Entertainment

The WWE Is Making Huge Profits During Coronavirus but Still Firing Workers

Soaring profits, employee layoffs, the bankruptcy of the XFL, and a seat at the table with Donald Trump. Did we expect anything else from CEO Vince McMahon?
April 24, 2020, 2:27pm
WWE, Vince McMahon, Donald Trump

As it has continued to run televised professional wrestling events during a global pandemic, WWE’s repeated refrain has been that its goal is to “put smiles on people’s faces.” In the wake of one of the most tumultuous weeks in the company’s history, it is even more apparent than ever that the only smile CEO Vince McMahon cares about is the one on his face when he checks his bank account.

Over the course of six days earlier this month, McMahon’s second-time upstart football league, the XFL, filed for bankruptcy, and the WWE negotiated essential service status in Florida, decided to indefinitely run three weekly live events, then fired 29 performers, and either released or furloughed another 12 producers and coaches.

The timeline of these events is a mind-blowing parade of corporate cruelty and political intrigue.

On April 9, an internal memo was quietly sent out by the Florida Division Of Emergency Management declaring that televised sports events without spectators in the venue was an essential service. This was a deviation from the original stay-at-home order issued by the state of Florida a week earlier. On April 10, it was reported that WWE personnel were given a letter to show to police stating they were “essential media.” At the time, it appeared WWE was simply flouting the rules, severely stretching the “newspapers, television and other media” caveat in the stay-at-home legislation.

The same day the WWE was quietly declared an essential service, the America First Action PAC, headed by Linda McMahon, wife of Vince, pledged $18.5 million for broadcast advertising in support of U.S. President Donald Trump's reelection campaign in the state of Florida. Later, Vince McMahon would be named to the committee advising Trump on how to re-open the economy.

The day the “essential media” letters were reported to have been given to personnel was also the day WWE was expected to tape five weeks of television at a time. In theory, this would have at least allowed performers and other workers to quarantine for 14 days in between outings—a low bar for safety to step over, but one nonetheless. According to Sean Ross Sapp of Fightful, in the middle of the tapings, Vince McMahon changed his mind, telling everyone involved with the production that the WWE would be going live from there on out.

As of press time, WWE is the only wrestling organization in the U.S. continuing to run live weekly televised events. Starting this weekend, it will operate under an amended taping schedule, which gives performers periodical breaks that range from six to 12 days, however many of the shows are still being taped on the day they air. All Elite Wrestling has taped several weeks of television, and will go ahead with a May pay per view. Ring of Honor has likely handled the situation the most responsibly. According to COO Joe Koff, the company has continued to pay all of its talent and staff, and ROH still televises a weekly compilation-style show every week, but has ceased running events until “it’s safe for everybody, our entire community.”

“I think there's a greater good that has to be served in all of this,” Koff told VICE. “As important as our industry is, there are so many things that are far more important right now that people are dealing with right now. I want to be respectful of that, and I want to be respectful of the people who work for me (and) not put them in any kind of danger.”

WWE’s decision to go live puts those working its shows in an unwinnable scenario. Even performers who work only one show a week would be wrestling at the WWE Performance Center in Orlando. They would have to choose between not quarantining and risk going home to their families each week (keeping in mind that an on-screen talent tested positive on April 11), or simply staying in isolation in a Florida hotel indefinitely.

The same day as Vince’s decision to go live, the XFL announced that there would be no 2021 season, effectively closing the league’s doors forever and leaving its employees without a severance. A day later, on April 11, Alpha Entertainment, the company started by McMahon to house the XFL, filed for Chapter 11 bankruptcy in Delaware. In the filing, the company stated that it had between 1,000 and 5,000 creditors, and those being owed money included some of the league’s head coaches and the stadiums themselves. The league’s commissioner, Oliver Luck, has since sued McMahon for wrongful termination.

Although the XFL took steps to distance itself from its previous incarnation and the WWE, it was always clear who was in charge. For one, the official launch of the league was just McMahon talking in front of a bizarre green screen on YouTube. According to the bankruptcy filings, McMahon owned 100 percent of Class A stock and 76.5 percent of Class B stock, and the WWE was listed as owning the other 23.5 percent of Class B stock. In addition, it was a poorly kept secret that Alpha Entertainment and WWE had neighbouring office space, with some employees working on both sides.

For those who worked at the XFL exclusively, there would be no more work. But they wouldn’t be the only employees McMahon dumped that week.

On April 13, the night of Monday Night RAW, No Way Jose and Sarah Logan flew to Orlando to take part in the night’s event. The two might have accrued two minutes of ring time collectively, with No Way Jose losing quickly to Bobby Lashley and Logan doing the same to Shayna Baszler. Two days later, they were fired along with 27 other wrestlers.

Elizabeth Myers, wife of Brian Myers, who performed as Curt Hawkins and was also released, penned an emotional blog post about the impact it has had on her family.

“There is so much uncertainty in the world, it’s terrifying,” wrote Myers, who is 30 weeks pregnant. “One week prior, they had wanted him to fly to Orlando to film for RAW and the next week they are getting rid of people. I went from being scared of my husband coming home from work with the coronavirus to days later him getting fired.”

