Updated January 12, 2023. Jump to additional info.
Thursday, January 5, 2023
The Wall Street Journal reported on Thursday afternoon that Vince McMahon will be electing himself and two former co-presidents and directors, Michelle Wilson and George Barrios, to WWE’s board of directors, according to people familiar with the matter.
The value of WWE shares quickly moved up 12% in after-market trading, possibly driven by the notion Vince will come back to sell the company.
A few hours later, Vince McMahon himself published a press release, confirming his intent to return and appoint himself, Barrios, Wilson, and remove three directors. He didn’t name which three members he would remove from the board.
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
NEWS PROVIDED BY Vince McMahon
Jan 05, 2023, 16:25 ET
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.
PRNewswire
It’s important to note at the end of Vince’s press release, he writes there will be filings in the following days detailing changes to WWE’s bylaws. We will learn from those whether he can make changes to the board immediately or if he needs to wait until the shareholders’ meeting in the spring.
Friday, January 6, 2023
The next day, Friday morning, WWE published a filing making it clear Vince McMahon is back on the company’s board of directors.
The new filing states that effective immediately Vince puts himself, Michelle Wilson, and George Barrios on the board and removes independent directors Alan Wexler, JoEllen Lyons Dillon, and Jeffrey Speed.
The filing shows Vince making changes to WWE’s bylaws so media rights deals and any company sales can’t be made without his approval.
The filing includes letters between himself and the board as exhibits.
Vince writes the following letter dated December 20, 2022, where he tells the board he wants to come back as executive chairman and participate in a possible merger or acquisition of the company, coinciding with the timing of what would be WWE’s important media rights renewal negotiations. He reassures the board that he’s supportive of current executives Stephanie McMahon, Nick Khan, and Paul Levesque.
Dear Board of Directors,
I have always recognized that we have a massive responsibility to the WWE Universe. Our fans deserve the best entertainment experience that WWE can offer, and I thank you for your efforts to keep our Company focused on that goal through this distinctly challenging year for WWE.
Throughout my entire tenure with the Company, I have always been committed to doing what I believed to be in the best interest of WWE and our employees, shareholders, fans, and other stakeholders. It also is why I voluntarily retired from the Company during the pendency of the special committee investigation and fully cooperated with the committee and its independent counsel’s process. My retirement was intended to give the special committee, its independent counsel, and the rest of the Board the time and space needed to understand and respond to the allegations.
Now that the completion of the special committee investigation has been publicly disclosed, I believe WWE has a unique opportunity during this critical juncture to maximize value for its shareholders and all other stakeholders. Specifically, given the rapidly evolving media landscape in which more and more companies are seeking to own the intellectual property offered on their streaming platforms – I firmly believe that the best thing to do for all of WWE’s shareholders and other stakeholders is to undertake a comprehensive review of strategic alternatives. I am confident that our other shareholders will support this decision.
As you know, the media rights subject to the upcoming negotiations are critical to any strategic alternative consideration, and therefore the two initiatives must occur in parallel fashion. By combining a review of strategic alternatives, with the media rights negotiations, our Company can make better, more well-informed, and faster decisions. Moreover, any party that engages in strategic discussions with WWE will want to be assured that I, as controlling shareholder, am aligned with the decision-making process. In other words, we must unify the Company’s decision-making regarding these two interconnected initiatives to fully capitalize on this unique opportunity.
For these reasons, it is critical for me to rejoin the Board as Executive Chairman to work alongside our management team in leading the exploration of strategic alternatives and media rights negotiations – and it is necessary to fulfill my commitment to doing what is best for WWE. Successfully navigating this process will require close coordination among WWE leadership and the Board, as well as a clearly defined and well-executed strategy to secure the greatest value for WWE’s stockholders. As WWE’s founder and largest shareholder, no one has a greater interest in the long-term success of WWE – or is more aligned with all WWE shareholders – than me.
I want to be very clear that I wholeheartedly believe that WWE has an exceptional management team in place. Stephanie, Nick, Paul, and the rest of the management team have my full and unconditional support, and as Executive Chairman, I would support them to facilitate unified, efficient, and effective
decision-making during this important period in the Company’s history.An announcement that I am rejoining the Board as Executive Chairman provides a natural opportunity for WWE to announce its intention to engage in a strategic review process. In light of timing of the media rights cycle, it is important to finalize my return to WWE as soon as possible. Accordingly, I would request to hear back from you by 6pm Eastern Time on Tuesday, January 3.
