Being deemed ‘essential’ saved some jobs but not all jobs for publicly-traded WWE
Even though Florida Governor Ron DeSantis deemed WWE “essential” — helping save jobs — it still did not prevent the company from issuing some releases and furloughs on Wednesday because of the business effects caused by the coronavirus.
WWE isn’t the only company doing this.
Because of COVID-19, many businesses, corporations have turned to releases, layoffs and furloughs.
The timing of this is odd with the ruling by Gov. DeSantis a few days prior, allowing WWE to continue providing new programming from the WWE Performance Center training facility in Orlando and Full Sail Live studio set at Full Sail University in nearby Winter Park.
Then again, the Vince McMahon-led WWE moved its annual meeting of stockholders from Thursday to May 14. Why?
From the Investors page of the WWE website, it reads because of “the rapidly evolving public health concerns relating to the COVID-19 pandemic and governmental actions related thereto, including the State of Connecticut’s Executive Order No. 7H dated March 20, 2020.”
This also gives WWE more time to cost cut, explain, produce and try to recoup some investment ground. WWE stock is trading around $39. The 52-week high is $100.45 and the low $29.10.
WWE announced on Thursday that its board of directors declared the company’s regular quarterly dividend of $0.12 per share for all Class A and B shares of common stock. The recorded date for the dividend will be June 15, and the payment date will be June 25.
That stirs the pot because instead of declaring a dividend, WWE could have used that money to prevent some job loss for the time being. In that situation, declaring a dividend, I think is the unpopular long-term move.
When you’re the boss, you have to make tough decisions, and some of those decisions will be unpopular. I would not want to be in any boss’s shoes through the pandemic. In this particular case, at this time, why declare a dividend? Well, McMahon has to answer to board members, TV execs and shareholders, too. I also surmise from the actions of WWE and other companies that this pandemic and how we conduct our lives now will last a lot longer than projected.
With WWE issuing releases and declaring a dividend, it allows released independent contractors to receive unprecedented unemployment benefits (which will be discussed below in the story) from the government and compensates shareholders.
It’s not a win-win, when jobs are lost, but at the very least, the releases come at a time when it’s better than the usual release process for independent contractors. Remaining employed is best, of course, but if you are released, you can now obtain benefits, even as an independent contractor.
From a press release on Tuesday on the Investors page of the WWE website.
Due to COVID-19 and current government mandated impacts on WWE and the media business generally, the Company went through an extensive evaluation of its operations over the past several weeks. This analysis resulted in the implementation of various short-term cost reductions and cash flow improvement actions including:
Reducing executive and board member compensation;
Decreasing operating expenses;
Cutting talent expenses, third party staffing and consulting;
Deferring spend on the build out of the Company’s new headquarters for at least six months.
Given the uncertainty of the situation, the Company also identified headcount reductions and made the decision to furlough a portion of its workforce effective immediately. The decision to furlough versus permanently reduce headcount reflects the fact that the Company currently believes the furlough will be temporary in nature.
The Company’s reductions of employee compensation and headcount result in an estimated monthly savings of $4 million along with cash flow improvement of $140 million primarily from the deferral in spending on the Company’s new headquarters.
Additionally, the Company has substantial financial resources, both available cash and debt capacity, which currently total approximately $0.5 billion, to manage the challenges ahead. Management continues to believe the fundamentals of the Company’s business remain strong and that WWE is well positioned to take full advantage of the changing media landscape and increasing value of live sports rights over the longer term.
The Company will provide further details when it reports its first quarter 2020 results next Thursday, April 23 after the close of the market.
The show(s) must go on
WWE Weekly Programming: Raw (Mondays on USA Network), NXT (Wednesdays on USA Network), SmackDown (Fridays on FOX), Main Event (Hulu) and 205 Live (WWE Network).
NXT UK is on hiatus from producing new content and is airing special shows about the formation and beginnings of NXT UK on WWE Network.
WWE employs a large number of talent, especially compared to other pro wrestling companies. With very little cross-over, you see talent on Raw, SmackDown, Main Event, 205 Live, NXT and NXT UK. There’s also talent for the weekly NXT Florida house show loops, as well as more in training at the WWE Performance Center awaiting opportunity.
This isn’t the first time for releases, but it is for unemployment benefits
Annually, WWE hires and fires talent throughout the year. Wednesday was different, though. It is reported to be the most releases and furloughs initiated simultaneously by the company ever.
Can released talent apply for unemployment?
WWE superstars are independent contractors — not employees of the company — which usually means no unemployment compensation for independent contractors who are released.
Well, because of the coronavirus issues, that rule has thankfully changed.
From Yahoo! Finance, “that distinction [independent contractor] has historically prevented laid off wrestlers from getting unemployment benefits, but the recent two trillion U.S. stimulus package has a provision providing unemployment compensation for laid off contractors for up to 10 months.”
So, at least this time WWE superstars released can obtain unemployment benefits.
Those placed on furlough — i.e. some who worked behind the scenes in WWE — can apply for unemployment benefits as well.
