What Is Happening With The WWE?

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The WWE has always been a company that evolves with the time period that they are in. They went national when everyone else was content with sticking to their territory, they set the model for television and PPV for wrestling promotions in the 90's, then they bought out their competition and it was off to the races. They then began pivoting from a live event company to primarily a television product, as TV's got better and people would prefer to stay home to consume the content. 

Then the 2010's would roll around and they would do something unheard of, they would almost completely pivot from the PPV model and create their own streaming service. The WWE Network would house all the content from the history of WWE (and many other promotions). Not only that but cities would begin to bid on WrestleMania due to the amount of revenue the show brought to communities. 

WWE wouldn't stop there in the middle of the 2010's they would create their own performance center in Orlando and then would begin to expand it globally. They launched a 3rd brand that got picked up on Cable with NXT, also another brand for the United Kingdom that is exclusively on the WWE Network with NXTUK. There have also been talks of expanding the NXT brand into Mexico, Japan and India. The WWE Network is available in nearly every country in the world. 

The WWE found a way to become a household name, they became "Kleenex or Lysol" they ARE wrestling. As much as we love that wrestling has so many options currently for us diehard fans, if you walk up to the average person on the street and say wrestling, they'll say oh yeah WWE!

I said all that to say this, the WWE is once again changing and evolving and it might make us as fans the most critical of them yet. We're use to WWE continuously signing and releasing talents, we're use to the WWE using certain talents and not using others, so why do all these recent (over the last 18 months) releases hit us so hard? It's something WWE and honestly every wrestling company has done for the entire history of the business.

The first is timing, the releases happening during the pandemic, in a time where many of us felt uncertain and were dealing with our own career or financial issues, seeing the company we loved release people we relied on for entertainment hurt. However it's more than that, it's also a change to what we are use to with WWE in recent history. Instead the current way WWE is viewing talents is more like the mid 90's mindset. 

Remember back, Vince lost Hulk Hogan, Ric Flair, Randy Savage, Scott Hall, Kevin Nash, Jim Duggan, Brutus Beefcake and Lex Luger to WCW. At the time it was due to the fact that Vince just couldn't afford to compete financially with Ted Turner, Ted was willing to offer equal or greater money with less dates and he also owned the Network they were on. 

So looking back you could understand why Vince would let talents walk and not do everything in his power to bring them back or sign them away. Vince would take gambles on guys like Steve Austin, Mick Foley, HHH, The Rock and build around Shawn Michaels and The Undertaker. If you look at WWE today it looks a lot like that, even down to touting budget cuts.

However how could WWE be touting budget cuts when, they are in their most secure financial position they've ever been in, ever!? WWE has leased their Network to NBCU (Peacock) for a billion dollars, they have a deal with Saudi Arabia for a billion dollars, they have multiple TV deals in the billion dollar range, and not to mention all the other money from live events, merchandise, social media platforms and the WWE Network internationally. 

So why has WWE made the roster decisions they have made over the last 18 months? Nick Khan. Yes the same guy I touting as the next superstar for the WWE is also the reason why so many of our favorite Superstars are now wrestlers again and working in one of the many other promotions. How could Nick Khan look at Bray Wyatt, Braun Strowman, Andrade and Zelina Vega after the Pandemic and say "yeah let's cut them". 

We have to remember Wyatt and Strowman had major wins at WrestleMania 36, Zelina and Andrade were mainstays in the main event of Raw and had multiple segments every week. Now granted Zelina is back and the reason she was let go has a different situation surrounding it, they were still willing to let her walk. There are so many talents to include but you know the names, how, how could WWE just cut these talents and let them walk to AEW?

We have to remember Nick Khan is from the sports world, he's used to seeing teams cut talents when they aren't performing up to their contract or just before they begin to decline in the eyes of the organization. This is not to say everyone who was cut "deserved to be cut" or "was asking to be cut" or "wasn't performing well". This is stating that in the eyes of the organization they weren't worth the value of their deal. 

As a fan does that suck? Absolutely. As a business does it make sense? Absolutely. Most of the cuts, if not all (excluding Zelina Vega) has been touted as due to "budget cuts" and this infuriates almost everyone. The funny thing about budgets are they don't have to be set for making MORE money, generally you set lower budgets if you are making less but you don't have to increase it just because you are making more money.

For instance, just because you get a massive pay raise at work, that doesn't mean you have to or should go out and max out your expenses for your credit cards, car note, cell phone or cable television. You can continue to budget that as it is, despite making more money. The other thing about budgets are, they rely heavily on what the cost of things are.

For instance, if Milk goes up from $1-$3 and gas raises from $2-$4 etc, you might have to increase your budget due to the raised cost of these things. However if Milk or Gas decrease in cost, theoretically you can lower your budget. In 2020 when the Pandemic hit, Independent Wrestling was hit very hard, and was incredibly difficult for wrestlers to get booked and paid.

