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TKO CEO Ari Emanuel will be deposed under oath by attorneys representing a class of WWE shareholders on December 2, according to new filings in Delaware’s Court of Chancery reviewed by Wrestlenomics.
Emanuel, who negotiated the 2023 merger between Endeavor and WWE that created TKO, is expected to face questions about the terms of the deal and his communications with Vince McMahon leading up to the transaction. Attorneys for the plaintiffs have argued that McMahon favored a sale to Endeavor because he believed Emanuel would allow him to retain power, unlike other potential buyers.
Former co-CEO and board member Stephanie McMahon will be deposed on October 24. She resigned from the company shortly after her father returned to power in January 2023. The plaintiffs’ attorneys may seek to learn what she knew about her father’s return, her own resignation, and internal board discussions about the merger process.
Frank Riddick, a longtime board member and former WWE executive who was initially named as a defendant before being dropped, will be deposed on October 28.
The defendants are Vince McMahon, Nick Khan, Paul Levesque, George Barrios, and Michelle Wilson — all of whom were members of WWE’s board of directors after McMahon returned to the company in January 2023, following his mid-2022 resignation.
Brad Blum, a former executive and close associate of Vince McMahon who now serves as president of McMahon’s new venture, 14TH & I, will be deposed November 14 at WWE headquarters.
Mark Zhu, Executive Vice President of Strategy for TKO and Endeavor, is scheduled for December 5.
As previously reported, other current and former executives and board members have been or will be deposed. Vince McMahon is scheduled for November 12, and Paul Levesque for November 4.
Several depositions have been rescheduled: WWE President Nick Khan is now set for November 19 (previously November 21); WWE executive Alex Varga for October 30 (previously October 8); and TKO Chief Financial Officer Andrew Schleimer for October 23 (previously September 25).
Under Delaware law, the defendants’ attorneys will also be allowed to question each witness. Depositions transcripts do not automatically become part of the public record, but excerpts may be filed later as exhibits in motions or at trial. The case is currently in the discovery phase, where depositions and evidence are collected.
The shareholder plaintiffs, in the case titled In re World Wrestling Entertainment Inc Merger Litigation, allege that Vince McMahon predetermined the process that led to WWE’s merger with Endeavor’s UFC to form TKO. They claim McMahon steered the sale to Ari Emanuel’s Endeavor because he allegedly believed other potential buyers would require his departure from the company due to sexual misconduct allegations against him.
McMahon and WWE are defendants in a separate federal lawsuit brought by former employee Janel Grant, which includes sexual misconduct allegations that the shareholder case says motivated him to drive the merger toward a buyer who would keep McMahon in power.
The plaintiffs in the shareholder case are asking the court for financial damages and other remedies. They claim McMahon and other board members breached their fiduciary duties by manipulating the sale process.
Former WWE executive John Laurinaitis, who was also accused of sexual misconduct during his time with the company, was deposed on September 26.
Filings indicate that representatives for Liberty Media, believed to be a potential bidder, were deposed on September 30. A partner for private equity firm KKR is set to be deposed on October 30.
Brandon Thurston has written about wrestling business since 2015. He operates and owns Wrestlenomics.
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More subpoenas have been served in the Delaware Chancery Court shareholder lawsuit against Vince McMahon, current top WWE executives Nick Khan and Paul Levesque, and former company executives and board members George Barrios and Michelle Wilson.
Former WWE executive John Laurinaitis, who is not a defendant, was scheduled to be and presumably was deposed this past Friday, September 26 via Zoom from his attorney’s office in Florida.
McMahon’s personal assistants during his time at WWE, brothers Paul Mangieri and Michael (Mickey) Mangieri, have also been subpoenaed for documents.
Liberty Media (owners of Formula 1, among other assets) and major private equity firm KKR are also scheduled to be deposed. Individuals at Liberty Media who are “most knowledgeable” about the subjects the plaintiffs are seeking information about are set to be interviewed under oath on Tuesday, September 30. KKR partner Ted Oberwager will be deposed on October 30. While it’s not been openly confirmed, Liberty Media and KKR may have been bidders or potential suitors for WWE in 2023.
