Q2 2023 World Wrestling Entertainment Inc Earnings Call
Hello, and welcome to the W. W. E second quarter 20 twenty-three earnings conference call. We have just a few announcements before we begin if you are listening to Ray phone line you may ask a question verbally by pressing star one on your touch tone phone.
If you wish to be removed from the queue. Please press star too.
I will now turn the call over to Seth Saslow SVP and head of Investor Relations. Please go ahead Seth.
Thank you and good morning, everyone.
Welcome to Wwe's second quarter of 2023 earnings conference call joining.
Joining us on today's call or Nick Con Wwe's, Chief Executive Officer, all of that our Chief content Officer, and Frank Riddick, Our President and Chief Financial Officer.
Following are prepared remarks will open the call for questions. We.
We issued our earnings release earlier, this morning, and I've posted the release and other supporting materials to our website.
As a reminder, today's discussion will include forward looking statements. These.
These statements reflect our current views are based on various assumptions and are therefore subject to risks and uncertainties.
Please refer to our SEC filings for a discussion of the risks and uncertainties.
Actual results may differ materially an undue reliance should not be placed on these statements.
We will also be discussing certain non-GAAP financial measures on today's call <unk>.
Reconciliations of non-GAAP . The gap information are provided in our earnings release and other supporting materials.
Lastly, today's conference call is being recorded and the replay will be available on our website.
With that I'd now like to turn the call over today.
Good morning, and thank you everyone for joining us today.
The Star Ah results and Q2 exceeded the high end of our guidance.
We delivered record financial results in the second quarter record quarterly revenue and record quarterly adjusted a whip it up.
We are on track to deliver another year of record revenue and adjusted or we're gonna in 2023 continue.
Continuing our trend a then record revenue and a whip it out in 2021, and then record revenue in <unk> in 2022.
I, along with Frank <unk> will touch on some financial and operational highlights from the order in more detail, but before I do I wanted to take a moment to address a few other topics.
First the TKO transaction.
As discussed on our last earnings Paul in early May we announced on April 3rd just a day after a record breaking Russell mania.
That we came to an agreement with endeavour to combine WWE in the U F C into a new publicly listed company TKO group holders we.
We remain excited about the combination of these highly complimentary businesses and rolling out a global lives sports and entertainment pure play.
We collectively remain focus on completing a regulatory review process and as we have said from the start we expected deal to close in the second half of this year.
Second media rights. We are currently engaged in conversations on the domestic rights to our weekly flagship programs raw Smackdown, and an iced tea.
As expected there was significant interest from the marketplace in these conversations are progressing well.
These conversations are taking place you are seeing record viewership for premium live events and increase ratings for raw Smackdown, and and <unk>.
These numbers underscore the enduring strength of our product.
Looking at Smackdown, first Smackdown was up 26% and the key 18, 49 demo and up 12% in total viewers year over year.
Compares to broadcast viewership that was down double digits and the key demo and down overall in total viewers for the same period.
Amongst most 18 to 49 and 18 for 34 Smackdown ranked number one on Friday Prime time for all of broadcast television.
On June 2nd.
Smackdown episode reached nearly 1 million viewers in the 18 to 49 demo not only our highest 18 to 49 viewership in 2023, but our strongest stomach performance and over three years.
Turning to raw raw was up 19% in the queue demo and three per cent in total viewers for the quarter.
This compares to cable viewership that was down double digits in both the key demo and down overall in total viewers for the same period.
This past quarter raw was once again the number one show on USA network and the number one entertainment program on all of cable.
For both programs raw and Smackdown had the highest engagements in their history viewers.
Viewers are watching longer than ever before.
Time spent viewing for raw is up seven minutes this quarter from last year and for Smackdown, It's an increase of four minutes, which means more AD dollars for a network partners.
Similarly, our third Bran and S. C has also been surging with younger audiences. So.
So far this quarter and excuse of 49% from last year and the 18 to 49 demo and I'm, 52% from last year and the 18th 34 demo.
Before we go to premium live events allow me to also acknowledge that almost two weeks ago, our founder Vince Mcmahon underwent major spinal surgery.
While remaining the executive chairman of WWE, Vince decided to take a medical leave of absence to focus on his physical recovery.
