It has been a rather tough week for WWE after a major corporate shake-up saw co-presidents George Barrios and Michelle Wilson leave the company. The two will also no longer serve on the Board of Directors for WWE, and these moves have already had a huge effect on the promotion. Reports show that since the departure of Barrios and Wilson on Thursday, WWE has lost $1 billion in value.
After the departure of Barrios and Wilson, Frank A. Riddick was named the interim Chief Financial Officer as the company begins a search for a permanent CFO and new Chief Revenue Officer. Riddick has been with WWE for more than 11 years and will answer directly to Vince McMahon during his time in the position.
When WWE made the news public on Thursday, the company saw their stock price drop drastically after the close of business that day. Since then, it has fluctuated and continued to stay lower than it usually does, but the financial effects are being felt in a big way.
Bloomberg reported that World Wrestling Entertainment Inc. dropped as much as 28 percent on Friday, and that erased more than $1 billion in market value. Many of those on Wall Street have lost confidence in the financial projections of the company.
The 28 percent drop is the biggest decline of WWE’s stock in nearly six years.
The official website of WWE Corporate states that the change is one that needed to happen. Vince McMahon even offered up his thanks and gratitude to George Barrios and Michelle Wilson for their more than a decade of service to the company.
Bloomberg‘s report states that McMahon was “not pleased” with the results of different international TV deals. He wanted more of the “growing cash flow” to be invested back into the business and felt as if things were not going in that direction with the current management.
Over the last two years, television ratings have dropped drastically, and WWE has even cut the number of live events happening each month. They are looking to make cutbacks wherever possible and save some money to get back on a positive track, financially.
Vince McMahon may be nearing the time where he’ll let go of some control, and he’s also about to debut the XFL again, but the WWE is still his baby. He’s going to do what he feels is best for the company and if that means letting go of longtime employees, it’s going to happen.
The loss of $1 billion in market value is certainly something to be concerned about, and that is why corporate changes had to be made.