So there became an influx of talent available to companies like WWE at a much cheaper cost than what they were paying their talents. So even though, WWE cut upwards of 30 talents last year, they also brought in close to 30 talents last year or beginning of this year. With this being said that means the cost of talent has decreased, as you can now get talent at a cheaper rate than even two or three years ago where talent had more of the negotiating power.

So let's go back to an example used above, Milk costs $4 however a new company now produces Milk and will sell it at $2, you can now cut your cost of milk however you have to switch to another brand of it. Thus bringing down your expenses and also allowing you to reset your budget. Does WWE have to reset their budget? No, they are making more money than ever and didn't need to let anyone go. Is it morally ok what WWE did? That's up to you to decide, I'm not looking at this from a right or wrong perspective, but from a business and analytics standpoint. Regardless if I've now cut my budget due to the cost of the performers decreasing, you can state that it is due to budget cuts.

Many people would bring up well what about Goldberg or John Cena they certainly cost more than someone like Zack Ryder or Curt Hawkins. That is absolutely true, however they also bring awareness, eyeballs and money back to the table. Whether we like it or not as diehard fans, people still get consumed by these legends that command big contracts and are probably more of a marketing expense than a talent expense. 

If I'm bringing Goldberg in, it's not necessarily to see how well he can work for a month, it's to bring in eyeballs to say oh shit, it's Goldberg and he's going to wrestle Lashley. Wow, Lashley is the champion he must be a badass if he's going to wrestle Goldberg, and holy cow Lashley has beaten Goldberg he must be on that level. It's to sell merchandise to old Goldberg fans and kids that want the big good guy to defeat the bad guy. So for every bit of that money he's costing, they are also bringing in revenue at much higher rates than others due to merch and ticket sales as well as eyeballs.

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Speaking of analytics, as mentioned before Nick Khan is from the sports world and is familiar with many teams and a statistic called "Wins Above Replacement". I am going to change that around a bit for this discussion and call it "Draw Over Replacement" or DOR. This is where people will get very sensitive to the topic and I want to repeat this is not me saying this is good or bad but more what I think is currently happening within the company.

In the WWE or in wrestling promotions as a whole you know there are almost unspoken tiers of every promotion. We've heard "Main Event, Mid Card and Lower Card" for as long as I can remember. Well what if I told you there were analytics, analytics that could break down exactly how well someone was doing in each tier, and then use those analytics to gauge whether a talent is performing to their valued contract within the company. 

If you were able to quantify said analytics, you could then break down the cost of each tier and how much each should be valued. Let's use Bray Wyatt as an example, Bray was someone I consider to be a segment eater, main event talent that sold tons of merch. What if WWE did have metrics that said over the last few months that Alexa Bliss, in those same amount of segments, with the same amount of merch and when in the main event of the show performed close to or equal to Bray? What if I also told you Alexa was with the company at a much lower cost than Bray?

This would if you remove the emotion out of it sound like Bray is now disposable and Alexa could easily fill that spot for the show/company. This is what I'm calling DOR, and it's completely my own hypothesis on the situation but when you look at what WWE is doing they are letting bigger contracts go especially if they are up in age. Look at Braun Strowman, a big babyface on a big contract, well now you have a guy like Riddle. What if Riddle is selling merchandise equal to or greater than Braun? What if he's doing equal or better number on social's and TV than Braun? Not to mention Riddle is on a cheaper deal than Braun, this again would make you say, well maybe Braun is disposable.

This again does not mean that the talent wasn't successful or that they didn't entertain tons of people. This isn't to say that these talents failed in their industry. Take a SG in basketball who ended up signing a big time contract, in two years their stats remain equal but a talent that is cheaper can fill that role at a lower expense, the SG is now expendable. That doesn't make them a failure, however it does mean that it's in the best interest of the team to sign the other talent at a reduced cost.

This kind of business model can ONLY succeed, if you continually bring in a mass amount of talents in many different forms that you can mold and have replace a talent that you feel is underperforming for some period of time. Which WWE currently, has due to the above mentioned Performance Center as well as the other promotions they have with NXT and NXTUK. 

Well the question becomes where is the line of where a talent looks like they are disposable and at what point do talents stop signing with the company due to them releasing so many talents? As far as the first question it's easy, the moment your value of your spot and contract falls below a certain threshold within that tier.

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As far as talents ceasing to sign with WWE, let's make it clear, WWE released tons of talents during a Pandemic and was easily able to sign some of the top Indy talents in the world. Their platforms and history will always provide more value than most other companies can offer. Many kids dream of being in WWE and having their stuff shared on all WWE social media platforms. I'm not sure this is something that WWE would be concerned about in the next 10-20 years due to how far ahead they are of everyone else due to that 18 year gap of WCW and AEW.

I'm not sure if WWE is trying to prop their sheets to make them more admirable to a buyer or if they are just trying to shift their business mindset when it comes to contracts to a more lean model (like many businesses are). Again this wasn't me stating this is ok or a justification for why WWE has made the business choices they have, just perspective at what I think they are doing as a business.

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