I intend to keep my letter and any ancillary communications out of the public domain and trust that the Board will do the same. While I of course reserve all my rights, my strong preference is to conduct any dialogue regarding this letter privately and collaboratively. I, along with corporate counsel at Kirkland & Ellis LLP, am available to discuss any questions you may have.
Thank you for your continued commitment to WWE. I look forward to working together to maximize value for our shareholders, other stakeholders, and the entire WWE Universe.
Happy Holidays,
Vince
corporate.wwe.com
The board members respond with an email dated December 27. They tell Vince that they’ve unanimously agreed that he shouldn’t come back to the company. Notably, board members include co-CEOs Stephanie McMahon (Vince’s daughter) and Nick Khan, as well as chief content officer “Triple H” Paul Levesque (Vince’s son-in-law), in addition to eight other members who are not full-time WWE executives.
Their reasons for not wanting him back include “non-public information the Board has become aware of and the risks to the Company and its shareholders of placing a greater spotlight on these issues.”
The directors ask Vince to sign a letter agreeing he won’t come back to the company and that he will pay for the cost of the company’s investigation into allegations of sexual misconduct made against him and former executive John Laurinaitis. In exchange, the directors say they will agree not to sue him for those expenses, against the wishes of a shareholder demand letter.
Dear Vince,
We write in response to your letter of December 20.
We fully agree with your assessment that the Company’s management team is exceptional and are pleased to hear that Stephanie, Nick, Paul and the rest of the management team have your full and unconditional support. We believe that our investors, employees and fans agree; there is tremendous excitement at the Company and among our fan base, and our stock price has grown by more than 40% in just the last year. We remain optimistic about the continued success of this management team and the WWE franchise overall, and we believe your support is critical to this success.
As you know, it is our fiduciary obligation to continue to act in a way we believe is in the best interests of the Company and its shareholders. We have always taken that responsibility very seriously and all of our decisions are guided by this duty.
With respect to your suggestion regarding a process to evaluate strategic alternatives, and your role in that process, we are prepared to initiate such a process and are happy to work with you to ensure that it is the best process for the Company and all of its shareholders. Indeed, we would welcome you and your advisors playing an important role in that process, including working together to identify the full range of potential alternatives and counterparties. To that end, we suggest that your bankers and lawyers meet with our bankers and lawyers in the first week of January to discuss how to best move forward together with this process.
Although we welcome your participation in the launch of a strategic alternatives review process, it is also our unanimous view that your return to the Company at this time, while government investigations into your conduct by the U.S. Attorney’s Office and SEC are still pending, would not be prudent from a shareholder value perspective. This determination is based on a variety of factors, including non-public information the Board has become aware of and the risks to the Company and its shareholders of placing a greater spotlight on these issues.
The attached draft letter agreement provides that the Board will not agree to the shareholder demand that the Company file suit against you, on the conditions that you confirm your commitment to repay all of the investigation-related expenses incurred by the Company and that you agree not to serve as an officer, director or employee of the Company during the pendency of the government investigations. Those conditions and the draft letter agreement reflecting such conditions were unanimously approved by the Board prior to receiving your letter of December 20, and were reaffirmed unanimously subsequent to that date.
We are excited about the future of WWE and its continued success, and we look forward to working with you in the exploration of potential strategic alternatives as we continue to try to maximize shareholder value.
Sincerely,
The Board of Directors of WWE
corporate.wwe.com
Vince wrote another message to the board on New Year’s Eve, December 31, clearly dissatisfied with the directors’ response. He states that he won’t agree to any company sale or media rights deals unless he’s involved as executive chairman, consistent with the Journal’s earlier reporting.
Dear Board of Directors,
I appreciate your timely response to my December 20 letter. However, it is surprising that you did not address what I had sought to make clear in my letter – namely that we have a unique but narrow window of opportunity to maximize shareholder value by combining the upcoming media rights negotiations with a strategic review process the Board acknowledges is the right course of action for our shareholders – and that the only way to fully capture that opportunity is by having me – the Company’s founder and controlling shareholder – return as Executive Chairman at this critical time so
that I can work alongside the management team to unify the decision making related to these two interconnected initiatives.I would like to be clear that unless I have direct involvement and input as Executive Chairman from the outset, I will not be able to support or approve any media rights deals or strategic transaction (including any commitments made by or on behalf of the Company regarding a potential transaction or process). This position is not driven by self-interest or a lack of confidence in the Company’s management team, but rather by my commitment to doing what is best for WWE and all its shareholders and by my strong belief that maximizing the outcome of these processes will require close coordination and unified and efficient decision making. I sincerely hope we can work together to unlock this tremendous value potential.
