WWE will restate earnings following misconduct allegations against Vince McMahon
World Wrestling Entertainment is revising its financial earnings going back to to 2019 to reflect payments made by its founder and outgoing chairman Vince McMahon that were not recorded in the company’s books.
The announcement made Monday by the sports entertainment company in a filing with the Securities and Exchange Commission follows reports that McMahon paid more than $14 million to suppress allegations of sexual harassment and infidelity, first reported by the Wall Street Journal.
The Wall Street Journal reported that four women formerly affiliated with WWE signed agreements with McMahon that bar them from discussing their relationships with him. McMahon is said to be cooperating with the investigation.
McMahon, 76, stepped back from his executive role in June and retired from the WWE on Friday. The company is being run by McMahon’s daughter, Stephanie, who is chairwoman, and co-chief executive Nick Khan. Stephanie McMahon’s husband, Paul “Triple H” Levesque, will lead the company’s creative direction.
The filing did not cite the allegations, saying only that the company made “a preliminary determination that certain payments that Vince McMahon agreed to make during the period from 2006 through 2022 (including amounts paid and payable in the future), and that were not recorded in the WWE consolidated financial statements, should have been recorded as expenses.”
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The company set the amount of those payments as approximately $14.6 million, which “were or will be paid by Vince McMahon personally.”
WWE said the unrecorded expenses would not have had a material impact on earnings in the periods they were paid out, but would be material if recorded entirely in the second quarter of 2022.
The company expects to revise its previously issued financial statements to record the unrecorded expenses for 2019 through 2021.
The WWE is a major supplier of programming to Fox Corp. and NBCUniversal. The company, based in Stamford, Conn., also produces pay-per-view and live wrestling events.
WWE stock surged on the news of McMahon’s retirement, trading at nearly $72 Monday afternoon. Being a free-standing content provider, the company is seen as a possible acquisition target by a larger media or tech company.
McMahon built the WWE into a multimedia and pop culture force after buying the World Wrestling Federation from his father in 1982. He turned the company, a regional promoter of wrestling events on the East Coast, into a global brand producing stars such as Dwayne “The Rock” Johnson and John Cena, who have gone on to success in movies, TV and merchandising.
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