WWE hints at other investigations into Vince McMahon’s misconduct and reveals $14.6 million payments

LAS VEGAS, NEVADA – JULY 02: Vince McMahon, Stephanie McMahon and Triple H attend UFC 276 at T-Mobile Arena on July 2, 2022 in Las Vegas, Nevada.

Jeff Bottari | yufc | Getty Images

world wrestling on Monday disclosed a previously unrecorded $14.6 million expense personally paid by major shareholder Vince McMahon, who announced his retirement on Friday if he is under investigation for allegations of sexual harassment.

WWE has also hinted that allegations of misconduct, already subject to ongoing independent scrutiny by the company’s board of directors, are being investigated by other organizations.

“The Company has also received and may receive in the future regulatory, investigative and law enforcement requests, subpoenas or claims arising from, related to or in connection with these matters”, This was stated in a WWE statement to the SEC on Monday morning..

The payout is $2.6 million. more than the amount reported by The Wall Street Journal. earlier this month. McMahon allegedly paid this money to women from 2006 to this year to ensure they keep quiet about alleged cheating and misconduct.

The company said it expects to conclude that its “internal control over financial reporting was not effective as a result of one or more material deficiencies.” WWE has said it will reflect unrecorded expenses in its 2019, 2020 and 2021 update, as well as the first quarter of this year when it reports second quarter earnings. The company was due to report for August. 9, but changes could delay that, WWE said.

The filing also officially announced a change in leadership. Stephanie McMahon, daughter of Vince McMahon, will become chairman and co-CEO. Nick Khan, the company’s president, will also become co-CEO.

Vince McMahon’s son-in-law, Paul Levesque, also known as “Triple-H”, will assume creative control of the company, which McMahon Sr. has retained since he stepped down earlier this month. This marks Levesque’s return from hiatus after the “heart event”. reports Sports Illustrated. It also expands his role from Executive Vice President of Talent. Levesque is married to Stephanie McMahon.

McMahon, 76, is the company’s largest shareholder with a roughly 32% stake.

WWE included bullish second-quarter earnings estimates along with McMahon’s disclosure, reporting $69.8 million in operating income in the second quarter, compared to $46.3 million in the same period last year.

WWE shares were up about 8% on Monday morning. It is up over 30% this year, even though the S&P 500 is down over 15% in 2022.

the future of WWE

Part of WWE’s strong performance this year may be due to heightened investor interest in a possible sale. On Monday, Loop Capital upgraded WWE stock to a Buy rating and raised its share price target to $90 from $59 “based on the greater likelihood that the company will be sold when Vince McMahon retires.”

Earlier this year, CNBC reported. major entertainment companies including Disney and Comcast may be interested in acquiring WWE. The deal could be finalized before the company’s next U.S. TV rights renewal, which is likely to be announced in mid-2023. WWE’s current U.S. streaming deal with NBCUniversal’s Peacock will expire in 2026.

“We are open for business” – Khan said in March on The Ringer’s “The Town” podcast. “If you look at what NBCU/Comcast needs, and I think that’s a factual statement, they don’t have the intellectual property that some other companies have. I think they see us as an organization with a lot of intellectual property. . Much of this has not been used. Now we have to monetize it properly and show the community exactly what we have.”

Loop Capital included Amazon as well as Netflix like other potential buyers.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

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