First and foremost, THANK YOU for the support seen on my last column entitled Vince McMahon Wants a WWE Return & Possibly to Sell the Company… For Profit or Revenge?. What I attempted to do was make a one-stop analysis of the Vince McMahon events that was quickly produced as the news was breaking that evening. I have worked for several corporations and an am quite familiar with merger & acquisition stuff. In addition, I have studied the WWE’s financials and proxy statements for years to somewhat understand their corporate structure.
As a THANK YOU for the support of my last column, I wanted to write a follow-up or sequel as many new Vince McMahon related items and events have happened since the evening of 1/5/2023. In fact, many things “hit the fan” yesterday, 1/6/2023 that needs covered. From what I’m gathering, Vince McMahon wanted this Board changeover to happen during December (hence why Wall Street Journal reported that Vince wanted to return), but the Board of Directors either ignored him or politely said “no thanks”. Hence why Vince McMahon, as the approximate 39% shareholder of the WWE, was able to make the changes himself by force.
WWE Corporation was set up to have the McMahons and the WWE Corp. to always own the WWE together, which is why WWE Corporation might own about 30% of WWE stock themselves. It’s always been under the assumption that a McMahon would run the company, and thus it’s 39% + 30% to fend off any hostile takeovers or board member flippings. However, WWE Corporation just found out what happens when the 39% ownership guy wants his way and wants it now. Furthermore, major corporate changes and things like mergers & acquisitions, whether you are buying or selling, are put to the votes of shareholders. So again, the WWE needs Vince’s cooperation on any of that…
For the remaining 30% ownership, as I’m estimating here, it’s very likely that 20% is owned by other bigger corporations (10% is probably public investment) and are just there to follow the money… The sale of the WWE is quite beneficial to shareholders, as are most sales of companies because the buyer either has to buy them out at a marked-up price or trade them with shares of their stock with a ratio mark-up. Thus, shareholders cheer it on… I have literally been at Annual Shareholder events when a shareholder has stood up and presented the case to SELL right to the President/CEO and Board Chairman’s face! And this person argued that we, as shareholders, have a ton to gain by this company being sold.
Before we get into the events that happened on 1/6, let’s recap what happened during the evening of 1/5:
(a) Wall Street Journal (once again, where you at dirt sheets???) broke a story that Vince McMahon was going to force his way onto the WWE Board of Directors, along with him replace 2 other board members with 2 past WWE executives Michelle Wilson and George Barrios. WSJ also suggested that Vince was returning to help sell the company.
(b) Vince McMahon released a public statement literally confirming what the Wall Street Journal had scooped (or was a response to WSJ to control the information). While Vince did not outright say that the WWE will be sold, he kept using words like “maximize shareholder values” which the sale of the WWE Corporation certainly would. WWE stock jumped in value on 1/6 just at the thought of a sale happening.
(c) With Vince’s desire to rejoin the Board, he has expressed that no Media Rights deal or sale of the company could occur without his approval. In other words, his 39% stake in the WWE as a shareholder is speaking. He put that in writing in his message to the WWE Board.
So after that, what did the WWE Corporation do in response to what appears to be a hostile push to change their WWE Board?
They caved in, of course. Vince is a 39% shareholder and can easily push to get at least 12% more of the private shareholders to join him. Because again, a SALE OF THE COMPANY is lucrative to existing shareholders to “maximize shareholder value”.
On January 6th, 2023, the WWE Corporation made this public filing: SC 13D/A: General statement of acquisition of beneficial ownership – amendment:
On January 5, 2023, the Reporting Person issued a press release announcing that he took necessary actions to position the Issuer to capitalize on a unique opportunity to maximize long-term value for all of the Issuer’s stockholders. These actions follow the Reporting Person’s good faith efforts to work with the Board to facilitate his return as Executive Chairman. These actions will enable unified decision making through the Issuer’s upcoming media rights negotiations and a parallel full review of the Issuer’s strategic alternatives, which the Reporting Person believes is the right course of action and in the best interests of the Issuer and the Issuer’s stockholders in the midst of the current dynamics in the media and entertainment industry.
