Q1 2022 World Wrestling Entertainment Inc Earnings Call

[music].

Please standby as we were about to begin.

Yes.

Hello, and welcome to WWE East first quarter earnings call. This call is being recorded.

We have just a few announcements before we begin first please use the question Mark icon in the upper right hand corner of your web console for technical assistance.

The option to enlarge slides is located to the right on your slides with the four arrows pointing in different directions, if you're listening through a phone line you may ask a question verbally by pressing Star then one.

On your Touchtone phone, if you wish to be removed from the queue. Please press star two I will now turn the call over to Seth Zaslow SVP and head of Investor Relations. Please go ahead Sir.

Thank you and good afternoon, everyone. Welcome to WWE first quarter of 2022 earnings Conference call, leading today's discussion are Vince Mcmahon WWE as chairman and CEO , Nick on WWE, as President and Chief revenue Officer.

And WWE, Chief brand Officer, and Frank Riddick, WWE, Chief financial and administrative officer.

Their remarks will be followed by a Q&A session.

We issued our earnings release about an hour ago and have posted the release our earnings presentation and other supporting materials on our website.

Today's discussion will include forward looking statements. These 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.

Additionally, the matters, we will be discussing today may include non-GAAP financial measures reconciliations of non-GAAP to GAAP information are provided in our earnings release and presentation, which are available on our website.

Finally, as a reminder, today's conference call is being recorded and a replay will be available on our website.

With that I would now like to turn the call over to Vince.

Good afternoon, everyone. Thanks for joining us.

Okay.

You know we have forward.

Our record performance in.

In 2021 and momentum seems to be carrying on very well in the 2022, we've got a really good strong start delivering record.

Actual results.

Obviously.

So actually strong performance across pretty much all lines of businesses.

A couple of notable achievements.

Yeah.

No organization Stupendous Cross media.

In addition to other successful premium live events, including elimination Chamber Royal Rumble on day one.

We also announced an expanded partnership with <unk> to produce original programming.

We completed a modest media rights agreement with media region.

Jeff will provide further perspective.

Our operations and Frank Sinatra.

Production performance in more detail.

I think we're pleased with how the business is currently performing in a position.

We believes our creativity.

It was to continue to drive growth and driving towards shareholders.

Nick.

Thanks, very much Vince and thank you everyone for joining us on today's call. We're pleased with the results for the quarter and we're confident the companys momentum is strong coming out of Russell maintenance 38.

To start with I want to share with you. Some information on Wrestlemania is performance across various lines of business.

In terms of viewership. This wrestlemania was the most viewed event in our company's history.

Both domestically and globally.

On this that affirm the strategics that we made over a year ago. The partnering with a widely distributed streaming service will drive new eyeballs to WWE.

This success comes as the increasingly cluttered streaming marketplace.

Subscriber numbers begin to slow and in some instances, even full and viewership stagnate.

Not for WWE to put it into context in 2021 Wrestlemania is first euro Peacock, we saw 15% increase in viewership from 2020, which was the last Wrestlemania to air in the U S on WWE network.

This momentum continued into 2022, where this past month at Wrestlemania 38, we saw a 61% increase from 2021.

We also doubled WWE viewership in total on Peacock over the past Russell media weekend compared to the year prior.

Massive year over year growth as you can see we did not hit a ceiling after our first year on Peacock.

Wrestlemania weekend, nearly one third of all Peacock accounts view WWE content.

In fact, Wrestlemania 38 was the second most watched live event in the history of Peacock behind only this year's Super Bowl.

What this tells US is that we are reaching new fans on our service and growing WWE audience with the growth of Peacock alongside the existing robust partnerships and viewership on USA with raw and Fox with Smackdown.

As we're all hurting Comcast earnings report last week.

<unk> increased its pace up by 40% in Q1 alone.

Peacock continues to grow its user base and in turn those users continue to sample WWE content. We are confident these viewership numbers when we continued to grow.

Our viewership records were not limited to the United States.

Staggering 56 million viewers watch Wrestlemania in India through Sony Sports Network.

The number of showcases our incredible reach in the region in total we saw a 54% global viewership increase over 2021.

