TKO Group Holdings Inc (TKO) 2010 Q1 法說會逐字稿

Good morning.

My name is Casey and I will be your conference operator today.

At this time I would like to welcome everyone to the WWE first-quarter earnings call.

All lines have been placed on mute to prevent any background noise.

After the speakers' remarks there will a question and answer session.

(Operator Instructions.) Thank you.

I would now like to turn the call over to your host, Mr.

Michael Weitz, Senior Vice President of Investor Relations.

Sir, you may begin your conference.

Thank you and good morning, everyone.

Welcome to World Wrestling Entertainment's first-quarter 2010 earnings conference call.

Joining me for today's discussion are Vince McMahon, our Chairman and CEO, Donna Goldsmith, our COO, and George Barrios, our CFO.

We issued our earnings release earlier this morning and will be referencing a presentation as part of our discussion.

These are available on our corporate website at corporate.wwe.com.

We will be making several forward-looking statements today as part of our discussion.

These statements are based on management's estimates.

Actual results may differ due to numerous factors which are referenced on page one of the presentation.

These risks and uncertainties are discussed in more detail in our filings with the SEC.

Reconciliations for non-GAAP financial information discussed on this call can be found in our Earnings Release or on our website.

Today we will review our financial results for the first quarter and will follow this review with a Q&A session.

At this time, it's my privilege to turn the call over Vince.

Good morning, everyone.

I think the most important thing to realize, the most important thing that we would be proud of here at WWE is that we achieved our highest profit margin, EBITDA margin of -- in recent history, which is 24%.

Not bad.

Notwithstanding that, as far as this quarter is concerned, when we consider WrestleMania, we had $13 million in profits, which is okay.

And for WrestleMania, it's down about 12% from last year, which I think is more due to more of a communal viewing habit, much like Super Bowl parties.

And in addition to that, I guess maybe the bottom line is as far as the attraction is concerned, maybe it wasn't exactly what everyone wanted to see.

Nonetheless, the brand remains very, very strong and its profit contribution very strong as well.

One of the things I'd like to make mention of today is our television platform, especially on SmackDown.

Raw has been a staple of WB for many, many years across not just here in North America with the USA Network but, quite frankly, it's been our lead program all over the globe.

Now that SmackDown, as we just secured a multi-year deal with the Syfy Network also under the NBCU umbrella as is Monday Night Raw's USA Network, the two of them together are going to be very, very complementary on the same NBCU platforms.

The cross promotion will be extraordinary.

And again, likewise SmackDown moving from a MyNet broadcast situation into a very secure and non-preemptive time, Friday night at 8 o'clock Eastern, is very, very big for us.

Because we're going to drive a lot of our overall revenues, not just SmackDown specifically.

And I think that in time SmackDown, hopefully, would have the same contributions as Monday Night Raw, given its consistency and, in fact, we're on a very strong cable platform of Syfy, and the cross promotion of USA, again, both owned by the NBCU conglomerate.

Internationally remains strong for us.

Revenue was up about 19%, and include live event touring specifically down in Latin America which has been very strong.

Mexico, specifically, very, very strong for us in terms of live attendance and pay-per-view which is now -- I think it's close, it's our second largest contributor other -- maybe it's just a little bit before, ahead or behind United Kingdom.

I'm not sure.

Other than that, another really key point is the very strong launch of our toys with Mattel.

This quarter you will see some mixed numbers with Mattel and our former distributor Jakks.

Nevertheless, very, very strong.

We were very happy about how the kick-off has been with Michelle.

And again, we look forward to achieving our same financial objectives of growth of anywhere from 15% to 20% over the longer period of time.

And now I'll turn it over to George.

Thanks, Vince.

I'd like to start by providing you with some additional perspective on our first-quarter results.

For the quarter we reported a 29% increase in revenue to $138.7 million.

Hang on.

Let me correct myself.

I said the launch of Michelle.

It's Mattel, not Michelle.

It's a little too early for me.

I'm sorry, George, go ahead.

And more than doubled our operating income to $37.3 million.

However, several items impacted the comparability of our results on a year-over-year basis.

These included the timing of WrestleMania, the receipt of certain tax credits related to our television production activities, and a one-time restructuring charge in the first quarter of last year.

As a reminder, WrestleMania occurred in the first quarter of this year compared to the second quarter last year.

The event contributed $28.8 million of revenues and $13.1 million of profit contribution, $8.8 million net of tax, to our results for the first quarter of 2010.

