Kemo
10-27-2016, 06:54 PM
WWE announced the following:
WWE® Reports Q3 2016 Results & Targets Record 2017 Adjusted OIBDA of $100 Million
STAMFORD, Conn.–(BUSINESS WIRE)–
WWE today announced financial results for its third quarter 2016. The Company reported Net income of $11.1 million, or $0.14 per diluted share, as compared to Net income of $10.4 million, or $0.14 per diluted share, in the prior year quarter.
“During the quarter, we continued to effectively execute our content strategy, which has resulted in record revenues to-date in 2016 and increased consumption across our media platforms,” said WWE Chairman & CEO Vince McMahon. “This growth illustrates meaningful progress against our long-term strategic plan and provides the foundation for achieving our 2017 financial objectives.”
George Barrios, WWE Chief Strategy & Financial Officer, stated “We achieved a 24% increase in average paid subscribers to WWE Network and generated profits that were within the range of our guidance. We expect continued year-over-year growth in subscribers and profits for the fourth quarter resulting in strong full year performance that is in-line with our previous business outlook.”
Fourth Quarter and Full Year 2016 Business Outlook
The Company projects fourth quarter Adjusted OIBDA of approximately $20 million to $24 million (Operating income of $12 million to $16 million) and average paid subscribers to WWE Network of 1.40 million (+/- 2%). The fourth quarter subscriber forecast represents an approximate 4% sequential decline from the third quarter 2016 and a 13% increase from the fourth quarter 2015. The Company also projects 2016 Adjusted OIBDA of $80 million to $84 million (Operating income of $54 million to $58 million) and average paid subscribers to WWE Network of approximately 1.42 million representing growth of 25% for the full year.3
2017 Outlook
In 2017, WWE management expects the Company to achieve another year of record revenue and has targeted Adjusted OIBDA of $100 million, which would also be an all-time record (up approximately 20% from projected 2016 Adjusted OIBDA of $80 million to $84 million), and Operating income of $70 million. Supporting the continued growth in the Company’s revenue and profits, management anticipates contractual increases in television rights fees from key distribution agreements and expects the level of WWE Network subscribers will continue to increase, albeit at a lower rate, on a year-over-year basis. As management believes there is a significant long term growth opportunity for WWE, the company plans to continue to invest in key areas to optimize WWE’s long-term performance while driving strong bottom line performance.
Providing perspective on the growth of WWE Network and the company’s targeted profit expansion, Mr. Barrios commented, “Given the current scale and leverage of WWE Network, increases in its subscribers have the potential to drive meaningful growth in revenue and profit; therefore, we define success by the achievement of sustained year-over-year increases in this measure. Based on anticipated subscriber growth, we believe we can achieve our targeted record financial results in 2017. Moreover, the continued growth of WWE Network would enable us to deliver a wider range of content, strengthening our engagement with a broadening audience of ardent fans. In addition to supporting our 2017 financial objective, growth of WWE Network would provide us with greater flexibility as the media landscape continues to evolve.”2
Comparability of Results
Third quarter 2015 revenue included approximately $14 million associated with the licensed reality series Total Divas and Tough Enough, which aired 21 episodes in the prior year period. These episodes did not have a material impact on OIBDA in the prior year quarter. There were no comparable airings in the third quarter 2016.
Three Months Ended September 30, 2016 – Results Overview
Revenues for the quarter were $164.2 million, essentially flat to the prior year. North American revenues decreased 6% from the prior year quarter predominantly due to the prior-year impact of certain licensed television programs (described above), a lower effective royalty rate for our franchise video game, WWE 2K16, and lower sales of our toy products. These factors were partially offset by the growth of WWE Network subscribers and increased television rights fees in key distribution agreements. Revenues from outside North America increased 13% driven by the increased monetization of content, as reflected in the Media Division and by higher Live Event revenue, particularly in the EMEA and APAC regions. Revenue in the current period was reduced by approximately $1.0 million due to unfavorable changes in foreign exchange rates.
Three Months Ended September 30, 2016 – Segment Performance Commentary
The year-over-year changes in the Company’s financial performance were driven by its Network, Television, Licensing, WWE Studios and Corporate & Other business segments. A further discussion of key business segments is provided in the narrative below. Refer to our third quarter 2016 Form 10-Q for management’s discussion and analysis of financial condition and results of operations pertaining to all of our segments.