We wished Vince the best in his recovery and will respect his privacy as it relates to this medical matter.
Onto our premium live events since our last call. We stage three premium live events. Each one has continued the trend of delivering record performance across multiple categories.
And may backlash from San Juan Puerto Rico was the highest grossing in most viewed backlash and WWE history.
34% in viewership from the prior year.
Night of champions emanating from Jetta was our most watch live event ever from Saudi and viewership was up 45% versus our last show from there this past November .
Then in July money in the bank from the O two arena in London was.
It was the most successful and highest grossing money in the bank all time.
Setting the record for the highest grossing arena events WWE history.
You worship there also up 14%.
This upcoming Saturday is Summerslam porterfield in Detroit.
March the first WWE events at Ford field since Wrestlemania 2007, and the first summer Slam in Michigan since 1993.
Interest in this premium live event is high and today, we have over 43000 tickets sold and are on track for a sell out.
Please note the three of these four premium live events will have taken place outside of the 50 states.
This record run of success for premium live events comes off the heels of Wrestlemania 39 from so five stadium in Los Angeles in April which was the most watched and most profitable Wrestlemania in our company's history.
Moreover, we were glad to see a recent report from applied analysis and highlighted the economic impact that Russell Mania had on the Southern California region.
The study found the Wrestlemania 39 had a total economic impact of $215 million.
Our continued effort to brought in Russells maintenance Russell maintenance scope of events brought out of town visitors staying an average of four plus nights in Los Angeles.
More than half of attendees travel to L. A from outside of southern California, with 15% of attendees travelling in from an international locations.
And visitors had an average.
Annual income of more than $100000.
This performance underscores ww's ability to drive substantial commerce to a local economy whenever and wherever we stage our premium live events as.
As we did in Cardiff Wales last September in San Juan Puerto Rico, three months ago. We were excited to continue to team up with local governments and municipalities to deliver these kind of results and look forward to sharing a few announcements regarding this in the months ahead.
Now if we could discuss live events for a moment. This past quarter was ww's highest grossing live event quarter of all time, surpassing the previous record by 6%.
While setting 34 in marketing sales records.
In North America, we average nearly 10000 attendees prevent.
A year over year increase of 45% please.
Please keep in mind, what you already know we do over 200 live events in North America ear, which seemingly makes that average attendee prevents that much more impressive from our point of view.
We are not seeing any signs of a slowdown in fact fans were purchasing tickets further in advance and we have historically scene.
Next consumer products.
Momentum we are seeing is also generating record in venue merchandise sales in the quarter. We set records for in venue singles at Wrestlemania backlash and money in the bank.
W. W. Shop also continues to steady growth as we round the one year anniversary of R. E Commerce deal with fanatics.
<unk> for Q2, 2023 were up double digits versus the prior year's quarter and operational costs are down.
And sponsorship there was another growth quarter at Royal Rumble in January we saw 200 per cent sponsorship increase for the event year over year.
Elimination Chamber in February you registered nearly a 300% sponsorship increase year over year.
And at Wrestlemania in April we sold a record $20 million in sponsorship more than a 100 per cent increase over a previous sales record.
Backlash were up 98% and sponsorship year over year money.
Money in the bank sponsorship numbers also up making it our highest grossing international events in terms of sponsorship ever.
We continued to expand the number of WWE partnership partnerships with sponsors while executing against our strategy of driving incremental dollars from our existing partners with the average spend per client up 38% for the year.
<unk> by August we've already booked our highest grossing sponsorship ear WWE history.
In closing I want to reiterate how pleased we are with the performance of our business as we head into the second half of the year.
Our expectation is to deliver another year record revenue and adjusted Whip. It up while remaining focused on obtaining final regulatory approval along with our partners that endeavor. So we can proceed together with T K O.
With that I will now turn the call over to Frank.
Thank you Nick.
Four I review, our financial performance in business outlooks I want to briefly discuss the transaction, we announced in April with endeavor.
As Nick highlighted we're very excited about the agreement we reached with endeavour to combine the W. W. E and UFC businesses were working as quickly as we can to close the transaction.
In June we announced that we obtained all of the required regulatory approvals, while the transaction remains subject to the satisfaction of customer at closing conditions. We continue to expect the transaction to close in the second half of 2023.
