BREAKING NEWS – Throughout December 2022, there were stories popping up with Vince McMahon, former WWE Corporation CEO/President & Board Chairman, telling friends, associates, and media that he regretted stepping down, that he should have just waited for the stories to “blow over”, and that he wanted to return to the WWE. Many laughed, thought he was just blowing smoke, and that the reasons why he
resigned retired would prevent him from trying anything. Those reasons, of course, were about $20 million in settlements made to and signed Non-Disclosure Agreements (NDA) regarding sexual relations or misconduct with female WWE employees or workers for the past 20 years. EVP of Talent Relations John Laurinaitis involved on some of the settlements/NDAs as well.
But then, bombshells were dropped after 4pm today (following the Stock Market closing) by, you guessed it, the Wall Street Journal once again. Tweets per WSJ writer Lauren Thomas:
• SCOOP: Vince McMahon plans to return to WWE following his retirement in 2022 amid a sexual-harassment scandal in order to pursue a sale of the business, sources say.
• McMahon, who has majority voting power through his ownership of WWE’s Class-B stock, has told the company that he’s electing himself and 2 former co-presidents and directors, Michelle Wilson and George Barrios, to WWE’s board. He will also seek to become executive chairman.
And then, Vince McMahon, himself, released a statement himself:
GREENWICH, Conn., Jan. 5, 2023 /PRNewswire/ — Vince McMahon, the founder and controlling shareholder of World Wrestling Entertainment Inc. (“WWE” or the “Company”) (NYSE: WWE), announced today that he has taken necessary actions to position the Company to capitalize on a unique opportunity to maximize long-term value for all WWE shareholders. The actions, communicated to WWE’s Board of Directors today via written consent, include the election to the Board of Mr. McMahon, as well as Michelle Wilson and George Barrios – former WWE Co-Presidents and Board members, and currently the Co-Founders and Co-CEOs of Isos Capital Management – and the requisite removal from the Board of three directors. Mr. McMahon expects to assume the role of Executive Chairman of the Board.
Mr. McMahon’s new role will enable unified decision making through the Company’s upcoming media rights negotiations and a parallel full review of the Company’s strategic alternatives, which Mr. McMahon believes is the right course of action and in the best interests of WWE and WWE shareholders amidst the current dynamics in the media and entertainment industry. As Mr. McMahon has communicated to the Board, he believes there is a narrow window of opportunity to create significant value for all shareholders and that to do so, the strategic alternatives review must occur in tandem with the media rights negotiations. He also expressed to the Board that he believes these two initiatives require Mr. McMahon’s direct participation, leadership, and support as controlling shareholder.”
WWE is entering a critical juncture in its history with the upcoming media rights negotiations coinciding with increased industry-wide demand for quality content and live events and with more companies seeking to own the intellectual property on their platforms,” said Mr. McMahon. “The only way for WWE to fully capitalize on this opportunity is for me to return as Executive Chairman and support the management team in the negotiations for our media rights and to combine that with a review of strategic alternatives. My return will allow WWE, as well as any transaction counterparties, to engage in these processes knowing they will have the support of the controlling shareholder.”
Prior to delivering written consent, Mr. McMahon sent two separate letters to the Board in late December in which he expressed the urgency of his return to the Company as Executive Chairman and his desire to work collaboratively with the Board and management team. Following conversations with representatives of the Company both before and after Mr. McMahon’s most recent letter on December 31, Mr. McMahon determined, consistent with his rights as controlling shareholder, that the steps announced today are necessary to maximize value for all WWE shareholders.
Mr. McMahon said, “Ms. Wilson and Mr. Barrios are highly qualified directors whose professional experience positions them well to help the Company achieve the best possible outcomes in both initiatives. As former WWE Co-Presidents and Board members, they are intimately familiar with industry dynamics and the organization’s operations and have helped guide the Company through past successful media rights negotiations. I look forward to working closely again with Michelle and George – as well as the Company’s remaining directors and management team, who have my full support and confidence. WWE has an exceptional management team in place, and I do not intend for my return to have any impact on their roles, duties, or responsibilities.”
