31 Jul

World Wrestling Entertainment: At A Tipping Point – World Wrestling …

Elevator Pitch

With the launch of WWE Network in February 2014 and the subsequent crossing of the 1.3 million subscriber mark in March 2015, World Wrestling Entertainment (NYSE:WWE) is now at a tipping point. If WWE successfully grows the subscriber base for WWE Network and leverages on the growth opportunities embedded within international markets, it should experience significant top line and bottom line expansion. I arrive at a target price of $21.70 for WWE by applying a 15 times EV/OBIDA multiple to my estimated OBIDA of $104 million and adding net cash of $89 million. My target price implies a 28% upside from WWEs closing share price of $16.93 as of July 18, 2015.

Why I Like The Business

At first glance, WWE does not seem to fit the bill of a great business. It was free cash flow negative in FY2014, and suffered from a negative OIBDA (operating income before depreciation and amortization) of $15 million and a net loss of $30 million. Headline numbers are potentially misleading in this case, as WWEs operating profit and net profit were adversely impacted by its investment in WWE Network for future growth. While WWE Network was only launched in February 2014, WWE started to invest in content and brand initiatives supporting the launch of WWE Network since 2011.

In fact, WWE owns very profitable and cash flow generating businesses. In FY2012 and FY2013, WWEs OIBDA margins for its Media Division were as high as 100%, while its Consumer Products Division and Live Events business delivered OIBDA margins between 30% and 40% during the same period. In addition, WWE generated annual free cash flow in excess of $50 million between FY2009 and FY2013, excluding investments made as part of WWE Network.

Putting financial numbers aside, I outline three reasons below why I like WWE as a business.

Firstly, WWE has arguably one of the best brands among its sports and media peers. The numbers speak for themselves. Its videos shown on its official YouTube channel have attracted over 5 billion views for the 12 months ended May 2015, making WWE the number one sports channel on YouTube ahead of competitors such as NBA, MLB, NFL, NHL, ESPN and NASCAR among others. As of end-May 2015, WWE also had approximately half a billion followers on social media, including but not limited to, Twitter, Facebook, Instagram and YouTube. In 2014, WWEs RAW and SmackDown television programs delivered average prime time viewers of 4.6 million and 3.0 million respectively, significantly higher than competing cable network programs including ESPN and Discovery. In October 2014, Forbes ranked WrestleMania, WWEs annual flagship event, eighth on its list of Most Valuable Sports Brands for 2014, and valued the WrestleMania brand at approximately $105 million.

Secondly, WWE boasts a content library that is difficult, if not impossible, for new entrants and competitors to replicate. Its library comprises 130,000 hours of professional wrestling content dating back to the 1950s featuring more than hundreds Superstars and Divas, which is growing at a rate of more than 500 hours every year as new original content is created. In addition to its original content (brands like RAW, SmackDown and ECW), WWEs library also includes content acquired from other wrestling promotions which have since ceased to exist, such as World Wrestling Federation WWF, World Wide Wrestling Federation WWWF and Capitol Wrestling Corporation. Given that WWE has already bought substantially all of the historical wrestling content available and there are currently no significant competitors challenging WWEs dominant position, WWEs content library is likely to remain unique and valuable for the foreseeable future.

The best validation of the value of WWEs content library comes from a willing buyer. In November 2014, Warner Brothers Home Entertainment, the countrys largest distributor of home video titles, signed a multi-year agreement with WWE for the right to distribute the Companys library of pay-per-view events and documentaries on both physical digital formats in the US Warner Brother cited reasons such as WWE titles accounted for all of the top 10 sports DVDs of 2013 and WWE is an iconic brand that has one of the most passionate fan bases in sports and entertainment for the deal.

Thirdly, WWE operates on a profit multiplier model similar to Disney (NYSE:DIS). As the name of the model suggests, WWE is able to earn multiples of its profit from wrestling events by mining the value of its intellectual property via various channels. WWE has invested a lot of capital into creating or acquiring content, and building its brand over the years and this will pay off handsomely for the Company as it is able to reap profits from its content, Superstars and Divas multiple times in different ways. Similar to how Disney monetizes its favorite characters like Mickey Mouse via films, videos, apparel and books, WWE benefits from multiple revenue streams derived from its intellectual property. These include the new WWE Network, television rights, sales of tickets and merchandise from live events, pay-per-view purchases, movies, home videos, video games and other branded products.