That increase is a credit to the content and so the recent distribution deals we've done globally that gets WWE network on more widely distributed services and international markets.

Wrestlemania 38 was also the most attended and highest grossing live event in WWE history, drawing in over 156000 fans from all 50 states and from 53 different countries.

Next year's Wrestlemania is taking place over two nights at <unk> Stadium in Los Angeles. Our goal is the top of the strong 2022 numbers.

Heading into this year's Wrestlemania, we wanted to expand offerings to our fans and provide more opportunities for them to interact with our product and our superstars for.

For the first time, we expanded WWE superstore access to five days and invested in building out enhanced Activations and live event programming at access. This included interactive exhibit on the 30 year history of the Undertaker and announcements where fans could call their own WWE match.

And over a dozen panels with superstars investment helped to drive the highest wrestlemania merchandise sales in WWE history.

For us to build on these onsite opportunities in the future.

Steph will speak shortly on the record setting performance on the sponsorship front for Wrestlemania we saw success across the board.

Beyond Wrestlemania during the quarter, we continued to identify new revenue streams and build on past success nowhere was that more evident than our international business in March we finalized and signed a deal with the NBC group to make it the home of WWE and the Middle East North Africa region.

NBC group as a market leader in the region and we followed what we believe to be a successful model here in the U S are partnering with an entity that showcases our product of free to air and on its Escalade service, we expect to see substantial growth in the Mena region, as well, which should increase our already robust live events.

<unk> in that region.

Speaking of which that NBC deal came on the heels of our February premium live events elimination Chamber a sold out show from the Superdome in Jeddah.

In terms of viewership the show saw 41% increase domestically and a 42% increase internationally over our last show in the region, which continues a viewership growth that we've all been seen for our premium live events.

Look for more news to come on plans for another Saudi event to take place later this calendar year.

Looking ahead, we announced last month that we'll be staging of September premium live event and part of Wales at Principality Stadium. It's the first major WWE stadium event to be held in the U K in 30 years, we're seeing that there is clearly pent up demand and excitement locally with over 85000 pre registrations.

For tickets significantly surpassing our own internal projections. These tickets go on sale may 20th and we believe they'll go quickly.

According to <unk> Dot com, 95% of all hotel rooms, and corridors are now booked for our part D.

Turning back to domestic business during the quarter, we continue to cultivate new revenue streams for the company and drive more value from existing lines of business and.

In February we announced on location as our first ever third party hospitality provider for our premium live events.

Location is the Premier live event hospitality business working with the NFL, the NCAA and the Olympics.

We will design individuals' experiences around all of our domestic premium live events, starting with helping us sell in Chicago on Sunday June 1st.

These unique experiences our new offerings for our company look.

Look for more of these activations at our biggest events for the rest of the year and beyond.

In March we announced the partnership with fanatics as part of the relationship fanatics will develop and manage all online WWE merchandize sales.

Coming off a record setting Wrestlemania merchandise, we can we believe that there will be further growth for all of our merchandise with diplomat X partnership which will launch this summer.

Finally, we continue to focus on developing original programming seeing its value as a revenue driver marketing tool and pathway to deepen relationships with additional media partners.

Following up on the success of last year's A&D shows biography WWE legends at most wanted treasuries, we extended the deal with Andy for 35, new episodes of biography and 24, new episodes of most wanted treasures and.

A number of things first Netflix is willing to make adjustments and reverse positions when did identify as an issue a few years ago Netflix put out on social that it was okay with password sharing amongst users obviously that has changed.

As recently as 2021 Netflix is most senior executives said, there would not be an AD product on Netflix.

Quote from the Netflix, earning call earnings called just a year ago are fundamental product is on demand in advertising free sports tends to be live and packed with advertising. So there's not a lot of synergies in that way.

As we had mentioned on our last earnings call. It's just a matter of time before Netflix goes with live nothing commands a higher cpm's alive and.

And nothing offers the leverage to command broader buys.

Let's talk Apple TV plus.

It is prolonged entry into the sports based came together in actuality this past quarter. The company began exploring sports rights back in June of 2020 since that time, they've come to the table for a number of rights deals negotiation.

