World Wrestling Entertainment on Monday disclosed $14.6 million in previously unrecorded expenses paid personally by top shareholder Vince McMahon, who announced his retirement Friday as he is being investigated for claims of sexual misconduct.
WWE also hinted that the misconduct allegations, already the subject of an ongoing independent review overseen by the company’s board, are under investigation by other entities.
“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,” WWE said in an SEC filing Monday morning.
The payout is $2.6 million more than the sum reported by The Wall Street Journal earlier this month. McMahon allegedly paid that money to women from 2006 through this year to ensure their silence over alleged affairs and misconduct.
The company said it expects to conclude that its “internal control over financial reporting was not effective as a result of one or more material weaknesses.” WWE said it would reflect the unrecorded expenses in updated reports for 2019, 2020 and 2021, as well as this year’s first quarter, when it reports second quarter earnings. The company was set to report Aug. 9, but the revisions could delay that, WWE said.
McMahon is the company’s largest shareholder, with an approximately 32% stake. WWE stock rose about 7% Monday morning. It is up more than 30% this year, even as the S&P 500 is down about 15% so far in 2022.
The disclosure accompanied leadership changes. Stephanie McMahon, who is Vince McMahon’s daughter, will act as chairwoman and co-CEO. Nick Khan, the company’s president, will also work as co-CEO.
Vince McMahon’s son-in-law, Paul Levesque, aka “Triple-H,” will take over the company’s creative control, which the elder McMahon held onto after he stepped aside earlier this month. It marks a return from a hiatus for Levesque after a “cardiac event” reported by Sports Illustrated. It also expands his role from the executive vice president of talent relations. Levesque is married to Stephanie McMahon.
Vince McMahon remains the majority shareholder of the company with about 32% of the stock in his possession, keeping a tight hold on the company.
The WWE included optimistic preliminary second-quarter earnings estimates along width the disclosures about McMahon, reporting $69.8 million in operating income during the second quarter, up from $46.3 million in the same period last year.
– CNBC’s Alex Sherman contributed to this report.