There is no rationale for your position that my return to the Company “would not be prudent from a shareholder value perspective.” To the contrary, my return in the context of the media rights negotiations and a potential value maximizing strategic transaction is necessary precisely from a shareholder value perspective because it will allow WWE (as well as any transaction counterparties) to engage in these processes knowing they will have the support of the controlling shareholder. Further, the special committee of the Board has concluded its investigation and presumably all of its material findings have been publicly disclosed by the Company, and nothing has been communicated to me about any matter that would prevent me from returning to the Board. So while I am pleased to see that we all agree as to the Board’s fiduciary obligations to act in the best interests of WWE and all its shareholders, it remains unclear to me how the Board can discharge these obligations if it does not permit me to be actively involved in helping to lead these two interconnected initiatives from within the boardroom so that I can make a fully informed decision about whether any potential transaction creates the most value for all shareholders.
I also feel that it is necessary to clearly state my position that, in light of the fundamental nature of WWE’s media rights to the core value proposition and purpose of WWE, it would be improper for the Company or Board to take material steps towards any media rights deal without WWE shareholder
support (particularly considering that a very clear majority of the voting power explicitly opposes the Company taking these steps without shareholder support).Regarding the shareholder demand letter, I am glad to learn that following a review of the shareholder demand, the Board has determined that the demand does not warrant any further legal action. However, it is unfortunate that the Board would seek to use this conclusion to attempt to extract an agreement from me not to return to the Company. Any construct along these lines is entirely unacceptable, especially in light of the critical inflection points now facing the Company.
I would also like to clarify that my intention is to avoid the creation of any conflict of interest related to the special committee’s investigation or related matters because of my return to the Board. As executive Chairman, and consistent with my prior actions, I would not interfere with any government
investigations or the special committee’s and independent directors’ process in cooperating with those or related investigations and would fully support appropriate and tailored governance measures to insulate me from those matters, as well as any improvements to the Company’s internal controls determined to be appropriate by the independent directors. As I have previously conveyed, I also remain willing to continue working to finalize my reimbursement of the Company for its reasonable expenses incurred related to the investigation by and findings of the special committee to the extent
not covered by insurance.Finally, I would like to reiterate my full support for WWE’s management team and their leadership of the WWE franchise. It remains my sincere preference that we enable a cooperative path forward so that we can navigate these interconnected processes together, for the benefit of our shareholders. I look forward to hearing back from you promptly (and in any case by no later than January 5, 2023).
Sincerely,
Vince
corporate.wwe.com
WWE shares opened at about $80 on Friday, quickly reaching a new 52-week high and up 11% from the previous day’s close price. Trading of company stock was momentarily halted, for about 20 minutes while WWE issued a press release, confirming Vince’s return to the board, as well as the appointments of Wilson and Barrios.
“Today, we announce that the founder of WWE, Vince McMahon, will be returning to the Board,” said Chairwoman & Co-CEO Stephanie McMahon, Co-CEO Nick Khan and Chief Content Officer Paul Levesque. “We also welcome back Michelle Wilson and George Barrios to our Board of Directors. Together, we look forward to exploring all strategic alternatives to maximize shareholder value.”
corporate.wwe.com
Saved for the end of the statement, WWE revealed that independent directors Man Jit Singh and Ignace Lahoud were leaving the board immediately. Singh was the lead independent director and the leading board member involved in the company’s investigation into McMahon and Laurinaitis’s alleged misconduct.
A short time later Stephanie McMahon sent an email to all WWE employees announcing a meeting later in the day where she, president and chief financial officer Frank Riddick, and Nick Khan would address Vince’s return.
Meanwhile, WWE’s share price continued climbing, getting as high as $89 during the trading day before closing at $84, up 17% in one day, rising to a market capitalization of about $6.5 billion.
Among the most plausible potential buyers of WWE include Comcast, which is the parent of NBCUniversal, which televises Raw, the WWE Network library and premium live events, and NXT, among other content.
Research firm LightShed argues Endeavor, a talent agency and also the parent of UFC, is the best fit to buy WWE.
Others speculate that media companies like Disney, Netflix, or Fox might be interested in acquiring WWE.
Front Office Sports reports that the Saudi Public Investment Fund may have interest in biding on WWE. The Saudi government already has a deal for two major WWE events per year in Saudi Arabia, paying the wrestling company $100 million annually. Saudi Arabia is invested in sports organizations currently, including the new LIV Golf league and Premier League team Newcastle United.
At the all-hands meeting that evening, WWE executives tried to reassure employees that normal business would continue despite Vince’s return.