In letters sent by the Reporting Person to the Board, dated December 20, 2022 and December 31, 2022, the Reporting Person stated his rationale for returning to the Board as Executive Chairman, consistent with his rights as controlling stockholder. The Reporting Person believes that the Issuer has a narrow window of opportunity to create significant value for all stockholders, and that to do so, the Reporting Person must return as Executive Chairman and support the management team in the negotiations of the Issuer’s media rights and that the strategic alternatives review must occur in tandem with the media rights negotiations. The Reporting Person also expressed to the Board that he believes these two initiatives require the Reporting Person’s direct participation, leadership, and support as controlling stockholder.
Based on correspondence from the Board, dated December 27, 2022, and following conversations with representatives of the Issuer both before and after the Reporting Person’s most recent letter on December 31, 2022, the Reporting Person determined, consistent with his rights as controlling stockholder, that the actions he has taken are necessary to maximize value for all of the Issuer’s stockholders.
On January 5, 2023, the Reporting Person acted by written consent (the “Written Consent”) to remove JoEllen Lyons Dillon, Jeffrey R. Speed and Alan M. Wexler without cause as directors of the Issuer and to fill such vacancies by electing the Reporting Person, George Barrios and Michelle Wilson as directors of the Issuer.
As my Dad always said, “they’ll treat you differently if you have money”. Well, the WWE Corporation will treat Vince McMahon differently with 39% ownership of he WWE shares.
Look at how Vince McMahon‘s statement suggests that he tried a “good faith” attempt to return as WWE Chairman. That confirms the December chatter about him wanting to return, but this report also confirms the dates in which Vince privately make this request. Now, he’s publicly doing it.
Also as you can see from the public filing, induced by Vince McMahon’s actions, 3 board members were removed with JoEllen Lyons Dillon (former executive at another company, member of other boards), Jeffrey R. Speed (former executive at Six Flags and Disney), and Alan M. Wexler (Senior Manager at General Motors) being forced off the board in favor of a returning Vince McMahon and his two suggested additions of Michelle Wilson and George Barrios who were employed by the WWE in the past as executives and were loyal to Vince until they were both shown walking papers and were replaced by Nick Khan and a new CFO.
In the Comments section of my last column, user T5W pointed out that Michelle Wilson and George Barrios “work for an acquisition firm”. This user is right… After Michelle and George left the WWE, they formed their own firm together called Isos Acquisition Firm during 2020 to help facilitate capital exchanges and mergers/acquisitions. Then, through August 2022, they merged their operations into a company called Progress Acquisition Corporation. Just 4-5 months later, they just so happen to join the WWE’s Board of Directors with Vince McMahon who says he wants to “maximize value to shareholders”.
I wonder if Dillon, Speed, or Wexler were privately alleged to have snitched to the Wall Street Journal about the Settlement/NDA stories along with leaking many other matters that should be known ONLY to the WWE Board of Directors? Besides wanting to sell the company, Vince could accomplish that using Barrios/Wilson as paid consultants rather than WWE Board Members. I think he suspects one of those 3 being rat, but we’ll see as this story keeps unfolding based on how much MORE information suddenly appears at the Wall Street Journal’s doorstep after the fact and how much future information they could present.
