WWE has announced staff cuts and other expense reductions in response to the coronavirus pandemic and its associated economic shutdown. A press release from WWE explains, "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."
WWE to Notify Furloughed and Laid Off Staff Via Text Message
According to a report by Dave Meltzer at F4WOnline, Vince McMahon announced the changes on a conference call with WWE staff. "Cutting talent expenses" means both furloughing and permanently laying off staff and contractors, including on-air talent. This marks a stark reversal from WWE's policy before the pandemic, when a combination of high cashflow from TV deals and Saudi Arabia money combined with fear of competition from rival wrestling organizations, most notably AEW, led WWE to tie-up as many wrestlers as possible in long-term, big money deals if for no other reason than to prevent them from signing with anyone else. That strategy included keeping talent under contract even when that talent expressed a desire to leave due to a lack of satisfaction over their career trajectory. Some of the talent may be released now, but in the middle of a pandemic when the entire economy is in a recession and live sporting events, at least ones with crowds, could be prohibited for months to come is probably not how they envisioned it. McMahon reportedly said staff who are furloughed or laid off would be notified by text message.
"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," WWE's press release continued. "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."
WWE says it will provide more details next week when they report their first-quarter earnings, but we should expect lots of talent who have been let go to speak up on social media in the coming days, so look for lots more news to come.