WWE Talent Releases: Here's What Happened Leading Up To Wednesday
A lot was going on behind-the-scenes at the sports entertainment company prior to its decision to release wrestlers.
On Wednesday, April 15, WWE laid off multiple WWE Superstars. The names were released and/or leaked to the public in a slow trickle over the course of the day. Unlike several WWE producers who were furloughed, the 22 WWE Superstars were "future endeavored" and will need to find other employment.
The current COVID-19 pandemic precipitated these cuts. Typically, WWE makes a bulk of its monthly revenue on live arena shows. In the wake of the pandemic, the company has been forced to cancel and refund its upcoming live events. Since March 13, WWE has been broadcasting Raw, Smackdown, NXT, and even Wrestlemania 36 from the WWE Performance Center in Orlando, Florida, with no audience.
In an April 15 press release, WWE announced a "headcount reduction" due to COVID-19 and "current government mandated impacts" on WWE. The company also announced it would be reducing executive and board member compensation; decreasing operating expenses; cutting talent expenses, third party staffing and consulting; and deferring spending on building the company's new headquarters. WWE estimates the company will save $4 million from releasing and furloughing employees and cutting their compensations.
WWE has faced criticisms for these actions. Some of it stems from the revelation that the now-defunct XFL and the WWE were more closely linked than WWE chairman Vince McMahon initially led on. When he announced the XFL league in January 2018, Vince McMahon insisted that both companies would operate as separate entities; he would pledge $500 million out of his own pocket to fund the XFL. However, the XFL bankruptcy filings revealed that the WWE owns 23.5% of the Class B stocks in the company, which means that the XFL and WWE's financial problems are inextricably linked.
WWE has also been criticized for placing its employees in unnecessary harm's way. WWE was originally included in Florida's statewide lockdown, which would have temporarily put an end to the company's live shows. However, a last-minute signed order from Florida's emergency management director reclassified WWE as an essential business, which allowed them to remain open. These actions would, theoretically, give WWE some financial space to avoid layoffs of certain employees, many of whom--like recently released Sarah Logan and No Way Jose--were traveling to the Performance Center to wrestle at personal risk.
Other critics have called attention to the McMahon family's political clout in Florida and question whether that led to WWE's reclassification as "essential." Linda McMahon, Vince McMahon's wife and former CEO of WWE, heads a Super PAC called America First Action, which supports President Trump's re-election campaign and recently announced $18.5 million in television advertisement spending towards that objective. On April 14, President Trump announced that Vince McMahon would be an advisor on his Great American Economic Revival Industry Groups, designated to assist in re-opening the economy following the pandemic.
Lastly, WWE announced they would be paying a stock dividend to all WWE stockholders that would amount to $.12 per share. With 78 million shares, that equates to $9.4 million paid out to stockholders--more than the $4 million the company estimated it would save with its headcount reduction.
It is unknown, at this time, if this was the only round or just the first round of layoffs at WWE. Gamespot will continue reporting on the releases at WWE and the response from WWE Superstars, both current and former.
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