WWE Layoffs Were Morally Heartless and Economically Unnecessary

It’s been suggested to me that every five years or so WWE goes through a cyclical change like this, the last one in 2014 after the WWE Network didn’t gain subscribers as quickly as they had hoped and there was a lot of cost-cutting in a year where the company was not profitable overall. 

WWE announced cost-cutting, layoffs, furloughs, and talent releases on April 15. Some of that may have been inevitable after the termination of George Barrios and Michelle Wilson, former co-presidents of WWE. There are probably a lot of people around them who in the name of regime change, and in the name of Vince McMahon’s apparent belief that too much was invested in customer data, would have been out eventually. Probably not now though, and certainly not in these numbers. And, by the way, WWE still hasn’t replaced its former co-presidents, not that they likely will in the midst of such wide economic uncertainty.

Brandon Ross (Lightshed analyst): Just philosophically, one of the key aspects to the WWE Network has been that it allows you to have a direct-to-consumer relationship and access to real first party the data. Would keeping those be important in any strategic alternatives and do these still matter to you or do you think that was a misplaced priority in the past?

Vince McMahon: I think it’s misplaced. It was one of our goals, still continues to be, but when you’re playing with some of the [major streaming players], it depends on whether or not we can negotiate holding on to things of that nature. Sometimes, you know the big boys want all of that for themselves, so it’s a matter of really negotiation. It’s what we keep. If we could keep it, absolutely.

WWE Q4 2019 earnings call, February 6, 2020

But WWE’s cost-cutting at this time is not something that’s necessary to keep the company profitable. It’s likely a move to keep the company as profitable as it had hoped it would be at the beginning of this year. 

Certainly WWE has a fiduciary responsibility to its investors, but I would suggest, radically, that it has a higher moral responsibility to not lay off workers in the middle of a pandemic if it can afford not to do so. 

The effects of COVID-19 give WWE a cloud cover to cut costs, to furlough or layoff a growing employee population; to cut wrestlers from an overgrown roster, a roster that had been growing not so much do you add to its own company but to keep that talent from adding to other companies. 

Underappreciated is that the cost cutting, and particularly the cutting of talent who fans are familiar with and have an affinity for, is a public message — and a talent message as well — whether the company wants it to be or not. Regardless of the economic argument that you can make for why it’s cost-effective and more profitable to cut costs, the public story, whether you agree with it or not, whether you feel that it’s accurate or not, is that WWE is the bad guy again. 

Especially over the last five years WWE has done a lot to damage its trust with its audience and with its talent, and we’ve seen what has happened to other damaged wrestling brands in recent history, brands that people don’t feel comfortable spending their money or time on. But WWE is the biggest and strongest wrestling brand that’s ever existed. It’s the company that is best positioned to withstand a lot of self-inflicted brand damage. 

How sustainable though is this self-destructive process that doesn’t show any signs of slowing down? This isn’t the 90s and it isn’t the 2000s, or 2010, or even the year 2015. An increasing portion of the wrestling audience is aware of news events like those that occurred the other day. That portion of the audience is increasing, not just because the audience overall is decreasing, but because people are evermore online and never more aware of the inner workings, or at least perceptions about the inner workings of wrestling. In the 90s, such a story would be shrouded in hard-to-find newsletters, and would go untouched by mainstream media that took wrestling even less seriously than it does today.

The notion now that people won’t be smart enough to understand what’s going on is unsustainable. And the notion that people are just wrong or they don’t “get” the story that they think is negative, doesn’t matter. Their perception of the brand and how much they can trust it is what matters. 

It’s the trust of your customers and the trust of your workers, which is a hard thing to measure, which isn’t a metric that’s on any of the KPIs on the corporate website, which probably isn’t even on any of the documents in the internal folders, it’s those things that are among a wrestling company’s most important assets. It’s also often really difficult for a wrestling promoter to admit to themselves that they’ve damaged those assets. 

Maybe someday those trust relationships will reveal themselves to have been even more valuable than the most massive media rights deal, and more valuable than delayed eight-figure payments from authoritarian governments.

If we think back again to the nostalgic 90s and think about what the turning point was in the competition between WCW and WWF: Was the turning point WrestleMania 14? Was it Starrcade ‘98? Was it the Finger Poke of Doom? Was it when WWF started to consistently beat Nitro in the ratings? 

One signal I think was important was when talent like Chris Jericho, Eddie Guerrero, Chris Benoit, and Dean Malenko realized that they couldn’t trust WCW, they wouldn’t be creatively fulfilled there, or have a fair shot at upward mobility. 

The Revival finally got their release recently, following the exit of a dissatisfied Jon Moxley, Brodie Lee, and, coincidentally, Chris Jericho. Does this sound at all familiar? Now pile on the unwilling releases of some 20-30 additional wrestlers.

But those are just economic concerns. Does a company like WWE — or AEW for that matter, which is still going to run a pay-per-view in an empty building on May 23rd — have any moral responsibilities? Will anyone scrutinize them? Media? Politicians? 

On each of two of my favorite non-wrestling podcasts, Pivot and Recode Decode, both hosted by Kara Swisher, the news of pro wrestling being deemed essential was brought up only as a way to drop Linda McMahon’s name and laugh. The subject was not worthy of discussion beyond that.

“But it’s just wrestling! If people in pro wrestling are exposing themselves to coronavirus, well, that’s natural selection for you!”

We’re learning at this time which companies and which people are actually willing to be uncomfortable for the sake of other people’s well-being. We’re being reminded that for some, philanthropy and service are effective vehicles en route to gathering profit and power. Some of us have been fantasizing for some time that those with power, eventually, in a dire enough situation would reach the point where some shred of decency would be revealed, and where their care for other people would finally exceed their care for economics or for their own comfort or for their own power itself.

We’ve been living under the impression that maybe in a big enough crisis there would be some distinction. We’re learning these days that for some there is no distinction. For some there is just one mode of value, there’s just one way to interpret the world, one goal. And it’s not a greater good for the most or all people; but the accumulation and retention of control, the reassurance that one will always have or will have even more of the control that one has now, whether that control is a company, an industry, or a public office.

You can get over it or lose. The kinds of people who care about things like some basic concept of decency are the kinds of people who don’t win the business competitions. They don’t get to dominate industries. The people who put economics above all remain the winners of a kind.

This post is based on audio from the episode of Wrestlenomics Radio, published April 18, 2020.