Media Division
Revenues from the Company’s Media division decreased 4%, to $110.4 million, primarily due to the impact of certain television programming, which more than offset the increased revenue from the growth of WWE Network subscribers and the contractual escalation of television rights fees.
* Network revenues, which include revenue generated by WWE Network and pay-per-view, increased 10% to $45.1 million. WWE Network subscription revenue increased 18% to $42.8 million from $36.4 million in the prior year quarter based on a 24% year-over-year increase in average paid subscribers to 1.46 million.
* Network segment OIBDA of $17.4 million was essentially unchanged from the prior year quarter as the growth in WWE Network subscription revenue was offset by increased programming expenses, including a $3.2 million allocation of certain expenses shared between the Company’s Network and Television segments.4 A portion of the increase in Network programming expenses relates to the Company’s previously communicated strategic investments.
* The Company continued to increase the global subscriber base of WWE Network, as measured on a year-over-year basis, with launches over the trailing 12 months in five countries including Germany and Japan. WWE Network had 1.44 million total paid subscribers at the end of the third quarter, which represented a 17% increase from September 30, 2015. WWE Network had 1.07 million U.S. paid subscribers and 373,000 international paid subscribers at quarter-end.
* WWE Network content, including pay-per-views, original series, NXT Takeover, and specials have continued to drive viewer engagement. During the quarter, the Company introduced compelling new content for WWE Network, including NXT Takeover Brooklyn III, Holy Foley!, WWE Draft Center Live, and Cruiserweight Classic, a ten-week global tournament. The Company is on pace to add more than 300 hours of original content to the network’s featured programming in 2016, and more than 2,500 hours of archival content to WWE Network, which would result in an on-demand library of over 7,000 hours at year-end 2016.
* Television revenues decreased 14% to $56.3 million from $65.2 million in the prior year as contractual increases in key distribution agreements were more than offset by the prior year impact of WWE’s licensed reality series, Total Divas and Tough Enough. There were no scheduled airings of these programs in the third quarter 2016, while the prior year quarter reflected approximately $14 million in revenue from the fourth season of Total Divas (13 episodes) and Tough Enough (8 episodes). As indicated above, the allocation of certain shared expenses reduced Network segment OIBDA and increased Television segment OIBDA by $3.2 million in the third quarter 2016.
Live Events
Live Event revenues increased 10% to $28.6 million primarily due to the staging of 5 additional international events.
* There were 82 total events (excluding NXT) in the current quarter, including 71 events in North America and 11 events in international markets, as compared to 85 events in the prior year quarter, including 79 events in North America and 6 in international markets.
* North American live event revenues of $21.0 million were essentially unchanged from the prior year quarter as increases in average attendance and ticket prices were offset by the impact of eight fewer events. Average attendance increased 4% to 5,300, and the average effective ticket price increased 3% to $50.51.
* International live event revenue increased 56% to $7.0 million from $4.5 million in the prior year quarter primarily due to the impact of five additional events. Average attendance declined 8% to 8,200 and average effective ticket prices declined 15% to $72.13, attributable, in part, to changes in the mix of territories.
Consumer Products
Revenues from Consumer Products decreased 4% to $21.6 million as higher online sales of merchandise at the Company’s e-commerce sites were more than offset by a reduction in licensing revenue. Licensing revenues decreased 22% to $9.0 million primarily due to a lower effective royalty rate for our franchise video game, WWE 2K16, and lower sales of our toy products. (As a reminder, the lower effective royalty rate derived from an increasing rate structure over the 2015 year as compared to a flat rate structure in 2016. For the full year, the Company expects the rate for 2016 will be comparable to the average rate for 2015.)
WWE Studios
Revenues from filmed entertainment increased to $2.5 million as compared to $1.7 million in the prior year quarter. The increase in revenue was due to the performance and timing of results from the Company’s portfolio of movies. During the quarter, WWE Studios released two feature films, Scooby Doo! & WWE: Curse of the Speed Demon and Interrogation. WWE Studios OIBDA increased $1.8 million due, in part, to the increase in revenues, and agreed changes to the terms of distribution of a previously released film, which resulted in lower expenses.
Corporate and Other
Corporate and Other expenses increased to $44.8 million in the current year quarter from $41.9 million in the prior year quarter. As defined, these expenses include corporate G&A expenses as well as Business Support costs, such as sales, marketing, and talent development costs, which are not allocated to specific segments. The $2.9 million rise in Corporate & other expense reflected investments in data analytics, global branding, and certain talent initiatives.
