Posted on 2/25/125 by Bob Magee
As WWE continues to post record financial results following
its merger into TKO, employees say they’re seeing cutbacks
in benefits and fewer promotions than expected.
Multiple current WWE employees, speaking under the condition
of anonymity, described to Wrestlenomics a decline in morale
tied to reduced benefits, limited pay increases, and heavier
workloads as the company integrates with UFC.
TKO will report fourth quarter and full year 2024 earnings
on Wednesday. The parent of WWE and UFC has guided investors
to expect adjusted EBITDA—its preferred measure of profit—
between $1.22 billion and $1.24 billion for the year, with
annual revenue projected between $2.67 billion and $2.75
billion.
Employees also pointed to a growing disconnect between
corporate messaging and their daily experiences. While WWE
management has emphasized the value of its workforce at town
hall meetings, multiple staff said they feel increasingly
undervalued.
A key reason for the merger was to improve profitability by
consolidating services under Endeavor, which holds the
majority of TKO’s ownership. As expected, this resulted in
significant layoffs soon after the merger was finalized in
September 2023.
At the same time, WWE is experiencing its hottest period in
consumer business perhaps since the vaunted “Attitude Era”
of the late 1990s and early 2000s.
Despite that, the company’s stock purchase program ended
when the merger closed, as previously reported. The program
had allowed employees to buy WWE shares at a 15% discount.
Since the merger was completed, the stock price has climbed
more than 50% over the past 18 months, meaning employees
lost access to a benefit that would have allowed them to
invest in the company’s growth at a discounted rate.
The removal of the “WWE Superstar” program—a peer-
recognition initiative that allowed employees to reward each
other with points redeemable for cash bonuses, gift cards,
or experiences—has also been a source of frustration.
Additionally, WWE eliminated complimentary live event
tickets for employees, a long-standing perk.
WWE didn’t respond to a request for comment for this report.
It’s possible the company would point to increased ticket
demand as a reason for the decision. Attendance for
televised events is at its highest in years, according to
data from WrestleTix, and the company has greatly reduced
the number of domestic house shows. Still, some employees
see the move as emblematic of a broader trend.
WWE’s corporate website, where potential job applicants
could consider the company’s “Total Rewards” benefits, still
lists the recognition program, stock purchase plan, and
complimentary tickets among the rewards employees may be
eligible for.
Update: Since this article was published the Total Rewards
page has been updated to remove the benefits no longer
offered.
Meanwhile, WWE and TKO management have publicly touted a
strong financial outlook. WWE’s new $5 billion, 10-year
streaming deal with Netflix took effect in January to
remarkable fanfare. The company announced that as part of
its partnership with Saudi Arabia’s General Entertainment
Authority, it will bring the Royal Rumble to the country
next year. The Saudi government already pays WWE around $100
million annually for two premium live events, which are
traditionally less prestigious than the Rumble. Further,
many recent PLEs have set new ticket sales records. WWE
registered a $4.8 million gate for the premiere of Raw on
Netflix at the Intuit Dome just outside Los Angeles in
January, the biggest arena gate in company history. Weeks
later, WWE had its biggest non-Wrestlemania gate ever,
somewhere over $17 million for the Royal Rumble in
Indianapolis. And last month WWE announced a deal with MLS
to allow the soccer league to produce its studio shows at
WWE headquarters.
Employees told Wrestlenomics, however, that WWE’s financial
success hasn’t translated into meaningful pay increases.
Multiple staff members said they received a 3% cost-of-
living raise this year, which they argue hardly keeps pace
with the rising living costs in Connecticut and New York, in
the region around WWE’s headquarters.
Employees with strong performance reviews were told that
despite those positive ratings, they wouldn’t get more than
a cost-of-living adjustment due to budget constraints set by
upper management. Some had expected significant raises or
promotions based on past company practices but were informed
that the business was not in a position to offer increases
because of the merger.
Employee morale at WWE has been declining for some time now,
employees informed us.
Following recent performance reviews, employees already
frustrated by the loss of the stock purchase program, comp
tickets, and peer-recognition program, were further
discouraged by the lack of meaningful raises to reward those
who have performed well.
Concerns raised with lower- and mid-level managers, we’re
told, were met with explanations citing executive-level
decisions.
Many who are frustrated by these unwelcome changes since the
merger have respect for the company but nonetheless told us
they feel obligated to speak up because they want to be
compensated fairly for the work they’ve performed. They’re
surprised by the direction WWE has taken since the
transaction with Endeavor, especially with WWE now on a hot
streak after many employees worked through periods when the
company’s business wasn’t as strong as it is now.
While pay increases for most employees have been modest, top
executives received substantial bonuses—multiples of their
base salaries—tied to the closing of the merger, according
to SEC filings including TKO’s most recent proxy statement.
TKO CEO Ari Emanuel received $20 million in cash related to
the merger, plus a stock award of 388,162 shares, the latter
now worth around $60 million (based on Friday’s closing
share price of $158.82).
TKO COO Mark Shapiro was awarded $5 million, plus stock
grants totaling 313,400 shares, equity valued at about $50
million.
WWE President Nick Khan received a $15 million cash bonus.
WWE Chief Content Officer Paul Levesque was awarded $5
million.
TKO’s top executives are compensated not only with a base
salary but with millions more in bonuses that are determined
by the TKO Board, based on the company’s financial
performance. The practice isn’t at all unusual for a public
company like TKO but further highlights how executives are
being incentivized in ways most employees are not.
We’re not aware of any bonus awarded broadly to employees
connected to the September 2023 merger or compensation
that’s determined specifically by WWE’s financial
performance.
It’s not just executives benefiting ahead of much of the
employee base. Investors have also been rewarded. In
October, TKO announced a stock buyback program, pledging to
repurchase up to $2 billion worth of shares—a move that
typically helps drive share prices higher. TKO stated it
expects the buybacks to happen throughout the next three to
four years. The company also announced it would begin paying
quarterly dividends to the non-Endeavor shareholder class—
largely financial institutions—with payments totaling $75
million every three months, the first set for March 31 of
this year.
Limits to benefits and compensation might be more
understandable if there were complications impeding the
merger’s success.
But on TKO’s most recent earnings call in November, Emanuel
told investors the merger had exceeded expectations.
“We’re executing on our strategy and delivering record
results while realizing greater integration and synergy
opportunities than initially expected,” Emanuel said before
he went on to note the buyback and dividend announcements.
As WWE’s financial outlook improves, employees say their
workloads have only increased. Some report working 50 to 60
hours per week, particularly during the busy Wrestlemania
season. Others say they have been assigned additional UFC-
related tasks since the merger, similar to how staff were
previously required to assist with XFL work when Vince
McMahon relaunched the football league before the pandemic.
Some employees are concerned that as TKO expands—acquiring
Endeavor assets like Professional Bull Riders (PBR), On
Location, and IMG—WWE staff will be expected to take on even
more work without additional compensation and dwindling
benefits. TKO executives have publicly discussed the
possibility of entering professional boxing, as well.
Like the wrestlers and MMA fighters who work under TKO, WWE
employees are not represented by a union or association.
One WWE employee noted to us that morale has suffered to the
point that some staff are less willing to go above and
beyond in ways they once did.