As we reported earlier, each of the defendants themselves and many other WWE executives and former board members are scheduled to be deposed before the end of November.
Attorneys for the shareholder class are expected to question each deponent in an effort to build a record supporting claims that the merger process was not conducted in good faith. It is customary for defense counsel to also examine the witness to elicit testimony supporting their position. McMahon is represented by separate counsel from the other defendants.
With their scheduled deposition dates now past, these individuals have presumably already been deposed: current TKO Chief Financial Officer Andrew Schleimer, and independent WWE board members at the time of the merger Steve Koonin, Steve Pamon, Man Jit Singh, and Jeffrey Speed.
Deposition transcripts and subpoenaed documents don’t automatically become part of the public record. In many cases they remain confidential throughout discovery. But portions of deposition transcripts or subpoenaed documents may become public later if they are filed as exhibits in connection with motions or later if this case goes to trial.
The lawsuit alleges that McMahon was predetermined to merge WWE with Endeavor’s UFC in 2023, rather than having a genuine M&A process that maximized shareholder value. The plaintiffs claim that McMahon believed that only a transaction with Endeavor would allow him to stay with the company, citing McMahon’s friendship with Endeavor’s Ari Emanuel. With the fallout of the sexual misconduct scandal surrounding McMahon that became public in 2022, plaintiffs say any other suitor wouldn’t have agreed to allow McMahon to stay on after that suitor took control. The other board members who are defendants are alleged to have breached their fiduciary duties in going along with McMahon in the alleged scheme.
Laurinaitis was accused of sexual misconduct along with McMahon by former WWE employee Janel Grant, as part of her federal lawsuit against McMahon and WWE. Earlier this year, Laurinaitis flipped on McMahon for the second time and was dropped as a defendant in Grant’s case, in exchange for his agreement to provide evidence for Grant.
Many attorneys from white-shoe law firms have been added to the shareholder lawsuit to represent the defendants in recent weeks. McMahon’s attorneys are from Kirkland & Ellis. The other former WWE board member defendants, including Khan and Levesque, are represented by attorneys from Latham & Watkins.
This case has gotten relatively little coverage partly because it’s being litigated in Delaware Chancery Court, a forum that’s more difficult to access electronically than the cases in federal court involving McMahon and WWE that have drawn more attention. This case is well into the discovery process, whereas the Grant case (in Connecticut federal court) and the ring boy lawsuit (in Maryland federal court) are still in pre-discovery phases.
Brandon Thurston has written about wrestling business since 2015. He operates and owns Wrestlenomics.
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Vince McMahon is pushing back against efforts to force him to turn over more documents in a shareholder lawsuit over the TKO merger, arguing that the plaintiffs are overreaching and trying to use the case to pry into his personal life.
In a filing with the Delaware Court of Chancery made public Thursday, McMahon’s attorneys asked the court to deny the plaintiffs’ motion to compel further discovery. The plaintiffs, including a pension fund that owned WWE stock, argue that McMahon predetermined UFC’s then-parent Endeavor as a merger partner to protect his own power at the expense of WWE shareholders. The plaintiffs allege McMahon favored a buyer that would tolerate the sexual misconduct allegations against him.
The lawsuit is filed against McMahon and other directors of the WWE board at the time. WWE itself isn’t a party to the lawsuit.
McMahon’s lawyers stated that theory is “meritless” and that he’s already agreed to produce all documents that connect the sexual misconduct allegations to the merger process.
But the former WWE Chairman and CEO is drawing the line at turning over what he calls “deeply personal and intimate communications” with women he had relationships with, and messages with family members about those relationships.
According to the filing, McMahon’s legal representatives say those materials are irrelevant to the case, which they argue is about fiduciary duty—whether shareholders got a fair deal in the 2023 merger that put WWE and UFC together to form TKO Group Holdings.