Getting back on track with the public finding, there’s more nuggets to display…
Pursuant to the Written Consent, the Reporting Person also amended and restated the bylaws (the “A&R By-laws”) of the Issuer to ensure that Issuer’s corporate governance continues to properly enable and support stockholder rights. The A&R By-laws, among other changes:
• require the 2023 annual meeting of stockholders to be held on a date between April 20 and May 31, 2023 and the 2024 annual meeting of stockholders to be held within 13 months of the date of the 2023 annual meeting;
• change the advance notice bylaws for stockholder proposals and stockholder director nominations for the annual meeting such that (i) the advance notice deadline is reset if the date of an annual meeting is more than 30 days earlier than the first anniversary of the previous year’s annual meeting (rather than if the annual meeting is more than 15 days earlier than such anniversary) and (ii) if so reset, the notice of a stockholder will be timely if received no later than the close of business on the later of 30 days before the date of such annual meeting and the tenth business day following the date on which public announcement of the date of such meeting is first made (rather than the fifth business day following such date);
• change the advance notice bylaws for stockholder director nominations for a special meeting such that notice of a stockholder will be timely if received no later than the close of business on the tenth business day following the date on which public announcement of the date of such meeting is first made (rather than the fifth business day following such date);
• memorialize in the A&R By-laws the stockholders’ existing right to take action by written consent pursuant to the procedures set forth in Section 228 of the General Corporation Law of the State of Delaware and prohibit the Board from taking any action that would require any stockholder seeking to take action by written consent to comply with any procedures or other requirements except those expressly set forth in Section 228 of the General Corporation Law of the State of Delaware or in specified provisions in the A&R By-Laws;
• specify the manner in which the record date for stockholders seeking to take action by written consent is fixed;
• provide that special meetings of the Board be called by or at the request of the Chairman, the President or at least two directors (rather than the Chairman, the President or a majority of the Board);
• provide that each director on the Board receive notice of meetings of committees of the Board;
• change the vote required and procedures for the Board or any committee thereof to (i) declare and pay any dividend or (ii) adopt, amend or repeal any provisions of the A&R By-laws;
• prohibit the Board from amending, altering, repealing or re-adopting any bylaw adopted, amended, altered or repealed by the stockholders of the Issuer;
• require approval of the stockholders of the Issuer prior to the Issuer (i) entering into, materially modifying or taking certain other actions with respect to certain media rights contracts or transactions, (ii) issuing stock or other voting securities (subject to certain exemptions) or (iii) entering into, modifying or taking certain other actions with respect to any contract or transaction that includes a “change of control” or similar provision related to the composition of the Board; and
• designate (i) the Court of Chancery of the State of Delaware, to the fullest extent permitted by law, as the sole and exclusive forum for the resolution of, among other claims, any derivative action or proceeding brought on behalf of the Issuer, and (ii) the federal courts of the United States of America, to the fullest extent permitted by law, as the sole and exclusive forum for any cause of action arising under the Securities Act of 1933, as amended.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the press release, the Written Consent, the December 20, 2022 letter from the Reporting Person to the Board, the December 31, 2022 letter from the Reporting Person to the Board and the December 27, 2022 letter from the Board to the Reporting Person filed as Exhibits 99.2, 99.3, 99.4, 99.5 and 99.6 hereto, respectively, which are incorporated by reference in their entirety into this Item 4.
The Reporting Person intends to participate in and influence the affairs of the Issuer, including with respect to the matters discussed above, through the exercise of his voting rights with respect to his shares of Class A Common Stock and Class B Common Stock. The Reporting Person currently controls approximately 81.0% of the Issuer’s total voting power.
The “Reporting Person” = Vince McMahon, so his return to the WWE Board now gives him 81% voting power (voting power determined on ownership of Class A vs. Class B shares). Wow… So Vince forced himself back onto the Board and at least has 3 guaranteed votes on any Board matter. Stephanie and Triple H are likely “yes” voters to him, too, to not rock the family boat. It’s very likely that other old Vince McMahon friends are on the WWE Board, as well, and that the 3 who exited weren’t.
In the above text, you keep seeing “Delaware” mentioned above… It’s like the Wayne’s World movie reaction… Delaware, yeah, Delaware… There are certain flexible laws in place with that state that has many publicly traded corporations placing part of their headquarters there for tax purposes and other filings. I’ve have seen this multiple times, and it’s not just WWE using that state to their benefit.
Those last 2 bullet points that I bolded are the important ones, which caves into Vince McMahon’s demands of having any Media Rights related stuff go through him and if a sale were pursued or presented, it would have be approved by him.
WWE Board 100% caved to Vince McMahon and again, they had zero choice because Vince McMahon owns 39% of the total WWE Shares, probably has higher voting power than that when considering Class A vs. Class B, and Vince probably has many other shareholders and board members “in the bag” based on past friendships to really perform a hostile takeover of the WWE if he wanted.
Instead, Vince just replaces 3 Board Members and ensures that everything gets approved by him, with him likely replacing Stephanie McMahon as Board Chairman.
And then, look at that 2nd to last paragraph… They confirm the letters between Vince to the Board on 12/20, the Board’s response on 12/27, and then Vince responded back on 12/31.
12/20 Letter from Vince to the Board – Vince proposes returning as Chairman and keeping this discussion private. He did not propose replacing 2 other board members.
