WWE released or furloughed dozens of people yesterday (Apr. 15) due to stresses caused as a result of the coronavirus pandemic. On the surface this might make sense to someone who doesn’t follow WWE very closely, because this is a situation that many businesses are currently trying to find a way to navigate through.
But there’s one important detail to keep in mind with WWE: this company is absurdly profitable, even with the pandemic going on.
Brandon Thurston does great number-crunching work over at Wrestlenomics, and he has a better feel for WWE’s financial picture and outlook than just about any other person outside the company. He recently wrote that he expects WWE to “report record-setting profits in 2020.”
“I think it’s WWE’s effort to try to protect the profit that they originally projected. I think it’s easy to look at it from the outside and maybe not know that much about WWE’s business and think that, well, everybody’s going through hard times here, and everybody’s business and lives are being affected, and of course WWE’s business is being affected as well. But it’s not a matter of keeping WWE profitable, I think it’s a matter of preserving their original profit projections.”
He reiterated that WWE’s profits this year (with a global pandemic) will be greater than last year (without a global pandemic).
So let’s put the following two pieces together:
- WWE is projected to have record-setting profits this year.
- WWE decided to release or furlough all of these people in order to maintain projected profit levels.
There is an obvious conclusion to be drawn here: WWE is swimming in profits at an unprecedented level, and they cut all of these people in order to maintain that unprecedented level of profit.
These releases and furloughs were not at all about WWE trying to keep its head above water. You can check out Thurston’s graphic to get a quick sense for why that is. Their strongest revenue stream (TV rights fees) is at the lowest risk of negative impact from coronavirus, while one of their weakest revenue streams (Live Events division) is among the highest risk areas.
This is just a reminder that WWE isn’t financially struggling during the coronavirus pandemic. Because of their highly lucrative television deals, they are absurdly profitable and will continue to be absurdly profitable for the remainder of this year.