McMahon’s attorneys say the plaintiffs are using discovery as a way to “harass and pressure McMahon and his family” and re-litigate issues already addressed in a separate derivative lawsuit that was dismissed with prejudice before this class action was filed.
In simple terms, the two sides are litigating over how far discovery should reach. The plaintiffs want McMahon to turn over documents related to the misconduct allegations, even if they don’t explicitly mention the merger. They say those records might show what motivated him to retake control of WWE and push a deal with Endeavor. McMahon says that goes too far; he’s willing to turn over communications records about misconduct only if they also relate to the merger, but not personal messages that apparently have nothing to do with business decisions.
“Litigation should not be used for this purpose,” McMahon’s attorneys added.
McMahon says he’s already offering several concessions. He says he’s willing to provide documents that mention both the sexual misconduct topics and the merger or potential alternatives. That includes communications with key decision-makers at WWE, Endeavor, or TKO, including current WWE President Nick Khan, current WWE Chief Content Officer and McMahon’s son-in-law Paul Levesque, and former WWE board members George Barrios, Michelle Wilson, Steve Koonin, Michelle McKenna, Steve Pamon, and Frank Riddick. He also agreed to produce non-disclosure agreements from before the merger, along with final board meeting minutes and resolutions from the Special and Demand Committees that reviewed the allegations.
What he opposes producing are private conversations that he says are unrelated to the deal process, particularly those with individuals not involved in merger negotiations.
The plaintiffs say McMahon is leaving out a key group of people: board members who left or were removed before the merger process began. Some resigned upon his return; others were removed to make room for himself, Barrios, and Wilson. Communications with those pre-merger board members, they say, could reveal why the board changed—and what McMahon wanted from the deal.
Notably, McMahon’s daughter Stephanie McMahon served as co-CEO and Chairwoman until she resigned from all roles with the company in January 2023, just as McMahon was forcing his way back into the company to begin exploring a sale or merger.
Ignace Lahoud told the LA Times in 2023 that he left the WWE board because McMahon’s return “wasn’t aligned with my way of seeing what governance is.”
McMahon’s legal team states that the plaintiffs already pursued a related theory in the earlier legal action, which was dismissed with prejudice, meaning the claims of that suit can’t be brought again by the same plaintiffs.
McMahon argues that allowing this discovery would effectively allow plaintiffs to rehash claims from that case, dragging the focus away from the financial fairness of the merger and toward sensational allegations from the past.
The plaintiffs, however, previously argued that documents about how the misconduct allegations affected McMahon’s thinking are relevant because they may explain why he returned to WWE in early 2023 and directed the merger process toward Endeavor, led by his longtime associate Ari Emanuel.
McMahon disagrees, arguing that the misconduct allegations were already public at the time and known to prospective buyers, including Endeavor, and that the plaintiffs already have access to that timeline from public records. He says he’s agreed to turn over communications that speak to his motivation, including those discussing his potential role in the post-merger company.
As part of the TKO merger, McMahon became Executive Chairman of the TKO board. However, he resigned after a sex trafficking lawsuit was brought by former employee Janel Grant against him, WWE, and former executive John Laurinaitis.
McMahon says broader discovery would turn the case into a sideshow.
“If this Court grants Plaintiffs’ Motion,” his attorneys wrote, “this case will devolve into a mini-trial over the Sexual Misconduct Allegations.”
The case is being overseen by Vice Chancellor J. Travis Laster, who hasn’t made a decision on this issue yet.
Brandon Thurston has written about wrestling business since 2015. He operates and owns Wrestlenomics.
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Updated May 7, 2025: This article has been updated to include new information from a public filing made available for the first time on Wednesday, detailing what plaintiffs are seeking in discovery and their version of how Vince McMahon has responded.
Vince McMahon is in a dispute over what evidence to turn over as part of the ongoing WWE shareholder lawsuit related to the TKO merger, according to new court filings from the plaintiffs.
A public version of a motion from April 29 was recently filed this week, in which plaintiff shareholders asked the Delaware Court of Chancery to compel McMahon to respond to discovery requests, including by producing documents related to sexual misconduct allegations and internal reactions at WWE.