In conjunction with the changes to WWE’s Board, Mr. McMahon’s written consent also includes certain amendments to the Company’s bylaws to ensure that WWE’s corporate governance continues to properly enable and support shareholder rights. These changes will be detailed in a Schedule 13D amendment to be filed by Mr. McMahon and a Form 8-K to be filed by the Company in the coming days.
No assurances can be given regarding the outcome or timing of the review process. Mr. McMahon does not intend to comment further until the process has concluded or Mr. McMahon has otherwise determined that further disclosure is appropriate or required.
Wow… Real quick, before we analyze what is happening here, let’s define how much WWE stock that Vince McMahon personally owns. Remember, by Vince
resigning retiring as WWE Board Chairman, he relinquished the access to the # of shares that the WWE Corporation owns itself.
According to the 2022 2022 WWE Proxy Report, Vince McMahon personally owned 28,737,689 Class A & B stock.
Per the WWE’s latest 10-Q report, WWE has a total of 74,399,066 Class A & B shares combined. Class A and B could matter, as Class A typically has more voting rights than Class B (10 to 1), but owners of said stock (like Vince) can convert to B to A at any time.
If you do the simple math of 28,737,689 / 74,399,066, Vince McMahon is the 38.6% owner of the WWE Corporation by himself. Granted, he would need above 50%, but all he needs is just above 11% to join him and based on loyalty to Vince McMahon, I guarantee he could easily obtain that. In addition, depending on who owns the Class A versus Class B, he could sway a contingent of certain stock holders to vote his way to make him Board Chairman once again.
And as Board Chairman, he regains control of the WWE Corporation’s shares of stock… Then, he has combined voting power again between his stock and the WWE Corporation’s stock, which is like 60-75% (I couldn’t find the WWE Corp’s share ownership number, but I remember the past percentage of Vince’s voting power). From there, he can flip the Board of Directors to his own personal liking and then the board change change the Executives to their liking. Quite peculiar that Vince is attempting to bring back former WWE Executives Michelle Wilson and George Barrios and make them Board Members. Remember, both of them were suddenly axed one day and that led to the rise of power of Nick Khan if I have my history right. It was just all of a sudden for those two longtime executives that everyone thought were two of Vince McMahon’s favorites.
But who is currently the Board Chairman right now? Oh, that is Stephanie McMahon. Who else is on the Board? Triple H.
Could something be up here between the McMahons? Is there a family feud brewing? Remember, things all started to get weird when Stephanie McMahon suddenly took a “leave of absence” as Chief Brand Officer to focus on family. Back then, everybody thought that maybe Stephanie and Triple H could have been seeing marriage issues… Little did we know, however, that the Board of Directors (besides Vince) were beginning to receive complaints about Vince McMahon’s sexual behavior and that prompted an investigation. Then, the Wall Street Journal was somehow informed of this Board investigation of Vince McMahon.
After that first story, once Vince McMahon appeared on WWE television a few times to flaunt that he was bulletproof, multiple stories then leaked about other past incidents of financial settlements and signed NDAs towards women. Once again, the Wall Street Journal. Suddenly, Vince
resigned retired and Stephanie McMahon ended her “leave of absence” to suddenly become Co-CEO/President of the WWE Corporation and also become Board Chairman (or Chairwoman). Triple H would return to his Creative Team and Talent Relations role as an EVP shortly thereafter. Nick Khan was the other Co-CEO/President.
Now, Vince McMahon wants to flip the Board of Directors as the someone with almost 39% of the stock. That ends Stephanie’s tenure as Board Chairman and Vince is also trying to place 2 hand selected stooges on the Board as well in Wilson and Barrios. If the Board was “just fine”, why add 2 new members? Sounds like Vince has beef with the WWE Board of Directors who investigated him for his infidelity, settlements, and NDAs, among other complaints probably.
On top of that, Vince McMahon’s return is to potential SELL the WWE company.
It’s like if he cannot still run it, he wants to burn it to the ground.