In addition, we recognized $4.2 million of Connecticut state tax credits related to our investment in television production in prior periods, and as a result reduced depreciation expense by about $1.6 million.

Finally, our first-quarter results last year included a $2.2 million restructuring charge associated with a 10% reduction in headcount that occurred in January 2009.

Excluding these items, adjusted operating income increased 20% to $22.6 million while revenue increased 2%.

Similarly, on an adjusted basis, net income rose 25% to $14.7 million.

Favorable changes in foreign exchange rates increased revenue by approximately $2.1 million in the quarter, but had a negligible impact on profits.

Accordingly, changes in FX rates have not been backed out in our calculation of adjusted financial results.

Our first-quarter performance demonstrates our continued commitment to manage our costs and run the business in a smart, efficient way.

We managed a 10% reduction in adjusted SG&A expenses.

As a result, adjusted EBITDA increased 14% to $26.1 million, and the Company achieved a profit margin based on adjusted EBITDA of 24%, representing the highest margin in our recent history.

To clarify the trends in our business, I'll discuss our performance on an adjusted basis, excluding the one-time items that I've just described.

For a more detailed review of our performance in the quarter, let's turn to page five of our presentation, which was the revenue and profit contribution by business unit as compared to the prior-year quarter.

Starting with our live events, including merchandise sales at these events, revenue increased 7% on an adjusted basis.

This was driven by higher average attendance at both our North American and international events.

Excluding WrestleMania, average attendance at our North American events increased 20% to 7,300.

This growth was partially offset by a 3% decline in average ticket prices to $32.47.

Additionally, changes in our touring schedule resulted in 13 fewer events in the quarter.

Revenues from outside North America reflected a strong live event tour in Latin America, which attracted an average of 11,300 fans.

This represented a 22% increase from the comparable four-event tour in the first quarter of last year.

Turing to our pay-per-view business, revenue was essentially flat for the prior year as growth from the comparable events in the quarter was offset by lower revenue from prior-period buys.

Revenue generated by Royal Rumble and Elimination Chamber increased 13%, reflecting a 3% increase in buys and a $5 price increase that was implemented at the start of this year.

During the quarter, we made significant progress in developing the pay-per-view market in Mexico, which became our second largest international pay-per-view market behind the UK.

WrestleMania XXVI generated $19 million in pay-per-view revenue based on approximately 885,000 buys in the quarter.

Overall, the event generated over $13 million in profit contribution for the second consecutive year and demonstrates our focus in maintaining WrestleMania as our most entertaining and most profitable pay-per-view event.

Revenues from the distribution of our television programming increased by 18% or $4.5 million, reflecting the fees from the addition of our new program, WW Superstars, and contractual increases inherent in our global TV distribution agreements.

During the quarter we announced a new multi-year television distribution agreement that will transition our SmackDown program to Syfy, a network of NBC Universal.

Based on the terms of the deal, significant cross-platform promotional opportunities and our expanded relationship with the NBC Universal family, we view this as a very positive development for WWE.

In our consumer products segment, our licensing revenue remained relatively flat over the prior-year quarter.

Increased sales of toys and novelties were offset by lower video game sales.

Revenues from toys increased 16% over the prior year, in part due to the strength of our new partnership with Mattel and the successful launch of our new toy product line.

Revenues from video games, however, decreased 8%, reflecting a 12% decline in shipments to 3.9 million units.

During the quarter, video game shipments associated with newer game platforms such as the Xbox 360 and the PS3 were not sufficient to offset the decline on more established platforms.

Notably, our long-term plan assumes an expansion of revenue from video games that derive from the introduction of several new product extensions.

For example, this includes a multi-player online game that will be launched in South Korea and China later this year.

Our home video revenue decreased 17% or $1.6 million, reflecting declines in unit shipments, lower sell-through rates, and a reduction in effective prices.

Specifically, unit shipments declined 11% to 813,000 units in the quarter, while their average effective price fell $6 to $13.75, reflecting the impact of ongoing discounts and promotional activity.

For the remainder of the year, we expect to realize year over year growth in this segment, with increased Blu-ray releases and strong titles.

In our magazine publishing business, revenue decreased 19% to $2.8 million, primarily due to lower circulation.

Sell-through rates for WW Magazine fell to 29% versus 32% in the prior-year quarter.

In our digital media segment, revenue declined 12% or $0.8 million to $6.1 million from the prior year, led by the expiration of a key wireless contract and lower sales of online advertising.

