The Other Argument (WWE Business)

Time permitting I may be calling in Thursday to the Cafe to present what I call “The Other Argument”. This is not something I fully support 100%, but it is something I have thought about and see valid points in. I am posting it here as I think it may be a good debate.

WWE is a publicly traded company with investors. Simply put, we can assume if they stop running shows (and it appears Live shows) they are at risk of losing out on very important TV Rights revenue which is the backbone of the company. It could be said WWE has an obligation to prevent further loss of revenue to its shareholders / investors.

The business case for Networks actually holding WWE to their contracts - they are getting crushed by Advertising make goods. The question as to why Networks would take the risk of letting such content air on the network, its somewhat simple. It’s Live, original content that satisfies advertisers who they are otherwise going to owe millions in ad make-goods for. If WWE costs the Networks money with advertising, why would Networks not withold full payment to WWE for not satisfying their contract, everything is linked, its the business.

So we have heard WWE talk about trying to provide safety precautions for their talent. I think we also heard that they aren’t forcing talent to be part of the tapings. Based on Braun’s twitter feed, it appears talent not used were just getting their downside. It would make sense if a talent opts to not participate in tapings, they will just receive downside payment, which, given the limited other uses for talent right now, could be very low for so many talent. We sometimes forget that these wrestlers are people too. They are being faced with the difficult decision facing so many working people right now. Risk health and safety to continue working or sit it out and sacrifice potential income. If it is true they are given the choice to participate or not, then shouldn’t it be on the individual to decide if they think enough safety precautions are being considered.

This point has been raised with other sports - people often cite owner greed for risking health and safety of employees or players. The fact is there are 3 major stakeholders for most sports impacted by the decision: Owners, Players/Employees, TV Partners. All are losing money, none want to keep losing money. The same applies to WWE, except you have to add a 4th stakeholder, investors. Nobody wants to keep losing money.

Whether WWE should be considered essential or not is a different conversation (there is a case for states starting to approve certain types of business activity where there is an absolute need to plug massive holes left from loss of sales tax, etc). The debts some state and local governments will be facing is going to be huge; so there’s a case why Florida (or other states) would be willing to stick their neck out like this)
For whatever reason they were approved. Now that that decision has been made, i think The Other Argument is equally as important as the one that focuses on the insanity of WWE running events right now. We should all ask ourselves what we would do. Maybe we have a mortgage to pay, or expenses that simply put our downside guarantee doesn’t satisfy. We don’t know how long this will go on so maybe folks who were willing to sit it out initially now are willing to participate. It’s a risk/reward discussion, it’s a business discussion, it is not just as black and white as I think we often make it.

If WWE starts taking hits in its TV Rights Money, talent inevitably make less, the market cap and ability for WWE to raise money takes a hit, that means the investment in the future of the company takes a hit. It’s easy to vilify Vince McMahon (goes without saying he is morally bankrupt); but there are SO many other people part of that machine that are dependent on the health of the company.

(may edit this because I typed it on my mid-day walk while listening to RAR)

One week earlier and you could’ve signed Deezy to be the title sponsor.


Separate thought: WWE not getting any attention or negative backlash outside the Wrestling bubble is a tricky thing.

Every company is facing the same issues. Look at what is happening at Amazon and their workers speaking out. Look at all the news broadcasters who were working in close sets and got the virus. This isn’t unique for WWE, they are like the smallest fish in a big pond of businesses facing all the same challenges.

To be honest it’s all about if the network’s have said something to The WWE about having live content.

If they said that they won’t pay the full amount if it’s not live, then come out with it.

Conversely if this was WWE’S decision solely then that needs to come out also.

Wrestlemania results did not get leaked so whilst not ideal, doing a bulk taping is preferable.

I believe it was Bryan Alverez who said on Wrestling Observer Radio, has anyone from WWE asked the Network’s?

The networks are dealing with this for all Sports and live content. I’m not sure they are speaking to it publically as every league and business may be impacted differently. For example, how they handle it with a league or event that has pandemic insurance could be different than other leagues or events. I don’t think they want to set a precedent because so much of this is unknown. Wwe has to operate based on their interpretation of the contract, as all leagues do. The big difference - wwe is public and has an obligation to shareholders.