wrestling / News

UPDATED: More on WWE’s Planned Headquarters Move: Rent Cost, Building Size, More

March 20, 2019 | Posted by Jeremy Thomas
WWE Crown Jewel Vince McMahon WWE XFL

UPDATE: WWE’s 8-K filing with the SEC has new details on the company’s move to a new headquarters starting in 2021. The filing notes that WWE entered into a lease with Stamford Washington Office LLC for the new building on March 18th. The building is actually two attached buildings located on Washington Boulevard in Stamford, with a total of 415,266 rentable square feet.

As previously noted, the lease is for 16.5 years. It contains five separate renewal terms for five years each. The first eighteen months are rent-free, after which the rent will be $19.1 million, increasing to $20.9 million on the sixth year of the deal and $22.8 million on the eleventh year.

A Q&A for the move is also available as follows:

Can we describe our workplace strategy in Stamford? If moving to centralized campus what happens to other properties in the area?

WWE today announced that the company will move its global headquarters to a new office complex at 677 Washington Boulevard in Stamford, Connecticut. This move will allow the company to bring together its operations, including its production studios and corporate offices at its new site. Having world-class talent collaborating seamlessly to create compelling content is one of the most important elements of our long-term growth strategy. This initiative will be the foundation to meet these objectives and underpins our ability to deliver long-term value.

Given our growth strategy, we have outgrown our existing Stamford facilities, which would require significant investments in building infrastructure if we remained. We expect to sell our owned and operated corporate facility at 1241 East Main Street, exit our leased spaces at 1266 East Main Street, and evaluate options for our production studio facilities at 88 and 120 Hamilton Avenue based on strategic, operating and financial considerations.

What are basic facts regarding our new headquarters?

The new headquarters will provide the company with work space suited to its growing and evolving workforce. The site in Stamford’s central business district provides greater access from various means of transportation (including Metro North and Amtrak Acela service), floor plans which are well-suited to producing video content and greater flexibility in workplace design.

What is the rationale for the move?

This initiative provides critical support of the company’s long-term growth strategy, which includes increasing our ability to recruit and retain world-class talent as well as to effectively create compelling content. Our workplace initiative will be the foundation to meet these objectives and underpins our ability to deliver long-term value.

What is the timing of the move?

We anticipate that we will move to the new headquarters in early 2021.

What is the annual incremental cost of this initiative on an ongoing basis?

A discussion of the base annual rent, which on a pre-tax basis ranges from approximately $19.1 million to $22.8 million over the initial lease period can be found in our 8K filing (as shown on our website at www.corporate.wwe.com/investors).

The costs associated with this initiative are partially offset by savings realized through forgone rental payments for our existing leased properties and foregone base operating costs of our owned and operated buildings. Considering these factors, we estimate that the annual incremental cost would be below the base annual rent.

What is the financial impact of the move on (i.e., impact on guidance)?

WWE will lease the space for an initial term of approximately 16.5 years (which includes a free rent period of eighteen months) commencing no earlier than July 1, 2019, with five five-year renewal options thereafter. The lease will be accounted for as a finance lease, with the creation of a lease obligation (equal to the present value of future lease payments and would result in the recognition of interest expense over time) and a right-of-use lease asset (equal to the lease obligation less tenant incentives and is depreciated on a straight-line basis through depreciation expense). Accordingly, the accounting for the lease agreement is not expected to have a material impact on Adjusted OIBDA. Depreciation expense associated with the right-ofuse asset will be reflected in operating income. The Company’s capital expenditure guidance reflects this initiative. That guidance estimated capital expenditures of approximately $70 million to $90 million for 2019 with continued spending in 2020 above the historic range of approximately 4% to 7% of revenue.

How do we measure the return of this initiative relative to other investments?

We believe that the move is integral to our long-term growth strategy as it facilitates increased operating effectiveness to create compelling content, strengthens our ability to recruit and retain world-class talent and provides greater long-term flexibility. We have evaluated these benefits and estimate that they outweigh the incremental costs associated with developing and occupying the new facility.

Why are we staying in Stamford and not relocating to a less expensive location outside the metro-New York area?

Typically, headquarter relocations are driven by four primary factors – to improve access to talent, create a catalyst for cultural change and organizational effectiveness, support organizational restructuring, and/or provide greater access to transportation and infrastructure. However, such moves are often characterized by significant costs and business disruption. We believe we can achieve the noted benefits, including greater access to worldclass talent and enhanced effectiveness in creating compelling content, with the new Stamford facility while avoiding the expense and business disruption that would have been associated with moving outside of this region.

ORIGINAL: Say goodbye, Titan Towers, and thanks for the memories. WWE has announced that they will move its global headquarters to a new location in Stamford, Connecticut. Stamford is the site of the company’s current location, Titan Towers, which has served as the company’s headquarters for the past thirty-four years. Titan Towers was famously the location for WWE’s “Attitude Era” Super Bowl XXXIII ad in 1999, which you can see in the video below (which also includes behind-the-scenes footage).

The announcement noted that the new site will be an office complex located at 677 Washington Boulevard in Stamford, Connecticut, which will bring all operations including production studios and corporate offices together. The plan is to lease the space for a term of sixteen and a half years starting on July 1st, with the company expecting to move in in early 2021. The announcement notes that they will sell the Titan Towers location, “exit its leased spaces at 1266 East Main Street, and will evaluate options for its production studio facilities at 88 and 120 Hamilton Avenue based on strategic, operating and financial considerations.”

“One of the most important elements necessary to execute WWE’s long-term growth strategy is world-class talent collaborating seamlessly to create compelling content. Our workplace initiative will be the foundation to meet these objectives and underpins our ability to deliver long-term value,” said WWE co-president George Barrios.

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WWE, Jeremy Thomas