There was an aggressive pursuit of the NHL last year.

They have now landed their first package with an exclusive collection of regular season MLB games.

That are streaming on Friday nights, we're all hearing about the possible movement of NFL Sunday ticket at a record price, that's all see where that lands with Apple now being a real player in the life space.

Let's talk to Amazon.

First tested live in the UK with tenants. Amazon then went bold with getting the exclusive NFL Thursday night game package in the U S and by accelerating the start date of that deal by a year to this september's nfl's season.

Pay big dollars for <unk> talent and production to make sure that their first big massive rights deal has the best chance to resonate.

<unk> also announced a smaller MMA deal last week, which we found interesting as well.

All of these moves towards more live programming on streaming is yet another sign that all of these traditional and your tech companies will be pursuing more live with both sports and entertainment.

Disney plus made moves on this front during the quarter and doing its first live telecast announcing the Oscar nominations on streaming exclusively and by announcing that dancing with the stars alive program will go exclusively to streaming this fall.

Hulu already in the lives space with ESPN plus simulcast of NHL.

Extreme that's first lives special this month with the Red Bull event.

And Amazon to experimented with live programming beyond sports with it's airing of the American country Music Awards, a month and a half ago.

Is all of these out outlets ramp up their investment and live with our sports or entertainment WWE is uniquely suited as these sports entertainment property.

Phil multiple programming needs, we're seeing the success with Peacock and we're confident of robust writes marketplace will be attracted to that success as well with that Ah hand, the call over to stuff.

Thank you in addition to the record viewership and sounds for Wrestlemania that Nicking things spelled Q, we would be remiss not to reiterate that Wrestlemania beat the superbowl in terms of our reach across digital and social media with 2.2 billion impressions 1.1 billion videos is 87 million engagements and <unk>.

2.1 million hours of video watch screen.

Wrestlemania also reached a new record for sponsorship Avenue at more than $10 million, which is a 50% increase here over a year and a 47% increase over our previous record from 2020.

For the first time in Wrestlemania history, we had to presenting partners and Snickers and Tok, which incorporated a fund social campaign around who the presenting partner really was that was highlighted an athlete.

<unk> WWE increase sales in sponsorship revenue, 34% year over year in the first quarter.

Throughout this time period, we brought on nine new partners, including Toyota Mike's hard lemonade.

Dash, Rihanna Fenty beauty and rocket mortgage.

More and more brands are looking for meaningful integration not what is referred to as a love those laps and WWE is the perfect vehicle that seamlessly incorporate partners into our content across platforms Toyota in partnership with Fox utilize that were augmented reality technology to bring the tundra to life inside the arena on Smackdown.

We also created customized commercials with our in house production studio, starting WWE Superstars Ric booths in Shinskie Nakamura as they took their tundra off roading to surf hike mountain bike and kayak.

Dash became our first ever legacy partner for Wrestlemania matching donations to five local non-profit businesses in Dallas and Fenty beauty is utilizing Bianca Bel air social reach to launch a new lipstick line across Youtube and Instagram.

Innovation and interactivity are critical to the success of any media property. We were extremely pleased with the relaunch of our premium video game console franchise WWE two K.

After taking a little more than a year off to improve the game engine. We work hand in glove with our partners. It take two interactive listen to our customers and fans and earned back their trust by delivering a game that exceeded their expectations WWE. Two K 22 was a commercial and critical success with the highest Metacritic score.

On both X box and Playstation platforms in franchise history with over 5.6 million hours viewed on Twitch to date.

We continue to see strength in the performance of our mobile games with two K and scope Lee Supercard and champions and recently signed a new deal and the roleplaying games base that will be announced soon.

We also continue to evaluate the metaverse, both walled garden environments that already exist as well as decentralized properties look to hear more in the coming months.

Gaming is a priority for WWE to reach our next gen audience with over 80% of Wwe's audience self identifying as gamers.

And nearly 60% of the gaming audience in general being 34 years or younger.

We are only targeting the next generation of WWE fans. We're also targeting the next generation of WWE superstars.