Operating Income Before Depreciation and Amortization (OIBDA)
OIBDA was $24.5 million as compared to $23.4 million in the prior year quarter. The increase in OIBDA reflected the increased monetization of the Company’s video content. Television and Network profits, on a combined basis, increased $5.5 million due to the contractual escalation of key distribution agreements and growth in WWE Network subscriptions, which were partially offset by higher production costs.4 These growth factors were offset, in part, by a $2.5 million reduction in Licensing profits from a lower effective video game royalty rate and lower sales of toy products, as well as an increase in Corporate and Other expenses as described above. The Company’s overall OIBDA margin was 15% in the current year quarter as compared to 14% in the prior year quarter.
Nine Months Ended September 30, 2016 – Results Overview
Total revenues for the nine months ended September 30, 2016 were $534.3 million as compared to $492.6 million in the prior year period. Operating income for the current year period was $41.8 million versus $40.3 million in the prior year period. Net income was $25.8 million, or $0.33 per diluted share, as compared to Net income of $25.3 million, or $0.33 per diluted share, in the prior year period. OIBDA was $59.6 million for the current nine month period as compared to OIBDA of $57.6 million in the prior year period.
Nine Months Ended September 30, 2016 – Segment Performance Commentary
Revenues increased 8% to $534.3 million from $492.6 million with growth from across the Company’s business segments. North American revenues increased 7% driven primarily by the growth of WWE Network, higher Live Events and Digital Media revenue, as well as higher online sales of branded merchandise as reflected in WWE Shop. Partially offsetting this growth was a decline in television revenue as the escalation of rights fees in key distribution agreements was more than offset by the impact of airing fewer episodes of the Company’s licensed reality series. Revenues from outside North America increased 14% driven by the growth of WWE Network, increased television rights fees as well as higher live event and e-commerce merchandise sales, particularly in the EMEA region. Revenue in the current period was reduced by approximately $2.7 million due to unfavorable changes in foreign exchange rates.
Media Division
Revenues from the Company’s Media division increased 6% to $337.6 million from $318.8 million primarily due to the growth in WWE Network subscription revenue, contractual increases in key television distribution agreements and higher digital media revenue. These growth drivers were partially offset by the impact of fewer episodes of the licensed reality series, Tough Enough and Total Divas, and revenue declines from the Company’s Home Entertainment segment.
Live Events
Live Event revenues increased 15% to $105.8 million from $91.8 million in the prior year period primarily due to a 12% increase in average ticket prices at the Company’s events in North America, including WrestleMania, an increase in international ticket sales, and an expanded touring schedule for the Company’s NXT brand. Average attendance at the Company’s international events increased 18% to 8,000 and the company held six additional events in international markets.
Consumer Products Division
Revenues from Consumer Products increased 8% to $80.1 million from $74.4 million in the prior year period, with growth driven by higher sales of branded merchandise through the Company’s e-commerce website, WWEShop, and on distribution channels including Amazon.
WWE Studios
WWE Studios recognized revenue of $7.7 million as compared to revenue of $5.3 million in the prior year period. The increase in revenue was due to the performance and timing of results from the Company’s portfolio of movies.
Corporate and Other
Corporate and Other expenses were $136.3 million as compared to $122.4 million in the prior year period. As defined, these expenses include corporate G&A expenses as well as Business Support costs such as sales, marketing, international management and talent development costs, which are not allocated to specific segments. The rise in Corporate & Other expense reflects investments to support key strategic initiatives and certain talent related costs.
Operating Income Before Depreciation and Amortization (OIBDA)
OIBDA increased to $59.6 million from $57.6 million in the prior year period primarily due to the increased monetization of the Company’s video content and higher profits from its Live Event business. Television and Network profits, on a combined basis, increased $8.3 million with the contractual escalation of key distribution agreements and growth in WWE Network subscriptions, which were partially offset by higher production costs.7 Live Event profits increased $4.9 million primarily due to higher ticket sales and effective pricing for the Company’s premier event, WrestleMania, as well as increased international events and attendance. Partially offsetting these growth drivers was a $13.9 million increase in Corporate and Other expenses (as described above). The Company’s OIBDA margin was 11% in the current year period as compared to 12% in the prior year period.
