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Hello, everybody, and welcome to the webcast entitled WWE third quarter earnings. We have just a few announcements before we begin. If you're logged into the webcast, please note that the slides will not advance during the presentation, you will only see the title slide. Please download the full slide presentation via the download presentation button at the bottom of the webcast screen. Also at the bottom of your screen you will find a Help icon for technical assistance, an enlarge slides button, and you may ask a question at any time by typing your question into the question box located on the web interface and clicking submit. (Operator Instructions)

I will now turn the call over to Michael Weitz, Senior Vice President, Financial Planning and Investor Relations. Please go ahead, Michael.

Thank you and good morning, everyone. Welcome to our third quarter 2015 earnings conference call. Leading today's discussion are Vince McMahon, our Chairman and CEO; and George Barrios, our Chief Strategy and Financial Officer. We issued our earnings release earlier this morning and have posted the release, our earnings presentation, and other supporting materials on our website ir.corporate.wwe.com. Today's discussion will include forward-looking statements.

These forward-looking statements reflect our current views, are based on various assumptions, and are subject to risks and uncertainties disclosed in our SEC filings. Actual results may differ materially and undue reliance should not be placed on them. Additionally, the matters we will be discussing today may include non-GAAP financial measures. Reconciliation of non-GAAP to GAAP information is set forth in our earnings release and presentation, which are available on our website. Finally, as a reminder, today's conference is being recorded and the replay will be available on our website later today.

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

Good morning, everyone. As you would note, we had strong earnings growth reflecting our strategy, realizing greater value from our content. Rev growth of about 23% to $493 million through the nine months of the year. Significant international growth about 43%, which really is coming from the television rights generally speaking and some network revenue as well. The network segment revenue reached a record $146 million over the past year, obviously exceeding the range of our former annual pay-per-view revenue throughout our history. The network currently has about 1.3 million subscribers at the quarter's end, obviously a big increase from a year ago. On the network itself, we had 85 hours of original content which is obviously something that our audience clamors for.

Some of the things that we did in terms of content. Beast in the East, which was something from Japan a live show which aired here I think at 7 o'clock in the morning or something like that here in the east, as well as the NXT Takeover. Those NXT shows do extremely well for us. We did an event out of Madison Square Garden, which was viewed very heavily and accepted very well by our audience. New content coming to the network. Actually Breaking Ground is currently on the network now, a new reality series. NXT Takeover another one, this one from London coming up live with a better time slot basically for us over here as opposed to the prior one from Japan. We continue to do episodes of WWE 24 and things of that nature.

Our global distribution of our network is about to take a pretty good leap here. We plan to launch the network in Germany and Japan in January, the Indian subcontinent on November 2. So, some eminent opportunities for us as far as the connection of the network is concerned. Some other I guess maybe indications of brand strength. Over our SummerSlam weekend, SummerSlam of course was sold out as was the Raw the night after. And the day before SummerSlam, NXT which is obviously our developmental brand which has turned into a brand in and of itself thanks to Paul Levesque, my son-in-law, talking nepotism here. And I think also of note in general speaking is concerned, we have 37 new advertisers secured for our programming with NBCUniversal Upfront showing obviously a broader appeal of our brand to advertisers as well as sponsors.

Also of note is that WWE is the most viewed channel on YouTube and was the most viewed channel on YouTube in August everywhere knocking out any of the sports channels as well as BuzzFeed, Taylor Swift, and things of that nature. And that's really important for us. As well as exceeding 660 million social media engagements, ranking considerably ahead of the NFL, NBA, and other media properties as well. So, gives you some idea of the flavor of our expansion and how we're capitalizing on all of that.

And with that, I'll give it to George.

Thanks, Vince. There are several key topics which I'd like to review today. These include management discussion of our financial performance, the progress of our strategic initiatives, and our business outlook. As Vince said, our overarching objective is to distribute our content across multiple platforms and optimize the value of that content. In the third quarter, our business accomplishments and financial performance reflected the successful execution of that strategy. We believe we can continue to increase earnings from the growth of WWE Network, the escalation of TV rights fees, and continued innovation throughout our businesses. For the quarter, our financial results reflected strong business performance.