In partnership with the Cowboys that their headquarters in state of the Art training facility. The Star. We recently held the first ever all college tryout with over 50 student athletes from 40 universities.

We hired 15 of those athletes eight men and seven women with the average age of 23.

This is in addition to the NIH program, we launched in December which we highlighted on our last earnings call feature an Olympic gold medalist and two time N C. Double a champion cable Steven who made two appearances at Wrestlemania we will be announcing our second class soon.

Pop culture also continues to help us reach a much wider audience Logan Paul's appearance at Wrestlemania garnered over 143 million impressions 119 million video views and 15 million engagements.

The Undertaker drove the pace car for the Daytona 500 run around the promoted Wrestlemania on Allen and Roman rains was invited back to the Tonight show starring Jimmy Fallon.

Gotcha banks and Xavier Woods were nominated for Nickelodeon Kids Choice Awards, and this past weekend for N F. L franchises invited WWE superstars to announce draft picks for their teams with the MS. Titus O'neill, Barry Corbin and gable Stevenson participating in Friday's national telecast across ESPN and <unk>.

F L network.

We feel confident about our ability to continue to strengthen WWE brand and grow our audience, which should result in incremental revenue opportunities across all of our lines of business and increase long term value for our shareholders and now I'll turn the call over to our CFO Frank Riddick.

Thank you Stephanie.

Several key topics.

These include discussion of our financial performance progress of key initiatives and our business outlook.

Vince highlighted 2022 is off to a strong start.

In the first quarter, we generated record quarterly revenue of $333 million.

Quarterly adjusted OIBDA.

$112 million, which exceeded the high end of our guidance.

Increased 33%, primarily due to higher revenue and profit.

Onto a full schedule a wide events.

A large scale international events.

The growth in revenue and profit was partially offset by the absence of one time upfront revenue recognition.

W. W use licensing.

Our performance in the first quarter places is firmly on track to meet our full year outlook I'll touch on the outlook for the second quarter and full year in more detail later on March.

During the first quarter, we had a strong strong performance across each of our business segments.

On page four of our presentation, we detail our business performance in the court shows revenue operating in Palmer.

Contribution by segment as compared to the prior year quarter.

Looking at our media segment on page five adjusted increased 20% or 15% revenue growth.

The most notable item driving the results was the contribution of our large scale international event elimination chamber.

Network revenue decrease due to the one time upfront revenue recognition in the prior year period related to the delivery of certain WWE network intellectual property rights to Peacock.

Excluding the impact of this one time item network revenue increase due to higher domestic network revenues related to the transition to the Peacock service.

Core content rights fees increased modestly Mister contractual escalation of rights fees from the distribution of our flagship shows raw and Smackdown was partially offset by the timing of events in the quarter.

Specifically, we had one fewer episodes Smackdown in Q1, 2022 as compared to Q1 2021.

The growth in revenue was partially offset by higher operating expenses.

The increase in expenses was primarily related to our large scale international events.

Vision production costs for a weekly entering content raw Smackdown decreased.

A reminder, we produced this content.

W.

In the field in the prior year period, which was more expensive than our regulatory scheme.

Now, let's turn to her alive and it's business as shown on page six of our presentation.

From our live events improved seven $1 million based on a $2.6 million increase in revenue.

Return to live in Ventura during.

During the first quarter, we continued to experience strong demand for our lives.

We have 52 events in North America with average attendance up nicely from the fourth quarter.

And our consumer product segment page seven of our presentation, adjusted OIBDA increased 78% or $5.2 million with the growth primarily attributable to our franchise video games.

22, which is Stephanie discussed was released in March and has had record performance for the franchise.

Then you merchandise revenue increased while sales sales of our merchandise on R. E Commerce site WWE sharp decline in part due to a tough comparison to elevated COVID-19 related sales in the prior year quarter.

Now, let's charge a deadly disease capital structure is shown on slide eight of the presentation.

And the first quarter, we converted 66% of our adjusted into free cash flow.

Generated $74 million in free cash flow as compared to $54 million in the prior year period.

The increase was due to higher operating performance as well as favorable working capital most notably the timing of collections associated with license fees, partially offset by an increase in management's incentive compensation payments and capital expenditures.