While the Wall Street Journal outright says that Vince is returning to “pursue the sale of the company”, Vince’s own statement doesn’t quite spell that out… However, when Vince alludes to “maximizing value for all shareholders”, particularly as they are alluding to the Television Rights deals set to expire through 2024, that’s a “read between the lines” thing that WWE is for SALE. Anytime another corporation is sold, usually an owner of the stock will see a certain multiplier added to the stock when acquired by another company. Thus, shareholders certainly capitalize whenever their company is sold and they are often rooting for it to happen. HENCE why the WWE stock has GAINED almost 8 points in After-Hour Trading!!! People are buying to get on this Acquisition Gravy Train!
I’ve always thought that Comcast/NBC/Universal could be the ones to heavily invest in the WWE for its back library for streaming content and also to firmly keep RAW on USA Network. Comcast is paying $1 Billion over 5 years for WWE content, but if they own it, said expenses can be invested in operating the company… Then, they just make pure advertising revenue. You could see a situation like what happened with UFC where it was sold and then Dana White was retained as UFC’s President (we’ll see if he retains that job, just wow). Maybe WWE gets sold to Comcast/NBC/Universal but Triple H and Stephanie McMahon are retained to continue to operate it.
And think about this… Triple H and Stephanie have a TON to gain by WWE being sold. They own shares of WWE stock, too, and are set to inherit Vince McMahons shares and wealth. While I might be wondering if a “family feud” exists, it could be an honest business proposal and they could be 100% for it. That’s a possibility, as they could literally retain their jobs within the WWE but become extra rich by selling.
I’m just wondering about Vince McMahon becoming Chairman and then adding 2 new board members of his choosing. THAT part if fishy to me…
What REALLY stings Stephanie/Triple H as Board Members, however, is the part of the Wall Street Journal article that states “Vince McMahon has communicated to the board that unless he has direct involvement as executive chairman from the outside of a strategic review, he won’t support or approve any media-rights deal or sale”. Holy cow, and again, as the 39% owner of he WWE, he can round up support from other shareholders to force things to a shareholder vote and place pressure on existing Board members… That sounds very hostile to me, which sounds like there has been hesitation to re-add Vince to the board since he’s been requesting it since December! Something must have gone wrong with those Springtime 2022 investigations of Vince McMahon or maybe Vince found how who has been leaking info to the Wall Street Journal…
WWE is a very profitable company, but that is mostly due in part to the TV deals. While their Live Events make money, particularly the major PLE events, those are cost heavy. Merchandise sales have been declining… Unless you have TV Executives who think that they can present the WWE in a better light than it currently is, WWE might not be as profitable as it appears. They have been using and abusing declining Cable/Satellite and now Network TV channels to acquire big TV contracts for the past 10 years now. As subscriptions to Cable/Satellite declines, the desperation for “Live Sporting Event” content increases because streaming services can’t do that as well as Cable/Satellite/Network channels. Hence why they are overpaying, as seen by the recent NFL, NBA, MLB, NHL, and NASCAR deals in which WWE is actually cheaper by comparison (yet gets more viewers than some of them).
We’re in NEW territory, folks… You thought that Vince McMahon was GONE, but now he has risen like the Undertaker and he wants to force his way back into the company. Not only that, he wants his Board Chairman job back and wants to place 2 stooges of his choice onto the WWE board. Then, he might want to sell the empire that he started building over 40 years ago that everyone thought would remain a family business. Nope… He might be there to sell and make every major shareholder rich in the process.
The REAL QUESTION is this… Does Stephanie McMahon and Triple H agree with Vince wanting to return as Board Chairman + adding 2 stooges to the WWE Board? Do they agree that the WWE should be sold? Are they afraid that if Vince returns to the Board, he could change their Executive roles again?
With this breaking news on Vince McMahon coming completely out of no where, I’m wondering how unified the McMahon family is right now. I don’t know…
If WWE sells, get ready for the G-Era of the WWE product. If you thought that the PG-Era had too many safeguards, wait until a bigger corporation owns it.
Stay tuned, folks… NoDQ.com will present you with the latest news as this situation unravels. My prediction is that more NASTY stuff is going to suddenly leak about Vince McMahon before he can attempt his hostile shareholder takeover of the WWE. And then things are going to get worse from there.
Wow, just wow…
So just chill, till the next episode!