WWE is releasing more high-profile talent from their contract as the company says they are grappling with budget cuts. Unlike recent years, these releases are under more of a microscope with the incarnation of new wrestling startup All Elite Wrestling (AEW). WWE may be setting itself up for headaches down the road by unwittingly offering new competition an edge.
WWE chairman and CEO Vince McMahon does not find cause for concern. The publicly-traded entertainment company is running their own race.
“It’s certainly not going to a situation [like with (former rival World Championship Wrestling) WCW] where it’s the rising tide because that was when Ted Turner was coming after us with all of Time Warner’s assets as well,” McMahon said on WWE’s 2021 second quarter earnings call. “That was a different situation. AEW is where they are. I don’t know what their plans are, I only know what our plans are. I don’t consider them a competition like I would WCW back in the day, nowhere near close to that.”
Earlier last month, WWE cut a number of wrestlers on their roster including Keith Lee, John Morrison, and Tegan Nox. The Stamford, CT-based family business also had waves of releases this past April, May, June and August.
While WWE claims these releases are to save money, the 18 superstars who were most recently let go from their contracts were fired on the same day the company touted success in the third quarter of 2021.
Revenue spiked 15% year over year due to the return of live tours across the country and merchandise sales at arenas.
WWE initially started releasing high profile talent from their contracts to save money during the pandemic. This first round of cuts also affected those behind the scenes, as executives and writers were either fired or also asked to take pay cuts.
The company missed out on a large number of merchandise sales throughout the pandemic, when it staged all of its performances in Florida without live audiences present. During live television, fans were shown on video screens throughout the country, simulating a live arena experience during the lockdown.
But WWE’s stock price soared after live touring was announced on June 7th, to $66.55 from a pandemic low of $33.80 in March 2020. As the country seeks a return to post-pandemic life, WWE shows have been a regular occurrence since the first show with fans after a year and a half in Houston, TX
WWE made close to $1 billion in revenue last year, an increase from pre-pandemic numbers. Net revenues for 2018 and 2019 totaled $930.2 billion and $960.4 billion, respectively, according to their annual reports.
It was not simply floundering or unused talent that were released by the professional wrestling conglomerate. There have been a number of former championship title holders from WWE’s mean roster, who are featured every Monday and Friday night on Raw and Smackdown respectively, as well as WWE’s developmental brand, NXT which is broadcast on Tuesday night.
The talent releases come at a time when WWE is facing the most direct competition in two decades from AEW. Their previous competition ended when McMahon acquired World Championship Wrestling (WCW) in 2001.
From their reported earnings, WWE clearly is not going to be in financial peril anytime soon, but the market may be trying to tell WWE to make some changes or risk revenue decreases off the heels of AEW being more successful when they book live events in identical venues
AEW has previously acquired former WWE talent such as Adam Cole, Ruby Soho, and Andrade El idolo. This next wave of releases makes many wonder how long before the company strikes again and says hello to talent like Keith Lee, Braun Strowman, and Bray Wyatt.