Specifically, we achieved OIBDA of $23.4 million and year-over-year revenue growth of 38% with an average of 1.173 million WWE Network paid subscribers. The quarter was highlighted by the performance of our network segment, which now generates more revenue on an annual basis than our previous pay-per-view business and provides a comparable level of profitability. The network segment generated OIBDA of $40 million on a trailing 12-month basis, which compares favorably to historic range of approximately $35 million to $40 million. The growth of WWE Network demonstrates our ability to transform our legacy pay-per-view business into a global subscription business with high growth potential.

At quarter-end WWE Network had more than 1.3 million total subscribers, which represented an increase of 79% from the third quarter of 2014. Subscriber growth was driven by the appeal of our original programming including WrestleMania and SummerSlam and our international expansion. During the quarter we premiered 85 hours of original content on WWE Network, increased the network's comprehensive on-demand library to more than 3,700 hours, and continued to broaden its global distribution. In the quarter, the network was made available in Italy and Malaysia in July and at quarter-end WWE Network had approximately 243,000 paid international subscribers. Importantly, the network's live and original content continued to drive viewer engagement.

Among the 85 hours of content that debuted during the quarter; original programs Beast in the East, NXT TakeOver: Brooklyn, Swerved, and Stone Cold Podcast were among the network's top programs. Additionally, Live from Madison Square Garden, a live event special produced in New York on October 3, became the network's most watched program to date excluding our pay-per-views. Viewer data shows that 90% of subscribers access WWE Network at least once per month while consumer research indicates that 91% of subscribers are satisfied with the experience of WWE Network. Last quarter we provided guidance that targeted a 3% to 5% increase in paid subscribers from the end of the second quarter. Paid subscriber growth exceeded this range increasing by approximately 7% and ending the quarter with just over 1.2 million.

In the fourth quarter of 2015 we expect to add approximately 90 hours original content to the network's featured programming. Exciting original content includes Breaking Ground, a reality series similar in style to HBO's Hard Knocks that chronicles what it takes to become a WWE superstar; NXT TakeOver: London, a live event special produced from Wembley Arena in the UK; as well new episodes of WWE 24 and Stone Cold Podcast. Additionally, we plan to continue to expand the network's robust on-demand library adding themed programming collections that focus on captivating periods in WWE history. To acquire and engage subscribers, we'll continue to utilize our sizable social media and digital assets. For example, in October we aired the premier episode of Breaking Ground, a network original on Facebook and YouTube to bring network content to a broader audience.

In order to increase payment options for WWE Network, earlier this month we introduced a three-month subscription card exclusively at Wal-Mart enabling a no-credit-card-required payment option. As part of our strategy to grow WWE Network, we continued to expand the global distribution. As such, we'll make the network available across the Indian subcontinent on Monday, November 2 and plan to make the network available in Germany and Japan in January 2016. We continue to develop our plans for expansion in China, Thailand, and the Philippines. Overall, we believe our strategy for attracting and retaining subscribers will facilitate the expansion of network growth and provide a global platform for deriving long-term growth.

To review our performance in the quarter, let's turn to page 7 of the presentation, which lists revenue and OIBDA contribution by business as compared to the prior year quarter. As shown, revenue increased throughout our businesses generating overall growth of 38% to $166 million. Adverse changes in foreign exchange rates reduced revenue by about $2 million, but did not have a material impact on our reported profit. For the quarter, OIBDA increased nearly $21 million driven by the increased monetization of our content, higher profits from our live events, and strong sales of our video games. Network segment OIBDA increased $15.4 million driven by the growth in network subscription revenue as well as operating efficiencies including lower marketing and customer service costs.

WWE Network generated $36.4 million in subscription revenue based on an average of approximately 1.173 million paid subscribers, which increased 62% from the prior year quarter. Pay-per-view buys of 360,000 contributed $4.5 million in revenue as three events were produced during the third quarter. Profits from the licensing of television content increased $5.9 million primarily due to the renegotiation of key distribution agreements, the largest of which became effective in the fourth quarter of 2014 and the first quarter of 2015. The revenue growth of $23 million during the quarter also reflected the production and licensing of two reality series, which are characterized by significantly lower profit margins than our in-ring programs.

