The pro-wrestling industry was shaken with back to back releases announced by the WWE in the past 48 hours. For the first time in history, the company announced more than 35 releases that include superstars and off-screen talents, producers, officials and more. Due to the coronavirus pandemic, WWE had to adopt a budget cut policy causing this change.
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WWE issued the following statement regarding the budget cuts which is primarily focused on trimming down the expenditure at a time when generating revenue has become impossible. So they had to take a hard call by letting some of the talents go from the company.
“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.”
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It was also noted that reducing employee compensation and headcount resulted in an estimated monthly savings of $4 million along with cash flow improvement of $140 million. It is primarily happening due to the deferral in spending on the Company’s new headquarters.
Being the biggest pro-wrestling company in the world they do have substantial financial resources, both in cash and debt capacity.
Approximately $0.5 billion of such resources are available that’d help the brand to survive during this tough situation. WWE officials remain very positive at this point that they won’t be steady holding down to the fundamentals that will not put the growth on hold.
“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.”
As predicted by WrestleVotes Twitter account, this is just the beginning of trimming down the roster to a significant extent. Overall, WWE is looking forward to firing more than 100 employees to keep the expenditure as much minimum, as possible. This is why top and veteran stars like Kurt Angle, Rusev, Mickie James, Zack Ryder and more had to quit the company without prior notice.
