New details on Vince McMahon planning WWE comeback
Former WWE Chairman & CEO Vince McMahon is reportedly looking to sell the company.
As noted back in mid-December, The Wall Street Journal reported that McMahon told people he plans to make a comeback at WWE an that he received bad advice from people close to him to step down back in July, and that he now believes the allegations and investigations would have blown over had he stayed, according to these people.
In an update, a new report from The Wall Street Journal notes that McMahon, who is still the majority owner of the company, is planning to return so that he can pursue a sale of the business, according to sources familiar with the matter.
McMahon has majority voting power through his ownership of Class-B stock, and he has reportedly told the company that he is electing himself to the Board of Directors, along with former WWE Co-Presidents Michelle Wilson and George Barrios, who were shockingly let go in early 2020.
The move to reinstate McMahon, which the Board previously rebuffed, and the others, will require three current Directors to vacate their positions.
McMahon reportedly expects that he will be able to assume the role of WWE Chairman, but he will need Board approval for that.
McMahon sent a letter to the WWE Board of Directors in late December to detail his desire to return to the company that he built into a global sports entertainment juggernaut, to help spearhead a strategic-review process. McMahon believes there is a narrow window to kick off a sales process because WWE’s media rights fees, including the RAW and SmackDown TV deals, are about to be re-negotiated.
McMahon believes the current media landscape is evolving quickly, and more companies are looking to own the intellectual property they use on their streaming platforms, making WWE an attractive takeover target, the sources close to the matter said. WWE posted its first year of over $1 billion in revenue in 2021, and the company currently has a market value of just over $5 billion.
The WWE Board responded last month in a letter to McMahon, saying they are prepared to initiate a review process and would welcome working with Vince on it. However, the Board also said it unanimously agreed that McMahon’s return to WWE would not be in shareholders’ best interest, according to those familiar with the letters.
The WWE Board also asked McMahon to confirm his commitment to repay expenses incurred by WWE related to the Special Committee investigation into the previous misconduct allegations, and requested that he agree not to return to the company during government probes of the matter. McMahon responded and said he remains willing to continue working to complete any reimbursement for reasonable expenses related to the investigation, to the extent that they are not covered by insurance, but he declined to agree to not return to the company.
McMahon has reportedly communicated to the Board that unless he has direct involvement as Executive Chairman from the outset of a strategic review, he will not support or approve any media rights deal or sale.
UPDATE– McMahon issued the following press release today to confirm the WSJ report:
Vince McMahon Takes Actions in Support of Plan for WWE to Undertake a Review of Strategic Alternatives and Capture Unique Opportunity to Maximize Long-term Value for All Shareholders
Submits written consent to WWE Board electing himself and Company veterans George Barrios and Michelle Wilson as Directors
Actions are necessary to ensure McMahon’s full participation in upcoming media rights negotiations and review of strategic alternatives
GREENWICH, Conn., Jan. 5, 2023 /PRNewswire/ — Vince McMahon, the founder and controlling shareholder of World Wrestling Entertainment Inc. (“WWE” or the “Company”) (NYSE: WWE), announced today that he has taken necessary actions to position the Company to capitalize on a unique opportunity to maximize long-term value for all WWE shareholders. The actions, communicated to WWE’s Board of Directors today via written consent, include the election to the Board of Mr. McMahon, as well as Michelle Wilson and George Barrios – former WWE Co-Presidents and Board members, and currently the Co-Founders and Co-CEOs of Isos Capital Management – and the requisite removal from the Board of three directors. Mr. McMahon expects to assume the role of Executive Chairman of the Board.
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.
“WWE is entering a critical juncture in its history with the upcoming media rights negotiations coinciding with increased industry-wide demand for quality content and live events and with more companies seeking to own the intellectual property on their platforms,” said Mr. McMahon. “The only way for WWE to fully capitalize on this opportunity is for me to return as Executive Chairman and support the management team in the negotiations for our media rights and to combine that with a review of strategic alternatives. My return will allow WWE, as well as any transaction counterparties, to engage in these processes knowing they will have the support of the controlling shareholder.”
Prior to delivering written consent, Mr. McMahon sent two separate letters to the Board in late December in which he expressed the urgency of his return to the Company as Executive Chairman and his desire to work collaboratively with the Board and management team. Following conversations with representatives of the Company both before and after Mr. McMahon’s most recent letter on December 31, Mr. McMahon determined, consistent with his rights as controlling shareholder, that the steps announced today are necessary to maximize value for all WWE shareholders.
Mr. McMahon said, “Ms. Wilson and Mr. Barrios are highly qualified directors whose professional experience positions them well to help the Company achieve the best possible outcomes in both initiatives. As former WWE Co-Presidents and Board members, they are intimately familiar with industry dynamics and the organization’s operations and have helped guide the Company through past successful media rights negotiations. I look forward to working closely again with Michelle and George – as well as the Company’s remaining directors and management team, who have my full support and confidence. WWE has an exceptional management team in place, and I do not intend for my return to have any impact on their roles, duties, or responsibilities.”
In conjunction with the changes to WWE’s Board, Mr. McMahon’s written consent also includes certain amendments to the Company’s bylaws to ensure that WWE’s corporate governance continues to properly enable and support shareholder rights. These changes will be detailed in a Schedule 13D amendment to be filed by Mr. McMahon and a Form 8-K to be filed by the Company in the coming days.
No assurances can be given regarding the outcome or timing of the review process. Mr. McMahon does not intend to comment further until the process has concluded or Mr. McMahon has otherwise determined that further disclosure is appropriate or required.
Michelle Wilson Biography
Ms. Wilson is Co-Founder and Co-CEO of Isos Capital Management. She is a leading sports and entertainment c-suite executive and, prior to founding Isos with Mr. Barrios, most recently served as Co-President and Board Member of WWE until January 2020. In 2018, Forbes named Ms. Wilson one of the 10 Most Powerful Women in Sports. She also was featured on the Adweek 50 list, which highlights the leading executives in Media, Marketing and Technology, and named one of Sports Illustrated’s 10 Most Influential Women in Sports. She joined WWE in 2009 and prior to her appointment as Co-President, served as Chief Revenue and Marketing Officer.
Previously, Michelle served as the Chief Marketing Officer of the United States Tennis Association, oversaw all marketing efforts for the launch of the XFL, a partnership between WWE and NBC, and held consumer products and brand management positions at the NBA and Nabisco, respectively. She received her MBA from Harvard Business School and currently serves on the Boards of Bowlero Corporation and Turtle Beach Corporation.
George Barrios Biography
Mr. Barrios serves as Isos Capital Management’s Co-Founder and Co-CEO. He is an award-winning c-suite executive and most recently served as Co-President and Board Member of WWE until January 2020. In 2017, Institutional Investor ranked George among the Top 3 CFOs in the Media Industry as part of its All-America Executive team rankings. He joined WWE in 2008 as its Chief Strategy and Financial Officer.
Previously, he held leadership roles in finance, strategy and operations at the New York Times, Praxair, Time Warner and HBO. He received his MBA from the University of Connecticut School of Business and currently serves as the National Board Chair of the Make-A-Wish Foundation.
Kirkland & Ellis is serving as legal counsel to Mr. McMahon.