Specifically, the quarter had nine additional episodes of our acclaimed original series Total Divas, which aired its fourth successful season, and a 10 episode run of Tough Enough, which premiered in June on the USA Network. Live event profits increased $2.5 million due to a 10% increase in average ticket prices in North America and the staging of six additional events in the region. Licensing profits increased $1.2 million primarily due to increased revenue from our video games. The growth derived from sales of our mobile video game Immortals, which was released earlier this year, and higher sales of downloadable content associated with our game WWE SuperCard.

Corporate and other expenses increased $5.5 million to nearly $42 million primarily due to increases in incentive compensations based on the Company's performance as well as some increased legal expenses. Net income increased $16.3 million reflecting the increase in our OIBDA results. Page 18 of the presentation contains our balance sheet. As of September 30, 2015 the Company held approximately $100 million in cash and short-term investments and currently estimates debt capacity under the Company's revolving credit facility to be approximately $178 million. Page 19 shows our free cash flow. Through the first nine months of the year we generated $16 million of free cash flow representing approximately $30 million increase from the prior year period. This growth was primarily driven by the Company's improved operating performance.

Looking back over the quarter, we continued to develop compelling new programs for the network including approximately 90 hours of original content that will debut in the fourth quarter of 2015. We also utilized our digital and social platforms to build awareness of WWE Network and overall engagement with our brands. As we continue to innovate, key brand measures remain strong. WWE was the most viewed channel on YouTube in August with more than 450 million views ranking above popular channels such as BuzzFeed and Taylor Swift. Similarly, our brands exceeded 660 million social media engagements on a year-to-date basis generating more social interactions than the NFL, NBA, and many other leading media properties.

Demonstrating this increasing commercial power of our brand, 37 new advertisers were secured for WWE programming following NBCUniversal's Upfront. As we look ahead, we're working to leverage our entrepreneurial spirit and brand strength and drive sustained earnings growth. For the fourth quarter of 2015, we expect ending paid network subscribers of approximately 1.2 million representing essentially flat results from the third quarter and an approximate increase of 50% from the end of the fourth quarter 2014. Additionally, we expect the Company's adjusted OIBDA will range from $4 million to $8 million and this performance would result in adjusted OIBDA of $62 million to $66 million for the full year. This range of financial performance is provided on an adjusted basis excluding non-recurring items which are unknown at this time.

The range of expected OIBDA results for the upcoming fourth quarter represents lower year-over-year growth than in the third quarter due primarily to the timing of some network expenses, the cycling of the renewal of our domestic TV agreement, and the performance of our home entertainment business including the recognition of a minimum guarantee in the prior year fourth quarter. On a sequential basis although our expected fourth quarter subscriber performance is expected to be comparable to that in the third quarter, we anticipate lower OIBDA results. This is due primarily to the recognition of tax credit for film and television production which normally occur in our third quarter, the seasonality in our video game business, and the timing of certain other expenses.

Over the next few years, we anticipate that the contractual escalation of television rights fees and the growth of WWE Network subscribers will be the key drivers of WWE's overall revenue growth. Our seven largest distribution agreements account for revenue that is expected to increase from $130 million in 2014 to approximately $235 million in 2018 thereby providing over $100 million of revenue growth over this period subject to only to counterparty risk. We project that WWE will realize nearly $45 million of this growth in 2015 as we've seen through the first nine months of the year. The remaining $60 million is expected to be recognized over the subsequent three years and include annual escalations over that period.

Accordingly, revenue from these agreement is expected to reach approximately $190 million in 2016. Now regarding WWE Network. Given the inherent uncertainty of this nascent and growing business, management will not provide guidance for 2016 subscriber levels at this time. However, we have evaluated other successful subscription businesses and observed a wide range of subscriber growth rates in the early stages of their development. For example, during the early stages of its development as a streaming service, Netflix's domestic paid subscribers grew at an average annual rate of 22%. Using Netflix growth as one potential benchmark, we would characterize an annual growth rate of 20% to 25% for WWE Network as incredibly strong performance.

If the average paid subscribers to WWE Network increased at a rate within this range in 2016, management currently estimates WWE's overall revenue would grow approximately 5% to 10% driven primarily by this increase in network subscribers and the escalation of the TV rights fees I previously discussed. We currently estimate that this level of revenue growth could result in 2016 adjusted OIBDA of approximately $90 million to $100 million with no other changes to our operations. However, as we believe there is a significant long-term growth opportunity for WWE in the rapidly changing media and entertainment ecosystem, we expect our approach will balance earnings growth with investment in three key areas; content, technology, and emerging markets.