“In terms of the day-to-day of the company, nothing is changing,” Khan said, according to a recording of the meeting obtained by Wrestlenomics. “Steph is in her role, I’m in my role, Frank’s in his role, Paul is in his role, Kevin Dunn is in his role.”
Riddick explained the variety of outcomes that are possible related to Vince’s return and pursuit of so-called “strategic alternatives”.
“[It] could include a broad range of potential transactions, everything from a combination with another company, an acquisition of the company by someone, or a take-private transaction, taking the company private and/or just simply some sort of cooperation joint venture agreement.”
Stephanie McMahon credited employees with the company’s success and tried to put a positive spin on her father’s return.
“So again thank you to all of you. This is an exciting time,” she said. “It shouldn’t be a scary time. It’s an exciting time for WWE. Our founder is back on the board and is going to help lead this process.”
Tuesday, January 10, 2022
WWE shares continued climbing through Tuesday, reaching $90 at the close of the market.
Later that evening, Stephanie McMahon announced her permanent resignation from the company.
She simultaneously sent an email to all WWE employees with the same paragraphs as seen in her public announcement in the tweet above, but added:
“WWE is the success that it is because of your hard work. You are the unsung heroes. No matter your position, your work contributes to our mission and makes a difference in people’s lives,” Stephanie wrote to all staff, to whom days earlier she’d given a message of stability and opportunity related to Vince’s return. “Thank you for your faith and trust, it has been an honor to work alongside you.”
Her reference to Paul Levesque as chief content officer seems to indicate her husband is continuing in that role.
Stephanie temporarily took a leave of absence on May 19, until she came back on June 17 to serve as interim CEO and chairwoman when Vince stepped down from those roles during the investigation into his alleged misconduct.
While Stephanie was away from the company, a Business Insider article in early June reported she was pushed out by her father.
It’s unclear if it’s related but WWE’s board of directors, by the time of her temporary exit, was already conducting an investigation into Vince’s conduct, which hadn’t been reported publicly yet by that time. Stephanie, who had long served as a member of the board, may have had knowledge of the investigation when she announced her leave.
Stephanie permanently resigned on Tuesday as co-CEO as well as from her position on WWE’s board.
Shortly after Stephanie’s announcement, WWE’s posted a press release reporting Vince McMahon was unanimously elected to the board’s chairman position.
The revelation came less than a month after the board — albeit with different membership — unanimously rejected the idea of Vince’s return.
The statement made clear Nick Khan is the sole CEO of the company.
The release published glowing comments from Vince, Stephanie, and Khan, about Stephanie’s departure.
“First, I’d like to express my full support for Stephanie’s personal decision,” Vince says of his daughter. “I’ll forever be grateful that she offered to step in during my absence and I’m truly proud of the job she did co-leading WWE. Stephanie has always been the ultimate ambassador for our company, and her decades of contributions have left an immeasurable impact on our brand.”
“Stephanie McMahon is a terrific executive and an even better person. It has been an honor to serve as Co-CEO with her. She will only continue to succeed,” Khan says in the release.
Six of the eleven directors who were on the board on Friday either were removed or resigned by Tuesday night.
That adds to the exits of directors Connor Schell in July and Erika Nardini in September, although filings say they didn’t leave due to any dispute or disagreement.
Where are they now? Members of WWE’s board of directors in spring 2022:
- Vince McMahon (interim resigned June 17; resigned permanently July 22; returned January 6)
- Connor Schell (resigned July 6)
- Erika Nardini (resigned September 15)
- Jeffrey Speed (removed January 6)
- Alan Wexler (removed January 6)
- Man Jit Singh (resigned January 6)
- Ignace Lahoud (resigned January 6)
- Stephanie McMahon (resigned January 10)
- Nick Khan
- Paul Levesque
- Steve Pamon
- Steve Koonin
Later on Tuesday night, rumors and speculation spread that the Saudi Public Investment Fund was near or perhaps already had a deal in principle to buy WWE.
Wednesday, January 11, 2023
By Wednesday morning, there were multiple reports, including from Wrestlenomics, denying that such a transaction was imminent or had been completed.
In a disclosure that will surprise no one, a filing published Wednesday evening confirms former board members Man Jit Singh and Ignace Lahoud resigned on Friday because they disagreed with Vince’s return to the company.
“While Messrs. Lahoud and Singh agreed with the Board’s decision to explore the Company’s strategic alternatives,” the filing states, “they did not agree with Mr. McMahon’s return at this time.”
Brandon Thurston has written about wrestling business since 2015. He’s also worked as an independent wrestler and trainer.
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