Revenue from e-commerce was flat year over year.

A 3% increase in the number of orders to approximately 62,000 was offset by a comparable decline in average sales per order to approximately $48.

During the quarter, WWE Studios recognized revenue of $3.4 million compared to $3.7 million in the prior year, with revenue in both periods primarily from our feature films, The Marine and The Condemned.

Earlier last year we released our fourth feature film, 12 Rounds, and the direct-to-DVD film, The Marine 2.

We do not participate in revenues generated by these films until their distribution costs are recouped by our partners.

As such, we have not recorded revenues for either 12 Rounds or The Marine 2.

As of the quarter end we had approximately $43.2 million in capitalized film production costs on our balance sheet, associated with 12 Rounds, our direct-to-video releases and the initial films that are being produced under our new distribution model.

The first project to be distributed under this new model is expected to be released in the third quarter of 2010.

Our overall profit contribution increased slightly as the expansion of TV rights fees and the strong performance of our live events was offset by the decline from home video.

Gross profit margins remained essentially flat at 47% compared to the first quarter last year.

Improved margins in our live and televised segment were facilitated by sustained cost reductions in marketing and TV productions.

These factors, however, were offset by lower consumer product margin, stemming primarily from lower average prices and increased returns in our home video business.

For the quarter, adjusted SG&A expenses decreased 10% to $25.8 million, reflecting declines in legal and professional fees, as well as a reduction in bad debt expense.

Page 14 of our presentation compares the quarter-over-quarter results and provides a summary of changes by business.

As shown, adjusted operating income increased 20% to $22.6 million, driven by the reduction in SG&A expense.

Similarly, adjusted net income as referenced on page 18 increased 25% to $14.7 million, reflecting both the increase in operating income and a reduction in our effective tax rate to 33% as compared to 35% in the prior year quarter.

Page 15 of the presentation contains our balance sheet which remains strong.

On March 31 we held almost $250 million in cash and investments with virtually no debt.

Page 19 shows our free cash flow.

For the quarter we generated approximately $38 million of free cash flow compared to about $46 million in the prior year quarter.

The decrease was driven by the timing of WrestleMania, film investments and changes in working capital, including changes in the Company's tax position.

Capital expenditures for the current quarter included an infrastructure tax credit of $4.2 million.

As a result, net capital receipts of $0.4 million in the quarter compared favorably to the $1.5 million in capital spending in the first quarter last year.

Looking ahead, our objective continues to be to manage the Company efficiently while capitalizing on our growth opportunities.

We remain focused on maintaining our operating efficiency, leveraging our partnerships, including our deeper relationship NBC Universal, and continuing to create original, compelling content.

Understanding these factors reinforces our confidence that we can achieve meaningful earnings growth of 15% to 20% over the 2009-2012 period, consistent with our previously announced business outlook.

That concludes this portion of our call and I'll now turn it back to Michael.

Thank you, George.

Casey, we're ready now.

Please open the line for questions.

(Operator instructions.) We'll pause for just a moment to compile the Q&A roster.

And your first question comes from the line of Richard Ingrassia.

Thanks, good morning everybody.

Vince, you mentioned maybe WrestleMania XXVI might have not been exactly what fans were looking for.

Can you talk about any thinking so far, maybe, on what can be done, what options you have to make WrestleMania XXVII hit the mark?

Generally speaking, always look at the attraction as the reason why something is successful or not.

That's not always the answer.

I think last year one of the things that helped us was the anniversary, 25th anniversary, I think, of WrestleMania, sort of a nostalgic kind of point of view.

And again, it's like anything else in the content business, sometimes you're right on, sometimes you're not.

This was, again, a substantial contributor to profit, at the same time not exactly what we wanted.

So it's -- and the content business is one in which you're successful most of the time.

I'm not saying this was a failure, but nonetheless it didn't measure up to what we had hoped in terms of budget and not all that favorable to last year, as I mentioned, dropped down -- was down about 12%.

So again, it was a good attraction.

It wasn't a great attraction.

And sometimes you just don't give them great attractions all the time.

It's the creative process and that's the process we're in.

Okay, thanks.

And then excluding WrestleMania, average live event attendance was very strong.

I mean, it was strong there, too.

But there does appear to be some weakness, at least in the year to year comparisons on sales ancillary to the events.

