In keeping with McMahon’s hard-charging style, his comeback has hardly been devoid of contention. He removed three board members, while two others resigned because they opposed his return — and the changes have also sparked shareholder litigation. At the same time, questions persist about the company’s response to the allegations of misconduct against McMahon that precipitated his short-lived retirement.

“Through the super-voting stock that he controls, he’s really able to control everything that goes on in the company,” Justin P. Klein, director of the University of Delaware’s Weinberg Center for Corporate Governance, said in an interview. “Nothing significant happens in this company without this guy’s permission.”

Company at a crossroads

McMahon, 77, has returned to WWE at what he said was a crucial time for the company. 

He argued that his leadership was essential as WWE prepares for negotiations for media rights that will encompass its flagship shows, “Raw” and “SmackDown.”

He also came back to initiate a review of “strategic alternatives,” a term in corporate America that generally refers to options such as a sale of some or all of a company’s business. WWE announced Thursday that it had retained outside financial, legal and strategic communications advisors to assist the board and management during that process.

“WWE’s upcoming media rights cycle will take place amid a rapidly evolving media and entertainment landscape,” McMahon said in a statement in a news release. “We believe exploring our strategic alternatives at this critical juncture will enable WWE to fully capitalize on the significant value of our intellectual property. I am highly confident that our outstanding directors, outside advisors and executive team will provide valuable expertise and counsel to help guide the company through this important process while our management team and employee base continue to deliver results and content our fans love.”

If WWE pursues a sale, there would not be a shortage of potential suitors, according to several longtime observers of the company.

“For someone like Vince, selling the brand to a major media corporation makes all the sense in the world,” Daniel Durbin, director of the Annenberg Institute of Sports, Media and Society at the University of Southern California, said in an email. “His family gets a huge payout. The brand gets the backing of a corporate giant. And the future of the brand is a bit more secure.”

“Fox would seem an ideal choice as they’ve built their brand on being the alternative — read, ‘we’re not ESPN’ — sports media giant,” Durbin added. “Disney might be less accepting of some of the traditional WWE storylines given their ‘family’ and/or ‘woke’ audience.  So, there are better and worse choices for McMahon. But the bottom line is that the benefits would seem to outweigh the costs of selling.”

WWE and Fox are already partners, as Fox’s broadcast network airs “SmackDown” on Friday nights. Connecticut is also familiar territory for Disney, which owns Bristol-based ESPN.

Spokespersons for Disney and Fox declined to comment on whether their companies had any interest in acquiring some or all of WWE. 

Comcast is another heavyweight that might have the resources to acquire WWE. Its holdings include NBCUniversal, whose NBC Sports division is headquartered in Stamford, and cable channel USA Network, which airs “Raw” on Monday nights. In 2021, WWE and NBCUniversal announced an agreement through which NBCUniversal’s Peacock streaming service become the U.S. home of WWE Network. 

A message left for a Comcast spokesman was not returned.

Many investors appear optimistic about the deals that could result from McMahon’s return. WWE shares closed Friday at about $89 — a gain of 24 percent since Jan. 5, the day that McMahon announced his comeback.

The stock jump and McMahon’s celebrity constitute “significant advantages of this recent development,” Josh Shuart, director of sports management at Sacred Heart University’s Jack Welch College of Business & Technology, said in an email.  

Shuart added that, “there is no hiding from the reasons for his departure, however, so that could be a cloud hovering over WWE in the short-term. On the surface, things had seemed to be running pretty smoothly in his absence, but given the significance of the upcoming talks, the organization appears to be leaning heavily on their most trusted leaders.”

McMahon’s absence had little to no effect on the popularity of WWE, which McMahon and others, including his wife and former CEO Linda McMahon, have built into a global business in the past 40 years. In the first nine months of 2022, the company’s revenues increased 23 percent year over year, to about $966 million. (Fourth-quarter 2022 and full-year results are scheduled to be released on Feb. 2.)    

WWE announced Monday that WrestleMania 39, which will be held April 1-2, at SoFi Stadium in Inglewood, Calif., broke the company’s “gate” record for WrestleMania ticket sales, despite not yet announcing any matches. The previous record was $17.3 million for WrestleMania 32, which was held in 2016 at AT&T Stadium in Arlington, Texas.