While WWE does generally do a yearly round of releases, more recently it has instead been hoarding talent for the express purpose of preventing them from going to other promotions. The company famously gutted the U.K. independent scene and created NXT UK, and recently started a trend of offering performers lengthy, lucrative extensions, whether they had genuine creative plans for them or not. Karl Anderson and Luke Gallows, who were released last week, recently signed five-year extensions rumoured to have been for $750,000 annually, to prevent them from signing with competitors All Elite Wrestling or New Japan Pro Wrestling. The two had expressed their desire to be released but were convinced to stay for greater money and, in theory, greater security.

Under normal circumstances—meaning not during a pandemic—most, if not all, of the released performers would immediately find work in what is currently (despite WWE’s best attempts) a competitive marketplace for professional wrestling. Unfortunately, there’s nowhere to go at the moment. AEW is essentially the only other American wrestling organization still actively running shows, and even if performers wanted to go there and had a contract offer, talent that was released in this wave of cuts is reportedly under a non-compete clause until July 15 anyway.

What’s most galling about these releases is that they didn’t have to happen. By the company’s own admission in a news release the morning of the firings, WWE has half a billion dollars in available cash and debt capacity to “manage the challenges ahead.” But when digging deeper into the company’s finances, it becomes apparent just how unnecessary this was.

On his indispensable website Wrestlenomics that tracks the finances of professional wrestling, author Brandon Thurston made a startling discovery when analyzing a model in which WWE continued to run weekly televised shows, didn’t release anyone, didn’t run a single live event with paying customers, and didn’t sell a single piece of merchandise.

“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 2020, 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,” wrote Thurston.

In addition, based on the calculations of the quarterly WWE dividend release, Vince McMahon’s own payout of roughly $3.5 million would have been enough to cover the cost of the released talent for at least eight months.

When asked for comment for this story, WWE replied by pointing to its quarterly investors conference call on April 23. In that call, and the accompanying press release, the company stated that “the ongoing and uncertain impact of COVID-19 on WWE’s business has required the company to take short-term actions to strengthen its financial performance and capital resources,” but that “revenues increased 60 percent to $291.0 million as compared to the prior year quarter.”

While these cruel decisions might be lining McMahon’s pockets, it’s not exactly doing him any favours in the court of public opinion. Television ratings are hitting record lows on FOX, and performers are creeping closer to taking a stand than they have in recent memory. Dolph Ziggler appeared on Smackdown and in accompanying segments wearing the T-shirt of the recently released Hawkins and Zack Ryder, something that might not have slid by had the show been taped. Ziggler also publicly purchased the T-shirts of 10 independent wrestlers, and helped promote the new merchandise of Ryder, who sold more merchandise than any other wrestler on ProWrestlingTees the day he was released. Top star Seth Rollins also engaged in a cordial back and forth with noted union supporter and independent performer David Starr in which he stated that they need to rally behind an industry.

Then, on the morning of April 21 at the Orange County Board of County Commissioners Meeting, a man identified as “John,” who claimed to be a WWE employee submitted a public comment, stating: “My employer, World Wrestling Entertainment, aka WWE, is forcing me to work the TV tapings for its weekly shows despite the stay at home orders for coronavirus. I am unable to speak out as I need this job, and I know I will be fired if I approach my higher-ups. Despite sanitary precautions, we cannot maintain social distancing and have to touch other people. I request the government to shut down these tapings and enforce the stay at home order so my colleagues and I can maintain social distancing rules with fear or repercussions of losing our jobs.”

Not only is it highly unlikely that the WWE will heed to any pleas or warnings, it will actually do something even more tone-deaf next month.

On May 10, the company will run its Money In The Bank pay-per-view event, flying many performers and crew to Stamford, Connecticut. In the feature matchups, wrestlers will battle through the various floors of WWE headquarters, past the offices left vacant by those let go or those occupied by those working during a pandemic, until one person reaches the rooftop and grabs a briefcase containing a contract, like the ones their friends had terminated days earlier.

The company’s behaviour tracks with how it acted during real-world crises in the past. When facing adversity or controversy, WWE has always presented itself as a babyface battling the heel that is whatever circumstances they’ve encountered. Following the Chris Benoit tragedy, the company railed against an attack on the industry of wrestling and then scrubbed Benoit from history. On the first Smackdown following 9/11, Stephanie McMahon, Vince and Linda's daughter, cut a promo comparing the 1994 steroid trials to the terrorist attacks. It is a tactic befitting of WWE Hall of Famer Trump to simultaneously claim victimhood and heroic victory over The Enemy, even when that enemy is either one of your own creation or isn’t something to be defeated whatsoever.

For storyline purposes, WWE has always pretended that it exists within “the WWE universe.” Vince McMahon himself has appeared off and on as an evil fictional authority figures on-screen since the 90s. The old saying in wrestling goes that the best characters are the ones based on the person’s true character, but amplified. But currently, there is no separating the WWE Universe from the actual world, not with the venues empty and the on-air references to “these uncertain times.” It is within these times that we have discovered just how little difference there is between Mr. McMahon the character and Vince McMahon the businessman.

Follow Corey Erdman on Twitter.

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