Rumble at the time, which was last January’s Rumble on St. In terms of ticket sales price for San Antonio, to date, we have a gross profit at the door of more than $4. 6 million, which puts us on track to make Royal Rumble 2023 our highest-grossing rumble in WWE history.
In February, we will present a premium foreign live event with Elimination Chamber taking place at the Bell Centre in Montreal. This will be the first premium live event in Montreal in 14 years. The Clash at the Castle, we expect high demand.
For WrestleMania 39, which will take place over two nights at SoFi Stadium in Los Angeles on April 1-2, 2023, we have already sold over 100,000 tickets. outside the stadium for either night. As well as what Steph discussed about Clash at the Castle. We are also working intensively with the Cardiff Tourist Board and the local government to secure a sightseeing tour for the event. This multi-million dollar commitment was added to the event. economy.
Our live events have proven to be a boon to the local economy of the cities we visit. Shortly after WrestleMania 38, last April, Dallas Mayor Eric Johnson and Arlington Mayor Jim Ross announced that WrestleMania was having an economic effect of more than $200 million in the Dallas and Arlington areas. Look for more of us, excuse me, look for more of us in the tourist space, a new monetary opportunity for us. We are in active discussions with other local governments and tourism forums on long-term occasions.
In our media segment and internationally, we have reached a number of deals since our last fall. In September, we expanded WWE’s rights agreements with our friends at News Corp. , when we reached a new agreement with Foxtel in Australia, the rights to our live streams will remain with Foxtel ATV Fox8 and the general entertainment streaming service Foxtel will be the home of WWE Network in the region, just like Peacock is here in the United States. premium live events on Fox8 and the launch of a new 24/7 WWE linear channel on Foxtel.
In addition, we concluded the agreement with C
Starting next week, members of WWE’s skills scouting team will travel to Nigeria to begin the search. These 3 agreements saw an accumulation of rights fees that expanded our distribution footprint in each respective territory and led us to move WWE Network to a much larger broadcast. platform in the region. This is consistent with the long-term goals that this control team has explained and replicated in the past through the style of success we have been able to achieve here in the United States. A distributed spouse that expands our success while allowing us to reduce costs by reducing WWE network operations.
Being on business abroad, in 3 days we returned to Riyadh for Crown Jewel. This is our exhibition time in the country for 2022. And we are pleased to return to our same rhythm as before. Beyond live events and media rights deals, we’re also seeing good fortune overseas, with local-language originals from WWE Studios. Contra las cuerdas, a 10-episode Spanish-language comedy about an aspiring Lucia Dora executive produced through WWE Studios to debut on Netflix in the first quarter of 2023. We’re excited to marry Netflix and expand our overseas presence with this original.
Also in 2023, WWE Studios will offer a new series on Hulu, starring superstars Bianca Belair and Montez Ford, the eighth episode of the first season is in production lately. We’re also excited to do more business with our friends at Disney and Hulu. , where we also recently extended our Raw broadcast rights deal.
We also continue to see good fortune in A.
As you know from previous calls, we are safer than ever in the WWE product as we head into the next media rights negotiation circular. The market is hungry and willing to pay a premium for live content, and as Steph detailed in The Most Sensible About This Call is that we’re seeing an increase in viewership across all of our content. Taken together, the physically powerful market and our strong ratings, we are well placed as we begin our discussions on media rights in the U. S. Next year.
All of us here are also keeping an eye on this quarter, as Amazon began its partnership with the NFL through Thursday night football. We witnessed in March 2021, when we moved the WWE network to Peacock, that an engaged audience will migrate to a new platform. Two months into the partnership with Amazon NFL, we’re seeing the good fortune of this partnership and audiences are turning to streaming. As we know, the first game delivered the most records ever recorded in the company’s history, providing quick construction into the Amazon subbase. Major games will also provide a higher number of 18 to 49 years, compared to previous plans, making them for advertisers.
What we’re seeing now is that the shift from sports to broadcast is a duplication of the dual-revenue cable style that made classic sports networks so valuable, healthy subscription fees coupled with a mass for advertisers. As we know, this will continue to grow over time, generating more insufficient revenue and higher CPMs.
As for the industry-leading NFL, let’s see if Sunday Ticket brings any other new customers to market. And classic players continue to spend a lot to compete as well. That’s what we saw last weekend with the new Big 12 Deal. Box and ESPN are paying a 70% raise, despite convention losses in Texas and Oklahoma. It is the strength to live. This market and our functionality give us confidence as we approach 2023.