Turning to our operations on slide four.
And the second quarter, we generated record quarterly revenue of $410 million and.
And record quarterly adjusted a web of $141 million, which exceeded the high end of our guidance.
Our performance in the corner of places is firmly on track to meet our full year outlook I'll.
I'll touch on the outlet for the third quarter and full year in more detail later in <unk> in my remarks.
On slide five of our presentation, we detail our performance by segment in the quarter as compared to the prior year quarter. The results in the quarter reflect the shift and timing of the staging of a large scale international events, which occurred in the second quarter of 2023 as compared to the first quarter of 2022.
Looking at our media segment on slide six adjusted a web to increased 39% on a 32 per cent increase in revenue.
The most notable item driving the results with an increase in other revenue due to the staging of a large scale international events.
Network revenue increase due to the contractual escalation of the media rights fee for our premium live events during.
During the second quarter, we change the premium live events calendar as a result, we recorded approximately 7 million of incremental network revenue.
Change has no impact on full year network revenue.
For content rights increase primarily due to the contractual escalation of media right fees for our flagship weekly programming raw and Smackdown.
The increase in revenue was partially offset by an increase in operating expenses. The increase in expenses was primarily related to an increase in production costs, including the timing of the large scale international event.
Now, let's turn to our live events business is shown on slide seven of our presentation.
Adjusted away a bit from our live events improved $21 million based on the 51 per cent increase in revenue.
During the second quarter, we experience strong demand for a live events. We have 53 total events with 43 events in North America and 10 in international markets.
Average attendance in North America was approximately 9945 per cent increase as compared to the prior year period.
And our consumer product segment shown on fly eight adjusted away it was $13 million on revenue of $28 million.
Results in the segment reflected a number of moving pieces licensing revenue reflected the decrease in video gaming and collectibles revenue.
As previously discussed the change in e-commerce in venue merchandise revenue reflects the transition of our retail platforms to fanatics.
Now, let's turn it W. W capital structure suck as shown on slide nine of the presentation.
And the second quarter, we generated $31 million in free cash flow as compared to January $9 million and the prior period.
This increase was primarily due to higher income from our operations and the timing of working capital.
And the second quarter, we incurred 46 million of capital expenditures 32 million of which related to our new headquarters facility.
Excluding the new H Q Capex free cashflow would've been $63 million in the quarter.
During the quarter, we returned 10 million of capital to shareholders in the form of dividends pay.
We also exchanged almost all of our outstanding convertible senior notes, we issued an aggregate of 8.5 million shares for approximately 211 million principal amount of the notes.
We also on while on the edge of Warren transactions, which resulted in net cash proceeds of $51 million.
As of June 30th approximately $4 million principal amount of the notes remained outstanding.
June 30, we held approximately $524 million in cash and short term investments yeah.
Totaled $25 million, including 4 million associate it with the carrying value of the convertible notes I. Just mentioned, we have no amounts outstanding under our 200 million dollar a revolving line of credit.
Looking ahead, we're not changing our outlook for the full year adjusted a limited at this time, we continue to target a range of 395 to 410 million, which would be an all time record for the company. As we've previously discussed were also targeting a record revenue in 2023.
As for the third quarter of 2023, we're targeting adjusted to we have done in the range of $75 million to $85 million. The estimate reflects a decrease in revenue. The decrease in revenue primarily reflects unexpected decline in revenue at the consumer product segment and a decline in third party original programming revenue in our media segment. This is due to the timing of the production.
The premium W. W. C team series.
The expected decline in consumer products revenue relates to the timing of revenue recorded as a result of the early termination of agreement of our license collectibles as well as the transition of the companies retail platforms in venue merchandise business to fanatics.
July 10 of our presentation provides an update on capital expenditures.
For 2000 twenty-three, we now expect total company capex of $175 million to $195 million up from a prior forecast of $150 million to $170 million. The current estimate includes spending of 135 to 150 million related to our new headquarters facility with the remainder primarily related to the maintenance and enhancement.
Shifting production enterprise technology infrastructure.
Slide 11 provides an update on total capex for the new H Q facility.
To date, we spent approximately 250 million in Capex on the new H G project and it received offsets in the form of tennis improvement allowances of approximately 35 million for a net spend of approximately $215 million.