The case originally filed in November 2023 is led by the Laborers’ District Council and Contractors’ Pension Fund of Ohio, and alleges McMahon predetermined the process that led to WWE merging with UFC’s parent Endeavor. WWE and Endeavor agreed to an all-stock deal in 2023, forming TKO. The merger kept McMahon on as Executive Chairman and a major stockholder, though the super-voting Class B founder shares that had previously given him control despite owning a minority stake were eliminated.
The case is now in discovery, where both sides exchange evidence. Plaintiffs seek non-privileged materials from January 1, 2022, through March 12, 2024.
According to the motion, the plaintiffs are requesting documents related to “Sexual Misconduct Topics,” including allegations of sexual misconduct, nondisclosure payments, and investigations. That includes the 2022 WWE Board investigation into allegations involving McMahon and former executive John Laurinaitis. Plaintiffs argue these materials are relevant to McMahon’s motivations for regaining control of the board in January 2023 and steering the company into a merger with Endeavor.
The complaint claims McMahon favored a deal with Endeavor, led by longtime associate Ari Emanuel, because other potential buyers were unwilling to retain him due to the allegations.
The new public filing says McMahon has declined to produce documents on those topics unless they explicitly discuss the merger or involve certain high-ranking executives. Plaintiffs argue this “narrowed responsiveness” standard improperly excludes key internal communications, such as messages reflecting McMahon’s thinking during the fallout in 2022, and communications with directors he removed from the board.
Plaintiffs state in the filing that they “are not seeking to re-litigate the merits of the underlying Sexual Misconduct Allegations or assess the rigor of any investigation. Rather, Plaintiffs are focused on obtaining discovery about how the Sexual Misconduct Topics impacted McMahon’s motivations and decision-making.”
The two sides agreed to search terms and a discovery protocol. According to the filing, McMahon’s latest search produced fewer than 6,000 documents, a number plaintiffs say is reasonable and manageable for litigation of this scale.
McMahon’s counsel agreed to use the plaintiffs’ preferred start date of January 1, 2022, but continues to apply the narrowed criteria, according to the motion. Plaintiffs are asking the court to compel production of all non-privileged documents matching the agreed terms, without additional limits.
McMahon’s representatives were contacted by Wrestlenomics for comment on this report but have not provided a statement.
The court has given McMahon until May 14 to oppose the motion.
In addition to the central discovery issue, plaintiffs have asked for confirmation about McMahon’s use of a personal cellphone during the period in question, and want to include texts with Laurinaitis and Stephanie McMahon in the discovery scope. These matters are not included in the current motion but remain under discussion.
The lawsuit also names WWE President Nick Khan, Chief Content Officer Paul Levesque, and board members George Barrios and Michelle Wilson as defendants. Following the consolidation of multiple related lawsuits related to this case, WWE, TKO, former Board member Frank Riddick, and former WWE Board member (and current TKO Board member) Steve Koonin are not longer defendants in the case.
Plaintiffs allege WWE’s board and McMahon failed in their fiduciary duties by not conducting a fair sale process. The complaint claims that Endeavor wasn’t the highest bidder; it was just the bidder that would keep McMahon in power after he forced his return in early 2023.
WWE’s regulatory filings following the announcement of the merger in 2023 disclosed some details about other bids. An entity anonymized as “Strategic Party 1” offered to buy WWE for between $95 and $100 per share. Based on our analysis of other WWE company filings, given there were about 74.4 million WWE shares at the time, that entails the offer would have been for just over $7 billion. Another anonymized party, “Financial Sponsor 1”, offered a slightly lower range: $90 to $97.50 per share. And yet another, “Strategic Party 2” made a lower offer at $76.83 per share, or about $5.7 billion for the company. In the actual deal with Endeavor, WWE was valued more highly, at just over $9 billion (or about $106 per share), however, it was an all-stock deal and no cash was exchanged. As of this writing, about 19 months since the merger closed in September 2023, TKO stock — which WWE shareholders received in exchange for their WWE shares — is valued at about $170 per share and has outperformed the major stock indexes.