With that, I’d like to pass it on to Paul Triple H. Levesque.
Paul Levesque
Thank you, Nick.
As Steph said at the peak of the call, we see a lot of viewership in our programming. The creation works and the narrative resonates with our fans. Beyond TV and broadcast audiences, we’re seeing expansion across all of our social channels. In the third quarter, WWE had the maximum social video prospects of any major sports league. In fact, WWE has beaten sports league number two more than twice.
In addition, we broke our own internal records for video perspectives. In July, our WWE Instagram page recorded the number of video views in account history. In August, our WWE Twitter account set an all-time record for prospects on the page. Performance is the result of the evolution of our platforms, we see more engagement, longer viewing times and, of course, an accumulation of advertising revenue.
Both YouTube and TikTok have maintained their positions. WWE remains the eighth most subscribed channel on YouTube with 91 million subscribers. During the quarter, our channels surpassed 70 billion lifetime views, making it the seventh channel in YouTube history to do so.
And on TikTok, we remain the most followed sports league on the platform, ahead of the NFL, NBA and UFC through millions. As Nick and Steph discussed before an express initiative where we saw good fortune on social media and it led to good linear visualization. Fortunately, this is also what we internally call the White Rabbit Project, a multi-week crusade that took hold on television, social media, and in stadiums.
We started the crusade by introducing moments into our live events, in arenas without any mention of our direct, social or linear virtual platforms. We let our enthusiasts talk about it among themselves and check out what was going on. Then we started incorporating more elaborate elements, adding QR codes in episodes of SmackDown and Raw. And when they flocked to those QR codes, they led the audience to more clues like interactive games and puzzles they needed to perceive. It would also lead them to encrypted decryption messages that would literally take you extra down the rabbit hole.
The buzz and excitement continued to increase as we went along, with QR codes and links to SmackDown on September 23, increasing viewership by 20% at 9:00 p. m. M. , while the audience tuned in to watch the campaign. It was the most-watched episode of SmackDown since March 2020. The task would culminate in taking him to Extreme Rules and the incredible return of one of our biggest superstars, Bray Wyatt. Bray Wyatt’s return to Extreme Rules resulted in a 30% increase in general viewership and became the most-Ví Extreme Rules in history. Just two nights later, Monday Night Raw also benefited from our audience development to approximately 2 million people, 14% more week over week, versus the rigid festival of Monday Night Football and The Voice.
The crusade also boosted sales for our customer products team. On the day of Bray’s return, his recently released Extreme Rules T-shirt became the best-selling item not only among WWE products, but also on Fanatics’ network of e-commerce sites. The assignment of WWE White Rabbit is the best example of how we can use a multimedia technique to drive engagement, excitement, and ultimately revenue.
Expect us to do more of those strategic artistic stunts that expand the plot of other platforms and run beyond our classic TV windows. WWE is, in fact, programming 24/7 as we continue to find new tactics to advertise established superstars like Bray. Wyatt, while also focusing on creating a channel for the next generation of superstars.
In October, we announced WWE Campus Rush, a multi-campus school athlete recruitment tour, which will stop at NCAA Division 1 most sensitive colleges in search of new talent. this spring, with schools participating in all Power Five conferences.
Every step of the way, student-athletes will hear all the opportunities WWE has to offer, whether in or out of the ring, opportunities like WWE’s NIL program they can use, adding fan engagement on social media and media training. to see more D1 athletes begin to evolve our progression formula over the next year.
You’ve heard of our established stars and stars of the future. But the growing excitement around the creation of WWE and WWE in general is opening up more and more opportunities than ever to interact with outdoor celebrities from the WWE Universe, helping us attract new fans.
An example this Saturday, we will be in Riyadh, Saudi Arabia for Crown Jewel, where one of the world’s top influencers, Logan Paul, will face tribal leader Roman Reigns. No doubt, Roman will have the total lineage with him, which would make you wonder if Logan will have his well-known brother Jake Paul, fresh from his victory against Anderson Silva in his corner to aim for the game box that will allow us to circulate the year well with this year’s Survivor Series, which becomes the Survivor Series war games at Boston’s TD Garden, that excites our fans. And speaking of excitement, no one is more enthusiastic about war games than our president and chief financial officer, Frank Riddick.