Based on our latest estimates we expect to incur an additional 70 90 million in Capex to complete the project as a result, we now forecast that total Bruce spin on the new HQ project will be in the range of $320 million to $340 million, an increase of approximately 30 million from the range. We provided in our fourth quarter 20 to call in February of this year.
After all steps, which we continue to expect to be in the range of 110 to 120 million Netspend is expected to be within a range of 210 to 220 million.
Our estimates for the total gross been increased primarily due to changes in scope and costs associated with the additional time needed to complete the work.
As a reminder, the estimated total for the new H Q project spanned includes approximately $70 million of accelerated expenditures for I T equipment and broadcast production technology that likely would've been spent an absence of this project.
In conclusion, WWE generate a strong second quarter results that reflected continued robust demand for our events and increased consumption of programming across platforms. Looking ahead, we remain focused on our day to day operations, while working to close the transaction with endeavor as quickly as possible.
We believe that W. W remains well positioned to take advantage of significant growth opportunities Ah costs are various lines of business.
That concludes our remarks, and I will now turn it back to Seth.
Frank Operator, we're ready for Q&A. Please open the lines.
Thank you if you would like to ask a question. Please signaled by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure that your mute function is turned off to allow your signal to reach our equipment.
Getting you a press star one to ask a question well.
We'll take our first question from Brandon Ross with Light said partners. Please go ahead.
Thanks, guys for taking the questions just gonna get the obvious one out there to start last last time, you guys did your raw and Smackdown deals. The deals were done shortly after a few exclusive window expired.
It's moving slower this time <unk>.
What what's the reason for that in your mind and is there an updated timeline and how you see the domestic deals resolving.
A follow up.
Thank you Brenda. This is next last time, having been across that negotiation starting prices of where we were for raw and smackdown, or far far less than the starting price is now which means deeper and longer conversations all of those conversations have been productive we remain quite optimistic on it.
In terms of time.
Often set of negotiations you can control a lot of the process you can never control the timing of the negotiation. So we feel we're there in full force with a robust product that seems to have quite high ratings and relevancy at this moment and we think the results will be what do we expect and hope there'll be.
Great and I think it's since your last call. It seems that we've seen in even further acceleration of bundled decline in this move to O T. T. E. S. P. N is now saying there basically ready to go O T. T. I guess, probably after the N b a deals done it feels like the leaks in general.
<unk> are preparing.
More diligently for a digital future does that change how you're thinking about your content licensing strategy and do you need a life digital component too.
This domestic deal to future proof yourself and then just generally how do you think about balancing.
Reach and the dollars and future proofing your business. If you approach this deal.
So just the three fold question any other attachments to that.
[laughter] I I could give me some more [laughter], okay I'm sure I'm sure you've got.
<unk>, a couple of things and I'm more keep in mind Ww. We I believe was the third mover in the O T T space. The digital space 2014 going off of what was traditional pay per view onto the WWE network, which again D to C. O T C understanding that that's where the business was going I think with our Peacock deal from.
Two and a half almost three years ago. We also saw where the business was going there that a number of stand alone O T. Ts would create a crowded marketplace and there's so many source only so many consumer dollars to go around so the way that these deals that ended up broadcast television we've been able to explore with Fox came.
Television, obviously, we've been in business and basic cable for decades with the Peacock deal with allows us to explore the digital space. There's so many upsides to it including live viewership same day viewership viewership over the first 24 hours 72 hours over the first week all of these and obviously.
Matter to each of these content buyers and I think all of them seem to results that have been driven towards Peacock and B O T. T buyers seem quite interested in not only raw not only smackdown, but an F C. As do the more traditional buyers. So we think it's a very strong landscape for products that register.
Do you have to be on the digital.
That is the traditional bundled goes away.
Important to have that as a component of your meal.
It's important that we did it with peacock and when we look at the other programming.
That we're dealing with now whenever those deals are bought by the way when all else fails looked at the NFL. So when the NFL. If you look at their most recent deals.
No longer a split between digital rights and linear rights as there was a few years ago Thursday night football. Okay. It's on C. V. S. Okay. It's been split N B C. C. B S. Okay, let's ship it over to Fox, Okay, now, let's do Amazon when it was with C. B S and N. B C. It was also on Twitter. If you remember that then it shifted to.