Assuming investment in these areas, our 2016 adjusted OIBDA could then be in a range of approximately $70 million to $85 million. You should know that our goal with this discussion is to provide insight into management thinking as it begins its planning for 2016. You should also note that all our decisions are made through the prism of driving long-term growth and shareholder value.

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

Thank you, George. Dana, please open the line for questions.

(Operator Instruction) Eric Katz, Wells Fargo.

So I think it's a bit surprising after the Q3 sub speed that you're guiding it flat in Q4 despite launching in India and having the Survivor Series in November. Just curious what the rationale there is? And also, I think there's some confusion around the flat Q4 sub guide and then the mention of potentially strong sub growth in the neighborhood of 20% or 25% like Netflix granted that would be strong. Is there a reason for putting that growth figure out there after a flat Q4 guide?

So, I'll take the last part first. Eric, as we've talked about before, the growth of WWE Network could happen sequentially or it could happen seasonally and certainly we saw the seasonal pattern manifest itself this year where significant growth at WrestleMania are believed going to hold those subscribers throughout the year, which then grow year-over-year growth through the remainder of the year. We saw something similar at SummerSlam although at a much more scale than WrestleMania. So the concept, and we've said this before, you should think about year-over-year growth as a more important barometer than necessarily sequential growth.

To your question then on Q4 specifically, as I mentioned, SummerSlam had a little bit of a kind of a mini-WrestleMania effect where it's a super successful event not only creatively, but from attracting network subscribers and then therefore, it becomes the attrition on those subscribers manifest themselves. Filling that in with new gross adds, we think flat is probably the right number to expect for Q4 2014. But the 20% to 25% if we're able to achieve that and again that wasn't the guidance, that was just an example using Netflix's data, but if we're able to achieve that, one way to get there would be through that kind of seasonal growth that we mentioned where we would see growth year-over-year next year of that amount.

Okay. And then just trying to get a gauge on how we should model OIBDA for 2016 based on your comments around investments. So what would dictate your investment spend for 2016? Are these investments that would happen regardless of the subscriber growth rates or are there certain benchmarks you like to hit before spending that money? And also, do you think this is necessary for subscribers?

I mean this is kind of high level. If you look at trailing 12-month revenue of around $633 million, just to use kind of some basic math, 5% to 10% let's say that's $50 million of revenue growth. As you know, we've got really terrific unit economics because we have high operating leverage. So, our unit profit on that $50 million would probably somewhere around $35 million or $40 million. That leaves the big fixed cost base that we have, which is around $430 million, $440 million. You have small growth there that takes about $10 million, $12 million off of the profitability.

So you're left then with about $25 million, maybe $30 million of incremental OIBDA and that's how we could get to $90 million to $100 million with the revenue growth I mentioned. What we're trying to balance is how much of that growth flows down to earning and we expect to deliver that and then how much do we invest in technology, in emerging markets like China and India, in new content that we think then drive future revenue and profit growth. So, that's the balance. As far as when the investment happens, it's a good question. Obviously, we're not going to know about the subscriber growth until we get through the year and in some cases we'll make those investments earlier than the beginning of the year. So, it will be a balance as far as timing.

And just to be clear and then the final question here is are these investments necessary for growth on subscribers or is this sort of a long-term game you're playing because now you have confidence in the trends? Thank you.

It's not just in the network, but the answer is more for long term. If you said to me, do I think I could still grow subscribers without making the investments I mentioned, probably. But what we found is for example, investments in content aren't just beneficial in the current year we believe. We believe it creates an asset because we see the consumption of the VoD on WWE Network so that has a long tail in terms of value creation, which is why we would do it. So, do we think we need to make those investments for 2016? No, we don't think we need to. But we think by making them, they help in 2017 and beyond.

Thank you.

John Blackledge, Cowen and Company.

First, could you discuss the churn characteristics of the network and perhaps how rising new original content and additional library content on the network could reduce churn over time for the network? Could you also talk about potentially different price tiers, is that a possibility down the road? And last question is we heard Netflix talk about credit card chip transition issues impacting sub growth in the third quarter. Just wanted to get your thought in 3Q or if you're seeing it in 4Q. Thank you.