McMahon resigned from WWE and TKO in January 2024 after former employee Janel Grant filed a sex trafficking lawsuit against him.
If successful, the shareholder case could result in compensation for those who held WWE stock during the relevant period.
The suit also challenges the board’s 2022 investigation, which began after reports of multiple million-dollar nondisclosure agreements with former employees. Plaintiffs claim the investigation was a “sham” and that the board cooperated with McMahon instead of acting independently.
McMahon is also the subject of other legal matters. While not charged with a crime, he was the target of a separate federal criminal investigation. His attorney has said the investigation has since been dropped. However, a federal appeals court ruled in February that certain communications between McMahon and longtime attorney Jerry McDevitt were not protected by attorney-client privilege. The court agreed with a lower ruling that found probable cause those communications, related to an NDA with Grant, were made in furtherance of potential fraud.
While the Delaware lawsuit is separate from Grant’s federal case in Connecticut—where she accuses McMahon of sexual assault and trafficking—both matters involve similar board actions and overlapping timeframes. If the shareholder case leads to discovery or depositions, that material could be relevant to Grant’s case.
Brandon Thurston has written about wrestling business since 2015. He operates and owns Wrestlenomics.
A shareholder class action lawsuit filed against WWE originally in November 2023 continues to develop. The consolidated case alleges that Vince McMahon manipulated the sale process that led to the TKO merger with Endeavor, for his personal benefit, preventing shareholders from getting a better deal.
The first lawsuit has been public for some time, but recent filings — including a second complaint raised in April 2024 — related to the case reviewed for the first time here by Wrestlenomics provides new insight on the status of the litigation. The case is with the Delaware Court of Chancery, where public filings are difficult to obtain.
The plaintiffs in the combined case now include pension funds from Ohio and Pontiac, Michigan, as well as Dennis Palkon, a university professor who has been prominently involved in previous shareholder class actions against WWE and other publicly-traded companies. The judge, Travis Laster ruled in August 2024 that the Palkon group is the lead plaintiff in the consolidated lawsuit.
Like many major corporations, WWE is incorporated in Delaware. According to their filings, the plaintiffs made a legal demand under a Delaware General Corporation Law which allows stockholders to inspect a company’s records for a “proper purpose”. That’s how the plaintiffs obtained copies of WWE’s Board of Directors’ meeting minutes, which they say reveal details of the company’s decision-making process as scandal around McMahon and the later merger process unfolded.
The minutes are referred to by the plaintiffs and are not provided in full in the public filings, and many parts of the filings are redacted. However, according to what the plaintiffs have made public, certain Board members, who included at least independent directors Man Jit Singh and Ignace Lahoud, attempted to resign the day after the Wall Street Journal’s initial report in June 2022 about McMahon’s nondisclosure payments related to sexual misconduct allegations.
However, the plaintiffs say Stephanie McMahon — who was still a Board member at the time, amid her temporary leave from her executive role which she announced the previous May — persuaded Board members to stay, leaving multiple voicemails and sent emails to other directors.
Two days after the Journal broke the story about the NDA payments, Vince McMahon resigned on an interim basis. Stephanie McMahon was appointed interim WWE CEO and Chair.
It’s worth noting that in the weeks ahead, Board members Connor Schell (on July 6, 2022), Erika (Nardini) Ayers Badan (on September 15, 2022) did resign from the Board. It’s unclear to what degree the scandal that emerged around McMahon weighed into those decisions, and the public versions of these complaints at least don’t offer claims about that. WWE’s contemporaneous filings claimed Schell left the board to focus on another project. Filings for both Schell and Nardini’s resignations claimed their decisions to resign were “not due to any dispute or disagreement with the Company, its management or any matter relating to the Company’s operations, policies or practices.”
Additionally, Singh and Lahoud actually did resign on January 6, 2023, soon after McMahon forced his return to the company, despite the Board’s unanimous opposition the prior month.
