Update On WWE Network Start Up Costs + More

– In today’s WWE Financials, there were some notes related to the WWE Network. They are as follows…

* WWE reported $2.1 million in network related operating expenses

* They noted that staffing costs increased to $34.7 million in Q1-2012 compared to $29.9 million in Q1-2011. The release also stated more on that noting, “increase in staffing costs was incurred primarily to support content and distribution initiatives. Total network-related costs reached approximately $2.1 million in the current year quarter.”

* The release also noted the following spending for the network: “Purchases of property and equipment increased $5.6 million from the prior year quarter, primarily due to a $6.4 million investment in assets to support efforts to create and distribute new content, including through a potential network.”

– Here are some more notes on the numbers…

* With WWE Axxess taking place at the end of March, the event provided a $1.6 million boost in revenue.

* While WWE Axxess was a part of the financials, keep in mind that WrestleMania 28 was not, due to it taking place on April 1st. That show’s financial impact will be reflected in the quarter two financials.

* WWE reported a “$4.1 million benefit due to previously unrecognized tax benefits,” which helps to make up for the difference in the total revenue increase.

* Reduced losses from our movie business, improved sell-through rates in home video, and incremental rights fees for online programming content contributed to the expansion in profit and overall profitability.

* Gross contribution margins increased to 44 percent from 39 percent in the prior year quarter. Excluding the impact of film impairments, Adjusted Profit contribution increased 12 percent to $55.5 million and Adjusted Profit contribution margin increased to 45 percent from 41 percent in the prior year quarter.

* Analysts were expecting a down quarter for the company, but overall the company exceeded analyst’s expectations. For example, wallstcheatsheet.com predicted that earnings would be $113.7 million in quarterly revenue, which would be a 5.1 percent decline from Q1-2011. WWE’s revenues totaled $123.1 million as compared to $119.9 million in the prior year’s quarter.

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