In the first quarter, we incurred $21 million of capital expenditures 13 million of which related to our new headquarters facility.

Excluding the new HQ Capex free cash flow would've been $87 million in the quarter or a conversion rate of 78%.

During the quarter, we returned $39 million capital to shareholders, including $30 million in share repurchases and $9 million in dividends paid.

The date, we repurchased approximately $5 2 million shares for $279 million and have $221 million available under our $500 million repurchase program authorization.

As of March 31, 2022, WWE held approximately $448 million in cash and short term investments that totaled $235 million, including $213 million associated with the carrying value of our convertible notes, we have no amounts outstanding under our $200 million revolving line of credit.

Our current and projected liquidity remains strong and we're currently evaluating our capital structure in financing strategy.

Looking ahead or not changing our outlook for the full year adjusting this.

Time, we continue to target arrange a $360 million to $375 million, which is up 10% to 15% from 2021.

As we discussed on our last Hauntings call. This range reflects our projection for record revenue with growth driven by full year impact of ticketed live events.

Beijing of additional large scale international events escalation of right fees for the company's flagship programs and modernization of new original series.

<unk> our outlook reflects our assumption of a significant increase in our operating expense space in particular, an increase in production content related and other expenses.

The initiatives that could have a meeting could have meaningful implications for WWE performance for the remainder of 2022 include the continuing execution of our alive of ensuring scheduled including our stadium strategy for our premium live events.

The licensing of raw second window rights.

Additional licensing licensing of WWE network International markets.

Further increases and sponsorship sales and the ongoing monetization of new original series.

The outlook is also subject to certain macroeconomic risks over the remainder of the year in particular potential impacts on consumer spending we've seen some pressure on expenses primarily related to labor delivered cost of merchandise and diesel fuel.

To date, we've been able to manage these costs and largely offset the impact with other cost savings and efficiencies.

At this point, it's unclear what impact they may have on other areas of our business such as live event attendants and merchandise spending going forward.

We will continue to monitor consumer behavior, very closely and as appropriate make adjustments to our business to address any potential impact on our operations.

As for the second quarter of 2022, we're targeting adjusted Arabia in the range of $80 million to $90 million, which represents an increase of approximately 17% to 32% from the prior year quarter.

The estimate reflect strong revenue growth growth from the impact of Wvu's returned to live event touring and the contractual escalation of domestic media rights fees for the company's flagship programs and premium events.

We also anticipate that second quarter results will reflect an increase in operating expenses.

In conclusion, WWE generated strong first quarter results that reflected robust demand for our events and increased consumption of programming across platforms.

We believe our long term outlook is supported by the rising value of life sports content.

Increasing spin by streaming platforms on live in sports content to retain and acquire customers increasing brand spend with media companies to deliver reach in fan engagement and.

An increasing premium for celebrities and had content fueling new IP monetization opportunities and the growth of media and entertainment International markets.

Looking ahead, we believe that WWE remains well positioned to take advantage of significant growth opportunities. These.

These include increasing the product production and monetization of content leveraging our celebrity talent in world class production capability to fuel new content product offerings and capitalizing on are expanding global audience to support growth across all business lines.

We look forward to updating you on the progress of these initiatives and coming quarters.

It concludes our remarks and I'll now turn it back.

Thank you Frank operator, we're ready for Q&A. Please open the lines.

Thank you as a reminder, that is star one for questions and we will go first to Brandon wrath of like Ted partners.

Thank God. This is actually Mark Kellion for brand and thanks for taking the question just a couple for US you have to convert coming due next year about 8 million or so chairs dilutive how're you thinking about resolving that and then the business has always been under leopard and what do you think the right amount of leverage is for the business.

And then one quickly on renewal it seems like the Peacock partnership has been extremely successful with viewership up dramatically and just given that success does it make sense to bundle that renewal for beyond 24, with the raw and Smackdown right. Thank you.

So on the first question on the convert we are currently analyzing our capital structure strategy and how will deal with the convert and we will have more to say about that in the secondly, second or third quarter. We do as we said before we do believe that given our cash flow and liquidity we can accommodate.

