The Wall Street Journal has followed up on last month’s report of Vince McMahon’s desire to return to power in WWE. McMahon stepped down as WWE’s CEO and Chairman last summer during an investigation into alleged hush money payments, but he now plans to make a comeback.
Vince needs approval from the WWE Board of Directors in order to return to power as Executive Chairman. He sent a letter last month to the WWE Board expressing his intentions. According to the WSJ, the Board “unanimously agreed that Mr. McMahon’s return to the business wouldn’t be in shareholders’ best interest.”
But Vince McMahon is the majority shareholder and owns the most voting power in WWE, so he won’t go away that easily. He claims he wants back in because it’s a good time for a company sale, given WWE’s five billion dollar market value and upcoming negotiations for new TV deals for Raw and SmackDown. That makes his return good for the company shareholders, because he is needed for such a sale to take place. Furthermore, Vince maintains a lot of power and isn’t planning to play ball unless he gets what he wants:
“[McMahon] declined to agree to not return to the company.
He has communicated to the board that unless he has direct involvement as executive chairman from the outset of a strategic review, he won’t support or approve any media-rights deal or sale, the people said.”
With that in mind, Vince’s plan to reclaim his spot is very much underway. Here is a new press release from McMahon detailing actions he has taken to elect himself, Michelle Wilson, and George Barrios to the Board:
“Vince McMahon, the founder and controlling shareholder of World Wrestling Entertainment Inc. (“WWE” or the “Company”) (NYSE: WWE), announced today that he has taken necessary actions to position the Company to capitalize on a unique opportunity to maximize long-term value for all WWE shareholders. The actions, communicated to WWE’s Board of Directors today via written consent, include the election to the Board of Mr. McMahon, as well as Michelle Wilson and George Barrios – former WWE Co-Presidents and Board members, and currently the Co-Founders and Co-CEOs of Isos Capital Management – and the requisite removal from the Board of three directors. Mr. McMahon expects to assume the role of Executive Chairman of the Board.
Mr. McMahon’s new role will enable unified decision making through the Company’s upcoming media rights negotiations and a parallel full review of the Company’s strategic alternatives, which Mr. McMahon believes is the right course of action and in the best interests of WWE and WWE shareholders amidst the current dynamics in the media and entertainment industry. As Mr. McMahon has communicated to the Board, he believes there is a narrow window of opportunity to create significant value for all shareholders and that to do so, the strategic alternatives review must occur in tandem with the media rights negotiations. He also expressed to the Board that he believes these two initiatives require Mr. McMahon’s direct participation, leadership, and support as controlling shareholder.
“WWE is entering a critical juncture in its history with the upcoming media rights negotiations coinciding with increased industry-wide demand for quality content and live events and with more companies seeking to own the intellectual property on their platforms,” said Mr. McMahon. “The only way for WWE to fully capitalize on this opportunity is for me to return as Executive Chairman and support the management team in the negotiations for our media rights and to combine that with a review of strategic alternatives. My return will allow WWE, as well as any transaction counterparties, to engage in these processes knowing they will have the support of the controlling shareholder.”
Prior to delivering written consent, Mr. McMahon sent two separate letters to the Board in late December in which he expressed the urgency of his return to the Company as Executive Chairman and his desire to work collaboratively with the Board and management team. Following conversations with representatives of the Company both before and after Mr. McMahon’s most recent letter on December 31, Mr. McMahon determined, consistent with his rights as controlling shareholder, that the steps announced today are necessary to maximize value for all WWE shareholders.
Mr. McMahon said, “Ms. Wilson and Mr. Barrios are highly qualified directors whose professional experience positions them well to help the Company achieve the best possible outcomes in both initiatives. As former WWE Co-Presidents and Board members, they are intimately familiar with industry dynamics and the organization’s operations and have helped guide the Company through past successful media rights negotiations. I look forward to working closely again with Michelle and George – as well as the Company’s remaining directors and management team, who have my full support and confidence. WWE has an exceptional management team in place, and I do not intend for my return to have any impact on their roles, duties, or responsibilities.”
In conjunction with the changes to WWE’s Board, Mr. McMahon’s written consent also includes certain amendments to the Company’s bylaws to ensure that WWE’s corporate governance continues to properly enable and support shareholder rights. These changes will be detailed in a Schedule 13D amendment to be filed by Mr. McMahon and a Form 8-K to be filed by the Company in the coming days.
No assurances can be given regarding the outcome or timing of the review process. Mr. McMahon does not intend to comment further until the process has concluded or Mr. McMahon has otherwise determined that further disclosure is appropriate or required.”
You can read between the lines there to see Vince is asserting that his return to power is in the company’s best interests, and is in fact required to facilitate some of these major business moves that will benefit company shareholders.
This is just the beginning of what appears to be a huge developing story on McMahon’s power play to return to WWE. We’ll bring you more as we have it, Cagesiders.