I mean, if we assume the same kind economic pain at the consumer level this year, is this the pattern that we can expect, that fans will spend their WWE budget, if you will, on events and maybe show more discretion toward merchandise, magazines, video games, et cetera?

Part of this is probably due to the economy, I don't know, more than anything else.

I think when the economy improves so, too, all of our ancillaries.

I don't know if it's a direct result.

I think it really does reflect the economy more than anything else.

Okay, and just maybe a question for George on the SG&A.

Cuts went even deeper here than expected, I think.

Is this a reliable quarterly run rate for 2010 now or do you expect that to maybe inch up a bit this year?

It will inch up a bit.

I think we've talked about the annual run rate of around $30 million for SG&A.

And I think that's probably a fair target.

As I mentioned before, one of the big benefits year over year was legal expenses.

And those are things that are tough to time.

So I think it's unusually low.

Feel good about the fact that all the other areas we were able to manage.

But I think the guidance that we've given on SG&A expense is probably a better target.

Okay, thanks.

And your next question comes from the line of Michael Kupinski.

Thank you very much for taking the question.

I just want to drill a little bit more on the WrestleMania results.

How much do you think the economy had to do with the weaker WrestleMania?

I know that's a difficult question, but obviously the Phoenix market and so forth was a pretty tough market.

Do you think that the venue itself -- I just kind of want to drill to determine what the economy might have played there.

Well, contrary to the economy, Phoenix and that whole general area is very, very strong for us.

We had over 70,000 fans.

Obviously, some of that -- a lot of that comes from other parts of the country and, indeed, the world.

But we thought Phoenix as a region really out-performed, certainly, our anticipation as it relates to the economy, which speaks, I think, strongly to the attraction.

Everyone there was so cooperative in terms of pulling all of this together with everything that we did.

All of the efficiencies were there.

Again, I think everyone who had anything at all to do with the Phoenix operation should be, quite frankly, applauded.

And on -- and just a follow-up on Richard's question, too, on the domestic ticket prices.

Do you have some thought on the ticket prices heading into the second quarter?

Do you believe that the weakness that we saw there is related to the economy, or do you think it might be related to the talent and/or story lines there as well?

I think it's always a combination of things.

I mean, there's -- I don't want to use the economy as the excuse to everything, like everybody does.

My -- one of my performers many, many years ago, his name was Bobo Brazil, did not believe in excuses.

And the only form of revenue that we had at the time was live events, long before anything else.

And whenever the house did not do well, all the other members of the locker room would complain and come up with excuses.

And Bobo Brazil said, "The only reason we didn't draw tonight is because of the all night gas station," which back in those days was something that didn't exist.

So there is no excuse.

It's not just the economy.

It's the mix of everything that we have.

We're strong.

And we're not superlative at the moment.

And that's what we always strive, Michael.

Okay.

And in terms of the tax rate going forward, any thoughts on that?

Yes, we had an unusually low in the quarter, about 33% because of some Section 99 benefits.

But for the year, I think the 34% to 35% is a good proxy.

Okay, great.

Thank you so much.

And your next question comes from the line of Marla Backer.

Thank you.

I was wondering if you have any sense for repeat traffic that you get year and year out from -- amongst your fans at WrestleMania.

I mean, do you have a sense of some 20% or 35% of the people who attend try to attend on an annual basis?

I don't think, Marla -- it's Donna Goldsmith -- that we have a specific percentage to give you.

But what I can tell you is that we have a program called Travel Packages where we offer a complete program for the whole weekend and room and board, and to our fans all over the world.

As Vince was mentioning, they come from all over the world.

And we have repeat customers, repeat fans that come year over year from Australia, from New Zealand, from the United Kingdom.

And we entertain them all weekend.

We also pick their brains and use them as the research, research on our products and our events as well.

But we do know that they come year over.

And then there is for sure a group of fans that come from all over the United States as well.

But I couldn't tell you that we could give you the exact number on those.

But we are pretty sure that there are often fans that are fans that come year over year.

And having said that, it's important for us to bring new fans into our viewership and using WB is very, very important, not just repeat fans.

No, I agree.

But I guess also having the repeat fans would give you some -- as you've just indicated, some insight into what it is they're looking for.

But I'm also wondering, do you -- in the past when you've had some declines in live event attendance, one solution that you very successfully implemented was to reduce the number of live events so that it was more special each time you went to a particular market.

Do you have a sense of potential or possibly there is any WrestleMania fatigue here that we're seeing in this year's results?

First, on the first point, Marla, I think there's been a fairly consistent trend of increasing the number of live events.