Franck Riddick
Thanks Pablo
As Step and Nick pointed out, we had a solid quarter. Regarding the third slide of our presentation, in the third quarter we generated a profit of $305 million and adjusted OIBDA of $91 million, which exceeded the upper limit of our guidance. 19% and higher adjusted OIBDA up to 70% year-on-year.
Based on our functionality in the first nine months of the year, we now expect adjusted OIBDA for all of 2022 to be at the top end of diversity from 370 million to 385 million. I’ll talk about the outlook for the fourth quarter in more detail later in my remarks. On page 4 of our presentation, we detail our commercial functionality for the quarter, which shows OIBDA’s operating income source and segment-adjusted contribution compared to last year’s quarter.
During the third quarter, we delivered strong functionality across our business, and our 3 reporting segments generated double-digit earnings growth.
For our media segment on page five, adjusted OIBDA increased earnings expansion to 10% and earnings expansion to 15%. Basic content rights fees increased due to the contractual escalation of domestic rights rates for the distribution of our flagship programs, Raw and SmackDown. Due to the schedule, we also aired an additional episode of SmackDown this year.
Royalties on fundamental rights to foreign content increased mainly as a result of the media agreement we reached earlier in the year. Network revenues increased primarily due to higher domestic revenues similar to our agreement with Peacock. Other media revenue increased due to delivery of original programming to A
Advertising and sponsorship revenue declined due to our resolve to terminate a third-party partnership in the audio space. This resolution had an adverse effect of $3 million on our effects for the quarter, and we are recently executing a new agreement with some other third party.
Revenue expansion was partially offset by higher operating expenses. Accrual of expenses is basically similar to accumulating original third-party programming and accumulating content-like pricing. As a reminder, we resumed the normal excursion program in July. 2021. And as a result, TV production prices for our weekly in-ring content on Raw and SmackDown were strong year-over-year.
Now let’s move on to our live events activity, as defined on page six of our presentation. Adjusted OIBDA from our live events was $10 million and revenue was $35 million. During the third quarter, we continued to enjoy strong demand for our live events. Occasions. We host 58 events in total, 57 in North America and one overseas event. The average attendance in North America was around 6300. A superior mix of higher capacity sites.
International ticket sales at prices have increased due to the holding of a main event at Clash at Castle Stadium this year.
The shift to our customer product segment on page seven adjusted OIBDA more than doubled to $19 million in a 45% or $11 million profit expansion. During the quarter, we recorded approximately $10 million in profit, primarily due to a revision to our earnings popularity estimates for certain licensing agreements with minimal warranties. Prior to the updated estimates, we expected to recognize approximately $9 million of this amount in the fourth quarter, which will be negatively impacted by this amount.
Profits from new products basically increased due to an accumulation in the total number of events. E-commerce sales basically declined due to the transition of our virtual platform to Fanatics. While we remain very positive about Fanatics quotes and look forward to Fanatics functionality. To be added to adjusted OIBDA, the partnership design produces a relief in profit as we record activity on a net gross basis.
As announced in the past, a special committee, comprised of independent Board members, was formed to investigate the alleged misconduct of Vince McMahon, who resigned, and some other official who left the company. The special committee’s investigation is now in its entirety and the special committee has been dissolved. Management is rushing with the Board to implement the Special Committee’s recommendations similar to the investigation.
Our third quarter effects come with an $18 million expense related to the charge incurred through the company in connection with the investigation, which has been excluded from adjusted OIBDA.
In the future, we expect to incur additional costs similar to those of research. As mentioned above, Mr. McMahon agreed to pay the moderate investigation charge covered by insurance.
Now let’s move on to WWE’s capital structure, as on slide 8 of the presentation.
In the third quarter, we generated $4 million in loose cash flow, compared to $45 million in the same period last year. The reduction is due to higher capital expenditures similar to those of the company’s new head office. In the third quarter, we incurred $51 million in capital expenditures, adding $42 million similar to our new parent company. Excluding the parent company’s new CapEx, loose cash flow would have been $46 million in the quarter, representing a conversion rate of 50% of adjusted OIBDA.
Since the beginning of the year, we have spent approximately $97 million on the allocation of the new headquarters and lately we are making plans for approximately $180 million to $195 million in annual allocation expenses.
The company also earned $14 million in the third quarter and $27 million in the first nine months of the year, similar to rebates for lease innovations for the main office facility. While those amounts reduce our overall outlays for the project, they are not included in our loose money calculation.
