Financial Focus: What WWE can teach us about the coronavirus economy, your job & you

By Professor Anthony Rivieccio MBA PFA

The World Wrestling Entertainment (WWE), a public-held wrestling and entertainment company, has lost 40 percent of its stock value from Jan 1 through March 11 (the beginning of the coronavirus pandemic).

The Dow Jones Industrial Average, the broadest measure of our economic growth, was down 18 percent during the same time. 

The WWE was in trouble!

Then soon after, the US economy was shut down. And WWE was deemed an “inessential” business.

Since January 1, the World Wrestling Entertainment has lost 40 percent of its stock price. Pictured: WWE Hall of Famer Hulk Hogan (Credit: WWE)

The wrestlers could not wrestle. They could not entertain once paying fans. They could not sell merchandise to those fans. Since they could not entertain, then they obviously could not make pay-per-view money. On March 16th, the WWE stock was down 52 percent and the Dow Jones was down 31 percent.

But CEO & owner Vince McMahon tried hard. He taped his shows and sold them to TV stations to broadcast. And he even taped his biggest pay-per-view event of the year, WrestleMania and sold it.

But like President Trump says frequently, “no one wants to watch taped sports, they want to watch live sports.” McMahon was able to have WWE designated an “essential” business in Florida. He began to produce live shows in a private area he owns called a “performance center.” But with no ticket-buying fans to come to those live shows, the bloodbath continued.

And on tax day of all days, April 15th, the ax fell.

Hall of Famer Kurt Angle was furloughed by WWE on Wednesday afternoon, as 34 members of the main roster and backstage personnel were released, including:

Rusev, Sarah Logan, Aiden English, Erick Rowan, Epico Colon, Primo Colon, Mike Kanellis, Maria Kanellis, Zack Ryder, “No Way” Jose, Kendo Kashin Serena Deeb, Deonna Purrazzo, Drake Maverick, Curt Hawkins, Luke Gallows, Karl Anderson, EC3, Eric Young, Heath Slater, Lio Rush, Josiah Williams, Dorian Mak, and Alyssa Marino.

A number of other producers: Lance Storm, Dave Finlay, Shane Helms, Deonna Purrazzo, and Aleksandar Jaksic had been laid off. MJ Jenkins and Ace Steel were furloughed alongside Angle.

By days end, forty percent of  WWE personnel had been let go.

On March 11th, when Vince was already losing market value, at the beginning of the pandemic, the World Wrestling Entertainment’s stock was trading at $38.72. Now after the cuts, WWE was trading at $38.90 — a gain of 0.46 percent in 34 days.

So while he is still losing 40 since Jan 1st, Vince was able to get his company in coronavirus-positive mode. He gained 23 percent back to bring the losses back to 40 percent from 52 percent

Assuming he can still keep his last 34 day pattern consistent, this would translate to a positive 3.2 percent at the end of the year. So he can say he saved the coronavirus bloodbath but still lost 40 percent of per-share stock value in 2020.

Since the beginning of the Coronavirus till now, April 15th, he did not lose any money. Nonetheless, 40 percent of the company was cut!

Sound like your job? Sound like your 401k? Sound like your money?

Vince McMahon is going to have a very rough second half of the year to be sure. Even if we turn out to have a decent 4th quarter, the economy will be slow to open up and gain speed, now till the end of the 3rd quarter, in September.

Sound familiar? Welcome to the new America.

Later that night, former champion Seth Rollins went on Instagram to saying: 

“One thing I am seeing that is a little upsetting to me is all the negativity and hostility towards WWE. This is a difficult day for everyone, for all of us. I think if ever there was a moment for us to unify, for us to kind of band together and to try to do the best we can, to keep this business alive the best we know how, this is that moment. I think pointing fingers or saying you should have done this or you should have done that — I don’t know, it just doesn’t feel like the time or the place for it. I think this is a day for compassion and for empathy and for understanding and to try to support each other, to pick each other up.”

“That’s for everybody, that’s not just for the guys and girls that were let go. For all of us that were fortunate enough at this moment to still be able to have a position where we can collect a paycheck and we can support those who love us and those around us, I think we have to take it upon ourselves to work harder to make sure that there’s a place for all those had it the worse today to come back to. As a planet, we can rally around the idea that this is only temporary and those that lost their positions and are struggling to figure out what to do next, that they will be able to make it back from this. Whether that’s with WWE or with another organization or a completely new field, this isn’t the end. I think that if we start fighting amongst ourselves, it’s only going to make things worse. I just encourage everyone to try to come together over this and to try to support each other, to lift each other up,” said Rollins.

As former WWE Champion Hulk Hogan would have said, “Eat your vitamins and say your prayers”.

Ladies & Gentleman, the rest of the year is going to be one of a hell of a ride.

Professor Anthony Rivieccio, MBA PFA, is the founder and CEO of The Financial Advisors Group, celebrating its 24th year as a fee-only financial planning firm specializing in solving one’s financial problems. Mr.  Rivieccio is an Adjunct Professor of Business, Finance & Accounting at the City University of New York and Monroe College. You can reach Anthony at 347.575.5045.

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