On April 15, 2020, World Wrestling Entertainment (WWE) announced that several of their wrestlers had been released from the company with their contracts being terminated with immediate effect.
This comes after the company released a statement that same day that WWE would be introducing a series of cost-cutting measures to help deal with the pressures of the COVID-19 pandemic. These included postponing construction on new headquarters, executives taking pay cuts and several employees being furloughed.
So far, so normal as this has been what many companies have been doing during the pandemic to allow employees to stay home and follow medical and government advice and directives.
But WWE is no ordinary company. Thanks to Florida Governor Ron DeSantis, WWE is classified as an “essential business”. This means the company can keep running and will be producing three live wrestling shows per week, with the next pay-per-view set for early May. It also puts them on the same level as other essential businesses such as pharmacies and supermarkets while also saying that the wrestlers (or “superstars” as they are known) are part of an essential workforce which includes medical staff, support workers and retail workers.
The announcement from Gov. DeSantis has raised eyebrows within the wrestling community, especially as it came on the same day that a so-called “super PAC” – another name for a Political Action Committee – would be committing a spend of $18.5 million during President Trump’s re-election campaign.
The chair of the committee: Linda McMahon. The same Linda McMahon who spent nearly 30 years as President and CEO of WWE, alongside husband and current Chairman Vince McMahon, as well as appearing on screen as an authority figure in the wrestling promotion. Linda McMahon is also the former Administrator of the Small Business Administration under President Trump. It should also be noted that Vince McMahon will be part of a group assembled by Trump that will focus on rebuilding America’s economy, with Trump mentioning Vince McMahon by name during a recent press briefing.
While Gov. DeSantis has since denied any connection between the Super PAC’s plans and the decision regarding WWE, the timing of it all has raised some eyebrows among both industry professionals and fans.
Turning back to the wrestlers who have been released – almost 20 at the time of writing – and what it means for them. Contracts in WWE are an interesting issue, as wrestlers are not actually employees of the company. Instead, they are “independent contractors” who are responsible for a lot of their expenses – including health insurance and travel costs. Under normal circumstances, when a contract expires or someone is “released”, as has happened with these people, they are subject to a 90-day no-compete clause before they can wrestle again.
This, however, is not a normal circumstance. At present WWE is the only wrestling company still putting on regular shows. Some companies, like All Elite Wrestling, used the time before shutdown to pre-tape enough content to tide fans over for the next few weeks. WWE looked to be heading the same way – pre-taping a few weeks of shows as well as their biggest event of the year, WrestleMania.
Other companies – such as New Japan Pro Wrestling – have simply postponed their shows for the foreseeable future. Hiroshi Tanahashi, one half of the current IWGP Tag Team Champions, actually told a government consultation group: “I think it should be acceptable for professional wrestling to be the last sport to return to full activity. I want people to know that when professional wrestling is back, then and only then it means truly that Japanese entertainment has properly recovered.”
When it was revealed that the pre-taped shows would cover the Raw episode after WrestleMania (usually one of the biggest TV audiences the company gets during the year), many fans assumed that the company would announce that they would be going on hiatus and that the TV time would be used to air classic episodes of WWE television. Instead, the company has chosen to continue with their shows being broadcast live, with talent travelling to and from the Performance Centre as required for the individual shows and spending the rest of the time sequestered in a hotel nearby.
WWE’s decision to continue shows in the face of the pandemic has been a divisive one from the start. While some are happy to still have this routine element and escapism in their lives, others have questioned the decision citing the risks to employee health, lack of atmosphere and a decline in ratings in their arguments.
With the announcement of these releases, it has thrown more fuel onto the proverbial fire. Two of the wrestlers released, Sarah Logan and No Way Jose, wrestled on television two days earlier. Another wrestler, Drake Maverick, announced via social media in an emotionally charged video that he will be wrestling on screen in an upcoming tournament – which itself is mired in controversy as it is to crown an “interim Champion” as the actual one is in lockdown in Ireland and can’t travel to compete.
Interestingly, these releases have come as part of cost-cutting measures to help the company get by as it may not have been the exact truth. Brandon Thurston of Wrestlenomics, a website dedicated to researching and analysing the business of professional wrestling, wrote a risk-assessment for the company in terms of their finances. In the report, Thurston surmises that the company could still make a sizable profit this year, stating:
“Ultimately, I concluded that if WWE doesn’t run live events at any point for the rest of the year, WWE’s revenue would be impacted by as much as $218 million and operating income would be impacted by $42 million. In such a scenario, I estimated WWE would still report record-setting profits in 202, with an operating income of $121 million and total revenue of $927 million – largely supported by continued TV rights fees, which I don’t believe are at risk.”
Where Thurston says the biggest losses will come will be in the live events sector, which includes merchandising as well as domestic and international ticket sales, and for the company’s on-demand service, the WWE Network. Only time will tell on the long-term effect the pandemic has, but WWE seems to be fairly solid from a financial point of view.
The long and short of it is this – the announcement that dozens of people have been released from WWE in one day has shocked the wrestling world. WWE’s move to do this has been met with mixed reactions and is only a small part of a much bigger story unfurling in the wrestling world. This week has been one that the company will want to forget but one that might come back to haunt them when the world goes back to normal.
Words by Megan Roxburgh