During the quarter, we returned $9 million of capital to shareholders through dividend payments. We did not repurchase shares during the quarter due to regulatory and legal needs similar to the investigation. To date, we have repurchased approximately 5. 3 million shares for $289 million and have $211 million available under our $500 million buyback program.
In the future, we plan to remain opportunistic in our percentage buybacks. We will continue to compare points such as our percentage price, money market conditions, regulatory issues, and our estimate of the intrinsic price of our percentages when determining our point of activity.
As of September 30, WWE had approximately $441 million in money and short-term investments. The debt amounts to $235 million, totaling $214 million related to the e-book of our convertible notes. We have no noticeable amounts in our $200 million revolving credit facility.
Our existing and projected liquidity remains strong and we continue to benchmark our capital design and investment strategy to identify opportunities for our capital burden and shareholder value creation.
Regarding our full-year adjusted OIBDA outlook, in February, we first provided diversity from 360 million to 375 million. In August, we raised this diversity to 370-385. We are now targeting the upper end of diversity from 370 million to 385 million. We are pleased with our effects during the first nine months of the year and remain firmly on track to generate record earnings and adjusted OIBDA for the full year.
As for the fourth quarter of 2022, we have an adjusted OIBDA of between 83 and 90 million. The estimate reflects year-over-year profit growth, primarily due to an unforeseen accumulation in domestic media rights fees for the company’s premium events, as well as the creation of updated monetization of third-party programming.
This earnings expansion is expected to be partially offset by the similar negative impact at the time of the customer’s product licensing earnings, of course, the minimum warranty agreements I mentioned earlier in my comments, as well as the timing of the transmission of the company’s flagship. Weekly programming, especially SmackDown, which is expected to air one less episode compared to last year’s period.
We also expect the effects of the fourth quarter to reflect higher operating expenses as we continue to invest in our content creation.
As we previously announced, our deal with Hulu for the rights to stream Raw expired at the end of September. During our conversations with Hulu about ending the relationship, we expressed our preference for aligning rights and windows for our content, making it more productive to position WWE for upcoming renewal discussions in 2023.
As a result, we enter into a short-term extension that balances the wishes of both parties. We are pleased with the result, but it will create a modest hurdle in our finances for the fourth quarter and for 2023. We look forward to 2023, we are recently in the midst of our annual operating plan procedure and plan to provide a more comprehensive update on our next effects call.
Given the importance of U. S. media revamps, the U. S. media revamps are not allowed to do so. In the U. S. for Raw and SmackDown, we plan to continue investing in the creation of our content, the company’s most productive position for the long term. effect on customer habit and any similar effect on our monetary performance.
In conclusion, WWE generated strong third-quarter effects reflecting strong demand for our events and increased programming intake across all platforms. Our long-term perspective is underpinned by the rising price of live sports content, increased spending through streaming platforms on sports and live content to win and retain customers, increased spending on logos with media corporations that offer success and fan engagement, and premium expansion for celebrities and engaging content. driving new opportunities for IP monetization and media and entertainment expansion in foreign markets.
Going forward, WWE remains well placed to capitalize on those vital opportunities to aid expansion across our lines of business. We look to the future to update you on the progress of those projects in the coming quarters.
This concludes our observations. And now I’m going back on the ground with Seth.
Seth Zaslow
Thank you, Franck. Operator, we are in a question and answer position. Please open the lines.
Q&A session
Operator
Of course, thank you. [Operator Instructions] And we’re stopping by to move on and respond to our first response from Brandon Ross with LightShed Partners. Continue.
BrandonRoss
Hi, thank you for answering the questions. I have a pair. Can you tell us a little bit how you see the job design going to increase over the next one or two years, i. e. when it ends or starts?And what do you think about strategic reinvestment, adding even beyond city charges, by marrying your role as chief financial officer with your new role as president?And are there room for improvement in the design of positions you say?? I have a follow-up.
Franck Riddick
Yes, obviously, as I said in my remarks, we see a desire to continue investing in content creation, especially as we head to WrestleMania in Los Angeles for renewal discussions next year. It takes into account the margin forecast for 2023, but we are still in the process of making plans. And we’re looking to find that balance between making sure we continue to create the engaging content that drove audiences and that will result in meaningful construction in our rights. We see opportunities to manage and control pricing, primarily in the domain of not to mention profit and talent generation, i. e. commercial pricing, which we have, as we have discussed in the past, Brandon, a higher price point relative to the duration of the business, and we see opportunities to do so to balance other developments necessary for the business.
