Notes from new WWE SEC filing

Jan 17, 2023 - by Marc Middleton

WWE Chairman Vince McMahon has repealed some of the company bylaw amendments that he made earlier this month when he returned to the company.

We noted before how on January 5, McMahon used his voting power as controlling shareholder to elect himself back to the WWE Board of Directors, along with George Barrios and Michelle Wilson. McMahon’s return included amendments to company bylaws. He then officially returned to the Board on January 6, and was elected back to the role of Executive Chairman the following Monday, on January 9. According to a new SEC filing made today, McMahon issued another written consent this week to “substantially repeal” the amendments that were made on January 5.

The most notable amendments made earlier this month required shareholders to approve any company transaction or media rights agreement. Since Vince controls 81% of WWE shareholder votes, this means he would have had to approve any such transaction or agreement. Wrestlenomics points to how today’s action removes that amendment.

“No further approval of the stockholders of the Company is required to approve any of the actions taken by Mr. McMahon pursuant to the January 16th Consent,” the filing states.

Today’s filing also included the following: “…Mr. McMahon informed the Company of his view that there is substantial alignment among the Board and management concerning the decision to conduct a review of strategic alternatives amid the Company’s upcoming media rights cycle and that the Company’s corporate governance will properly enable and support stockholder rights.”

It was noted by Wrestlenomics that the January 5 amendments were a tool for Vince to leverage the Board to his will, which included re-establishing himself as a Board member. With that objective complete, the earlier amendments are no longer useful to Vince, and removing them may minimize liability he exposes the company and/or himself to. Removing them also undermines a key complaint of the class-action shareholder lawsuit filed on January 10.

It was also noted that removing the requirement that shareholders (i.e., Vince) must approve of any TV deal or company sale may also prevent anyone who in the near future might inherit his shares from also inheriting that approval power. Vince’s immediate family members, such as Linda McMahon, Stephanie McMahon or Shane McMahon, would retain his enhanced voting rights due to being McMahon Family members if they were to come into possession of his shares. It has not been confirmed that there is any will or succession plan in place regarding what would happen to Vince’s shares if he were to pass away or become incapacitated.

Wrestlenomics noted that it’s important to emphasize, so the previous paragraph is not misconstrued, that the filings do not mention other McMahon Family members or explore the possibility of others inheriting Vince’s shares, as this was just the analysis of Wrestlenomics’ Brandon Thurston, and it’s possible that such a consideration actually played no part in motivating the actions from today’s filing.

In another note related to the the aforementioned class-action lawsuit, Sportico reports that the Detroit Police & Fire Retirement System petitioned the Delaware Court of Chancery last Thursday to have their own class-action lawsuit against McMahon recognized.

The suit claims McMahon acted wrongfully in trying to “impose his personal will on WWE and its [Board] by purporting to adopt a package of invalid and inequitable bylaw amendments that would hamstring the Board from making critical business decisions.”

It was also claimed that McMahon enjoys too much voting power due to his Class B shares (10 votes per share) vs. Class A shares (1 vote per share). Vince controls 81% of the voting power but owns 39% of company equity.

It remains to be seen if both of these class-action lawsuits will be dismissed due to McMahon’s repeal of the company bylaws changes. It was believed that more of these lawsuits would be filed following McMahon’s return, and now there are two confirmed.

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