The past couple of months proved eventful for wrestling promoter Vince McMahon and his World Wrestling Entertainment Inc. The nation’s premier wrestling company launched the WWE Network (its much anticipated subscription streaming video service), set an internal record with more than 1 million views of its flagship WrestleMania event and reversed a dramatic decline in stock price triggered by investor fears about the viability of its streaming service that had dissipated $300 million of McMahon’s net worth.
These successes were soon overshadowed by the death of the 54-year-old Ultimate Warrior, a popular wrestler from the 1980s and 1990s who recently accepted induction into the WWE Hall of Fame. The medical examiner’s office determined that the Warrior’s cause of death was cardiovascular disease, which places him in the company of many other former WWE stars who died prematurely from heart-related ailments. Like many other wrestlers, the Warrior was a heavy user of steroids during his career.
Whether steroid usage causes heart disease remains a debated issue. However, the sudden death of yet another prominent star from the WWE’s drug-ridden golden era raises new questions about the company’s far from pristine reputation and ought to cloud sunny predictions about its future as a leading provider of content on demand.
Those predictions have thus far been based on two important facts. One, unlike Netflix and Hulu, the WWE owns the exclusive rights to the content — from live events to reality series to archival footage — on its streaming service, which, according to industry analysts, is the WWE’s chief appeal as a provider of streaming video. Because the WWE does not have to negotiate licensing arrangements with outside film studios and television networks, its subscription price is not affected by the fees that these entities charge. Two, the WWE is marked by an extremely unequal employer-employee relationship, one that further controls its costs and dates back to the earliest days of professional wrestling in the U.S. However, if this latter fact were changed to reflect the way athletes are compensated in other professional sports, the WWE’s future success would be anything but guaranteed.
History of talent-control
McMahon and his fellow executives’ ability to exercise a tremendous amount of control over their talent has a long history. From the 1920s, when wrestling promoters began scripting the outcomes of their most important matches in order to attract fans with exciting finishes, until McMahon’s nationwide expansion in the early 1980s, wrestlers worked on short-term contracts and traveled freely among dozens of small wrestling promotions. Considered independent contractors rather than employees because they possessed the skills, resources and job flexibility to act as their own employers, wrestlers are responsible for many of the perquisites that other professional athletes have come to take for granted — travel expenses, personal training and health insurance. The WWE is also freed from having to make contributions to Social Security, Medicare and unemployment insurance for these workers.
As the WWE expanded, the collapse of dozens of small, regional promotions decreased wrestlers’ employment options. But the independent contractor system remained firmly in place in this changed labor environment. The WWE explains on its website that “like some professional athletes and entertainers such as actors and actresses on television dramas, soaps or comedies, WWE performers are independent contractors … and are personally responsible for acquiring their own health insurance, life insurance and financial planning.”
WWE's value as a Wall Street investment has always come at a high cost in human capital.
Some popular performers such as John Cena and Randy Orton have been able to negotiate favorable deals with the WWE that include first-class travel arrangements and health insurance. However, available salary data indicates that most low-level performers and members of the female Diva division operate on short-term guaranteed contracts in the mid–five figures, out of which they must pay for their travel, food and lodging. Should these wrestlers seek greener pastures in Total Nonstop Action, the nation’s second-largest wrestling company, they will discover even more unequal labor relations: Many of the performers in TNA are paid a mere $200 to $300 a match.
Failed union bid
It’s not that wrestlers haven’t tried to right the ship. While employed as a WWE commentator in 1987, former Minnesota governor and star wrestler Jesse “the Body” Ventura attempted to organize a wrestlers’ union to bargain with the company for higher wages and better working conditions, only to see the effort defeated after Hulk Hogan and some of the company’s other higher-paid performers sided with management. In his autobiography “I Ain’t Got Time to Bleed,” Ventura stated that he believed unionization was necessary because “you’re paying out enormous amounts in taxes” with “no pension, no health benefits. You’re a piece of meat.” He and other wrestlers, such as “Rowdy” Roddy Piper and “Captain” Lou Albano, pursued side careers in Hollywood in part because of the insurance and pension benefits that membership in the Screen Actors Guild afforded them.
Hogan, Ventura and the Ultimate Warrior were three of the steroid-enhanced performers whose muscular physiques and colorful ring personas established the WWE as the nation’s top wrestling promotion during the 1980s. But they weren’t the only reasons for the company’s success. “Macho Man” Randy Savage, “British Bulldog” Davey Boy Smith, “Ravishing” Rick Rude, “Hercules” Hernandez and “Mr. Perfect” Curt Hennig all enjoyed extended runs near the top of the card throughout that period, and each would later die from a heart-related ailment.
It is easy to forget, given McMahon’s subsequent ascension to the ranks of America’s billionaires (and his wife’s bid for a Connecticut Senate seat), that the company was nearly bankrupted by a steroid scandal that led to McMahon’s 1994 federal indictment on charges of illegally distributing steroids to wrestlers. McMahon, a dedicated amateur bodybuilder whose obsession with muscular size is well-documented, found himself at the center of a lurid media spectacle that ended in acquittal only after key prosecution witness Hogan said that he had no recollection of McMahon’s ever selling or distributing steroids to wrestlers.
In the wake of that high-profile trial, the WWE implemented a drug-testing wellness program that has persisted, in varying forms, to the present (though some disgruntled former wrestlers have alleged that the league’s top performers, such as Cena and McMahon’s son-in-law Triple H, do not have to participate in this program). The company has also taken measures to reduce the incidence of chronic head trauma, which has been linked to depression and dementia (and which some say may have contributed to former WWE superstar Chris Benoit’s murder of his wife and children), by introducing a concussion management program similar to the programs in place in the NFL and NHL. Less admirably, the company touted the program, somewhat tastelessly, through a fictional storyline involving Triple H.
Ditching old practices
The WWE Network, which launched bug-free and already offers functionality in many ways superior to Netflix’s and Hulu’s video apps, certainly warrants the praise that sports journalists such as Grantland’s Bill Simmons and David Shoemaker have heaped on it. But the death of the Ultimate Warrior — perhaps another steroid casualty from an era that produced too many of them — should remind us that the WWE’s value as a Wall Street investment has always come at a high cost in human capital. The company owns its independent contractors’ likenesses, their performances and in many cases even their stage names.
McMahon has posted absurdly high profit margins on the backs of uninsured, undercompensated bodies for too long. Now that the WWE has fully embraced the digital age, it should consider abandoning its 19th century labor practices too.