WWE has announced it will be making a series of cuts as a result of the financial impact of the COVID-19 pandemic.
Chairman Vince McMahon informed the company's employees - including performers - that cuts would be necessary to save them an estimated $4million a month.
McMahon said the talent roster would be trimmed, while others will be furloughed.
Plans to move to move from their Titan Towers home to a new headquarters in Stamford, Connecticut have also been shelved.
WWE continues to produce television from its Performance Centre in Florida after being deemed an "essential business" by Gov. Ron DeSantis.
Aided by a landmark network TV deal with Fox, WWE revenues hit a company record $960.4million (€879.5million) in 2019.
Despite regular live events no longer proving profitable, missing out on this year's Wrestlemania income will have placed a large dent in this year's finances.
There are more than 200 wrestlers currently on the WWE's roster, but infamously these are not regarded as employees but as independent contractors.
The first wrestlers to be cut from the roster were Drake Maverick (James Curtin), Curt Hawkins (Brian Myers), Karl Anderson (Chad Allegra), EC3 (Michael Hutter) and Lio Rush (Lionel Green).
A statement on the WWE's corporate site reads:
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.
Download the brand new OffTheBall App in the Play Store & App Store right now! We've got you covered!
Subscribe to OffTheBall's YouTube channel for more videos, like us on Facebook or follow us on Twitter for the latest sporting news and content.