WWE Network Brings Unexpected Benefits

WWE Network is an important extension of WWEs profit multiplier model discussed in the section above. Launched in February 2014, WWE Networks makes all of its 12 pay-per-view events, including WrestleMania, and over 3,000 hours of VOD (video-on-demand) content available to subscribers in more than 170 countries globally. As of 1Q2015, WWE Network boasts a subscriber base of 1.3 million, more than 2.5 times what it achieved in 1Q2014 a year ago.

There are two key factors to consider in assessing the future potential of WWE Network and its value to the Company apart from being just another revenue stream.

The first factor is scalability. Management provided estimates of the 2015 OIBDA contribution from WWE Network based on different paid subscriber levels in its Investor Presentation. It is worth noting that WWE Network has already crossed the OIBDA breakeven point of a million subscribers. However, what is even more interesting is the operating leverage embedded within WWE Network. According to management estimates, when WWE Network doubles the number of subscribers from a million to two million, the OIBDA contribution will increase by between 2.7 and 3.4 times. Similarly, if WWE Network increases its subscriber base by 67% from 1.5 million to 2.5 million, WWEs OIBDA generated by WWE Network is estimated to double. This disproportionate increase in operating profit relative to subscriber additions is due to the low marginal cost nature of the WWE Network business. Since it requires little incremental costs or capital to service an additional subscriber, every new subscriber for WWE Network results in revenue dollars flowing straight down to WWEs bottom line.

The second factor is data. This benefit of customizing WWEs content to suit consumer preferences by mining data from WWE Network is vastly underestimated. WWE is a unique hybrid of a live sports entertainment company and a media business, particularly with respect to its ability to script content. In comparison, for other sports events such as soccer matches, it is impossible to create exciting episodes such as a great goal or a perfectly-executed set-piece. Prior to launching WWE Network, WWE was limited to obtaining customer feedback via interviews and surveys where respondents may not necessarily communicate their true preferences. Having the privilege of collecting and analyzing data on WWE Network to sift out the most popular programs, WWE will be able to optimize its content offerings to maximize consumer utility and its revenues at the same time. In other words, there is another multiplier effect at play here, as WWEs other revenue streams outlined above are likely to benefit from increased demand resulting from more popular content.

Long Growth Runway

Looking ahead, WWEs most significant growth driver will be international markets. WWE generated a mere 21% of its FY2014 revenues from markets outside North America, despite the fact that WWE is a global brand with strong international recognition. For example, television viewership for WWE programs is ranked third in India, one of the worlds most populous countries, behind national sport cricket and soccer.

Based on a consumer survey done by WWE, the global addressable market is huge compared with the Companys current revenue contribution from international markets. WWEs research found that among 311 million homes equipped with broadband in the 16 largest global markets (including the US), approximately half or 159 million homes have affinity for WWE. Even if I were to be conservative and include only passionate or casual WWE fans (as defined by survey responses) in selected international markets such as India, Mexico, Canada, Australia, Germany, Japan, the UK and France and a 4% penetration rate, WWE has the potential to add at least 2 million new international subscribers based on my calculations. This number is significant compared with a mere 196,000 international subscribers that WWE Network has as of 1Q2015.

WWEs revenue contribution from international markets grew by a 6% CAGR from $62 million in FY2004 to $112 million in FY2014. Going forward, WWE is targeting to capitalize on the huge international market opportunity by expanding the reach of WWE Network and signing a greater number of TV distribution contracts in new territories. WWE Network is currently still not available in certain countries like Germany, Japan, India, China and Thailand among others. Chief Financial amp; Strategy Officer George A. Barrios guided that WWE should launch WWE Network in all of these markets within the next 12-18 months at the latest. With respect to television rights, WWE signed new distribution agreements or renewed existing ones in the UK, India, Canada, Thailand, Mexico and UAE last year.

Target Price

I arrive at a target price of $21.70 for WWE by applying a 15 times EV/OBIDA multiple to my estimated OBIDA of $104 million and adding net cash of $89 million.

I forecast that WWE grows its revenue by a two-year CAGR of 13% from $543 million in FY2014 to $693 million in FY2016. I assume that the Companys OIBDA margin normalizes to approximately 15% by FY2016 as investment in the WWE Network moderates, resulting in an estimated OIBDA of $104 million.

My target price implies a 28% upside from WWEs closing share price of $16.93 as of July 18, 2015.

Variant View

If WWE either fails to sign up new subscribers or retain existing ones for WWE Network, the growth prospects for the Company could look very different. In particular, due to the operating leverage embedded within WWE Networks low marginal cost business model, WWE Networks future earnings are likely to vary significantly depending on subscriber take-up rates.