Cash Flows & Liquidity
Cash generated from operating activities was $19.7 million in the current nine-month period, compared to $31.9 million in the prior year period. The $12.2 million decrease in cash generated by operating activities was primarily due to the increased payout of management incentive compensation.
Capital expenditures increased $8.0 million from the prior year period in continued support of the Company’s content production activities. Capital expenditures in the current year period include $4.8 million paid as part of the consideration towards the purchase of a building and underlying real property located in Stamford, Connecticut.
As of September 30, 2016, the Company held $68 million in cash and short-term investments and estimates debt capacity under its revolving line of credit of approximately $150 million.
Notes
(1) The definition of OIBDA, Adjusted OIBDA and a reconciliation of Q3 2016 Operating Income to Adjusted OIBDA can be found in the Supplemental Information in this release.
(2) The Company’s business model and expected results will continue to be subject to significant execution risks, including those risks outlined in the Company’s Form 10-K filing with the SEC.
(3) Reconciliation of Q4 2016 and full year 2016 and 2017 Operating Income to Adjusted OIBDA can be found in the Supplemental Information in this release.
(4) Beginning in January 2016, the Company started allocating certain shared expenses between its Network and Television segments. Management believes this allocation more accurately reflects the operations of these segments. For the third quarter 2016, the implementation of this allocation methodology reduced Network segment OIBDA by $3.2 million and increased Television segment OIBDA by a corresponding $3.2 million. The allocation methodology had no impact on the Company’s consolidated financial statements.
(5) Metrics reflect subscribers who are direct customers of WWE Network and subscribers reported under licensed partner agreements, which have different economic terms for the network.
(6) Average paid subscribers are calculated based on the arithmetic daily mean over the relevant period, and may differ substantially from paid subscribers at the end of any period due to the timing of paid subscriber additions and losses.
(7) For the nine month period ended September 30, 2016, the allocation of shared production expenses (as described in note 3 above) reduced Network segment OIBDA by $11.6 million and increased Television segment OIBDA by a corresponding $11.6 million. The allocation methodology had no impact on the Company’s consolidated financial statements.
The full release with charts can be found here (http://corporate.wwe.com/~/media/Files/W/WWE/press-releases/2016/q3-2016-earnings-release-10-27-16.pdf)on WWE’s Corporate site.
WWE® Reports Q3 2016 Results & Targets Record 2017 Adjusted OIBDA of $100 Million
STAMFORD, Conn.–(BUSINESS WIRE)–
WWE today announced financial results for its third quarter 2016. The Company reported Net income of $11.1 million, or $0.14 per diluted share, as compared to Net income of $10.4 million, or $0.14 per diluted share, in the prior year quarter.
“During the quarter, we continued to effectively execute our content strategy, which has resulted in record revenues to-date in 2016 and increased consumption across our media platforms,” said WWE Chairman & CEO Vince McMahon. “This growth illustrates meaningful progress against our long-term strategic plan and provides the foundation for achieving our 2017 financial objectives.”
George Barrios, WWE Chief Strategy & Financial Officer, stated “We achieved a 24% increase in average paid subscribers to WWE Network and generated profits that were within the range of our guidance. We expect continued year-over-year growth in subscribers and profits for the fourth quarter resulting in strong full year performance that is in-line with our previous business outlook.”
Fourth Quarter and Full Year 2016 Business Outlook
The Company projects fourth quarter Adjusted OIBDA of approximately $20 million to $24 million (Operating income of $12 million to $16 million) and average paid subscribers to WWE Network of 1.40 million (+/- 2%). The fourth quarter subscriber forecast represents an approximate 4% sequential decline from the third quarter 2016 and a 13% increase from the fourth quarter 2015. The Company also projects 2016 Adjusted OIBDA of $80 million to $84 million (Operating income of $54 million to $58 million) and average paid subscribers to WWE Network of approximately 1.42 million representing growth of 25% for the full year.3
2017 Outlook
In 2017, WWE management expects the Company to achieve another year of record revenue and has targeted Adjusted OIBDA of $100 million, which would also be an all-time record (up approximately 20% from projected 2016 Adjusted OIBDA of $80 million to $84 million), and Operating income of $70 million. Supporting the continued growth in the Company’s revenue and profits, management anticipates contractual increases in television rights fees from key distribution agreements and expects the level of WWE Network subscribers will continue to increase, albeit at a lower rate, on a year-over-year basis. As management believes there is a significant long term growth opportunity for WWE, the company plans to continue to invest in key areas to optimize WWE’s long-term performance while driving strong bottom line performance.
