By Jason Powell, ProWrestling.net Editor (@prowrestlingnet)
WWE issued the following press release on Wednesday to provide a business update related to the coronavirus outbreak.
STAMFORD, Conn.–(BUSINESS WIRE)– WWE (NYSE: WWE) today provided an update on measures taken by the Company in response to the current impact of COVID-19 on the organization.
Due to COVID-19 and current government mandated impacts on WWE and the media business generally, the Company went through an extensive evaluation of its operations over the past several weeks. This analysis resulted in the implementation of various short-term cost reductions and cash flow improvement actions including:
- Reducing executive and board member compensation;
- Decreasing operating expenses;
- Cutting talent expenses, third party staffing and consulting;
- Deferring spend on the build out of the Company’s new headquarters for at least six months.
Given the uncertainty of the situation, the Company also identified headcount reductions and made the decision to furlough a portion of its workforce effective immediately. The decision to furlough versus permanently reduce headcount reflects the fact that the Company currently believes the furlough will be temporary in nature.
The Company’s reductions of employee compensation and headcount result in an estimated monthly savings of $4 million along with cash flow improvement of $140 million primarily from the deferral in spending on the Company’s new headquarters. Additionally, the Company has substantial financial resources, both available cash and debt capacity, which currently total approximately $0.5 billion, to manage the challenges ahead. Management continues to believe the fundamentals of the Company’s business remain strong and that WWE is well positioned to take full advantage of the changing media landscape and increasing value of live sports rights over the longer term.
The Company will provide further details when it reports its first quarter 2020 results next Thursday, April 23 after the close of the market.
Powell’s POV: My heart goes out to everyone in WWE (and elsewhere) who has been put on furlough. It’s an incredibly unfortunate situation, though WWE is far from alone in terms of taking this approach, which essentially means the workers are on unpaid leave and that the company intends to bring them back eventually. The reduction of talent expenses is an interesting line, as WWE has only announced the release of Scott Dawson and Dash Wilder in recent weeks. While they did not offer any specifics in the press release, it seems like it’s only a matter of time before some talents are let go.
I’m not expert, but I’m taking to mean the talent expense cuts at this time would primarily mean things like not having to pay “extras” who are typically at each show such as local talent who currently can’t appear anyhow and cutting back on bringing in excess talent such as a Bobby Roode who lives in Canada and not appearing on shows. Talent expense cuts could also mean things like lower cost of catering due to there being less talent at shows.
I wish that was the case, but they announce a round of cuts (and more are coming).