The plaintiffs’ complaint again cites Board minutes. “While [Singh and Lahoud] agreed with the Board’s decision to explore the Company’s strategic alternatives, they did not agree with Mr. McMahon’s return at this time.”
Then on January 9, 2023, the plaintiffs claim Board minutes state that the meeting held that day “had two purposes. [1], [f]or Mr. McMahon to review, and the Board to approve, his appointment as Executive Chair and the scope of his activities in that capacity and [2], to appoint members to standing Board committees.”
The Board approved McMahon as Executive Chairman. The complaint goes on to state that directors Nick Khan, Paul Levesque, and Steve Koonin “reversed course” and voted to approve McMahon as Chair, contrary to the Board’s unanimous statement to McMahon in a letter on December 27, 2022, stating that he should not return. Steve Pamon didn’t attend the meeting, the complaint says, relying on the Board’s minutes. Another Board member, Michelle McKenna, abstained from the vote to approve McMahon.
Reasons for Stephanie McMahon’s permanent resignation from all roles at WWE the following day aren’t made any clearer from what we already know. The plaintiffs also don’t state whether she participated in the vote that placed her father back on the Board.
In a statement upon her resignation, Stephanie McMahon didn’t express any disapproval of Vince McMahon or the company’s direction. “WWE is in such a strong position, that I have decided to return to my leave and take it one step further with my official resignation,” she wrote on January 10, 2023.
The Delaware court filings from the shareholders also claim the Board’s investigation into McMahon’s conduct was a “sham”.
The Pontiac shareholders’ complaint, which was filed in April 29, 2024 and reviewed in recent days for the first time by Wrestlenomics, alleges:
“During McMahon’s brief hiatus, the Special Committee (including Defendants [then-WWE Board members Steve] Koonin and [Steve] Pamon) conducted a sham investigation of the allegations against McMahon. The Special Committee facilitated the cover-up by ensuring that they received no written materials throughout the entirety of that committee’s existence. The Special Committee did not interview McMahon’s victims, did not reprimand or otherwise censure McMahon, received no interview memoranda, reviewed no evidence, made no factual findings, and issued no report.”
In its public filings, WWE claimed that its Special Committee investigation was “substantially complete” by the time of the quarterly report filed on August 15, 2022.
The plaintiffs further allege:
“Special Committee minutes show that just the day prior, August 14, 2022, the Special Committee ‘reviewed and considered next steps in the investigation.’ The minutes say nothing about an investigation about to wrap up. Even after the [quarterly report] was filed, the Special Committee continued to meet. On August 23, 2022, the Special Committee’s counsel brought up ‘new developments’ and discussed ‘potential next steps.'”
Rather than issuing a final report, the Special Committee allegedly “simply transferred its investigation over to multiple different Board committees”.
The plaintiffs argue that WWE misled shareholders by claiming that the investigation was nearing completion when, allegedly, it had actually been stalled and ultimately buried.
“On October 27, 2022, the full Board held a meeting, wherein the Special Committee disbanded and the Board transferred the investigation pursuant to the ‘Recommendations of the Special Committee,'” the plaintiffs stated further, with more details redacted.
The plaintiffs also raise allegations about the sale process, which was central to McMahon’s justification for returning to the company as Executive Chairman. Plaintiffs allege that McMahon and WWE executives worked to ensure that only Endeavor was allowed to genuinely bid for WWE. The process was predetermined, it’s alleged, for McMahon and his longtime friend, Endeavor CEO Ari Emanuel, to make the deal that led to the formation of TKO.
While other bidders — whose identities are obscured behind redactions — were allegedly willing to cash out all WWE investors, the Board purportedly pushed for the deal with Endeavor because it guaranteed that McMahon would continue to have a role with the company. The shareholders claim that resulted in WWE being undervalued.
Additionally, the plaintiffs focus on WWE’s multimillion-dollar payouts to executives who were also Board members during the merger process: Nick Khan, Paul Levesque, and Frank Riddick. Khan received a $15 million bonus and Levesque and Riddick each got $5 million for completing the deal. Those payouts weren’t a secret; they were disclosed in 2023 by WWE in SEC filings. The plaintiffs contend, though, that WWE’s leadership structured the deal to benefit themselves above the company’s shareholders.
