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Photo: Hearst Connecticut Media via CT Insider
WWE published two filings this morning which recorded that Vince McMahon, effective January 16 (yesterday), rescinded many of the amendments to the company’s board of directors’ bylaws which he’d made on January 5.
Most notably the action removes the amendment Vince earlier enacted that required shareholders to approve any company transaction or media rights agreement. Since Vince controls 81% of WWE shareholder votes, that meant he would have to approve of any such transaction or agreement.
A portion of the 8-K filing published this morning reads:
“…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.”
A schedule 13D filing was also published this morning, which states similar information as the 8-K.
Our analysis
The January 5 amendments were an instrument 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 him. Removing them may minimize liability he exposes the company and/or himself to, and undermines a key complaint of the class-action shareholder lawsuit (Fellow v. McMahon) filed on January 10.
Removing the requirement that shareholders (i.e., Vince) approve of any TV deal or company transaction may also prevent anyone who in the near future might inherit his shares from also inheriting that approval power. Vince’s nearest family members, Linda, Stephanie, or Shane, would retain his enhanced voting rights due to being McMahon family members if they came into possession of his shares. However, we don’t know whether any will or succession plan is in place regarding Vince’s shares should he pass away or become incapacitated.
It should be emphasized, so the preceding paragraph isn’t misconstrued, the filings do not mention other McMahon family members or explore the possibility of others inheriting Vince’s shares. This is merely Wrestlenomics’ analysis of the situation, and it’s possible such a consideration actually played no part in motivating the actions recorded in this morning’s filings.
Since initially amending the bylaws on January 5, Vince put himself back on the board, and also appointed former WWE co-presidents George Barrios and Michelle Wilson, who are presumably agreeable to Vince’s objectives. Other directors subsequently were removed or resigned this month: Jeffrey Speed, JoEllen Lyons Dillon, Alex Wexler, Man Jit Singh, Ignace Lahoud, and Stephanie McMahon.
The remaining members of the board likely realize it’s futile and unhelpful to their own positions in the company to oppose Vince at this point, as evidenced by the members’ unanimous approval of him as chairman last week, despite some of those same members previously being a part of the unanimous agreement that rejected the notion of Vince returning to the company, as mentioned in the board’s December 27 letter to Vince.
Brandon Thurston
brandon@wrestlenomics.com
Brandon Thurston has written about wrestling business since 2015. He operates and owns Wrestlenomics.