This is a more detailed version of a tweet from the other day.
Vince McMahon was made TKO’s Executive Chairman until his death, resignation, or incapacity, at Endeavor’s insistence, according to a filing from May 2023 that detailed how the WWE-UFC merger was negotiated.
McMahon resigned from all roles at TKO and WWE on Jan. 26, after former WWE employee Janel Grant filed a lawsuit against him and WWE, alleging sex trafficking.
During negotiations that resulted in the creation of TKO, the Endeavor side, led by CEO Ari Emanuel, insisted on McMahon staying — not the other way around — as one might’ve predicted ahead of time, given the perception that McMahon would be unwilling to give up control of WWE.
The stipulation to install McMahon as Chairman unfolded as follows:
- Feb 7, 2023: Endeavor made an offer to WWE to merge UFC and WWE, with Endeavor owning 57% and WWE shareholders owning 43%.
- Mar 21, 2023: WWE’s Board considered the offer and, with its advisors, countered, wanting the ownership split to be 49% for WWE and 51% for Endeavor.
- Mar 23, 2023: Endeavor proposed Vince as Executive Chair until death, resignation, or incapacity, as a condition of giving WWE a 49/51 increased ownership. Vince would also get to pick 5 of 11 Board seats. (TKO Board membership was recently increased to 13 seats. 6 for WWE and 7 for Endeavor.)
Endeavor believed “that Mr. McMahon’s continued leadership… would be critical to the value creation driving Endeavor’s desire to engage in the transaction”.
This narrative is commemorated in SEC filings, with plenty of legal reason for all involved to be truthful.
This transpired in early 2023, well after news had broken in mid-2022 about various NDAs McMahon had multiple women sign, agreeing to pay them millions of dollars for their silence, following allegations of sexual misconduct.
TKO apparently understood keeping McMahon in the company came with risks, as he was identified among numerous other risk factors that publicly-traded companies disclose to investors, which has received some mainstream attention.
But before the merger, WWE earlier wrote the same risk factor into its filings, after news of the scandal broke. TKO put the same risk factor into its filings in nearly identical language. The lengthy entry starts with a heading that reads: “The Special Committee’s investigation into allegations of misconduct by Vincent K. McMahon and any further allegations and investigations may have an adverse financial and operational impact on our business performance.”
Sitting next to McMahon on CNBC the day the deal was announced, Apr. 3 last year, Ari Emanuel exclaimed, “Oh my god, yes,” in response to a question about whether he wanted the WWE founder to stay on as a part of the merged WWE and UFC.
“Did he have to convince you to stay?” the interviewer, Scott Wapner, asked McMahon.
“Um,” McMahon thought for a moment. “Not that much.”
Brandon Thurston has written about wrestling business since 2015. He operates and owns Wrestlenomics.