People

World Wrestling Entertainment’s Mike Sileck

The new CFO of World Wrestling Entertainment tells CFO.com why he moved from Monster to the world of body slams and pile drivers, and how he has ch...
Stephen TaubOctober 19, 2006
World Wrestling Entertainment’s Mike Sileck

Since joining World Wrestling Entertainment, Inc. in June 2005, chief financial officer Mike Sileck has been busier than a referee at a Friday night smackdown.

The WWE was founded by Vincent and Linda McMahon in Stamford, Connecticut, but Sileck has spearheaded several financial reporting initiatives intended to present a better picture of the company to Wall Street.

The 7 Habits of Highly Effective CFOs

The 7 Habits of Highly Effective CFOs

Download our whitepaper to discover the technical and behavioral skills needed to lead your business forward.

First, Sileck expanded segment reporting from two principal activities to four, reflecting just how much of wrestling’s revenue is generated outside the ring. The four new segments are ‘Live and Televised Entertainment,’ which includes live events, the sale of merchandise at live events, television programming and pay-per-view, and video-on-demand programming; ‘Consumer Products,’ which includes the sale of video games, toys, books and other products, as well as sales of magazines and home video products; ‘Digital Media,’ which consists of online advertising, ecommerce, broadband and mobile services, and ‘WWE Films.’

Sileck also changed the reporting schedule, announcing in June that WWE fiscal year-end, currently April, to a calendar basis beginning with calendar year 2007. This will result in an eight-month transition period through December.

Investors give such efforts a high-five. Since Sileck joined the company, its stock has surged from a two-year low of $10 to about $17, a 70 percent increase.

Sileck, 46, is also a member of the executive committee and serves on the company’s board of directors. From March 2002 until March 2005, he served as CFO at Monster Worldwide. Before that, he was CFO of USA Networks (now Interactive Corp), and vice president of finance at Sinclair Broadcast Group.

CFO.com pinned Sileck down to discuss the changes he has made at the company.
CFO.com: Were you a big wrestling fan growing up?

Mike Sileck: Frankly, I have not been a huge fan, but I was aware of it. Growing up in Detroit, I had my favorites as a youngster — Bobo Brazil and Dick the Bruiser. My oldest son was a fan when he was 12 or so.

How did you wind up at WWE?

I regularly get calls from recruiters. After leaving Monster, I was exploring what I wanted to do next.

Why did you leave Monster?

I had been there for three years. The company had five divisions when I started and was down to one and a half, and on the way to one and I was looking for a new challenge. I had known about WWE a long time. After spending time with [WWE founders] Linda and Vince [McMahon], I felt it was a good business opportunity.

What made WWE a good choice?

I look for situations with strong brand awareness, a franchise. When you look at the history of this form of entertainment and the McMahons’ stamp on that history, it was very interesting. It has a strong franchise. I felt there was upside to the business model, particularly in the digital space and internationally. Also, the McMahons are good people who want to continue to grow the company.

When you were hired, what was your mandate?

My agenda was to help the McMahons. Vince said he liked my operational orientation. He felt I could bring fresh eyes to an organization — a new perspective. I’m also fortunate to sit at the board level.

What are your biggest assets?

I thought I could bring more of a financial orientation to the company. Not necessarily from an accounting standpoint. They have great controls, [and] a great senior VP of finance. They were in great shape. But, I felt finance could be more integrated into the organization.

Give me an example.

We put financial people, who were in a centralized role, into the businesses, so they are now working for the operators of the different businesses. This helps to get a financial orientation into the corporate culture. For example, in our Live Events business, we now do a very rigorous analysis before we commit to new markets to tour in. This more rigorous analysis is made possible by having financial people in operating roles.

What does this accomplish from a practical standpoint?

When decisions are made, they think of finance and the implications of finance.

Your two biggest impacts have been changing segment reporting and moving to a calendar year. Were those your ideas?

Yes. One of the first things you do when you start a job is to meet investors and listen to what they have to say. The way we had our fiscal year, it became pretty clear we got in the way of how people understood the company — both internally and externally. May through April didn’t service anyone well. From top down we decided to do this. It’s a fairly complicated thing to do and takes a fair amount of time to do. Beginning next year, it will be great.

How long does it take to transition and what are the biggest things to do?

One of the biggest things you need to do is determine what new reporting time period to transition to. Then, leading up to that point, start establishing hard closes to coincide with the timing of the new fiscal quarter closes. Here, we do a pretty hard close every month, so it is not as problematic as it would have been at other places. But, you want a hard close every new fiscal quarter. Also, all reporting — different work sheets, models, budgets — must be reoriented. So, there is a lot of rewriting of software. We started talking about it a year ago and we’re now in the middle of the transition.

How long does it take to execute?

You need a year in advance to start that process. It will vary, depending on specific circumstances. We also needed Board approval.

Was that a hard sell?

No. It was pretty easily accepted.

Why did you change segment reporting?

We are now in the film business. [Our first films] were released in May and in October. As a result of the uniqueness of our business, we were required to report this business as a separate segment. It could have waited another quarter.

Who required that?

It fell somewhere between highly recommended and just short of required. It was situation specific. Also, strategically, we wanted to put a focus on our digital strategy. It also was important for investors to understand the way the company looks at the different businesses, so breaking out the digital business was important. The key to this is to show how management organizes internally to manage the different businesses.

WWE has certainly disclosed a fair amount of detail in the past, too, hasn’t it?

This company has done a great job with transparency for its financials. We want to position the company as being very professional. Financial reporting is an extension of that.

Why did you go to four segments?

We thought those four represented most accurately how internally we manage the various businesses.

Are there other changes being made to the process?

We tried to bring financial awareness to each business. So, we are now on a monthly schedule to forecast and re-forecast the business. We also have more communication on a monthly basis around the numbers. Finally, because we now have more financial people in the organization, we run business models and profit and loss statements before we make a decision. It is not necessarily leading the decision-making, but it’s a factor.

How did the old-timers who were not finance people accept these changes?

The family has done a nice job of balancing older employees with professional managers. Professional managers are more financially oriented due to their background. We have a good balance. More veteran employees accepted it very well.

What are the key metrics you look at that are unique to the wrestling business in order to judge success?

We look at attendance at our events. We have very good historical information, so we can see a trend. We look at TV ratings and Internet traffic. We have a good reporting system, so we have good visibility at what products are moving, in terms of pay-per-view buys.

What are your next biggest priorities?

The continuing evolution of the company and the continued refinement of our strategic goals.

What are those goals?

We need to develop strong digital media business. It could be lucrative. We need to figure out how to exploit our intellectual property around the world.

Your stock has soared from its low since you took over as CFO.

It’s nice of you to notice. Timing is everything. We’re a team here.

4 Powerful Communication Strategies for Your Next Board Meeting