Providing perspective on the growth of WWE Network and the company’s targeted profit expansion, Mr. Barrios commented, “Given the current scale and leverage of WWE Network, increases in its subscribers have the potential to drive meaningful growth in revenue and profit; therefore, we define success by the achievement of sustained year-over-year increases in this measure. Based on anticipated subscriber growth, we believe we can achieve our targeted record financial results in 2017. Moreover, the continued growth of WWE Network would enable us to deliver a wider range of content, strengthening our engagement with a broadening audience of ardent fans. In addition to supporting our 2017 financial objective, growth of WWE Network would provide us with greater flexibility as the media landscape continues to evolve.”2
Comparability of Results
Third quarter 2015 revenue included approximately $14 million associated with the licensed reality series Total Divas and Tough Enough, which aired 21 episodes in the prior year period. These episodes did not have a material impact on OIBDA in the prior year quarter. There were no comparable airings in the third quarter 2016.
Three Months Ended September 30, 2016 – Results Overview
Revenues for the quarter were $164.2 million, essentially flat to the prior year. North American revenues decreased 6% from the prior year quarter predominantly due to the prior-year impact of certain licensed television programs (described above), a lower effective royalty rate for our franchise video game, WWE 2K16, and lower sales of our toy products. These factors were partially offset by the growth of WWE Network subscribers and increased television rights fees in key distribution agreements. Revenues from outside North America increased 13% driven by the increased monetization of content, as reflected in the Media Division and by higher Live Event revenue, particularly in the EMEA and APAC regions. Revenue in the current period was reduced by approximately $1.0 million due to unfavorable changes in foreign exchange rates.
Three Months Ended September 30, 2016 – Segment Performance Commentary
The year-over-year changes in the Company’s financial performance were driven by its Network, Television, Licensing, WWE Studios and Corporate & Other business segments. A further discussion of key business segments is provided in the narrative below. Refer to our third quarter 2016 Form 10-Q for management’s discussion and analysis of financial condition and results of operations pertaining to all of our segments.
Media Division
Revenues from the Company’s Media division decreased 4%, to $110.4 million, primarily due to the impact of certain television programming, which more than offset the increased revenue from the growth of WWE Network subscribers and the contractual escalation of television rights fees.
* Network revenues, which include revenue generated by WWE Network and pay-per-view, increased 10% to $45.1 million. WWE Network subscription revenue increased 18% to $42.8 million from $36.4 million in the prior year quarter based on a 24% year-over-year increase in average paid subscribers to 1.46 million.
* Network segment OIBDA of $17.4 million was essentially unchanged from the prior year quarter as the growth in WWE Network subscription revenue was offset by increased programming expenses, including a $3.2 million allocation of certain expenses shared between the Company’s Network and Television segments.4 A portion of the increase in Network programming expenses relates to the Company’s previously communicated strategic investments.
* The Company continued to increase the global subscriber base of WWE Network, as measured on a year-over-year basis, with launches over the trailing 12 months in five countries including Germany and Japan. WWE Network had 1.44 million total paid subscribers at the end of the third quarter, which represented a 17% increase from September 30, 2015. WWE Network had 1.07 million U.S. paid subscribers and 373,000 international paid subscribers at quarter-end.
* WWE Network content, including pay-per-views, original series, NXT Takeover, and specials have continued to drive viewer engagement. During the quarter, the Company introduced compelling new content for WWE Network, including NXT Takeover Brooklyn III, Holy Foley!, WWE Draft Center Live, and Cruiserweight Classic, a ten-week global tournament. The Company is on pace to add more than 300 hours of original content to the network’s featured programming in 2016, and more than 2,500 hours of archival content to WWE Network, which would result in an on-demand library of over 7,000 hours at year-end 2016.
* Television revenues decreased 14% to $56.3 million from $65.2 million in the prior year as contractual increases in key distribution agreements were more than offset by the prior year impact of WWE’s licensed reality series, Total Divas and Tough Enough. There were no scheduled airings of these programs in the third quarter 2016, while the prior year quarter reflected approximately $14 million in revenue from the fourth season of Total Divas (13 episodes) and Tough Enough (8 episodes). As indicated above, the allocation of certain shared expenses reduced Network segment OIBDA and increased Television segment OIBDA by $3.2 million in the third quarter 2016.
