MUMBAI: World Wrestling Entertainment (WWE) has announced financial results for its second fiscal quarter ended 28 October, 2005.
Revenues totalled $88.9 million as compared to $83.9 million in the prior year quarter and operating income was $18.9 million as compared to $4.1 million in the prior year quarter.
The company reported net income of $11.7 million as compared to $4.4 million in the prior year quarter. Operating income in the current quarter includes approximately $3.4 million in positive legal settlements.
WWE CEO Linda McMahon says, In addition to excellent operating results, the quarter was marked by the successful move of Monday Night Raw to USA Network CEO. Thanks to an integrated marketing campaign, and the dedication of our loyal fans, we achieved a 4.7 average household rating for our inaugural homecoming show, which was the top rated basic cable entertainment telecast for the month of October.
"Also, in the quarter we successfully transitioned to Friday Night SmackDown enabling UPN to reach new key demographics on Fridays. Both of our television partners have been very pleased, as are we, with the results of these programming moves. The operating results for the quarter reflect another strong quarter for this fiscal year. Our pay per view (PPV) buys in the quarter exceed last years buys, despite having only three events this quarter as compared to four events last year. Additionally, revenues in all of our branded merchandise businesses are ahead of the prior year quarter, with home video and licensing showing the largest percentage gains,adds McMohan.
Revenues from the live and televised businesses were $60.0 million for the current quarter as compared to $66.8 million in the prior year quarter. PPV revenues were $18.8 million versus $18.5 million in the prior year quarter. There were three PPV events produced in the current quarter as compared to four events in the prior year quarter. WWE will produce 16 PPV in fiscal 2006, as compared to 14 events in fiscal 2005.
Live event revenues were $13.0 million as compared to $20.1 million in the second quarter of last year. This decrease is primarily due to fewer international events in the current quarter. There were 78 events, including two international events, during the quarter as compared to 83 events, including 15 international events, during the same period last year.
The average attendance in the US was approximately 4,300 as compared to approximately 3,800 in the prior year quarter.
The decrease in revenues is attributable to fewer international events, which generate significantly more revenue per event than the US events due to the combination of higher average attendance and higher average ticket prices.
Television ad revenues were $7.7 million as compared to $9.8 million in the prior year quarter. This decline was primarily due to the change in the television distribution with USA Network, which became effective in October 2005. Due to this change WWE no longer participate in domestic ad sales. This resulted in an overall decline in ad spots sold during the current quarter.
Television rights fees revenues were $20.4 million as compared to $18.4 million in the prior year quarter. The increase was due primarily to approximately $1.4 million of additional international rights fees primarily from India, Japan, South Korea and Italy.
Revenues from the companys branded merchandise businesses were $28.9 million versus $17.1 million in the prior year quarter. Merchandise revenues were $5.0 million as compared to $3.9 million in the prior year quarter. This increase in revenues was mainly driven by the WWE Shop website with the number of orders more than doubling from the prior year quarter from approximately 15,000 orders to around 36,000 orders.
Home video net revenues were $11.9 million as compared to $4.5 million in the prior year quarter. The increase was due in part to an increase of approximately 0.2 million gross units sold and an increase in the average sales price of DVDs, of approximately $5.00 per unit, due to the release of several higher priced titles in the quarter.
Licensing revenues were $6.4 million as compared to $3.8 million in the prior year quarter. The increase was generated by the sales in the toy category and the continued growth in our international markets. Digital media revenues were $2.3 million as compared to $1.8 million in last year's quarter.
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