BrandonRoss
Super. Et First of all, you all made the call talking about the good fortune of creation and what it means. And they’ve given a lot of concrete examples of some of the things they’re doing. Can you bow to him by getting a little closer and telling us who the main tenants of his content philosophy are and how he plans to manage that over a one-year cycle.
Paul Levesque
Of course. I think it’s about, as you said, the one-year content creation cycle over the course of that year, and looking to choose where you should go to put them in your kind of artistic GPS system, and then figuring out how you need to get to those things. So he’s more than we’ve done before. I think as we turn the corner into the new year and look at WrestleMania, I’m already starting in my brain to get started: with the team participating in how we need WrestleMania to look next year and how we need WrestleMania spring to become summer. then in autumn. It’s a great cycle. And I think the further we can go, to know where we need to go, obviously, our business is different than movie theater or whatever, in terms of the human beings involved, injury rates, whatever happens with that.
But when I look at the creation that we’re doing now, when I look at the good fortune of that, I understand, we’re still doing this without Charlotte Flair, we’re still doing this without Becky Lynch, we’re doing this without Cody Rhodes, we’re doing that without Randy Orton. I think those are stars that they have, when they come back, they will also move the needle.
I think the other wonderful thing for us is to really focus on the progression of the character. And since you see a lot of stars coming back, you see stars emerging through our progression formula that had never been noticed on Raw or SmackDown before those characters appeared. So you invest in each of them separately so that they mean more in the programming itself.
And then Array for us, it’s about keeping things fresh, checking things off the beaten track, some are going to work, some aren’t. But I think the White Rabbit stuff we talked about a lot today was off the beaten track. of this artistic team. And that leads you to be able to try new things that you had never tried before, maintain successes, lose losses, I am not afraid of losses. That’s when I learned that successes don’t teach me as much as defeats. So when things don’t work out. It’s phenomenal. We’ll find out why they didn’t and the next one will. So I’m not afraid of all that. And it’s just moving forward and having a plan from where you need to go. I hope that answered you.
BrandonRoss
He did it. Thank you so much.
Operator
We’ll move on to our next Guggenheim Securities Curry Baker. Continue.
Curry Baker
Hello, good afternoon everyone. Thank you for the question. I have two for Nick. The first considerations are the US renewal of Raw and SmackDown next year. Can you help us think about the measures you’re considering?Does it give you confidence and the renewal cycle next year?Qualifications, recent renewals of sports rights load all of the above to a higher level?How do you think about renewal and what motivates you to be so positive right now?
Nick Khan
Thank you very much Curry. I think we’ve looked at what we internally call the 3 R’s, ratings, relevance and revenue. And we think the company is doing everything it can in that regard. Plus the market you’re targeting full speed, in terms of what you’ll pay the other entities that deliver those things. So there’s a lot of micro in this macro. But those 3 macro problems are what we constantly read and communicate about.
Curry Baker
And then, on the front of local grants for big events, obviously, Wells has great merit there. Do you think we’ll be able to see one or more of those grants next year?I know you mentioned that there are active negotiations going on. Or would you describe it more as an opportunity 24, 25?
Nick Khan
Yes. This is something we are delving into now. So, in fact, there will be more out there. We have an offer for one of our premium live occasions that we already love. So we’re looking to shut that down. And there will be more to come than that. We thought about the economic advantages that I described in my reviews that our product brings to other cities and countries. see results
Curry Baker
Super. Thanks for the questions.
Operator
And we’re moving on to our next Eric Handler with MKM Partners. Continue.
Eric Controller
Hello and thanks for the question. This for Paul and Paul next year with a kind of transformation of NXT UK betting into NXT Europe. I wonder if you could communicate a little bit about what you think, or how you think, or what you think NXT Europe can in terms of a bigger, bigger idea?And from there, what kind of timetable do you foresee for expansion even beyond Europe?
Paul Levesque
Thanks for the question, Eric. Bigger, better, wider, this may be the slogan of the new brand in the future.
Eric Controller
I have already submitted it.
Paul Levesque
Oh, really? Well, well, we can communicate about it. Frank will take care of it.
Franck Riddick
We pay a lot for them.