Live Events
Live Event revenues increased 10% to $28.6 million primarily due to the staging of 5 additional international events.
* There were 82 total events (excluding NXT) in the current quarter, including 71 events in North America and 11 events in international markets, as compared to 85 events in the prior year quarter, including 79 events in North America and 6 in international markets.
* North American live event revenues of $21.0 million were essentially unchanged from the prior year quarter as increases in average attendance and ticket prices were offset by the impact of eight fewer events. Average attendance increased 4% to 5,300, and the average effective ticket price increased 3% to $50.51.
* International live event revenue increased 56% to $7.0 million from $4.5 million in the prior year quarter primarily due to the impact of five additional events. Average attendance declined 8% to 8,200 and average effective ticket prices declined 15% to $72.13, attributable, in part, to changes in the mix of territories.
Consumer Products
Revenues from Consumer Products decreased 4% to $21.6 million as higher online sales of merchandise at the Company’s e-commerce sites were more than offset by a reduction in licensing revenue. Licensing revenues decreased 22% to $9.0 million primarily due to a lower effective royalty rate for our franchise video game, WWE 2K16, and lower sales of our toy products. (As a reminder, the lower effective royalty rate derived from an increasing rate structure over the 2015 year as compared to a flat rate structure in 2016. For the full year, the Company expects the rate for 2016 will be comparable to the average rate for 2015.)
WWE Studios
Revenues from filmed entertainment increased to $2.5 million as compared to $1.7 million in the prior year quarter. The increase in revenue was due to the performance and timing of results from the Company’s portfolio of movies. During the quarter, WWE Studios released two feature films, Scooby Doo! & WWE: Curse of the Speed Demon and Interrogation. WWE Studios OIBDA increased $1.8 million due, in part, to the increase in revenues, and agreed changes to the terms of distribution of a previously released film, which resulted in lower expenses.
Corporate and Other
Corporate and Other expenses increased to $44.8 million in the current year quarter from $41.9 million in the prior year quarter. As defined, these expenses include corporate G&A expenses as well as Business Support costs, such as sales, marketing, and talent development costs, which are not allocated to specific segments. The $2.9 million rise in Corporate & other expense reflected investments in data analytics, global branding, and certain talent initiatives.
Operating Income Before Depreciation and Amortization (OIBDA)
OIBDA was $24.5 million as compared to $23.4 million in the prior year quarter. The increase in OIBDA reflected the increased monetization of the Company’s video content. Television and Network profits, on a combined basis, increased $5.5 million due to the contractual escalation of key distribution agreements and growth in WWE Network subscriptions, which were partially offset by higher production costs.4 These growth factors were offset, in part, by a $2.5 million reduction in Licensing profits from a lower effective video game royalty rate and lower sales of toy products, as well as an increase in Corporate and Other expenses as described above. The Company’s overall OIBDA margin was 15% in the current year quarter as compared to 14% in the prior year quarter.
Nine Months Ended September 30, 2016 – Results Overview
Total revenues for the nine months ended September 30, 2016 were $534.3 million as compared to $492.6 million in the prior year period. Operating income for the current year period was $41.8 million versus $40.3 million in the prior year period. Net income was $25.8 million, or $0.33 per diluted share, as compared to Net income of $25.3 million, or $0.33 per diluted share, in the prior year period. OIBDA was $59.6 million for the current nine month period as compared to OIBDA of $57.6 million in the prior year period.
Nine Months Ended September 30, 2016 – Segment Performance Commentary
Revenues increased 8% to $534.3 million from $492.6 million with growth from across the Company’s business segments. North American revenues increased 7% driven primarily by the growth of WWE Network, higher Live Events and Digital Media revenue, as well as higher online sales of branded merchandise as reflected in WWE Shop. Partially offsetting this growth was a decline in television revenue as the escalation of rights fees in key distribution agreements was more than offset by the impact of airing fewer episodes of the Company’s licensed reality series. Revenues from outside North America increased 14% driven by the growth of WWE Network, increased television rights fees as well as higher live event and e-commerce merchandise sales, particularly in the EMEA region. Revenue in the current period was reduced by approximately $2.7 million due to unfavorable changes in foreign exchange rates.