A slight increase in leverage but we're not at this point, giving any indications as to what we're gonna do.

In terms of the bundle Mark.

The bundle it can be a very powerful tool obviously, we have a strong relationship with Fox. So we'll talk to both incumbents first see what makes the most sense and ultimately move forward from there.

Great. Thank you.

And we'll go next to Curry Baker was Guggenheim Securities.

Hey, good evening. Thanks for the question I have a couple in India for you WWE clearly saw some strong engagement there during Wrestlemania can you provide any additional color on ratings or engagement that help us think about your momentum and and be a more broadly and then maybe walk us through how you view the media media ecosystem there.

And your outlook for the next renewal and lastly are there any opportunities there like a stadium of that too maybe realize more meaningful economic sooner. Thanks [noise].

Thank you so I think the first part of the question.

And encouraged the first part of that.

On India and other indicators, there so about a year or so ago, we did and.

An exclusive to India only event, which were are up and coming Indian superstars verse are Americans superstars, so for that event, which we produced out of Orlando.

We did 25 million viewers.

So a significant amount again, even in India Indian Superstars are not big names yet. So we saw a massive viewership turnout for that obviously the Wrestlemania numbers are terrific as our other premium live events have done quite well there as well, it's a hugely important market to us the third.

Part of your question, we're always taken a look globally as we sort of found part us.

Outside of the two middle East North Africa shows that we do annually. We found caught us we thought it was the right spot at the right time Stadium show with we're all optimistic on and we mentioned those pre registration numbers. So we're taking a look around the globe to see where else that will work for us.

Refresh my recollection on the second part of your question Yeah. The the second part was just on the the media ecosystem, there and maybe kind of any initial outwork you have further no I know, it's a coupla years away, but but yeah just that.

Everyone is you know is waiting on the cricket rates.

So June 12th in 11th in India and for the companies who were putting in bids for those are obviously going to be big Big days, obviously, a lot of American based companies bidding on those rights.

I would say the entire focus of that ecosystem is on that once we come out of that we will see where other properties land there.

Great. Thanks.

Q.

And it will go to our next question from Eric Hamburger with M Cam partners.

Thank you very much for the questions two questions.

Start with Smith.

Uhm, assuming partners around the world are are seeing the benefit.

That peacock is seen from the viewership from Wrestlemania another premium live events is that burning.

More.

People to the table to to do more license deals internationally and if so is that also has being a positive benefit give me a dollar value of these licensing contracts.

So I think the first part of this I had nothing to do with when Vince Stephanie and company launched.

Network in 2014, I felt they were way ahead of the game and getting into the squad business at the time, if I'm remembering correctly it was Netflix Hulu WWE.

In my humble opinion I think we were ahead of the game again in the Peacock licensing deal for WWE network domestically, almost so where are the U S companies, who were in constant contact with their international strategies. Most of them are just sort of starting to materialize now so even if you look at these.

Sky Showtime partnership, which was for 2002 European countries.

It made sense for them to get in and do that together since they weren't established on their own in those territories. We think all of that is leading to a robust international rates marketplace for us and we're in deep talks and many of those territories.

Excellent and then question on.

The the court.

<unk> writes fees.

It was down about 11, and a half million dollars from the fourth quarter.

I think you guys said that you know there was once your <unk>.

Smackdown episode, which.

I assume I have a little bit, but that seems like a pretty steep sequential drop is there something else in the core concept like fees that went away or.

Wasn't there will that happen again in two Q.

Yes.

Primarily that the number of of gas and moving the revenue from quarter to quarter, but there was also some changes small changes other changes in smaller international markets and hearing that number as well.

And are disappointed clarification I think it was a premium lab event not a smackdown episode.

I have that right Dot Smith.

Smith Smacks I've got it okay, but on the premium web events. For example, when we decided to go with day one on January one that eliminated of December premium live event for US obviously, our fiscal year is the calendar year, so things like that always get taken into consideration as well.

Okay. Thank you.

And we'll go to our next question from David Choice with Barclays.

Thank you a couple more on the international front I'm, just wondering where you are on ramping up to the international events towards the normal.

Normal sea level.