Numerous parties have been subpoenaed for documents and testimony related to this case. That includes Board members, but also law firms and banks involved with the merger process, J.P. Morgan, Moelis, Paul Weiss and Kirkland & Ellis.
All four of the aforementioned firms have been asked to provide information about dozens of parties, but one interesting party that the plaintiffs want information about is the Abu Dhabi Investment Authority (ADIA). It’s unclear how the ADIA might be connected to the subject matter of the case, but it’s possible to imagine the sovereign wealth fund owned by the United Arab Emirates might’ve had interest in bidding on WWE.
Liberty Media Corporation has also been subpoenaed. Liberty, which is the parent of companies like Formula One and Sirius XM, fits the description of the anonymized “Strategic Party 1”, which bid on WWE, according to WWE’s own filed narrative about the merger process. WWE referred to the party as being headquartered in Englewood, Colorado, consistent with the location of Liberty’s main offices.
Also subpoenaed was Vestry Laight, the firm that specializes in sexual misconduct investigations. WWE brought the firm in to assist with the Board’s investigation of allegations against McMahon and the company culture.
The Ohio Laborers’ Pension Fund is suing Vince McMahon and members of the now-dissolved WWE board of directors, trying to start a shareholder class-action suit.
It’s the kind of lawsuit WWE has been hit with multiple times over the years, though each with different allegations. This one is built around claims that Vince McMahon and other members of the WWE board breached their fiduciary duties by bringing Vince back onto the board in early 2023 and executing the WWE-UFC merger, putting Vince’s interests over those of shareholders.
The plaintiffs claim Vince McMahon and the board didn’t fairly consider company sale offers from bidders other than Endeavor because, allegedly, those alternatives would have bought the company outright and would have pushed Vince out of WWE permanently, whereas the WWE-UFC merger with Endeavor allowed Vince to continue as executive chairman. Shareholders were left with a less valuable transaction as a result, the lawsuit says.
The complaint, filed in Delaware Chancery Court, paints Vince as a “larger-than-life figure” who “used his domineering personality and control over WWE to carry out his own personal agenda at the expense of the Company’s public stockholders.”
The suit goes over allegations of sexual misconduct and Vince’s $15 million in payments to silence women he allegedly abused, originally reported by The Wall Street Journal in 2022, which resulted in Vince’s “first real threat at becoming dethroned” from WWE.
There’s a heading in the complaint that reads, “McMahon is a serial sexual predator who cost the company millions of dollars and significant reputational harm”, which details various previously reported misconduct allegations against Vince.
Vince’s “retirement” (yes, the complaint puts that word in quotes), as we know, was followed by his forced return to the company. He used a Written Consent action in January 2023, enabled by his preferred stock and control of WWE voting shares, to remove members of the board and replace himself and add “two of his cronies”, former WWE executives Michelle Wilson and George Barrios. Subsequently, two independent directors and Stephanie McMahon, an executive and board member, resigned.
Nick Khan, Frank Riddick, Paul Levesque, and Steve Koonin remained on the WWE board before and after Vince repositioned himself in the company this year. Along with Vince, Barrios, and Wilson, the aforementioned board members are all named defendants in this lawsuit.
“As justification for his coup, McMahon claimed that it was ‘necessary’ for him” to return and oversee a sale or merger of WWE, the suit says. But “[i]n reality, McMahon was maneuvering to secure his power and control over the Company in the face of mounting stockholder discontent and government investigations into his illegal predatory behavior.”
“McMahon immediately approached his long-time friend and Endeavor CEO Ari Emanuel, whom McMahon knew would allow him to remain at the helm of the post-transaction Company,” the complaint alleges. “Thereafter, the WWE Board — which was controlled by McMahon — conjured up a sham sales process designed to favor Endeavor and exclude other bidders seeking axe [sic] McMahon.”
