LAS VEGAS, NEVADA – JULY 02: Vince McMahon, Stephanie McMahon and Triple H attend the UFC 276 event at T-Mobile Arena on July 02, 2022 in Las Vegas, Nevada.
Jeff Bottari | Ufc | Getty Images
World Wrestling Entertainment on Monday disclosed $14.6 million in previously unrecorded expenses paid personally by top shareholder Vince McMahon, who announced his retirement Friday as he is being investigated for claims of sexual misconduct.
WWE also hinted that the misconduct allegations, already the subject of an ongoing independent review overseen by the company’s board, are under investigation by other entities.
“The Company has also received, and may receive in the future, regulatory, investigative and enforcement inquiries, subpoenas or demands arising from, related to, or in connection with these matters,” WWE said in an SEC filing Monday morning.
The payout is $2.6 million more than the sum reported by The Wall Street Journal earlier this month. McMahon allegedly paid that money to women from 2006 through this year to ensure their silence over alleged affairs 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 weaknesses.” WWE said it would reflect the unrecorded expenses in updated reports for 2019, 2020 and 2021, as well as this year’s first quarter, when it reports second quarter earnings. The company was set to report Aug. 9, but the revisions could delay that, WWE said.
The filing also officially announced leadership changes. Stephanie McMahon, who is Vince McMahon’s daughter, will act as chairwoman and co-CEO. Nick Khan, the company’s president, will also work as co-CEO.
Vince McMahon’s son-in-law, Paul Levesque, aka “Triple-H,” will take over the company’s creative control, which the elder McMahon held onto after he stepped aside earlier this month. It marks a return from a hiatus for Levesque after a “cardiac event” reported by Sports Illustrated. It also expands his role from the executive vice president of talent relations. Levesque is married to Stephanie McMahon.
McMahon, 76, is the company’s largest shareholder, with an approximately 32% stake.
WWE included optimistic preliminary second-quarter earnings estimates along with the disclosures about McMahon, reporting $69.8 million in operating income during the second quarter, up from $46.3 million in the same period last year.
WWE stock rose about 8% Monday morning. It is up more than 30% this year, even as the S&P 500 is down more than 15% so far in 2022.
Part of WWE’s overperformance this year may stem from heightened investor sentiment for a possible sale. Loop Capital upgraded WWE shares to a “buy” rating Monday and raised its price target on shares to $90 from $59 “based on a greater likelihood that the company is sold with Vince McMahon stepping down.”
CNBC reported earlier this year large entertainment companies including Disney and Comcast could be interested in acquiring WWE. A deal could come before the company’s next U.S. TV rights renewal — likely to be announced in mid-2023. WWE’s current U.S. streaming deal with NBCUniversal’s Peacock expires in 2026.
“We’re open for business,” Khan said in March on The Ringer’s “The Town” podcast. “If you look at what does NBCU/Comcast need, and I think it’s a factual statement, they don’t have the intellectual property that some other companies have. I think they look at us as an entity that has a lot of intellectual property. A lot of it has not been exploited it. Now it’s up to us to monetize it properly and show the community exactly what we have.”
Loop Capital included Amazon and Netflix as other potential buyers.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
WATCH: WWE’s McMahon steps aside during misconduct investigation