12/27 Letter from WWE Board to Vince – They had a unanimous view that “your return would not be prudent from a shareholder value perspective” and they discussed that based on investigations of Vince’s own conduct and that returning as Chairman would place a bigger spotlight on those issues. Ouch.
12/31 Letter from Vince to the Board – Vince wasn’t thrilled by the 12/27 letter and expressed his threat about not approving media rights or “strategic transaction”. He also advised that the WWE Board respond to him by 1/5 or else… Hence, why he went public and forced the change anyway.
Now, this could all be a game for the WWE Corporation to SAVE FACE by saying “no” to Vince McMahon’s private concerns. If Vince doesn’t have anger towards Stephanie McMahon, Nick Khan, or Triple H, assuming none of them were leaking info to Wall Street Journal, this could all be a game to make WWE Corp and Steph/Nick/HHH as babyfaces while Vince McMahon did the “villain move” to force this move anyway. With as far as we know, there does not exist any “family feud” between Stephanie and her father. She’ll remain President/CEO and as far as we know, Triple H will run the wrestling product of the company. PLUS, if the WWE does get sold, Stephanie and Triple H will become EXTREMELY RICH and will likely be retained by the buyer to help manage the company.
What’s done is done… Vince McMahon + Barrios/Wilson are now on the board, with 3 other board members gone. Vince will likely assume the Board Chairman spot, which I believe needs a FORMAL VOTE by Shareholders to perform. Hence, why Vince wasn’t immediately given that title in the corporate world. It is one thing with a succession plan (Stephanie becoming Chairman), it’s another for someone to return and take a position.
The important thing coming up are the TV Deals set to expire during 2024, while I believe that the WWE Network deal may expire in 2026 with Peacock. For 2023-2024, this is where things will get interesting. I believe that the ball is mostly in Comcast/NBC/Universal’s court to buy because they have already invested in the WWE Network (saves them on money), have WWE’s current TV Contract with RAW and NXT, and have been business partners for years. In addition, these companies are flush with cash because they didn’t get screwed on paying over $70 Billion on 20th Century Fox as Disney did. That purchase appears to have hurt Disney, along with sagging revenues on failed recent Box Office films. While Disney+ does host the WWE Network in other countries, I believe this is a matter of convenience and not a growing business partnership. Reportedly, Disney is shopping around ESPN, and so thus getting out of the sports content world might be what’s happening there.
Here’s my real question… How much would the WWE cost? In other words, to acquire the WWE, 51% of the shares, at least, must be purchased by another entity. As it stands now with Vince McMahon + WWE Corporation, they own up to and about 70% (my guess, as I don’t have the WWE Corp’s # of shares number) of the shares and 81% of the voting power (Class A vs. Class B). It’s very likely that WWE Corp’s and part of Vince’s shares would be for sale to make this deal complete to get at least above 50%, but I would suspect that a buyer would want more… Probably 60%?
How much would that freakin’ cost? Just by my guess of wanting 60%, 60% of the total # of WWE Shares of 74,399,066 = 44,639,440 shares… WWE stock closed 1/6 at $84.27, thanks to a $12.23 bump to the “WWE is selling” bandwagon investors. With those shares and that price, it would cost about $3.7 Billion… But there is MORE TO THIS STORY… Shareholders will get a kickback or a share conversion, so probably add $1-2 Billion on top of this. WWE has just under $1 billion in Liabilities consisting of Debt, Leases, and Expenses to cover as well. Then, you have branding value on top of that, plus the library of content… Maybe $7-8 Billion? Maybe pushing $10 Billion?
It will all depend on how many interested buyers are out there… If only Comcast/NBC/Universal are buying, the number could be lower… If FOX, Amazon, Disney (I doubt it), and maybe the reformed Viacom get into the game, maybe? Google just bought the NFL Direct Ticket for their YouTube platform, why not? Apple needs content for their platform… Comcast has the biggest foot in the door because they own a stake in WWE Network, so hence any other buyers may either have to wait for that to expire in 2026 or buy out Comcast, too, of their remaining stake (bought for $1 Billion, 2 years have gone by).