The chip card, obviously the data doesn't get to that granular level, but certainly we didn't see anything in the churn numbers that we would say look abnormal given our more recent performance. So the short answer to the chip question is no, we don't think that had any impact. In terms of the churn characteristics, one of the things we've talked about obviously is we're changing two behaviors in our audience. For people who use to buy pay-per-views, we're changing the behavior of coming in and out and selecting which pay-per-views they wanted to watch because of the high price point.

And for those members of our audience, even really passionate fans, the non-pay-per-view buyers is getting them into the habit of now feeling like they can enjoy our best content as well a whole lot more for a really great price of $9.99. So, those are the two key behaviors that we hope to change over time. We mentioned before if you look over the quarter average churn was around 10%, we want to lower that number as anybody with a subscription business always want to lower the churn number. And as you mentioned, our thesis is that over the long term as we continue to add content to WWE Network that that will be one of the drivers that brings that churn down.

So, that's why we're doing what we're doing there and we do think it's a long-term play because the content has a long tail of value, it's not just in the current year. And then on the price tiers, we like the simplified $9.99 price. We think that's easy to message, it's easy to understand. I think if you look at like for example Netflix when they first started, they kind of stayed with one price. Obviously it's five years in now, they have a few price points. So if you said is it possible that ultimately we'll have different versions of the network with different pricing tiers, it could be. But as of right now, our plans are really focused on that one price point, simple message. We think it's the best value in entertainment around the world.

Thanks, George.

Laura Martin, Needham.

So Vince, one of the things that you guys have now is really great data about what your consumers are watching on the over-the-top network and our channel checks would suggest that the big surprise is that 75% of viewing is the library and another 15% is sort of your events so only 10% is of the 85 hours of new programming. So the question I have in your mind is return on invested capital because you probably can't do it for less than $100,000 and you guys are high quality producers so I guess somewhere between $10 million and $20 million was spent on that 85 hours in the quarter. And if only 10% of the viewing is there, is there some point in your mind where you say you know what, let's cut back on this original content because it's really not garnering the viewing that we had hoped for. So, do you think about return on capital? That's my first question.

We always look at our data and we're getting more and more data as we progress in time naturally through the network. I think as George just mentioned, there is a long tail with a lot of our programming. So when you look at percentages, it's sort of misleading in that you need to be able to drive viewers and subscribers in terms of a current live event, it brings more and more subscribers to the network. Once you're in it, it's so deep that yes, once you're in it you go into all sorts of VoD stuff. So again, it's important to continue that extraordinary live event current programming, which garners all these other numbers as well. But you need to have all of that and a reason why you come to the network and subscribe and again the new live event programming provides that.

Laura, just on the $10 million to $20 million you mentioned. Obviously looking at the numbers, the network segment had about $23 million in total expenses so it's impossible for us to have spent $10 million to $20 million, anywhere near that $20 million number obviously on just programming.

Okay. My next question is on YouTube. So we're hearing that YouTube has forced every single one of its channels into Red, which is their subscription service and you guys were just sort of throwing accolades at YouTube. Could you talk about strategically how you think of WWE because it feels to me like it's going to drive value of Red and give too much value to YouTube for the money you're getting back for that. So, could you talk about the transition to sort of channel pay over on YouTube?

As you kind of rightly mentioned, what's been in the media is that if you're going to be on YouTube, you also have to be available on the pay tier so publishers like WWE are going to either get compensated on a rev-share basis for the free product and then on a rev-share basis for the subscription product because the basis of the rev-share is different, one [DAD] and the other ones are subscription revenue.

Vince mentioned it before, strategically we view YouTube as a phenomenal asset globally not unlike if you look at WWE's history of using TV distribution early cable for example here in the US to grow the brand, engage on this broadly distributed medium.

That's the way we view social media including YouTube. It's a place where people go to consume content, especially millennial and trailing millennial. So we're going to win there, we're going to get our unfair share of that viewership. I think your point about there is a balancing act of what content goes where. And again, we pioneered the concept of tiering content when we created pay-per-view. We are doing the same thing today. So if you look at YouTube and Facebook, primarily you see us as uploading short clips of our shows or short form original content and then you see our fans creating their own content.

