Vince McMahon hosted a conference call with WWE employees this afternoon to discuss some important company updates, and we now have an idea of what those changes entail.
According to PWInsider.com’s Mike Johnson, McMahon announced a number of cutbacks and furloughs for both office employees and on-air talents. It was noted that WWE is cutting back on pay for Board Members and Executives and plans for WWE Headquarters to relocate to their new facilities have been delayed. Additionally, McMahon announced WWE would be cutting the talent roster and overall headcount of employees retained, effectively immediately.
It was also noted that the meeting lasted less than five minutes and that McMahon said these were hard decisions to make, but they were a reflection of the current reality the world faces due to the coronavirus pandemic and its influence on the economy.
The company has since issued a full press release on the new changes announced by Vince McMahon on this afternoon’s call, which can be read below:
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.