Media Division
Revenues from the Company’s Media division increased 6% to $337.6 million from $318.8 million primarily due to the growth in WWE Network subscription revenue, contractual increases in key television distribution agreements and higher digital media revenue. These growth drivers were partially offset by the impact of fewer episodes of the licensed reality series, Tough Enough and Total Divas, and revenue declines from the Company’s Home Entertainment segment.
Live Events
Live Event revenues increased 15% to $105.8 million from $91.8 million in the prior year period primarily due to a 12% increase in average ticket prices at the Company’s events in North America, including WrestleMania, an increase in international ticket sales, and an expanded touring schedule for the Company’s NXT brand. Average attendance at the Company’s international events increased 18% to 8,000 and the company held six additional events in international markets.
Consumer Products Division
Revenues from Consumer Products increased 8% to $80.1 million from $74.4 million in the prior year period, with growth driven by higher sales of branded merchandise through the Company’s e-commerce website, WWEShop, and on distribution channels including Amazon.
WWE Studios
WWE Studios recognized revenue of $7.7 million as compared to revenue of $5.3 million in the prior year period. The increase in revenue was due to the performance and timing of results from the Company’s portfolio of movies.
Corporate and Other
Corporate and Other expenses were $136.3 million as compared to $122.4 million in the prior year period. As defined, these expenses include corporate G&A expenses as well as Business Support costs such as sales, marketing, international management and talent development costs, which are not allocated to specific segments. The rise in Corporate & Other expense reflects investments to support key strategic initiatives and certain talent related costs.
Operating Income Before Depreciation and Amortization (OIBDA)
OIBDA increased to $59.6 million from $57.6 million in the prior year period primarily due to the increased monetization of the Company’s video content and higher profits from its Live Event business. Television and Network profits, on a combined basis, increased $8.3 million with the contractual escalation of key distribution agreements and growth in WWE Network subscriptions, which were partially offset by higher production costs.7 Live Event profits increased $4.9 million primarily due to higher ticket sales and effective pricing for the Company’s premier event, WrestleMania, as well as increased international events and attendance. Partially offsetting these growth drivers was a $13.9 million increase in Corporate and Other expenses (as described above). The Company’s OIBDA margin was 11% in the current year period as compared to 12% in the prior year period.
Cash Flows & Liquidity
Cash generated from operating activities was $19.7 million in the current nine-month period, compared to $31.9 million in the prior year period. The $12.2 million decrease in cash generated by operating activities was primarily due to the increased payout of management incentive compensation.
Capital expenditures increased $8.0 million from the prior year period in continued support of the Company’s content production activities. Capital expenditures in the current year period include $4.8 million paid as part of the consideration towards the purchase of a building and underlying real property located in Stamford, Connecticut.
As of September 30, 2016, the Company held $68 million in cash and short-term investments and estimates debt capacity under its revolving line of credit of approximately $150 million.
Notes
(1) The definition of OIBDA, Adjusted OIBDA and a reconciliation of Q3 2016 Operating Income to Adjusted OIBDA can be found in the Supplemental Information in this release.
(2) The Company’s business model and expected results will continue to be subject to significant execution risks, including those risks outlined in the Company’s Form 10-K filing with the SEC.
(3) Reconciliation of Q4 2016 and full year 2016 and 2017 Operating Income to Adjusted OIBDA can be found in the Supplemental Information in this release.
(4) Beginning in January 2016, the Company started allocating certain shared expenses between its Network and Television segments. Management believes this allocation more accurately reflects the operations of these segments. For the third quarter 2016, the implementation of this allocation methodology reduced Network segment OIBDA by $3.2 million and increased Television segment OIBDA by a corresponding $3.2 million. The allocation methodology had no impact on the Company’s consolidated financial statements.
(5) Metrics reflect subscribers who are direct customers of WWE Network and subscribers reported under licensed partner agreements, which have different economic terms for the network.
(6) Average paid subscribers are calculated based on the arithmetic daily mean over the relevant period, and may differ substantially from paid subscribers at the end of any period due to the timing of paid subscriber additions and losses.
(7) For the nine month period ended September 30, 2016, the allocation of shared production expenses (as described in note 3 above) reduced Network segment OIBDA by $11.6 million and increased Television segment OIBDA by a corresponding $11.6 million. The allocation methodology had no impact on the Company’s consolidated financial statements.
The full release with charts can be found here (http://corporate.wwe.com/~/media/Files/W/WWE/press-releases/2016/q3-2016-earnings-release-10-27-16.pdf)on WWE’s Corporate site.