Paul Levesque
I think what you see in Europe, when we introduced NXT UK, the preference was to reflect what we were doing in the US. And we have to start. And then COVID hit, and it slowed everything down. And then we had to reconsider. Then we got to a position where we were in a position to get out. But it’s a bit complicated to rename something and restart it, while you’re still doing it, it’s like looking to change the position of a tire on a car on the road.
So we’ve shut it down as Europe evolves and grows, once we get that back, I think we start to see it reflect a little bit more of what you’re seeing in the United States. So, a formula underneath, to recruit a formula to bring the most productive athletes from all over Europe, that we recruit them at the Olympic point as we are here, college athletics is a little different there, but around athletics and young people there. And as we start bringing those athletes in, educating them, developing them, whether it’s on our existing PC or as we evolve into something bigger, we’re looking to turn that into a strength formula for all of WWE, whether it’s Raw. and SmackDown. And I think this kind of globalized local logo is very exciting for many of our partners in the market. And I think we have a chance to make it even bigger.
And Europe is also becoming a very attractive centre for us, for other countries. So, I would take for example India, while we recruit there, it is very complicated for us to locate athletes who bring them to the United States to start exercising. , is a very long procedure for us. We can get them to Europe much faster and allow them to exercise much faster and succeed in less time. Therefore, it becomes a very vital center for us. It sets, let’s start taking a look at diversification in other markets as well.
Eric Controller
Very useful. And then, a follow-up content query. A few years after the start of its NIL agreement with American school athletes. I’m curious you’re thinking about your investment in this assignment and other educational recruitment opportunities. First, you have like a timeline where you think you can get those other people into the Performance Center, second, clear who can succeed and who can’t succeed, what kind of it is — what is your [offer sound] [ph] with that. And then, how long would it take them to get into NXT or the main roster?
Paul Levesque
It’s attractive because we’ve been doing it for a few years. And recruitment, some school athletes, and still others, the difference with school athletes coming to us through NIH and the School Rush program that is seeing well. Now it is being implemented, this point of high-level school athletes are used to being trained and trained at another point, this gradually increases the speed at which they progress through our program. And we’ve become smart enough to predict. So there’s a very short window of time once they come in, there’s almost like a kind of six-month cut-off era that happens almost naturally, and then there’s another one a little bit later, but maybe 4-6 months later that, with the crowd starting to clear up a little bit.
And we have skills right now that are being passed on, coming to NXT programming now and that’s only been in the formula for maybe six or eight months. You see them almost in about a year, with Array appearing. But like I said, we have some that are six months away and now appear in the series, so the curve isn’t big. And they recover it very quickly. And I think because of that and the number of athletes who become increasingly interested in WWE day in and day out, the long term is incredibly bright on that front.
Eric Controller
Thank you so much.
Operator
We’ll take the next one from David Karnovsky with JPMorgan. Continue.
David Karnovski
Hi, Steph, I think in your ready comments, you discussed as one of your strategic priorities, mergers and acquisitions that align with your core competencies. And acquisitions, historically, I don’t think they’ve been a precedent for the company. I hope you can expand on that comment a bit.
Stéphanie Mc Mahon
Of course. In fact, I got rid of the words that were advised to pronounce. So there are smaller strategic opportunities that we’re looking for in the short term. And in terms of the long term, who knows what the long term holds?
David Karnovski
It is ok. And then Nick, I think it’s been a long time since someone on this particular call asked about Canada, yet you have a rights deal that expires there, I think in 2024, and I think it’s still one of the five most sensible. regions for you. So hopefully maybe give us a first look at how you see the market for content areas, you might be able to start negotiations.
Nick Khan
We believe the market is strong for us, especially with all U. S. -based corporations. In recent years, they have gone international. Instead of a handful of potential buyers in Canada, he has a plethora of them. – Permanent spouse Rogers at this time. And let’s see what the long term holds. But we are positive there.
David Karnovski
Super. Thank you.
Operator
We’ll move on to the next one by Steven Cahall of Wells Fargo.
Steven Cahal
First of all, Nick, we see a lot of linear tension in terms of fee cutting and advertising. I think NBC has headed toward a more challenging outlook for the fourth quarter. And as you know, Fox doesn’t have a streaming platform and it’s becoming harder for them for SmackDown, maybe to succeed in classified ads for years to come. So, with everything that’s going on, and when you think about rights and waiting for rights in 2022, this very long consultation That is, do you still think linear packaging and distribution with some other partners is the right way to convey this?Do you plan to start becoming more artistic and look for opportunities to maybe have broadcast-only rights and broadcast-only rights to attract a larger organization of bidders, because I think it will soon enter into exclusive negotiations with its existing partners here?.
