WWE issued a press release today announcing measures being taken by the company in response to the impact of the COVID-19 pandemic.
To combat the effects of government mandated impacts on WWE, the company evaluated its operations and came up with a few short-term cost reductions and cash flow improvement actions. Among the steps being taken are:
— Executive and board member pay being reduced
— Cutting talent expenses, as well as third party staffing and consulting
— Deferring spending on the build out of the new headquarters for at least six months
— Furloughing part of their workforce effective immediately
The release states that these measures will save the company $4 million monthly with $140 million being freed up mostly from the deferral in spending on the new headquarters. The decision to furlough rather than permanently reducing the workforce shows the company believes the furlough will be short-lived.
WWE Chairman and CEO Vince McMahon reportedly held a conference call with company employees shortly before the press release was issued. According to PWInsider, the meeting lasted less than five minutes and reflected most of what was said in the press release. McMahon did state that employees would be notified via text message of their standing in the company.
We will continue to follow this story as more becomes available. The full press release is below:
WWE® PROVIDES COVID-19 BUSINESS UPDATE
STAMFORD, Conn., April 15, 2020 – 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.
About WWE
WWE, a publicly traded company (NYSE: WWE), is an integrated media organization and recognized leader in global entertainment. The company consists of a portfolio of businesses that create and deliver original content 52 weeks a year to a global audience. WWE is committed to family friendly entertainment on its television programming, pay-per-view, digital media and publishing platforms. WWE’s TV-PG, family-friendly programming can be seen in more than 800 million homes worldwide in 28 languages. WWE Network, the first-ever 24/7 over-the-top premium network that includes all live pay-per-views, scheduled programming and a massive video-on-demand library, is currently available in more than 180 countries. The company is headquartered in Stamford, Conn., with offices in New York, Los Angeles, London, Mexico City, Mumbai, Shanghai, Singapore, Dubai, Munich and Tokyo.
Additional information on WWE (NYSE: WWE) can be found at wwe.com and corporate.wwe.com. For information on our global activities, go to http://www.wwe.com/worldwide/.