Again, all of that creates what we think is a virtual circle. Then you watch our core programming Raw and SmackDown live 52 weeks a year today lives in the pay-TV ecosystem because we think that's the best place for it globally. And then you've got a global subscription network with our prime content, new content, and access to our vast video-on-demand library. So, I think the real question is that balancing act of which content goes where as opposed to saying I'm not going to put content out there and that's something that we'll continue to evolve. It's probably one of the biggest discussions we're always having internally.

Last question on ad share. Can you talk about ad revenue on the over-the-top network, what's going on with advertising?

Obviously in the world of direct-to-consumer, it's still early days generally and perhaps advertising even more so. So, we run advertising on the network. It's got a really, really light touch and I know you're a user of the network so you've probably seen that. So at this point, I would say we're experimenting. We think there's a brand who have chosen to avail themselves, have found it really intriguing, but today it's got a really light touch and we'll learn as we go.

Thank you.

Brandon Ross, BTIG.

When you gave your 2016 guidance, I know you didn't give subscriber guidance, but you used Netflix as a barometer to speak to sub growth of 20% to 25%. But back in 2012 and 2013 Netflix's domestic subscribers grew 25% in 2012 and 23% in 2013. You're also an international business and international seems to be growing a lot faster than domestic. So, why would you not think about higher than 20% to 25% growth for next year especially with new markets to come internationally?

So the first point is yes, the numbers we quoted for Netflix were only their domestic because we think that's the best apples-to-apples given that the way they launch internationally is they stagger their markets pretty significantly as opposed to us, which essentially after six months we are broadly available. So, we think we have less of that kind of comp issue or same-store sale issue. So, we think the right view is international versus domestic. To your point about the faster growth rate internationally, look it's early days. As mentioned, we're not ready to talk about 2016 subscriber levels. But what we have done is looked at just about every subscription business that exists not just video and looked at their early years and we think Netflix has done an amazing job and if we could kind of be in that range, we would consider it a home run for ourselves even with some of the issues you mentioned about international distribution and so on and that's the way we view the world today.

Okay. And then on the short form and digital video, obviously you've built a really significant presence on YouTube and Facebook and that's helping you to build and retain your audience of WWE fans. How do you think about the possibility of incremental monetization from these channels over time? Do you think digital could be a real earnings contributor?

Obviously if you look at what we do on YouTube today, it's gone from low six figures a few years ago to mid-seven figures today. So still significantly below the monetization on traditional pay-TV or WWE Network, but a 10x increase over the last few years. The media and entertainment ecosystem is changing rapidly and every day and Brandon, you know this better than any, you have people in the ecosystem with completely different views of the world; where they should put content, who they should partner with. So, our view is we're not smart enough to guess where all of this is going, but if we own all the platforms and if we're winning on YouTube and if we're winning on Facebook and if we're winning in pay-TV and if we're winning on direct-to-consumer, then we'll be able to choose depending on how those ecosystems develop and where the money goes. I will say historically wherever the eyeballs have gone, the money has eventually followed and there is no doubt there are a lot of eyeballs on social media, especially if you're under 35. So, that's the way we look at it.

And then one more on the rating side for RAW and SmackDown, ratings are down year-over-year. We saw that for Q3. Do you think this is secular or do you think it's a content issue, a mixture? And what steps are you taking in that area to improve ratings?

It's tied back to your other question. When we think about our brand, we don't about one metric in isolation like ratings. We think about all of them together so that's why we talk about social media engagements not just followers, YouTube video views, TV ratings. So we feel when you put all that together, we're bigger and more engaging with our audience globally than ever before. But you're right, we don't like to be down anywhere. We're down year-to-date. But back to your question is it cyclical or secular, hard to tell.

We certainly think the content is great and our fans are enjoying it, but we do look at the totality of all those metrics as opposed to just one because I think it just reflects the reality of the way people are consuming content. Now like I said before, we want to win in each ecosystem we play so we don't like being down. We're working like hell to change that, but it's important to us that we're beating everybody else. And we feel like we're doing really, really well in the domestic pay-TV ecosystem compared to everyone else.

And how do your ratings compare to USA's overall ratings?

The rating performance for WWE programming is significantly better than the overall USA ratings and also SyFy ratings for SmackDown.

Great. Thank you.

Daniel Moore, CJS Securities.

George, how many international paid subs do you expect to have at year-end in that 1.2 million figure?

We're not going to give guidance on individual elements of the subscriber level, Dan. I think you should be happy we're giving you quarterly guidance. So at this point, we're going to stay away from kind of trying to segment that any further. But as you know, we've been around 19% or 20% of total subs within international.