The plaintiffs’ narrative about the company sale process seems based on WWE’s prior disclosures in SEC filings, in particular the S-4 filed in May.
The plaintiffs claim “McMahon’s crony-filled Board would later seize on this unequal playing field to pretextually accuse [bidders other than Endeavor] of showing ‘less enthusiasm and urgency.'”
The suit details other offers WWE received, as disclosed in the S-4.
One bidder offered $95 to $100 per share on March 13. This bidder was anonymized in WWE’s filings as “Strategic Party 1”. The plaintiffs seem to name the other bidders but their names are redacted from the complaint.
I believe Strategic Party 1 refers to Liberty Media, the owner of Formula One, SiriusXM, and the Atlanta Braves. Notably, the S-4 disclosed, “Strategic Party 1 attended a WWE event held in Denver,” on March 26. The event was a house show, which suggests to me it was convenient for this party to attend. Ball Arena, where the event was held, is a 20-minute drive from Liberty’s headquarters.
Another bidder, which WWE anonymized as “Financial Sponsor 1” offered to pay $90 to $97.50 per share. A third bidder, “Strategic Party 2”, which I believe is Comcast, offered $76.83 per share.
“But because these offers all contemplated cashing out WWE stockholders (including McMahon–signaling his complete ouster from the Company and likely the wrestling world), the Board never bothered to a counterproposal,” the suit alleges.
The all-stock deal not only secured Vince’s future,” the suit says, but “also stuffed the pockets of his loyalists”, referring to the other named defendant board members who, WWE’s own filings show, received millions in bonuses as part of the merger process.
The merger agreement valued WWE shares at $95.66, less than two of the aforementioned offers.
I’ll note that the $95.66 per share valuation referred to by plaintiffs, was disclosed by WWE as the value of WWE without considering any cost synergies as a result of the merger. According to the S-4, WWE was being valued as being worth at least “$105.04 per share with synergies”, which would make the valuation greater than the other disclosed offers. The complaint claims WWE could have gotten higher offers from other bidders but didn’t negotiate in good faith.
In any case, TKO shares (which WWE shares converted to 1:1) are worth about $78 on the New York Stock Exchange, as of this writing, whereas, purportedly WWE shares could have been sold for cash for the greater offers mentioned above.
The suit accuses WWE of not using independent and disinterested directors in its sale process and alleges the financial advisors used (Raine, JP Morgan, and Moelis) were “largely conflicted”. Raine had previously provided services to Endeavor and major Endeavor shareholder Silver Lake. Both Moelis and Raine had their compensation for the deal contingent on the closure of the merger, plaintiffs say.
The complaint thoroughly details the events of the public scandal surrounding the news of Vince’s alleged sexual misconduct, related payments for non-disclosure agreements, the letters Vince and the board wrote to each other in late 2022, and his return to the company.
The complaint notes Vince continued to control WWE’s creative process while the investigation was ongoing and immediately appeared on TV after the news broke. It brings up Stephanie’s comment at a media conference in November 2022 where she said there had been “a pause” from some sponsors who were hesitant about advertising with WWE because of the scandal.
There are numerous curious redactions. The suit alleges that on the day Vince completed his forced return to WWE “Emanuel contacted McMahon”. The sentence continues but is redacted.
The complaint references a January 9 board meeting, which is after Vince’s January 5 return. The minutes “indicate that McMahon represented to the Board that he [redacted]. But McMahon’s coup was complete.”
There are additional redactions throughout the complaint’s narrative of the bidding process, hiding the names of the other bidders but also seemingly other details, as well sentences that mention WWE’s board’s meeting minutes and offer letters.
Quotes from Nick Khan’s interview with Bill Simmons are mentioned, including one where he offhandedly says it was “always [Khan’s] point of view . . . at some point he [i.e., McMahon] would come back”. Khan in the interview said that Vince’s controlling shares gave him the power to return “and I applaud him for doing so.”
The complaint is dated November 17. The Ohio Laborers’ Pension Fund is represented by lawyers from Block & Leviton LLP.
