By James Caldwell, Torch assistant editor

As part of the fall-out from WWE announcing a significant dividend cut on Thursday, WWE management touched on a concerning aspect of their business at Friday's shareholders meeting.

WWE suggested their goal was not just to expand the business by keeping more cash on hand, which was the stated objective in Thursday's announcement, but to meet basic financial needs. It suggests WWE's business was in worse condition than originally believed during the recent business downturn. (This was foreshadowed at the beginning of the year when WWE announced in-advance poor fourth quarter and year-end 2010 earnings results.)

WWE CFO George Barrios said the broader context of the dividend cut was to "make sure WWE can always support the solvency of the company in the long-term."

Barrios noted "a lot of companies were not able to make it through the recent economic downturn." WWE decided it needed to support the company's liquidity needs covering expenses and outflows by cutting the dividend.

WWE management stressed the company will be re-focusing on their core content, which we've covered in separate articles from the shareholders meeting, as part of re-establishing their business to make the company financially stable in the long-term.

With the "media world changing drastically," Barrios said, WWE is trying to capitalize on the TV content they produce every week to find new ways to make money from the product.

Caldwell's Analysis: This is a really interesting aspect of the conference because of WWE's admission they may have been in financial trouble without a serious change to the business e.g. cutting the dividend to keep more cash on-hand since more cash was going out than cash was coming in recently. It will be interesting to see if WWE's decision to use the excess cash (following the dividend being slashed) for more financial investments in the "New WWE" initiative pays off or will flop because it could be a determinant in WWE's long-term health.

FYI: This is the last of six stories from WWE's annual shareholders meeting Friday covering a lot of what WWE had to say about the state of their company. The full list of articles are in the WWE News section.

Link: WWE.com for video of the lengthy meeting.

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