WWE’s Vince McMahon “Confident” Probe By Feds Will Be Resolved “Without Any Findings Of Wrongdoing” – Update

Jill Goldsmith
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UPDATED with statements, 10:30 AM: In dual statements issued later in the day, Vince McMahon said he is “confident” the government’s investigation will not find wrongdoing. WWE said it fully understands and respects the government’s need for a complete process.”

McMahon statement: “In 2022, WWE formed a special committee to review allegations of misconduct against me. That review was concluded in November 2022 following an extensive investigation. Throughout this experience, I have always denied any intentional wrongdoing and continue to do so. I am confident that the government’s investigation will be resolved without any findings of wrongdoing. I am focused on completing the recovery process from my recent spinal surgery and on closing our transaction with Endeavor, which will create one of the preeminent global sports and entertainment brands.”

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WWE statement: “We believe this is a continuation of the investigation that commenced last summer. WWE has cooperated throughout and fully understands and respects the government’s need for a complete process.”

UDATED with subpoena, 7:47 AM: WWE said federal law enforcement agents executed a search warrant and served a federal grand jury subpoena on executive chairman Vince McMahon on July 17.

In a quarterly SEC filing, the company said no charges have been brought.

The company itself has received voluntary and compulsory legal demands for documents, including from federal law enforcement and regulatory agencies, “concerning the investigation of and related subject matters.”

During a conference call with investors, Khan said McMahon was on medial leave until further notice following spinal surgery.

CEO Nick Khan said, “We continue to fully cooperate  with any investigation. Outside of that we are not going to comment on any legal matter.”

Khan told investors on a conference call after the numbers that Vince McMahon, WWE’s executive chairman, had major spinal surgery two weeks ago and is currently out on a medical leave of absence until futher notice. The longtime former CEO and majority shareholder who grew the company into a global powerhouse stepped back last year amid a probe over sexual misconduct and payouts to women, but returned to the board in January.

“As previously disclosed on June 17, 2022, a Special Committee of the Board of Directors was formed on June 15, 2022 to investigate allegations of misconduct by Vince McMahon. As previously disclosed, the Special Committee investigation was completed during the fourth quarter of 2022. However, related government investigations remain ongoing,” the SEC filing today said.

WWE’s internal probe of McMahon wrapped up in November of last year. The executive paid the company $17.4 million for costs incurred during the investigation of misconduct allegations, according to an SEC filing in March. The company had to revise several sets of financial statements downward as a result of McMahon’s payments to women that the company said had totaled close to $20 million.

PREVIOUSLY, 6:30 AM: WWE set viewership records last quarter as revenue jumped 25% and the company’s planned merger with Endeavor’s UFC announced in April remains on track to close in the second half of 2023. Media sales jumped more than 30% to $320 million, revenue from live events surged 50% to $62 million.

WWE CEO Nick Khan called the UFC deal “historic,” creating a “one-of-a-kind global sports and entertainment company.” The combination will create a new public entity, one of the few standalone public companies in sports and entertainment, run by Endeavor CEO Ari Emanuel. The new company, valued at $21 billion, will be a subsidiary of Endeavor, with 51%, and the other 49% controlled by WWE.

Khan told investors on a conference call after the numbers that Vince McMahon, WWE’s executive chairman, had major spinal surgery two weeks ago and is currently out on a medical leave of absence until futher notice. The longtime former CEO and majority shareholder grew the company into a global powerhouse. He stepped back last year amid a probe over sexual misconduct and payouts to women, but returned to the board in January and announced a strategic review that led to the UFC deal.

Second-quarter highlights saw viewership for weekly flagship programs, SmackDown and Raw, increase 26% and 19%, respectively, in the 18-49 demo, significantly outperforming overall broadcast and cable television. WWE premium live events, WrestleMania, Backlash and Night of Champions, set global viewership records with year-over-year increases of 29%, 34% and 45%, respectively.

Weekly shows Monday Night Raw and NXT air on NBCUniversal’s USA Network and Friday Night SmackDown on Fox with five-year deals ending in 2024. Peacock, which absorbed the WWE’s previous stand-alone streaming network in 2021, retains streaming rights to the wrestling circuit through 2026.

Khan said “productive” rights negotiations continue and he’s “optimistic” results “will be what we expected.”

Asked why talks seem to be progressing more slowly now than they did last time around, and if Hollywood strikes and overall turmoil in the media business are slowing things down, Khan said: “Last time, the starting prices for Raw and SmackDown were much, much less than the starting prices are now… You can control a lot of the process, you can never control the timing of a negotiation.”

He called the writers and actors strikes “unfortunate” and said he was glad to hear the news yesterday that the WGA and AMPTP are looking to restart talks.

In live events, WWE said average attendance in North American of 9,870 was up 45% for the quarter ended in June. In July, Money in the Bank at The O2 in London was WWE’s highest-grossing arena event in company history, seting new records for viewership, sponsorship revenue, merchandise revenue and social media activity.

Overall, WWE sales rose by $82 million to $410 million on events and higher media rights fees.

Operating Income increased 26% to $87.3 million on higher revenue partially offset by higher expenses including content creation and costs related to its “strategic alternatives review” and merger deal.

Net Income of $52.0 ($0.67 a share) was up from $49 million ($0.58).

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