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WWE News
WWE News: WWE reports flat third quarter 2008 revenue; company announces major cost cutting Nov 6, 2008 - 9:09:45 AM
WWE reported third quarter 2008 earnings today, capturing the months of July through September with flat results in revenue and a decrease in profitability. Most telling about the impact of excessive costs was WWE announcing a reduction in budgeting for their TV studio capital project from $100 million to $65-75 million.
Revenues totaled $108.8 million compared to $108.1 million in the third quarter of 2007. Meanwhile, net income declined. WWE reported $5.3 million in income this quarter compared to $8.5 million in the prior year quarter.
WWE CEO Linda McMahon said in the press release that WWE achieved growth in the first-half of 2008 "despite a difficult economic environment," but revenue growth slowed down considerably in the third quarter.
As a result, McMahon announced they are going through with "at least $20 million of cost savings in 2009." That is merely short-term expenditures and budget costs. It does not include the $25-35 reduction in costs associated with the TV studio expansion. Overall, WWE is looking to cut $45-55 million from expected expenditures going forward.
Caldwell's Analysis: I'll also break down the segment-by-segment numbers in a separate post, but it's very evident WWE was hit hard by the third quarter economics. They were relatively immune during the first two quarters of the year, but not so much this quarter. At first blush, it doesn't look like a "bad" quarter, but WWE is going to need to take steps in the long-term to reduce costs across the board in every segment.
WWE recognized that last quarter, but it will take a few quarters for the impact of their cost-cutting policy to "show up in the box score" on future quarterly reports. Interestingly enough, Linda McMahon didn't even try to spin the numbers in the company's press release. McMahon simply laid it out there quite honestly, which was refreshing.
RELATED STORY at PWTorch.com:WWE COO resigns from executive post.
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