Obviously, you've already mentioned Carter, but just let the under normal level of <unk> Wonder, where we are on that reopening.

And also on the performance Center front are there any lord that you're opening up to develop more talent or are you pretty much set with that infrastructure at this point so you're just working on the.

The on the the development at this point.

David I'll take the first one of those and then I'll hand, it over to Frank on the performance centers on the International live events. We just came out of a European tour, which ended last week. So in Paris, France for example over I think it was 11000.

In attendance Big show there for them for Us European Tour, where we saw success across the board and each of the cities that we visited so we're back up and running in terms of televised international events <unk> will be outside of the.

Saudi show, which we already had Carter.

<unk> will be the first one and then again, we're anticipating another Saudi show this calendar year. So look for more of the televised bigger shows next year, but our touring is backed internationally and the results are strong.

On the performance centres as we've ramped up his step was pointing out as we ramped up our recruiting effort tricky.

Tricky with younger college athletes in an I L programmer looking at expanding and improving some of our performance Center. We don't have a decision on what we're gonna do yet, but we are looking at it.

Alright, thank you.

<unk> <unk> <unk>.

Cannonball research.

Thank you very much you were talking about.

But.

The optimal capital <unk> capital allocation. So in that regard I wanted to ask you about your philosophy with regards to four by box. So you're already buying back stock pretty much regularly can you tell us how you make the decision how much stop to buy them. If I take a look what I should take it as your job.

<unk> <unk>, calling in the near future call made that change after the coin, but yes resolved and will you commit their saddam by backup recorder or will you remain opportunistic and if so what criteria will yoga's. Thank you.

So the way we manage the stock buyback program as we look at we have an option opportunistic program, where we look at a discount to where we think the intrinsic value of the stock is in wherever trading and we buy back stock. According.

To the level of discount between the intrinsic value.

And we will intend to remain offer opportunistic and the way that we were on the program. So on the convert you know, we'll we'll deal with the convert probably some time in the third quarter.

When you come up with a plan to how to do it but.

Future stock buybacks will be depend on our cash flow and our liquidity.

And other uses of capital.

Thank you.

And we'll go next to Steven K Hell.

Fargo.

Thanks, maybe first just curious if you could speak a bit more about ratings you had a really successful Wrestlemania. So just wandering the Cape Yandex show's ratings still kind of training flat to down I know you had a different mix it up the phone, but has there been a rebound in in ratings since since Wrestlemania.

Yeah, I think if you look at this entire the entire past quarter speed.

Ratings were up on raw ratings were up on Smackdown. In fact, two or three weeks ago on a Friday night Smackdown.

Obviously on Fox network, we'd be the NBA playoff game, which was on a B C network head to head and both the overall ratings in the demo. So we're confident that the ratings have been strong a lot of linear ratings as you know are down significantly where especially.

In the original scripted programming side I'm not sure how much more.

More you're going to see in terms of high end scripted content on network television we'll see.

A very very strong outside of the Olympics.

We are pleased with them.

Great and then I was wondering if you have any information on how cpm's have been trending around your linear network content and it's an interesting time as we head into the upfront I think there's a lot more kind of talk out there about growth in Avon and screaming and how that may impact just.

Linear cpm's overall, so I'm curious if you know from your network partners, how your Cpm's had been trending and and how you kind of feel about how those cpm's might get price as we get into this upfront. Thanks.

Clearly you've been talking to our network partners as we can see which you should be doing.

We're good we're good with where they're going obviously any increase is a good thing for us a good thing for them <unk>.

Keep in mind these relationships peacock relationship, especially on the sales side is new the Fox relationship where a coupla years into so it takes time to get these things up and running the way that they need to be we think are some numbers. We deliver we think are advertising numbers. We deliver we think ratings wise, we deliver so we feel good about.

Thanks.

Thank you.

And with no other questions in queue I would now like to turn the call back that successful for any additional closing comments.

Great. Thank you we just like to thank everyone. We appreciate your interest in W. W and joining us on today's call.

If you have any follow up questions. Please feel free to reach out to me.

You can now conclude the call.

And thank you that does conclude this call. Thank you for your participation you may now disconnect.

[music].