To Amazon now it's an all in package. We expect the same thing if it's traditional buyer there'll be a digital <unk>. If it's a digital buyer like peacocks there won't be a traditional presence so depending on what the totality of the offer it looks like we think that we think will be in good shape, though.
Thanks, so much.
Thank you.
Let's take our next question from been Swinburne with Morgan Stanley . Please go ahead.
[noise]. Thanks.
Nick two things going on right now that obviously, we're all watching Brandon mentioned the N b a deal or negotiation and there's also obviously the writers and actors strikes I'm just wondering.
Do you think we should be thinking about the N. B a is something that has to get done prior to your deals I I think I know the answer but I figured I'd I'd ask you again and then secondly, do you think the labor strikes in that production shut down you know speed up slow down the process for you guys have any impact it off and then I just want to ask Frank just on the guidance.
He got to beat the high end of the EBITDA Guide for Q2, but you didn't raise the year I. Just wondering if it was there sort of a timing shift and how the EBITDA is falling through the quarters and that explains a little bit of the.
After the unchanged full year, given the two Q outperformance thanks guys.
Thanks, but I'll take the the the easier one first yes. It partially reflects the fact, we didn't raise guidance partially reflects timing move between the first half and the second half and there was a couple of items that we can get into later that drive that but in addition, given the where we are with the endeavor trans.
Action and also just doesn't make sense from our perspective change the guidance at this point given given that the deal will we're we're trying to close the deal as we said in the second half so it made it.
May not be totally germaine going forward. So those are the two factors.
Thank you.
Then if you could repeat the first part of your question.
Yeah, just wondering I think there's at least some thought out there that the N D. A is sort of the elephant in the room from our rights point of view and so until that's done WWE is less likely to get completed so be curious on your thoughts there today and then on the writers and actors strike you know almost all the companies you are having conversations they'd be all of them.
I have a huge part of their business, that's got a tremendous amount of new uncertainty around it and I'm. Just wondering if you think that helps hurt serve is immaterial just read that back to you he's hand in all of this.
Understood on the first part of the question you had set initially that you had to take on it and thought that I might agree with that is your ticket to the answer is no. It doesn't affect us b M B a.
Yeah, I think I've heard you say in the past that you you don't think the N. B a has to get done for you to get done. So I didn't know if that was still your view I don't Wanna assign you reviewed you say I'll, let you speak for yourself [laughter] I see thank you. Yes. My my view has not changed our view has not changed on that we respect you know the N b as product and what it means and thank God, there's an entire marketplace.
Out there for us in terms of the strike. It's unfortunate we continue to support our friends with the W. G and <unk>, we're happy to read that the W. G E and the studios are getting together I believe this Friday and we hope for a quick resolution for everybody.
Thank you.
Thank you Alright next question comes from Eric Handler with Roth M. K M. The floor is yours.
Good morning, and thank you for the question Frank maybe just an accounting question for you it seems like.
And the income statement the sponsorship revenue in the media line was probably a bit.
<unk>, what people were looking for a relative to expectations, but the in the live events business you had record advertising and sponsorship was there some type of shift in recognition of where sponsorship dollars are going.
No it really reflect cause there's no change in accounting. It just reflects the performance that we're getting relatively higher performance for the P. L. As in doing a great job of selling those visa V. The traditional sponsorship for that fell into media, but it's just a reflection of the business that we're doing in the strength that we're seeing on the.
Selling them sponsorships related to the P. L eases as Nick <unk>, you know noted in his comments.
Okay, and then is there anything you can really say about and the 10-Q about the July 17th peanut for for Vince and you know what Wwe's implications are from this.
Eric. This is this is next thanks for asking the question.
We continue to fully cooperate with any investigation outside of that we're not going to comment on any legal matter.
Thank you.
I'll move to our next question from Stephen came home with Wells Fargo. Please go ahead.
Yeah. Thanks, good morning, maybe.
Maybe just ask the right question, a slightly different way uhm I understand why the timing is what it is between the U S linear television rights and the Peacock right based on where you are with those prior T V deals and then the way that you transition the network to Peacock. It seems like that a lot of the digital buyers are taking a little more of an all.