And then related. Frank, did you say that Hulu’s repeat creates a modest headwind?I’m just curious if you put them in competition. And maybe why is this a modest headwind?It turns out that you don’t need us to read this as some kind of implication for further rights renewals. So I’d like a little more color there. Thank you.
Nick Khan
Regarding the first component of this question, we believe that weeknights are vital in terms of return on investment of linear transmission chains. Premium live events on a Peacock streaming service worked perfectly, as they allowed us to check each platform or our product and see where we can get the best result.
We are delighted with those 3 platforms and their destination. Yes, there will be fewer opportunities on fundamental cable because there will be fewer critical cable networks. But we believe that much of that content has been clearly captured through the transmitters in terms of loose streaming. We’ll see what other people do with their 10 o’clock hour. But all signs are that scripted programming has shifted to streaming, at least premium scripted content, and linear platform, the loose platform is the most productive to live on. , which is who we are. So we like the way it is directed and we remain positive about it. Frank, I’ll give you the part of the moment.
Franck Riddick
Steven, obviously we have — you get it. We don’t think it says anything about the price of our content as a negotiation, this conflict has been confusing due to our preference for knowing what we have to do with the two streaming rights at the moment, as well as some other contractual restrictions and how it can be. be put in competition. So, we just thought the short-term deal was better for us. And, we haven’t revealed the original agreement, nor the new one, but that says nothing about the long term of our rights negotiations in 23. I don’t know if Nick, you need to upload something to that.
Nick Khan
Yes, I can go up to that. And some of that was also part of your question, Steven. In terms of rights sharing, if you take a look at the NFL in its recent negotiations, when it went to NBC, the virtual rights also when it went to Amazon, the linear rights haven’t been sold anywhere else?And yes, of course, in the two local markets you will be able to see it clearly. But have you noticed this uniformly across the board?I’m not sure I’ll replace it. For them, I probably wouldn’t replace them with others. So, it would be great on Raw and SmackDown to split them into 4 instead of two. But as long as the same number is monetized, we agree with that.
Steven Cahal
Thank you.
Seth Zaslow
Operator, why do you answer one last question, please?
Operator
Of course, you bet. And the last one will come from David Joyce of Barclays. Continue.
David Joyce
Thank you. Since you have just closed new deals in Australia and Africa, and this year in Canada. Could you help us think about how you would rank the importance of your markets outside the U. S. ?USA? Well, we know [indistinguishable]. I just want to think about what you can do for the widest diversity of monetization opportunities. Thank you.
Nick Khan
Thank you, David, for the consultation. We, live events and rights agreements, are the same now. So even the question that was previously asked about Canada and the next deal there in 2024, as we discussed earlier, we have the live premium event in Montreal in February. You saw the Cardiff exhibition we also talked about, on Labour Day weekend in Wales, obviously, everything is connected. Therefore, our existing partners and potential new buyers can come and see our programming.
When you watch our material live, it’s less difficult to sell. Because you see this reaction from the audience and how passionate the fan base is. And when we see audience accumulation, for example. And yes, Cardiff’s primetime live broadcast in the UK is a vital factor, unlike its 2am broadcast. m. o at 3 a. m. , if originated in the U. S. up to 400%, or anything like that, something else with that. So, the UK matters to us, Canada matters to us, the APAC region, we announced about a year ago a deal with Disney for two of the countries there. He expects us to do so. Australia notoriously issues.
So there’s going to be more emphasis, Steph, Paul, Frank and I communicate all the time. It is a localized global product that we are looking for. So when we are even communicating about skills recruitment, staying under the new Superstar contract in Africa, it will start next week, if we can locate an upcoming superstar from the African country, it just resonates, sorry, the continent of Africa that just resonates on the African continent, a wonderful victory for us, if that user can cross and resonate in the United States, Even a bigger win if you can become a global superstar. And hey, that’s a purpose forged for us. That’s why we like strategy. We who are applying it correctly. And the effects we’re excited to see.
David Joyce
Super. Thank you so much.
Nick Khan
Thank you.
End of questions and answers
Seth Zaslow
It is ok. Well, thank you all for joining us today. We appreciate your interest in WWE. Operator, you can end the call now.
Operator
And with that, that concludes today’s call. Thank you for your participation. You can now log out.