THIS IS CRAZY and we’re in completely uncharted territory…
My question is really how much will Vince McMahon just be a Board Member (or Chairman) and not be an active participant? Is he OK with the Talent and Creative changes that Triple H has made, as HHH has actually reversed some of Vince’s prior moves. However, I sense that Vince McMahon has made his opinion from the sidelines and probably was OK with Triple H bringing back wrestlers that he was comfortable using along with William Regal. I just see that family rift here, just yet… Unless it was discovered that Stephanie or Triple H was leaking to the Wall Street Journal, which I cannot fathom just yet. Vince has made both Stephanie/Triple H extremely rich and successful, along with always taking good care of his daughter. Who would have thought that a communications major with NO experience would become President/CEO of a publicly traded corporation?
I’m also curious if Mattel has a problem with Vince McMahon returning? At least with Mandy Rose, she never sexually harassed or had relationships with WWE employees that forced million dollar settlements to be created and non-disclosure agreements (NDA) to be signed. She never forced her body parts on anyone… Just saying.
Now, there is CREATIVE opportunity here, especially on Monday Night RAW, which is the brand that is sinking in viewership while Smackdown has actually improved a tad bit lately (thank you Roman Reigns mostly being there). Vince McMahon has a ton of heat and one of the guys who appears to have been screwed here was Austin Theory with Vince leaving… Vince could appear on the RAW roster and reform his “Corporation” stable, which Austin Theory as a major part of it along with other wrestlers. These unique opportunities, such as Montreal’s Survivor Series 1997 screwjob, only present themselves every so often to capitalize on and use to push more interesting storylines. You could always play out Vince vs. Triple H on RAW, too… There’s lots of money to be made on this creative.
But my real question is how does talent like Sasha Banks, FTR, and CM Punk feel about Vince McMahon returning? I believe that Sasha and FTR primarily had problems with Vince McMahon’s Creative style and hence, wanted out. I think this chaos may cement that Sasha Banks will NOT return to the WWE, but money always talks and that’s what she wants. If Vince just remains a Board member and let’s Triple H do his Creative thing, then she could return if the money is right. FTR hated Vince’s Creative vision, but they may hate Tony Khan’s much, much worse. I believe they are returning to the WWE during 2023 at some point. As for CM Punk, well, his prior issues were more with Triple H though he always expressed disappointment with Vince McMahon for never letting him headline Wrestlemania. Punk is also in a similar situation with FTR in that the “grass isn’t always greener” elsewhere and his AEW rift is much worse than what FTR is enduring.
What about the Rock possibly returning to the WWE brand or John Cena continuing to do business with them? Rock works for politically correct Hollywood, as does John Cena… While Hollywood had their own settlement/NDA guys to deal with, they’ve been pushing them out and ramping up more diversity efforts in their management with no tolerance on #MeToo stuff. Would Rock and John Cena, who are Hollywood fully now, want to engage with a WWE surrounded in Vince McMahon controversy?
And my last question… Are we done with Vince McMahon stories? The guy has a history of looking at and desiring other women. Right now, Vince McMahon has been separated from his wife Linda McMahon and she could easily throw a HUGE wrench into this mix by filing for DIVORCE right now. I bet she won’t… But, Vince has a long history of admitting to infidelity and she always forgave him, until recently. In addition, it was discovered that John Laurinaitis was also having inappropriate relations with WWE employees. If Vince was doing it at the time, there’s likely more than just Johnny Ace having a little bit of fun with female WWE employees or even talent. Vince is the enabler to a toxic working environment for women, so I’m wondering how many other shoes might drop. With Vince forcing his way back in, we’ll see if those 3 departing Board members (probably signed NDAs upon their exit) will talk or if other insider news stuff gets spilled.
Folks… Strap in, as we’re in for an interesting ride through unchartered territory!
Gonna be fun!
As long as WWE remains in some form, we’ll be good… I’d hate to see WWE completely meltdown and then AEW somehow becomes the #1 company with their puny less than 900,000 viewers per week. WWE falling from grace would be BAD for the many websites and content providers out there, with many jobs on the line. Hopefully, wrestling can prevail and somehow find a good storyline writer to make it interesting again. Doubtful, as the corporation buying the WWE will make it much more corporate than before. Enjoy the “G-Era” of wrestling, as we’ll long for the days of the PG-Era afterward…
If more Vince crap hits the fans, I’ll be back… Otherwise…
So just chill, till the next episode!