Nothing approach I know the N b, a or sorry, the N F. L is a little different than that but I think the more and more we've seen new right uhm. It seems like some of the digital first companies are looking for these bigger blocks. So I'm just thinking about how you think about the potential of a one year extension on your linear right in order to have a package deal that combines.
Currently on Peacock with what's currently on linear to kind of create this bigger either all in your cross platform or are all streaming asset so that that's the first one and.
And then Frank just a bit of a housekeeping one but could you talk a little bit about how are you thinking about generating cash between now and either the end of Q3 or or the deal closed I think you're still expecting to pay with cash dividend as that happened. Then maybe you can just clears up on the pro forma share count now that you've taken out that preferred as it relates to.
The dividend payment. Thank you.
So thanks for the questions. This is next on the first part of that.
I don't see a one year extension.
The outcome for Us I don't think that's what the marketplaces, suggesting also keep in mind. What you already know are content drive subscription behavior not just your ship.
The 12 month calendar resist subscriber churn so of course, the digital players are going to be there. They see the results from Peacock with under 20 live events or so a year between the premium live events and <unk> premium live events. So no I don't see an extension like that in our future and yes, we're talking all of.
The digital content partners, who I think see the power and what we can do.
So on the cash flow share account question of of course, you know we are continuing to operate our business as usual and our objective is always to generate as much cash as quickly as we can and manage our cash position you know the biggest variable one of the biggest variables in determining how much the.
Dividend will be of course will be the actual date of closing and where we stand in our normal cycle of cash collections as of that point in the year the share count the cap table will be updated is in the S. Four it will be updated in the next version of the S. Four and we're tracking and we can give you some of the details to help reconciled.
That you know about total outstanding sum of about 83 million shares.
Great. Thank you.
Our next question comes from Curry Baker with Guggenheim Securities. Please go ahead.
Hey, Good morning, guys, Frank maybe one for you could we drill down on the third quarter guidance any chance you could maybe size the license collectible impact and also how how much of the fanatics part is related to timing and then lastly, any any chance you could also maybe help us drill down further on the.
Impact of the the third party programming and whether that's just timing.
You know the the order of magnitude on the collectibles is around 6 million and the other thing that move a revenue and profit from second quarter out from third quarter of second quarter was the timing of the P. L. He's and we can we can provide guidance on that later, but.
Those are the major drivers what was the last part of your question Alright.
But if there was any timing related to the fanatics peace.
No. The fanatics piece reflects it it's more of a accounting change four months of the both the venue merchant E Commerce business is strong.
As we know that it's more of that it's just not.
You know, it's not in the revenue on it and and the expenses <unk> item, Yeah, we moved to the <unk> to the venue merge deal in May So it's only partially reflected in the quarter. So but it doesn't you know the bottom line. The the net profit in that set those segments isn't changed.
Okay. Thanks, and then may be one for for Nick can you remind us when you expect to negotiate your your top two international rights deals that UK in India, and maybe any initial thoughts on how you feel like your position in those markets.
Yeah, I think we're physician strongly in the U K and I've had a number of in persons. There. It's a further you know what we think is a robust market for us and the UK, India is two years or so so it would be premature, especially with the Sony India Z merger.
Awaiting final approval it would be premature.
I mentioned I believe in the last call we have a live events in India. In early September we're excited about that Sony India is excited about that so too early to predict India, but we're thrilled with our partnership with Sony.
Thanks, guys.
Thank you.
Alright next question comes from Peter Subpoena with Wolf research the floor is yours.
Hi, everybody. Thank you. This question relates to your expectations for the timing and structure.
Your next U S rights deal I know, it's not totally predictable, but we do have a point of view in the F for that the company published in Q2 for the TKO deal and so I'm looking at the management <unk> projections and of course, they're they're just claimed clearly as just a moment in time I wondered if you could talk to us about the logic.
Behind the EBITDA dollar <unk>.
In 2025, and 2026, it seems to accelerate in 26, but there's no sign of an impact from the renewal and the 24 and 25 EBITDA dollar growth projections is so let me tell you could help would be great. We get this client the question from clients frequently.
Well I <unk> I'm not quite sure I follow Peter what <unk>, but the projections that we put out or you know for stand alone.
