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09-16-2013, 12:36 AM #1
Reason Behind WWE Cutting their Costs
In a press release issued on Friday, WWE mentioned that they have trimmed their outlook for 2013 due to lowered revenue expectations and higher investment spending. Operating income was lowered before depreciation and amortization of $40 million - $50 million from the $56.9 million - $69.5 million they previously projected. Revenue for the second half of 2013 is expected to be 5% lower than previously expected.
"Our revised 2013 Outlook reflects a relatively moderate change in our second half revenue expectations and our continued investment in the WWE brand and our content," said George Barrios, Chief Financial Officer. "Given the rising value of content in the market place, we believe these investments will maximize WWE's future earnings as we renegotiate our four largest television distribution agreements and potentially launch a WWE Network."
WWE's stock was down 2.6% in after hours trading on Friday. As noted earlier, there was talk of cutting back secondary talents like managers from house shows due to the revised outlook.