WWE To Significantly Reduce Spending, Cost Structure, TNA Competition, More

I was in today’s WWE Investor Conference Call to discuss the company’s 2008 third quarter earnings. If you post this report on another website please give credit to WrestlingNewsWorld.com.

– In response to WWE’s slowed third quarter earnings that were announced by the company today, Chief Executive Officer Linda McMahon vowed that the company will reduce the cost structure in 2009 by $20 million and reduce spending by at least 30 million. McMahon said that the 2008 third quarter earnings showed that the company is resilient but not immune to a weakening economy. She said that WWE will reduce their spending range to the $65-$70 million range.

– World Wrestling Entertainment Chief Financial Officer George Barrios blamed the slowed third quarter earnings on lower pay-per-view sales, lower live event attendance, and a decrease in web-based advertising revenue. The reasons Barrios gave for the slowdown in quarter three were tougher competition from the 2008 Summer Olympics as well as a weakening world economy.

– Linda McMahon answered a question regarding WWE Studios as she said that the company remains committed on going forward with straight-to-DVD projects. McMahon talked about how the costs were shared between WWE and 20th Century FOX for the upcoming Behind Enemy Lines: Colombia (starring Kennedy) project which will be released in January.

– An investor asked Linda McMahon about WWE’s competition, more specifically TNA Wrestling. Linda responded by saying that the company views anything in the entertainment realm as competition. She said TNA is part of WWE’s competition because they are in the entertainment realm.

– An investor brought up the decline in domestic Live Event attendance (which was down 4% from quarter three in the year prior) and asked Linda McMahon if this is a trend that she thinks will continue. McMahon responded by saying that she could see some continuing decline but that the company had to look at the marketplace. She said that they wanted to be careful not to “burnout” areas where they already draw well in.

– George Barrios fielded a question on WWE’s plan to reduce the cost structure in 2009 by $20 million. Barrios said that it is a number that the company is committed to realizing in 2009 and is part of the DNA of their plan. Barrios said that it’s about doing business as smart as the company can and that they would be renegotiating with venders but not lowering the quality. Barrios said that it’s about leveraging their marketing channels and not taking out capabilities but spending money smarter.

– Donna Goldsmith will be replaced as the Executive Vice President of Consumer Products when she takes on what is currently Michael Sileck’s position in the company as the Chief Operating Officer of World Wrestling Entertainment.

– WWE made it clear throughout today’s conference call that they are committed to their quarterly dividends paid out to shareholders.

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