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WWE's Network blamed for roster cuts, corporate bloodletting expected

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Within the company, today's roster cuts are being blamed on the continued lack of success of the WWE Network. Things are so bad that administrative cuts in pretty much every department are expected imminently too.

Even Vince McMahon must be feeling a little tired of saying "You're fired!" today.
Even Vince McMahon must be feeling a little tired of saying "You're fired!" today.
Michael N. Todaro

Today's purge of almost a dozen expendable WWE performers (including Brodus Clay, Evan Bourne, Teddy Long, Drew McIntyre, Jinder Mahal, Aksana and JTG) caught everyone by surprise, even though the writing should have been on the wall that major cuts were imminent.

After many years of relative prosperity where WWE could afford to carry a bit of deadwood in their ranks, their wrestlers had been lulled into a false sense of security. Releases only occurred when contracts expired or sackable offenses were committed. As long as you played by the rules, your job was safe. Until today.

Unfortunately such niceties can't continue in a company projected to lose a whopping $45-52 million this annum and whose cash-in-hand is rapidly running out to fund such heavy red ink. This is clearly a time where any excessive or unnecessary spending by WWE had to be ruthlessly eliminated regardless of the lives ruined in the process.

Not just in the wrestling ring, but also on the corporate sides of things too, as Dave Scherer of PWInsider.com has just reported that more cuts and redundancies are expected in all areas of the promotion:

"There is a lot of talk that the cuts/releases are not done and that there will be cuts on the administrative side of the company as well, perhaps as soon as tomorrow. Potential cuts loom across pretty much all departments."

To me that's a red flag as to how serious WWE's financial problems really are, given that their corporate executives are usually left untouched in any culls, as Vince McMahon has the MO of looking after his non-wrestling staff first and foremost because they can get high paid jobs in other industries, unlike those who have only ever trained to be a professional wrestler.

It didn't take long for people to point the finger of blame for the savage cuts toward the sluggish launch of the WWE Network. Indeed, my quick-thinking colleague Sean Reuter was immediately on that bandwagon. This isn't mere speculation anymore, as Scherer has confirmed that's the word on McMahon Street too:

"The word making the rounds is that the current state of the WWE Network, its success or lack thereof, is what is precipitating cuts both in talent as well as potentially in office staff. That wouldn't bode well for state of the Network base when they release the current subscriber numbers at the second quarter earnings conference call."

That's obviously the main reason but there's more to it than just that. WWE's last financial quarter results revealed that the company's profitability was down pretty much across the board in all divisions excluding WWE Studios, not just in those revenue streams that have been directly affected by the launch of the WWE Network like pay-per-view.

Another key factor is the disappointing new television contract WWE received from NBCUniversal, which means that their television profits didn't skyrocket like anticipated and whatever increase won't be enough on its own to bankroll the Network until it starts breaking even.

Moreover, the loud public complaints from WWE investors that the company had misled them about the potential of their new Network and was being badly mismanaged meant that Vince McMahon was compelled to act swiftly to offset some of the projected losses to prevent further criticism of his leadership skills.

A final note on the WWE wrestler cuts is apparently those that got the chop were unhappy that Triple H left his corporate lackey Mark Carrano to break the news to them and didn't handle the situation personally:

"We have heard that Mark Carrano, who works in Talent Relations under Triple H, is the man who made most, if not all, of the calls to the released talent today. It is fair to say that at least some of those let go would have appreciated that the call came from Triple H himself."

All in all, a very dark day in WWE history. Hopefully there's not many more days like it in the future.