W. W. E were based on our planning models that we use.
To do our planning and reflected or you know what we felt were was a reasonable expectation for both the.
Renewal of the rights on on Smackdown, and raw as well as the Peacock deal so I'm not quite sure I follow.
Where you see the disconnect.
Just to clarify that the EBITDA dollar growth in 24 over 23, and then twenty-five over 24 looks ordinary and then in 26 at the dollar growth rate doubles $200 million a year over year growth in the forecast and so I'm trying to connect that to the idea of a U S rights renewal in 2000.
23.
You know we can follow up with you Peter but I think I think the answer is the full year effect of the U S Rice and the Peacock renewal are what's driving the difference driving the jump up.
You have to keep in mind, Peter This is big speaking raw and Smackdown on up until October one of 2024.
And obviously Peacock is March I believe of 2026, So I think Frank is correct in answering your question and of course, we can dive deeper into it with you. If you want more yeah. We will we'll go we'll go look at it and we can we can talk off line, but I <unk> I believe that that's what's driving the changing changing right on those renewals, it's just the timing.
And the fact that the Peacock deal comes up and <unk> and 26.
That's helpful. Thank you.
Thank you.
Our next question comes from Jason Bazinet, what city the floor is yours.
I just had a question on that transaction clothes I think most people think this is a pretty uncontroversial transaction and you guys reiterated the timing.
But it seems like you're giving yourself a pretty wide berth second half of 23. So do you mind just walking through some of the day you said I'm sorry. This is Sarah how we can't hear you well he maybe just speak up a little bit Oh, sorry.
Yeah. So I think most people on the Street think this transaction is is uncontroversial, but but you've given yourself a pretty wide berth in terms of closing in the second half of 23. So can you just walk through the things that could happen more quickly or the things that could happen more slowly that could cause the transaction to.
To close later in the year versus earlier thanks.
So from this is that got Jason Thanks for that from day, one we particularly the second half of this year as you know regulatory process is not the speediest of all processes, but it's been a good one thus far so I I don't Wanna see that I don't want to suggest that it's easy, but it certainly hasn't been difficult yeah and.
We've given the information that we need to give obviously to get the approval that we're seeking and we expect to stay on track with our predictions. The second half of this year for the clothes and the ringing of the bell.
But if I can just have someone follow up there's nothing other than the customary regulatory approval and shareholder, though there's no X factor in this transaction that we're unaware of.
That's correct 100 per cent correct.
Okay. Thank you.
Thank you upper it or why don't we take one last question. Please.
They'll take our last question from David Kornacki with J P. Morgan. Please go ahead.
Alright, thanks, nicotine streamers potentially out in the market offering Kia pricing deals to leagues or conferences I'm wondering how you view the attractiveness of a structure like that you did just stay prior that your contact drive subscription behavior and then a second question just wanted to see if you could provide any incremental DT.
Still around your partnership with Twitch, how was that deal structure does it mainly and add chair and any any incremental detail would be great.
Sure. So in reverse order add shared deal with Twitch, we're excited about.
It pays are superstars more than they would make if they just did it on their own Twitch show. So look for more investment into that property and more robust programming once our deals closed and which would be the right timing for that in terms of the first part of the question. If you recall when <unk>.
<unk> first launched it was actually a three tier service free in front of the pay wall and then 499 a month at 999, a month on the AD free. So we had programming mostly archival programming on the free platform and then again consumers option for 499 with ads at the time or 999 without ads.
And we liked how that worked so our library you know you're talking about over 100000 hours of archival footage that people still watch on a regular basis. We think that's what part of that is what led to our Youtube road in the infancy of Youtube people.
You'll still like to watch our library of stuff you don't see that with other sports or entertainment properties, you're not watching the grammy's from 20 years ago I don't believe many folks are watching the superbowl 20 years ago, we see around Wrestlemania spike in viewership on prior Wrestlemania us so we like the way that the.
That works it allows people to sample our product and then once enough people with sampled it we went off the free platform. So we're looking at all of that and taken into consideration as we make these final decisions.
Thank you.
Well. Thank you everyone for joining us on today's call operator, you can conclude the call. Please.
This concludes today's call. Thank you again for your participation you may now disconnect and have a great day.
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