(CBSNewYork/CBS Local) — WWE is facing its biggest threat to date. In a world of bruising seven-foot giants and freakishly athletic strong men, it is a virtually weightless and invisible virus that is challenging every member of the roster and employee of the company.
Already the coronavirus has forced WWE to tap out of live events and body slammed the idea of holding WrestleMania in front of a packed stadium. For the first time ever, the event was held without a single fan in attendance. Millions of dollars in critical revenue that was being counted on was instead counted out of their bottom line.
There were mass talent layoffs and furloughs for employees.
Television audiences continue to erode as its live broadcasts have lost much of their sizzle because there are no cheers or jeers. There is only silence.
“There’s a lot of things to figure out in this environment,” said Vince McMahon, WWE Chairman and CEO. “It’s brand new for us and for anyone. When there’s no audience, it is a different show. A completely different show.”
During the pandemic, WWE is being forced to re-think the way its television properties are produced and to generate outside-the-box ideas to try to captivate audiences.
McMahon says his crystal ball is as cloudy as anyone else’s and doesn’t know when — or even if – things will return to how they once were. In short, it’s impossible to define what the new normal will look like.
But if it sounds like WWE is going down for the count, think again.
The company posted revenue of $291.0 million during the first quarter of 2020, representing a 60 percent year-over-year increase. They also logged a record number of new subscribers to the WWE Network over WrestleMania weekend. The total number of subscribers to the streaming service is up to 2.1 million, which represents a five percent increase over last year’s WrestleMania. The company declined to say how many of those are paying subscribers.
Records were also set for viewership on its digital and social platforms with 967 million video views during the week of WrestleMania.
As for the ratings of Raw, the company’s flagship show posted a 16 percent decline in viewership during the first three months of the year, but still managed to outperform its broadcast home of USA Network which is down 29 percent during the same time, according to WWE officials.
“As far as the content is concerned [our broadcast partners] totally get that it’s not our fault,” McMahon said when asked whether he thought the company’s television properties were in jeopardy because of the lack of ratings and live crowd. “They’ve lauded what we’re doing because there is nothing out there right now… They have our back as we do theirs.”
McMahon is also confident that ratings will rebound once the audience becomes more familiar with new faces on the roster.
The company’s first quarter financials were largely unaffected by the coronavirus pandemic, because its wrath didn’t cause a seismic shift in live entertainment until mid-March. Additionally, WrestleMania did not occur until the second quarter.
McMahon gave an honest appraisal of the challenges they are facing and the road ahead.
“I think the COVID-19 stuff caught everyone with their pants down,” McMahon said.
Resuming a live touring schedule and attracting fans to arenas will be among the biggest hurdles for WWE to clear once restrictions are lifted. And there is no clear indication as to when that process could begin. Even the prospect of running another major show in Saudi Arabia as far out as November or December is in doubt.
“I don’t know when it’s going to be allowed, and I don’t know what it’s going to look like when it is allowed. I don’t think anyone does,” McMahon said. “Right now we’re just taking it month by month and continue to push it further out every month in terms of when we’re going to do this thing. I really have no crystal ball there at all.”
Still, the company has dates reserved at multiple arenas in the event they can dip their toes back into their previous business model. McMahon is also open to the idea of welcoming fans back to tapings and employing social distancing measures if permitted to do so by state officials.
Moving forward, finances may get a little cloudier for WWE as stay-at-home orders and restrictions on live events with large crowds drag on.
Such uncertainty is what led to the release of a large number of talents and furloughing of much of its off-camera workforce. In speaking with investors, company executives stressed that the employees had not been laid off and expect the staff reductions are a temporary measure.
With revenue from ticket sales completely dried up, the company is leaning heavily on the massive television contracts that went into effect last October. Live programming has never been more important to WWE and officials are going to great lengths to ensure the safety of its production staff and crew on the closed sets where the shows are being broadcast.
During the taping process, performers are sequestered in a hotel to limit potential exposure to COVID-19 and temperatures are checked as they arrive at the show. Anyone displaying a fever is barred from entering the premises. All employees and wrestlers are also required to fill out a form documenting whether they’ve been exposed to the virus on a weekly basis.
Additional measures include limiting the total number of people on set during the taping, cleaning the ring ropes in between matches, and frequent “pandemic cleanings” of the entire facility and mobile production trucks.
The company is also using long-lasting industrial-strength chemicals to reduce the risk of viral transmission. WWE Executive Vice President of Global Talent Strategy and Development Paul “Triple H” Levesque revealed the company has contracted with Allied Bio Science to apply a substance capable of continually killing viruses on surfaces for up to 120 days.
“How it was explained to me is that it acts like a sword that punctures the cell wall of the virus or what causes the virus and kills it on contact,” Levesque said.
The veteran performer turned executive added that it remains effective even if additional cleaning chemicals are applied on top of it.
“We’re doing everything we can do for safety and making sure the environment is as good as it could possibly be,” McMahon said.
Both the company and officials in Florida have recently faced criticism as the shows have continued despite the safety measures that have been put in place. McMahon says that contingency plans have been crafted and company officials have identified a number of alternate locations in multiple states to hold tapings should Florida pull the plug.
No matter how things shake out in the future McMahon says he is confident WWE will be able to adapt and continue to roll with the punches for as long as it takes.
“If anyone can figure it out, we will,” McMahon said. “We’re highly adaptable as you’ve seen through the years. Whatever happens, we’re there.”
Investors reacted positively to the update as shares jumped more than 12 percent in after-hours trading.
Chuck Carroll is former pro wrestling announcer and referee turned sports media personality. He once appeared on Monday Night RAW when he presented Robert Griffin III with a WWE title belt in the Redskins locker room.
Follow him on Twitter @ChuckCarrollWLC.