So just to be clear on that.

As far as the pay-per-view specifically, we've reduced this year one of the pay-per-views versus last year, which we'll see in the second quarter.

Last we had five pay-per-views in the quarter because of the timing of WrestleMania.

This year we'll have three because of that, as well as eliminating one of the June pay-per-views.

So we only have one in June this year as opposed to two last year.

But we're always looking at those things and making sure we're providing a great attraction and value for that.

And we also look at the mix, Marla.

We'll look at where we went the year before and compare that to the year before then.

And should we be going to New York twice a year or three times a year.

Same thing for Chicago.

And we make a conscious effort of making sure that the mix is right as well as the ticket prices and the -- as Vince said before, of course, the content.

Okay, that makes a lot of sense.

And then I had a question about WWE Studios.

Can you give us a little bit more color on the project (technical difficulty) Keeper, the timing of it and if you're getting any sense for tracking.

I'm sure it's way, way premature on tracking, but have you shown it to any focus groups and any color you have?

Want me to take it?

It's Donna again, Marla.

Well, first of all, let me give you some insight to what our first three movies under this new model are going to be.

Our first movie is going to come out, as I think George mentioned, in the third quarter.

It's going to be September 10 and the movie is called Legendary.

And it's starring John Cena, our of course, superstar, as well as Patricia Clarkson and Danny Glover.

Is that the one that had been Brother's Keeper?

Was that formerly called -- ?

That's right.

That's right.

That was the working title.

It's going to be called Legendary.

And that will be coming out in the movies, as I said, September 10.

And under our new model we are going to consolidate the windows, and it will be followed by DVD in a shorter window than is typically done in the industry.

After that -- and by the way, that is going to be a global day and date DVD release.

So we are right now selling it into not only to domestic theaters and Vivendi will handle the DVD distribution, but we are also going to Cannes next week where we'll be selling it internationally as well.

From there, our movie -- our second movie is a movie called Knucklehead.

And it's starring Big Show.

I'm sorry?

It's a comedy.

It's a comedy, as Vince said.

It's starring -- it's very different than the first movie which is more of a drama and a coming of age story.

The second movie is Knucklehead, it's a comedy starting Big Show and Malora Hardin and Mark Feuerstein from Royal Pains on USA Network.

And that movie comes out October 24.

And then after that we'll be going into the 2011 year.

And our working title of our first movie is Big G.

And that is, again, it's just a working title.

And that is going to be starring Ed Harris and Amy Madigan, as well as Randy Orton has an appearance in there, our superstar, Randy Orton.

And again, just to remind you that it is a -- these are theatricals.

They are going to be promoted on all of our vehicles, from television to digital, to magazines.

And we are working with Goldwyn to get the movies out into the theater, again, followed by the DVD and the video-on-demand and the pay television as well as ultimately on free TV, again, as a global release.

And sounds very interesting, your partnership with Vivendi.

Are you seeing increased -- I think one of the strategies you had talked about was trying to increase the amount of revenue you get from the rental market.

Are you seeing that happen yet?

Well, it's -- relative to the WWE side, we're just pursuing things like Red Box and looking into that -- because the rental market in general is down.

So we are going after it in a bigger way on our business because we haven't been big in the rental business, WWE that is, up to this point.

As far as our movies go, we're just starting to have conversations with retailers who are -- they're bullish about these movies.

They're excited about them.

Not only do they feature our superstars but they feature big-time celebrity names.

So -- and the other thing, I wanted to back up for a second Marla, you did ask if we've researched these movies yet.

We have put them in front of various research groups, not WWE fans per se.

We've gone out there and talked to moviegoers.

And moms and kids and all generations are enjoying the movies.

For the first three movies that we have put in front of them, we're getting some good responses.

And when they respond that maybe there's portions they're not that bullish about, we go in and we can make some changes in our movies, certainly at the back end for the releases that are at a later date.

So I wanted to answer your question on the research as well.

And one thing you want to make reference to, the cost of these films.

Yes.

And the most important -- or one of the most important things is that you'll remember our -- when we worked with Lionsgate and with Fox we were looking at $20 million productions.

These films in the end after tax credits are about $5 million.

So the model not only is changing it up from the way we do business in movie to DVD to the other outlets, but it's also changing it up in the costs and the production -- the production costs themselves.

But the value -- the production value as you will see when you see these movies is really, really good.

And very, very strong.