And just wanted to circle back the discussion on churn, network's been up for 18 months now. What insights can you elaborate or expand on that you've gained in terms of tangible steps that you are taking or considering taking to try and mitigate churn as we go forward?

Like I said, I think a lot of it is time and I know some people don't like that answer because they feel like it's uncontrolled. But I think there is an element of time of changing that behavior. We have built the behavior for 30 years that we need to change in both groups, both the non-pay-per-view buying band and the pay-per-view buying band so I think that's time. And then if you said to me all right, what are the things you can control, it's what we always talk about. We want to make the content great, the pay-per-views as well as the new content. We want to increase the amount of VoD because we know our fans enjoy exploring kind of WWE history. We want to keep making the service better from a UX, UI, and functionality standpoint so we continue to invest there. So for me our ability to reduce that over the long term is going to be the content and the experience.

And lastly, you provided a ton of color on the call and it's appreciated. Any more you're willing to share with regard to the incremental investments; be it in talent, be it in content, in new shows; just any more granularity on the potential incremental investment in 2016 would be appreciated?

First of all, it will probably manifest itself in multiple segments on the content side, probably primarily in the network segment. As you know, international and a lot of our analytics and technology fall in the kind of corporate and other so I'd call that not the traditional corporate function, but more of the forward-leaning corporate function. So, you see some manifest there. So it will be throughout the segments, but I think those two especially. And look, I'll just reiterate what I said in the answering I think it was Eric's question earlier. The reason we are investing in emerging markets is because we have a great business in India and we think there is a super long tailwind there for us and we want to again get our unfair share of attention in India and more and more because of what's happening in China, that has gotten a significant amount of attention from us over the last six months. So, we're really excited there.

We're going to invest in China in 2016. On the technology standpoint, a lot of questions from different people today on the data, on your viewership data, on advertising. At the end of the day, direct-to-consumer we want to be able to avail ourselves not only in subscription, but there is an ad-supported model as well, as well as continue to learn more what our consumers are doing across all our platforms. So, we're going to invest on the technology stack side more than we've ever done at WWE and we're excited about that. So, that's why we're doing it. And like I said in the prepared remarks, every dollar of investment we're expecting has a multiple on the revenue side and because of our high operating leverage, therefore a significant return on investment. We are really, really thoughtful about where we put our investments, why we're doing it, and what we think the long-term opportunity is.

Now, you gave a ton of color and appreciate the additional insight in sort of getting ahead of the curve for 2016. So, thank you and good luck.

Jamie Clement, Macquarie.

George, I'm trying to understand your unit economics a little bit better with respect to growth in 2016 from 2015, which obviously should be a function of contractual escalations in TV rights and an increase in subs. So given the Netflix example that you used and I think you actually said a number of about $50 million in incremental revenue and then sort of call it $35 million to $40 million in incremental OIBDA, to me 70% to 80% incremental margin on that kind of revenue that actually seems low to me. Am I missing something?

So when I use the 70% or 80%, obviously we have a portfolio of businesses and they all have different unit economics for the most part all pretty high. But to your point, the escalation on the TV right fees are closer to 95%. The network actually sits in that 70% to 80% unit economic level, but the $50 million in revenue was across the portfolio of businesses. So, that's where you get that.

Okay. And then changing to potential spending that you may see next year that gets you from that theoretical $90 million to $100 million of OIBDA down to $70 million to $85 million. Considering that new content is obviously an emphasis here and that's by and large capitalized, I'm having a hard time getting my arms around that big of an incremental number. And I guess the question B there is I mean presumably the useful life of new content that you're putting on the network is virtually infinite. So, over what time period are you expensing that?

You're right it gets capitalized, but for the most part it gets expensed pretty quickly. So, the only time you'd have something on the balance sheet is usually around year-end where you're producing something that's going to air in the next period, which is the following year so it doesn't sit on the balance sheet for long. As opposed to for example our film business where there can be a long delay between the production and the release, on the network side it usually happens pretty quickly. And then our recognition of the expense is we're not building ultimates for the content, Jamie, to your point about a long lived asset so we're in essence expensing it on first air. So if we create a series and it costs $1 million and there's 10 episodes that's $100,000 a episode; as each episode airs, we expense the full $100,000.