30 Jul

EA SPORTS Partners With Real Madrid C.F. as Official Videogame Partner

EA SPORTS is one of the leading sports entertainment brands in the
world, with top-selling videogame franchises, award-winning interactive
technology, fan programs and cross-platform digital experiences. EA
SPORTS creates connected experiences that ignite the emotion of sports
through videogames, including Madden NFL football, EA SPORTS(TM)
FIFA, NHL® hockey, NBA LIVE basketball, Rory
McIlroy PGA TOUR® golf, SSX(TM) and EA SPORTS UFC®.

About Electronic Arts

Electronic Arts (NASDAQ: EA) is a global leader in digital interactive
entertainment. The Company delivers games, content and online services
for Internet-connected consoles, personal computers, mobile phones and
tablets. EA has more than 300 million registered players around the

In fiscal year 2015, EA posted GAAP net revenue of $4.5 billion.
Headquartered in Redwood City, California, EA is recognized for a
portfolio of critically acclaimed, high-quality blockbuster brands such
as The Sims(TM), Madden NFL, EA SPORTS(TM) FIFA, Battlefield(TM), Dragon Age(TM) and
Plants vs. Zombies(TM). More information about EA is available at www.ea.com/news.

EA SPORTS, Battlefield, The Sims, Dragon Age, Origin, SSX, and Plants
vs. Zombies are trademarks of Electronic Arts Inc. and its
subsidiaries. John Madden, NFL, NHL, NBA, Rory McIlroy, PGA TOUR, UFC,
and FIFA are the property of their respective owners and used with
permission. “PlayStation” is a registered trademark of Sony Computer
Entertainment Inc.

About Real Madrid CF

In 1905 Real Madrid CF clinched its first title. Since then, this
Spanish football club has acquired more silverware in order to become
the most laureate club of all times. With over one hundred years of
history, Real Madrid CF was rated by FIFA as The Best Football Club
of the Century, reaping victories and success both on and off the
playing fields.

The value of the brand and the eagerness of the club has ensured the
complete satisfaction of millions of supporters and motivated the
development of a wide variety of products, services and communication
channels tailor-designed to their followers.

As a result of the international recognition of its brand, the club is
sponsored by the most prestigious companies worldwide, leaders in their
respective fields and eager to link their brand with the values that are
associated to Real Madrid CF

View source version on businesswire.com: http://www.businesswire.com/news/home/20150720006491/en/

30 Jul

Mexico coach blasts team’s traveling conditions to Atlanta

Soccer returns to the Georgia Dome on Wednesday night. Team USA will be involved, but its another match involving Mexico and Panama thats creating some odd headlines.

Last summer, almost 70,000 fans packed the Georgia Dome for a match-up between Mexico and Nigeria.

Before Mexico plays in the Gold Cup games at the Georgia Dome Wednesday night, the teams coach is doing some trash talking about the teams traveling conditions.

Coach Miguel Herrara has been critical of the conditions for their flight from New York to Atlanta.

Mexico started the Gold Cup quest with a blowout against Cuba last week. Then the team went on to beat Costa Rica on Sunday before heading south.

About the flight to Atlanta, the Reuters news agency is reporting Herrara said:

We had to wait three hours, then they packed two teams (into the plane)… We were all squashed.

During the flight, the players were squeezed in and that cant be.. the players shouldnt have to wait so long (at the airport) and travel in those conditions.

Our luggage had to go by land because of too much weight on the plane… They say were carrying too much but were the ones who put most fans in stadiums.

While its the official airline of the games, Delta cant confirm the Mexico soccer team was on one of its flights.

Its unclear if any problems were the fault of an airline or whoever booked the flight.

29 Jul

Apprenda Raises $24M Series D Funding Round For Its Enterprise PaaS | TechCrunch

Apprenda, an enterprise platform as a service (PaaS) player that originally launched back in 2007, today announced that it has raised a $24 million Series D round led by Safeguard Scientifics. Other participants in this round include New Enterprise Associates and Ignition Partners. This brings Apprenda’s total funding to $56 million.

Like other enterprise PaaS services, Apprenda aims to make it easier for enterprise developers to build modern software on top of its infrastructure. What sets the service apart, Apprenda tells us, is that it allows enterprises to work with their existing infrastructure and applications. “That means with Apprenda you can leverage all of your previous investments,” the company’s communications manager Sean Ludwig told us. “Other players focus only on new apps, not existing [ones].” He also noted that Apprenda offers production-grade .NET and Java support.

The company says it plans to use the new funding to hire for its engineering, product, client services and sales teams in order to “further the adoption of its enterprise PaaS” (though I assume it would indeed be unreasonable — yet refreshingly novel — to expect a company to say it raised new funding in order to impede adoption of its products…).

