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WWE announces coronavirus-driven budget cuts, including to talent roster

Like most businesses in the world today, the coronavirus pandemic has created a slew of challenges for WWE to face - including significant lost revenue from the cancellation of live events and the downturn in advertising expenditures.

WWE Chairman & CEO Vince McMahon held an internal conference call with employees today (April 15) to address those challenges. The company issued a public press release shortly after the call concluded, the content of which matches up with reports about what McMahon said in his remarks.

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.

The emphasis seems to be on furloughing employees rather than laying them off, which indicates a hope the financial picture will improve and workers can be brought back. But when it comes to wrestlers, they’re independent contractors - ceasing to pay them would seem to signal the end of the contract.

We’ll await more clarity on that from sharper business and legal minds. But we will probably see the return of “future endeavors” statements, in a much bigger way than we’ve seen them over the past several years.

Our thoughts are with folks at WWE, and the many other places where people’s financial futures are in doubt these days.

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