Vince McMahon

WWE SEC Filing Reveals Vince McMahon Actually Resigned; Company Warns of More Investigations

— In a recent 8-K SEC filing, WWE revealed more potentially troublesome news regarding the ongoing Vince McMahon investigation. Specifically, the company noted that $14.6 million in NDA payments should have been recorded as company expenses:

The Company has 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 in the quarters in which those agreements were made (the “Unrecorded Expenses”).

As of the date hereof, the Company has identified Unrecorded Expenses totaling approximately $14.6 million. All payments underlying the Unrecorded Expenses were or will be paid by Vince McMahon personally. While the Company continues to evaluate the impact on previously reported financial statements, the Company has preliminarily determined that, while the amount of Unrecorded Expenses was not material in any individual period in which the Unrecorded Expenses arose, the aggregate amount of Unrecorded Expenses would be material if recorded entirely in the second quarter of 2022. Accordingly, the Company currently anticipates that it will revise its previously issued financial statements to record the Unrecorded Expenses in the applicable periods for the years ended December 31, 2019, 2020 and 2021, as well as the first quarter of 2022, when it issues its financial statements for the second quarter of 2022. The Company is working with the goal of issuing such financial statements by August 9, 2022, but there is no assurance that it will be able to meet this deadline. In light of the Unrecorded Expenses and related facts, the Company expects to conclude that its internal control over financial reporting was not effective as a result of one or more material weaknesses. The Company continues to evaluate the appropriate accounting treatment for the Unrecorded Expenses, as well as its internal control over financial reporting, and its ultimate conclusions on these topics may differ from what the Company currently anticipates.

— It was also noted that Vince McMahon handed in his resignation to the WWE’s Board of Directors on July 22 and on the same day, the company then appointed Stephanie McMahon as Chairwoman and co-CEO and Nick Khan as the other co-CEO. This would be a distinct difference in earlier verbiage which suggested that McMahon voluntarily retired, making it very difficult if not impossible for him to ever return in a position of power with WWE.

On July 22, 2022, Vincent K. McMahon informed the Company and its Board of Directors (the “Board”) of his resignation from his positions as Chief Executive Officer, Chairman and director of the Company, effective immediately.

On July 22, 2022, the Board appointed Stephanie McMahon, Chief Brand Officer, interim Chief Executive Officer, interim Chairwoman and a director of the Company, and Nick Khan, President, Chief Revenue Officer and a director of the Company, to serve as the Company’s Co-Chief Executive Officers. The Board has also appointed Stephanie McMahon to serve as the Company’s Chairwoman. The appointments were made effective as of July 22, 2022.

— Finally, the company confirmed that the investigation into McMahon’s conduct is ongoing and warned that they have received requests and inquiries from other regulatory or government organizations, including subpoenas, and may receive even more in the future.

As previously announced, a special committee of independent members of the Board is conducting an investigation into alleged misconduct by Vince McMahon, which investigation remains ongoing.

The Company has also received, and may receive in the future, regulatory, investigative and enforcement inquiries, subpoenas or demands arising from, related to, or in connection with these matters.

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