29 Jul

Vietnam Veterans Traveling Exhibit lands in Carroll County – Carroll County Times

Carroll County is hosting the Maryland Public Television Salutes Vietnam Veterans traveling exhibit at two locations in the coming weeks: first at the Carroll County Public Librarys Westminster Branch, where it arrived Tuesday and will be on display through July 30, and then Aug. 1 through 7 at the Carroll County 4-H amp; FFA Fair.

All of our veterans should be acknowledged for their service to our country. The exhibit is really special because it recognizes Vietnam veterans who did not receive the gratitude they deserved, said Kristen Penczek, managing director of special events and community engagement at MPT.

28 Jul

Enterprise teachers take Aviation Challenge – : News – Dothan Eagle

Submitted photo

Enterprise teachers take Aviation Challenge

Enterprise City STEM (Science Technology Engineering Math) teachers were fortunate enough to be part of the first ever teacher professional development experience for Aviation Challenge at the US Space and Rocket Center in Huntsville last week. The pilot program nicked named Bell X-1 for its pioneering mission, brought educators from Alabama and around the US to learn and experience the scientific aspects of flight. Enterprise teachers pictured 4th from left – Stephen Phillips, 6th – Nick Ciuzio, 7th – Melanie Hamlin, 12th -Chelsea Smith.

28 Jul

Keep these tips in mind when traveling with your pet this summer

Are you considering taking your pet with you this summer on vacation? According to petrelocation.com, 60 percent of families traveled with their pet in 2010 and that number continues to grow. More and more families are traveling with their pets and experts say pet travel is fast becoming a multi-billion dollar industry due to the popular trend.

Gone are the days when you had to board your pet because a hotel or airline had policies against them. Now you can find pet-friendly hotels, campgrounds, vacation homes and even four-star resorts that specifically cater to pets and their owners. Some offer special pet beds, food and water dishes and services like pet massage, walking and grooming.

There are travel agents specializing in canine-centered vacations and you can even find canine camps where dog-friendly activities and lodging keep you and your friend dog-happy for a week or more at a time. If your plans require air travel, check with the airline for specific accommodations available for your pet. Some will allow them to be in the cabin in a pet carrier.

Traveling with your pet can be rewarding for you and your familys pet but the key to a successful vacation is proper planning, common sense and sometimes a dose of creativity. The most important thing to remember before making plans, is to make sure your pet is healthy enough to travel. A pre-vacation check-up with your veterinarian is just what the doctor ordered to make sure Fido is up to snuff and ready to hit the road. Make sure your pet is up to date on all vaccinations and that you have the documentation to prove it if your travels take you across the border. Youll also want to make sure you have adequate refills available for any medications your pet is currently taking. And, if youre worried about your pet being a bit anxious during your travels, your veterinarian may even prescribe a mild sedative to help him relax while you get to where youre going.

If you are traveling with travel trailers, fifth wheels or campers, make sure your pet is properly secured in either a carrier or with a leash. This will ensure their safety should there be any sudden stops or an accident occurs. If this is the first time your pet will be traveling in a recreational vehicle, its a good idea to even take a test run around the neighborhood to see how the pet will react and get him acclimated to the idea.

Before you leave home, feed your pet a light meal and lots of water. This will help prevent motion sickness. Youll want to allow enough time to take lots of potty and exercise breaks and remember to never leave your pet unattended while traveling, especially in a towable that could become unhitched from a car or truck.

If youve done your homework, determined your pet is fit to travel and planned your trip carefully, you should have a memorable vacation that the whole family will remember. Happy travels!

Dr. Patrick L. Paradis is a veterinarian and the owner of Woodburn Pet Hospital. He has been practicing in Woodburn for over 32 years. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

27 Jul

Laila Ali, Antonio Brown Accept Variety’s Sports Personality of the Year Awards

Boxer Laila Ali and Pittsburgh Steelers wide receiver Antonio Brown were honored with Sports Personality of the Year awards at Varietys Sports Entertainment Breakfast, presented by Mercedes Benz, on Tuesday at Vibiana in downtown Los Angeles.

She is a woman of many fists, excuse me, of many firsts, joked former New England Patriots Hall of Famer and sports analyst Willie McGinest, who presented Alis award.

27 Jul

Fighter Don Frye Slams WWE’s CM Punk UFC Signing: "Becoming Sports Entertainment"

Everyone in the professional fighting and wrestling world has an opinion on former WWEChampion CM Punksigning with the UFC. Some thoughts are positive and others hate the idea of a wrestler joining the sport. One of the guys who especially does not like the ideais former fighter Don Frye. Frye thinks Punk will be spoon-fed easy fights.

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