As if you would not have guessed, wrestling is apparently not a recession-proof business. This morning there was an announcement from World Wrestling Entertainment Inc. (NYSE: WWE) that it was "restructuring," which is the new lingo for job cuts and cost cuts.
McMahon & Co. has announced that it is cutting 10% of its staff,which should result in annual cost savings of approximately $8million. In exchange for that, the company will take a one-time chargeof $3 million. WWE also noted that the company has completed anevaluation of its operating and capital expenditures and has identified"additional efficiencies." In short, more cost cuts are on the way.The company’s ultimate goal is to trim $20 million from its expensestructure in 2009.
WWE is not the only sports and entertainment fallout here in theeconomy. We have seen and heard of cost cuts in many professionalsporting teams and even in some of the leagues. In December, the Arena Football League decided to cancel its 2009season.
The next time you go to a game or event and notice how there are manyvacant seats, it might be the recession’s impact rather than thequality of your team or venue.
Does WWE get to fully expense all those chairs and other bits of equipment they break, or do those get amortized? Maybe it shouldn’t blow up any more cars or other expensive props as part of the cost cutting ahead.
Jon C. Ogg
January 9, 2009