The Wall Street Journal reports that Vince McMahon is seeking a return to the WWE as a means to sell the company. McMahon sent notice to the Board in December.
McMahon has majority voting power through his stock holdings as he has the majority of preferred shares in the company. He will seek to return as the Executive Chairman to sell the company and
McMahon informed the WWE board of his intent according to a press release he issued on Thursday. He intends to return along with former executives Michelle Wilson and George Barrios and appoint themselves directors. This would mean that 3 currently on the board would be forced out. The board had expressed an interest to work with McMahon but did not believe that his return would be beneficial to the company.
McMahon left the company in June due to an investigation of a “hush payment” made to a former employee. It was discovered that McMahon had made at least three other payments to women for sexual misconduct. He also made donations to a Donald Trump charity in prior years without previously reporting it.
He intends to come back prior to a new media deal being negotiated with WWE. In 2021, WWE signed a five year streaming rights deal with NBC Universal for over $1 billion for WWE to shutter its digital platform to be solely on the Peacock Network. Its TV rights deal will begin negotiation sometime after Wrestlemania in April.
John Ourand of the Sports Business Journal predicted that NBCU could be in a position to purchase WWE outright. Right now, Fox owns the rights to WWE Smackdown while Raw airs on NBCU’s USA Network and NXT is on USA.
Via McMahon’s press release:
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.
Payout Perspective:
This move appears to be a last gasp by McMahon to return to the WWE as he needs it more than it needs him. WWE has had its most profitable year in the company’s history in 2022 and you can argue that it is in spite of McMahon and not due to him. But the intent to sell the company seems to be a ‘take your ball and go home’ scenario while cashing out one final time. We will see if there will be board opposition to this move or if the board will look to appease McMahon in order to work together to find a seller.
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