There is more information about that at this website: https://esd.wa.gov/unemployment/temporary-layoffs
Released WWE superstar Zack Ryder, real name Matt Cardona, said via Twitter: “The only thing I wanted to do in life was wrestle. I’m grateful I spent 14 years living my dream in WWE. Thanks to my fans & everyone who believed in me...I’m #AlwayzReady & beyond excited for the future. #NotThere”
I was disappointed that it came to this for all those released, especially Ryder and NXT Superstars MJ Jenkins and Deonna Purrazzo. Jenkins, who wrestled in South Florida for Fighting Evolution Wrestling, is a unique talent with a unique look, and Purrazzo has it all. They have bright futures whatever they do, wherever they land.
WWE producer Scott Armstrong from the famous Armstrong wrestling family said via Twitter: “This virus has claimed thousands of lives and thousands of jobs. Today, the landscape of WWE changed forever. Some of us were furloughed and others released. Today, I’m grateful for my health and my family and friends! This too shall pass!”
Released means you are no longer employed by the company in any capacity.
As for a furlough, you are still part of the company, but it is a mandatory suspension from work without pay, according to TheStreet.com. It can be as brief or as long as the employer warrants necessary. Usually, you continue with your health benefits, while on furlough.
Furloughs can occur in public and private institutions. An organization will furlough employees as a cost-saving measure when it doesn’t want to lay off staff but lacks the resources to continue paying them. It is a cost-saving way to keep them with the company during these trying times.
As an outsider, it’s easy for me to say how a company should save or spend its money. But it’s not my money, and when you are publicly traded, it’s a whole ‘nother ball game. Many businesses are making cuts. Still, I hope WWE is salvaging as many jobs as possible.
WWE personnel consists of professional wrestlers (tagged superstars), managers, play-by-play and color commentators, ring announcers, interviewers, referees, trainers, producers, script writers, production crew, community relations, media relations, and various other positions. Plus, executives and board members.
Step up WWE
Unless WWE offered severance type packages to those released, I would like to see the company allow talent to work elsewhere expeditiously. The company showing a good gesture by removing the 30-day, 60-day, 90-day (whatever the number) no-complete clause, under these circumstances, would help a few.
I also think this is an excellent time for talent remaining on the roster and those released or furloughed (who can) to take advantage of WWE’s program, offering to pay for college — whether it’s an AA degree, bachelors or masters. WWE provides this for current workers and alum.
The WWE Effect
I’m not here to debate what is essential and what isn’t. If WWE could figure a way to do this, it can serve as a springboard for other sports to return — even if that means competing in empty arenas, ballparks, stadiums.
I enjoy the break from the daily coronavirus monotony to watch WWE, NXT, AEW, Impact Wrestling, Ring of Honor and MLW streaming or on television and NWA Powerrr streaming.
WWE paying it forward
It would be cool for some of these pro wrestling companies to cross-over with talent for a super pay-per-view and streaming card at the WWE Performance Center or Full Sail Live to benefit a worthy cause like Feeding America or No Kid Hungry.
An NXT wrestler vs. an AEW wrestler; an ROH wrestler vs. an Impact Wrestling wrestler; an MLW wrestler vs. a NWA Powerrr wrestler. Imagine the money that can be raised from such an event. This would be the time to do it, helping kids in this country during these very trying times.
United We Stand, Watch, Subscribe, Buy
This is the time for pro wrestling fans to unite. Let’s watch pro wrestling/sports entertainment (WWE, NXT, AEW, Impact, ROH, MLW, NWA Powerrr) on television and/or streaming. Let’s subscribe to their YouTube channels. Let’s click Like and Share to their social media posts. Let’s buy some merch, especially from those released, when they offer their own. Indie wrestling, too, let’s support that and them.
Support the industry.
WWE Superstar Seth Rollins on Instagram: “One thing I am seeing, that is a little upsetting to me, is all the negativity and hostility toward WWE. This is a difficult day for everyone, for all of us. I think if ever there was a moment for us to unify, for us to kind of band together and to try to do the best we can, to keep this business alive the best we know how, this is that moment. I think pointing fingers or saying you should have done this or you should have done that — I don’t know — it just doesn’t feel like the time or the place for it. I think this is a day for compassion and for empathy and for understanding and to try to support each other, to pick each other up.
“That’s for everybody, that’s not just for the guys and girls that were let go. For all of us that were fortunate enough at this moment to still be able to have a position where we can collect a paycheck and we can support those who love us and those around us, I think we have to take it upon ourselves to work harder to make sure that there’s a place for all those had it the worse today to come back to. As a planet, we can rally around the idea that this is only temporary and those that lost their positions and are struggling to figure out what to do next, that they will be able to make it back from this. Whether that’s with WWE or with another organization or a completely new field, this isn’t the end. I think that if we start fighting amongst ourselves, it’s only going to make things worse. I just encourage everyone to try to come together over this and to try to support each other, to lift each other up.”
That’s what WWE did a couple of weeks ago by restructuring WrestleMania 36, after coronavirus blocked the Super Bowl of pro wrestling/sports entertainment from appearing at the sold-out 75,000-plus seat Raymond James Stadium in Tampa.
WWE WrestleMania 36 — two nights, no crowd from the small WWE Performance Center — was outstanding. Hey, it wasn’t our normal crowd-erupting, live watching marathon inside a massive stadium, but it was better than nothing, much better.
Now it’s time to unite, rally for all those released and furloughed and active on the roster and all those elsewhere in this business.
Hopefully that will help all, while also preventing another day like Wednesday in WWE and anywhere else in this industry.
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