WWE Furloughs Staff to Cope With Blow From Canceled Events

Kamaron Leach

16 Apr 2020, 02:05 AM IST

(Bloomberg) -- World Wrestling Entertainment Inc. announced a round of staff layoffs in an effort to cope with a reduced calendar of events the pro-wrestling giant will host in 2020 as a result of state-ordered rules enforcing social distancing.

In addition to the furloughs, management is postponing spending on a new headquarters for six months, cutting compensation for executives and board members and limiting expenses tied to on-air talent, third party staffing and consulting, WWE said in a business update Wednesday. The measures are projected to save $4 million a month, in addition to cash flow improvement of $140 million, primarily from the delayed headquarters spending.

WWE declined further comment on the number of staff affected, but said in a statement that “the decision to furlough versus permanently reduce headcount reflects the fact that the company currently believes the furlough will be temporary in nature.” WWE employed 960 as of Dec. 31, the latest date for which figures are available.

Shares in the Stamford, Connecticut-based company rose as much as 2.1% as of 2:33 p.m. ET, extending a 7-day advance that’s lifted the stock some 14.5%. WWE, led by Chief Executive Officer Vince McMahon, is down more than 40% from a recent high in early January.

WWE shareholders have had little to rejoice over since the new year began as McMahon fired two of his top lieutenants in January amid steep declines in viewership. And McMahon’s move to offload more than 2 million shares in late March further weakened confidence.

The company got a boost Monday when Orange County, Florida Mayor Jerry Demings said Governor Ron DeSantis labeled WWE an “essential business,” allowing WWE to continue hosting closed-set wrestling matches in Orlando. The decision followed reports that one wrestler tested positive for Covid-19 and several wrestlers had withdrawn from an event due to illness. Still WWE, according to a Pro Wrestling Sheet article, said it decided to move forward with business because the employee had no contact with anyone from the company after an exposure outside WWE.