WWE employee raises and promotions put on hold as shares stagnate

World Wrestling Entertainment, Inc. (NYSE: WWE) shares remain under $50 following the company’s recent earnings report, on February 4. WWE set its annual net income record in 2020, but fourth quarter earnings were underwhelming relative to analyst expectations, in part due to costs related to the Thunderdome production set.

WWE employees learned on Friday that raises and promotions have been put on hold. The move will aid profitability and possibly the stock price.

Revenues for the fourth quarter were only slightly off from expectations, but earnings per share (an expression of profitability) was 20% lower than analysts estimates. WWE reported an EPS of 24 cents for the quarter when the average analyst was expecting 30 cents.

Shares climbed following the third-quarter earnings report in late October. The stock went as high as $57 after the announcement of the company’s new agreement to sell U.S. rights to WWE Network content for exclusive distribution through NBCUniversal’s Peacock streaming service.

The Peacock deal is reportedly worth more than $1 billion over five years. That puts the deal on par with the average annual value of WWE’s current payments from Fox for the rights to two-hour flagship program Smackdown, and just below the value of three-hour flagship Raw.

Several stock analysts who cover WWE upgraded their price targets in recent weeks. The average target is currently at $60, according to TipRanks. Shares closed today at $46.50.

The decision to put raises and promotions on hold was originally reported by PWInsider last week.

Furloughs and lay-offs implemented in the spring, along with other cost reductions allowed WWE to report the Covid pandemic had a “net neutral impact” on the company’s adjusted OIBDA (a measure of profit) in 2020.

Multiple employees we’ve been in contact with say morale has suffered because of the decision to freeze raises and promotions. After helping the company succeed financially through the pandemic, taking on additional work related to furloughs, and helping achieve WWE’s most profitable year, workers were hoping to be rewarded for their effort.

Company executives did not announce the decision in a company-wide meeting, which added to the frustration for some. News of the freeze was communicated to employees by managers on Friday.

WWE media relations did not respond to a request for comment.

According to WWE’s annual report published this month, the company currently employs more than 900 full-time employees. That count does not include nearly 300 wrestlers and on-screen talent who are independent contractors, nor does it include other contract personnel. WWE is headquartered in Stamford, Connecticut, and has regional offices throughout the world.

February 18, 2021 UPDATE:

Brandon Thurston has written about wrestling business since 2015. He’s also worked as an independent wrestler and trainer.

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