And even with that decline and negative budget, you're still able to get some recognizable talent, like Amy Madigan and Ed Harris and Patricia Clarkson?

We have a wonderful team working on the West Coast for us.

Mike Pavone is our executive producer of these movies.

And he is out there and he -- not only does he know a lot of people, he's real good and he's able to get them into these good movies because they are just that.

They're good movies; they're good content.

And these people have all walked away saying they have adored working with us and with Mike Pavone, and call us back in the future.

And you're right, they're not huge dollars that are going out there.

Thank you.

And your next question comes from the line of Luke Shagets.

Thank you.

Can you talk a little bit more about the video game license and you mentioned that longer term you expect some growth here.

Do you expect that to be driven more from the benefits of the direct agreement with THQ or better sell-through of SmackDown or the ancillary titles that you mentioned such as the online game in Asia?

I think, Luke, it's a combination of a few of those things.

As George mentioned, this quarter there was some decreased sell on SmackDown versus Raw as compared to the prior year.

And some of that has to do with the fact that the older consoles, the PS2, the PSP, the Nintendo DS are selling at lower prices.

And of course, they're cataloged at this point.

And the newer game platforms, we're just not there yet.

We need to catch up on the newer platforms.

But for the future, we feel real good about it because of those things George was mentioning.

We have an online game.

We're looking at all different ways to increase the revenue from downloadable content to social networking games to iPhone games.

All of these things are in the works as well as brand extension, additional games.

The other thing I wanted to mention that you mentioned, Luke, is that we do have a new deal with THQ.

It is a long-term deal.

It allows us all to refocus because, obviously, in the past that was difficult when we were in litigation.

Now everything is settled and we move forward.

And it's a richer deal for us from the royalty standpoint.

So I feel real good, we feel real good about what the future holds for THQ.

And they were in here recently and we're talking about the future and lots of new stuff on the horizon.

In fact, in THQ's earnings call, Brian Farrell mentioned that at E3, the Electronics Entertainment Expo, they'd be announcing a new branded game for WWE when he talked about the -- our category.

So look for that because we're real excited about it.

Okay, great.

And then real quick on -- can you just give us any sort of direction on CapEx and free cash flow in 2010 relative to 2009?

Yes, for the rest of the year $8 million to $10 million for the remainder of the year is a good number.

Okay, and then in terms of free cash flow?

Would you expect it to be up or down relative to 2009?

Well, we don't give guidance on free cash.

So what we've talked about is what the -- what our 15% to 20% long-term earnings growth over a three-year period.

We talked about the CapEx guidance.

We've talked about our film spend being somewhere around $20 million to $25 million this year.

I gave you the effective tax rate.

So you'll have to make your own estimate.

But we don't give specific guidance on free cash flow.

All right, sounds good.

Thank you.

(Operator instructions.) Your next question comes from the line of Jamie Clement.

Good morning.

Hi, Jamie.

Hey, Jamie.

Two questions.

One is over the last two quarters I think five of your seven pay-per-view events you'd actually seen increases in the number of buys.

And the remaining two, there was another major pay-per-view player that had an event the night before.

I don't if that's something that you guys think has impacted the two out of seven that have been down.

But can you schedule these going forward so that you don't run into kind of the same problem?

And do you think that's had an impact on your buys?

We're not sure whether it has or not.

You're talking about two relatively different audiences completely.

The UFC audience, I guess, is what you're making reference to.

That's more of a boxing audience than it is an entertainment type of thing that we are.

Nonetheless, we don't see -- there has been some of that the night before.

And we were going forward -- from a scheduling standpoint we certainly can't control that.

But from a scheduling standpoint we don't see any at the moment night before pay-per-views with any substantial pay-per-view provider.

Okay, and just changing gears a little bit, you've mentioned doing some work evaluating whether a WWE cable network is something that would be feasible and beneficial to you all.

Is there any update on your thinking on that subject?

No, what our update on our thinking is the model is pretty much written out.

We are in the process now of knocking on doors and determining what the receptive nature of the cable providers are at the moment.

So we still are pursuing that stronger than ever, quite frankly, Jamie.

Okay, great.

Thank you very much.

Casey, are there any more questions?

There are no questions in queue at this time.

Thank you everyone.

Thank you, guys.

We appreciate you listening to the call today.

If you have any further questions, please do not hesitate to contact me, Michael Weitz, at 203-352-8642.

Thank you

This concludes today's call.

Thank you for participating.

You may now disconnect.