With the official merger between the UFC and WWE complete to form TKO, the details in the Securities and Exchange Commission filings are coming out. One of the most eye-popping is that former WWE owner Vince McMahon will receive a windfall in dividend payments, but is using it as collateral for a loan of money from a bank.
McMahon who was briefly ousted from the company last year only to return to be a part of the transaction to sell WWE to Endeavor will earn $111 million based on his 28.84 million shares he currently owns. The dividend will pay $3.86 per share. Sportico reports that he has leveraged 3.48 million shares against a loan from an unnamed bank for $84 million that he must pay by March 2024. While McMahon retains the right to the dividend, the downside in the agreement is having the former WWE boss to pay up to as much as $125M if the TKO stock is below $36 dollars per share which would mean $40M for an $84M loan. Of course, if TKO dips dramatically, McMahon could be paying substantially less for the shares.
The transaction is one of the interesting tidbits to this merger. McMahon has a wealth of TKO stock and is borrowing against it for money right now. For what reason, we do not know. Its a risky deal for McMahon or the bank if there is a steep downturn for TKO stock.
But for now, TKO stock hovers around $100 per share which would mean McMahon’s stake is worth $2.9 billion.
Leave a Reply