Okay. Because I think that's an important point of differentiation between how you are recognizing costs and expenses versus how some other people might be that are out there. It seems like what you are doing is actually the most conservative way of doing it.

It is the most conservative and it's why to your point the balance sheet reflects that because you don't see a big liability on the content side of it.

And then last question, if I may, any update on the Tapout brand and some expectations for 2016 in terms of the kinds of products we might be seeing out there?

It sounds like you're a fan of the Tapout brand. So, we're not going to make any news today. We're really excited about that. We think it's a great opportunity and stay tuned and I'll tell you what, I'll save you a couple items just for you.

Thanks very much.

(Operator Instructions) Mike Hickey, The Benchmark Company.

Congratulations on another very strong quarter. I guess briefly if you could provide some insight on your WWE audience in (inaudible) Germany, that would be helpful. And any timing framework around possible network launch for China and your audience there? George, I believe you just noted that you plan to invest in the region in 2016. So I don't know if that is sort of a signpost for a possible launch or not.

On Germany specifically as you know, Mike, probably about 18 months now that we have been in partnership with both ProSieben and TELE 5. So I think those partnerships are growing, are doing great, and we're really excited about what that means for the audience because it's the first time in a long time that we've been broadly distributed in Germany. We were on pretty narrowly distributed pay-TV platform up until those agreements. And the reason for that you may or may not know, the German pay-TV market is somewhat of an anomaly compared to other developed western economies. Obviously Germany is the largest economy in Europe, but the ARPU in pay-TV is significantly lower than what you see for example in the UK or the US.

Probably it's about 20% or 25% of the corresponding ARPU in the UK and the US. So in short, German audiences don't pay for TV content. So as far as the network and direct-to-consumer we'll see, that's also fairly nascent so we're really excited to launch it, to make it available in January. Obviously not going to give any numbers there, but we're really happy about what the partnership with TELE 5 and ProSieben have meant for us in Germany. As far as China, as again you guys know we've been in China since 2007. As we've said before, we took a strategy that we thought was the right one at the time of distributing our content on local TV stations primarily to build up the audience. Obviously China is a dynamic market.

The most recent five-year plan in China has a specific focus on sports and entertainment generally or in other words, the country investing in those areas and then if you're watching the marketplace there for media and entertainment, you've seen a tremendous amount of activity over the last 12 months. A few of us were recently there and heard more than once there's probably been more changes in the media and entertainment ecosystem over the last 12 months than in the previous 20 years and a lot of it is being driven by the large digital players. So because the facts on the ground are changing, our stance is going to change. We've had an office in Shanghai for some time, we're going to increase the level of investment of the number of people we have on the ground in China, and we're going to take it from there.

Last question, I'm sort of wondering why you believe NXT has become so successful and sort of what opportunities do you think to sort of developed a the sort of sub brand there, maybe even challenges or perhaps you don't want to talk about that, but what opportunities it can sort of provide to your main programming? And I would imagine there's sort of a balance there between generating too much excitement for NXT and attention that is versus sort of what you're doing on the main stage, but any help there would be appreciated. Thank you.

We've talked a lot. There've been a lot of questions today about how we think about YouTube and Facebook. I think NXT is a great example of the power of those platforms and more importantly, our ability to engage our fans on those platforms more than just being there, you've got to be able to engage them. And we attribute a lot of the growth of NXT and its vibrancy to social media. So the fact that it's available in the States on a subscription video-on-demand network that has 1.3 million subscribers but you can still sell out an arena like the Barclays Center, to us that is the power of social media. So, we're really excited about that. As far as competing with RAW or SmackDown, that doesn't ever enter our mind at all. There is an endless appetite to be entertained in the world and different people like different things. So I think if you went to an NXT show, you'd have the answer to your own question. It's got a different vibe, different feel, the audience is a little bit different. So, we're not worried at all about the quote-unquote competition.

Thanks, guys. Best of luck.

And that does conclude our question-and-answer session. Gentlemen, I'll turn the call back to you for any additional or closing remarks.

Thank you, everyone. We do appreciate you listening to the call today. If you have any questions, please don't hesitate to contact me, Michael Weitz or Laura Kiernan, 203-352-8600. Thank you.

Thank you. And that does conclude today's conference. Thank you for participation.