Shame on me for underestimating him.
Once again, Vince McMahon has found his way back atop WWE. But determining how long McMahon will remain in power will be a fascinating real-life story line to follow.
There are multiple layers to this whole affair. Earlier this week, McMahon was named executive chairman of WWE’s board of directors. Soon after, Stephanie McMahon resigned from the company, leaving Nick Khan as the sole CEO. The board has changed significantly. And it was no surprise McMahon was unanimously voted to be reappointed as executive chairman, as any potential opposition is no longer part of the board.
McMahon never lost power in the company. He owns the bulk of voting power as WWE’s largest shareholder, meaning he remains the most powerful individual in the company. But following his retirement in July, amid a growing sexual misconduct scandal, he became irrelevant in the day-to-day operations. While McMahon was no longer part of the board or overseeing creative or a myriad of other responsibilities, he most certainly took note that the company continued to flourish despite his absence.
The board attempted to thwart McMahon’s return but clearly was unsuccessful in its attempt. And McMahon did not come back alone. He elected two familiar faces in George Barrios and Michelle Wilson, who were unceremoniously removed as WWE co-presidents and board members in February 2020, to return to the board.
McMahon also referenced exploring strategic alternatives for the company. That traditionally signals a sale is not too far away. And that is the key to his return.
When it appeared as though Wall Street would never welcome McMahon back, he orchestrated a populist move by effectively announcing he was coming back for the specific purpose of selling the company. If there is one word that guarantees a surge in stock price, it is “sale.”
Had McMahon come back and the stock dropped, the shareholder lawsuits likely would have been filed immediately—so he pulled two moves that almost guaranteed the stock would not drop. The first was coming back with the intent to sell the company, and the second was bringing back two people (Barrios and Wilson) Wall Street previously held a favorable view of to ensure a steady transition and the best terms for a sale. That caused a jump in the stock—from $72.04 per share on Jan. 5, the day before McMahon announced his intention to return, to $89.34 per share at the close of business Thursday—so there was no reason to sue. If the stock goes below where it was before this announcement, then the lawsuits could start—but the stock price is currently higher than it has been since April 2019.
McMahon removed JoEllen Lyons Dillon, Jeffrey Speed and Alan Wexler from the board in order for Barrios and Wilson to rejoin alongside him. Amid that commotion, WWE also announced that Ignace Lahoud and Man Jit Singh were both leaving the board. That is not a minor change or two; it is an overhaul of the now eight-person board.
This all follows a back-and-forth between McMahon and the board that started days before Christmas, beginning with McMahon announcing his plan to return and the board immediately balking at the decision. The board sought reimbursement for the money spent on internal investigations regarding McMahon and expressed the concern that it would be negative for shareholders if McMahon were to return. The board even went as far as to ask McMahon to agree to not return during ongoing government probes. McMahon, as you might imagine, did not agree to that. Now, with many different board members in place, McMahon has considerably more strength than he did weeks ago.
Regarding those who have departed, Speed had been with WWE since 2008. Lyons Dillon only joined in September. Wexler and Singh had both been part of the board since 2018. Singh is notable for overseeing a special committee company investigation last year, which continued after McMahon retired as chief executive and chairman in July, into allegations of sexual misconduct by McMahon and hush money he paid to prevent women from publicizing the allegations. That investigation concluded in November, and McMahon wasted no time in forging forward. He has moved past his decision to pay women more than $12 million dollars to remain silent about their sexual relationships, payouts he did not report to the board, as well as other ongoing sexual misconduct allegations.
McMahon’s plan to step down, clearly, was only temporary. He and his legal team plotted his return, and it has now come to fruition. An integral part of that plan is that no media rights deals can occur without McMahon’s approval. (Its U.S. rights agreements with Fox and NBCUniversal expire in late 2024.)
For now, McMahon has reinserted himself as the company’s deciding factor. As majority shareholder, he needs to vote for a new media rights agreement. Nothing happens without his input and approval. He is back in charge of his company, regardless of the fact that it was successful without him. But there are plenty of variables out of McMahon’s control that could completely turn this upside down. That includes potentially ongoing investigations from the Securities and Exchanges Commission, regulatory commissions, or district attorney offices, and even class-action lawsuits from shareholders. There could also be new allegations.
Multiple questions remain unanswered. What about WWE creative? Will talent balk if McMahon returns backstage at events? Could he reinsert himself as an on-air character? And will the company be sold? Any speculation is worthy of consideration. There isn’t anything that should be ruled out at this juncture.
There are too many variables to make a prediction about how this unfolds. The company could be sold and then go private. There could also be something, like an indictment, that causes McMahon to be removed again. The potential scenarios are endless.
Ultimately, this ongoing saga continues. WWE’s future is more unknown than ever, but for now, McMahon has returned to power.
Justin Barrasso can be reached at JBarrasso@gmail.com. Follow him on Twitter @JustinBarrasso.