At the same time, WWE’s cornerstone capital project is advancing. The company plans to open within the next few months its new headquarters, at 707 Washington Blvd., in downtown Stamford. The new hub stands about two miles west of its current headquarters at 1241 E. Main St. 

Board and management shake-up

McMahon was able to engineer his comeback because he is WWE’s controlling shareholder, status that he maintained despite his retirement. His shares of the company’s stock represent approximately 81 percent of shareholders’ total voting power, according to a filing that he submitted to the Securities and Exchange Commission.   

Last week, he acted by “written consent” to remove, without cause, board members JoEllen Lyons Dillon, Jeffrey Speed and Alan Wexler. To fill those vacancies, he elected himself and former WWE co-presidents George Barrios and Michelle Wilson. 

Two other board members, Man Jit Singh and Ignace Lahoud, resigned. 

“While Messrs. Lahoud and Singh 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,” WWE said in an SEC filing. 

In a related move, McMahon said in his filing that he amended and restated company bylaws to “ensure that (WWE’s) corporate governance continues to properly enable and support stockholder rights.” 

McMahon solidified his return on Monday when the board elected him executive chairman. 

On Tuesday, his daughter, Stephanie McMahon, informed the company that she had resigned as co-CEO, a role that she had held since her father’s retirement, and stepped down as a board member.   

While co-CEO, she had also served as chairwoman. As a result of her father’s election as executive chairman, she had “ceased to be” chairwoman, according to WWE’s filing. 

“I cannot put into words how proud I am to have helped lead what I consider to be the greatest company in the world,” Stephanie McMahon said in a statement in a news release. “I am confident WWE is in the perfect position to continue to provide unparalleled creative content and drive maximum value for shareholders.”

Before being named co-CEO and chairwoman, Stephanie McMahon served for a few weeks in those roles in an interim capacity, after the company announced that Vince McMahon had voluntarily “stepped back” from his leadership roles until the completion of an investigation of his alleged misconduct by a special committee of the board’s independent directors.    

The investigation and Vince McMahon’s retirement were announced in the wake of articles published by The Wall Street Journal that revealed the allegations against him. The Journal reported that he agreed to pay four women a total of more than $12 million over the past 16 years to keep secret allegations of sexual misconduct and infidelity, citing unnamed people familiar with those agreements and related documents.

Stephanie McMahon had previously served as chief brand officer, a role that ended when she announced last May that she would take a leave of absence. She cited a desire to focus on her family. She is married to and has three daughters with Paul “Triple H” Levesque, who is WWE’s chief content officer, a board member and a 14-time world champion in the ring. 

Nick Khan, who had served as the other co-CEO and formerly as president and chief revenue officer, is now the sole CEO. He is also a board member. 

Some investors have objected to Vince McMahon’s actions. One shareholder registered his discontent by filing this week a class action complaint against Vince McMahon in Delaware’s Chancery Court. 

“This action arises out of McMahon’s serial abuses of power as chief executive officer of WWE, his subsequent banishment from the board room, to which he acquiesced by resigning his positions and his current effort to impose his personal will on WWE and its board of directors by purporting to adopt a package of invalid and inequitable bylaw amendments that would hamstring the board from making critical business decisions,” the lawsuit said. 

A message left for a WWE spokesperson inquiring about the company’s response to the complaint was not returned. 

‘Some transparency,’ but not ‘full transparency’

The board’s inquiry into the allegations against Vince McMahon has proved costly. 

In its third-quarter 2022 earnings report, WWE disclosed that it had incurred $19.4 million in the first nine months of 2022, including $17.7 million in the third quarter, in “certain costs” related to the investigation of McMahon and another recently departed executive, John Laurinaitis. The report did not provide a detailed summary of the expenditures. 

“The special committee investigation is now complete, and the special committee has been disbanded,” Frank Riddick III, WWE’s president and chief financial officer, said during an earnings call on Nov. 2. “Management is working with the board to implement the recommendations of the special committee related to the investigation.” 

“Going forward, we expect to incur additional costs related to the investigation,” Riddick added. “Mr. McMahon has agreed to pay the reasonable costs of the investigation not covered by insurance.”

Riddick did not specify the special committee’s recommendations, and the company has not publicly disclosed them. 

Among related disclosures, WWE confirmed last August the revision of financial statements to recognize $19.6 million in unrecorded payments personally made by McMahon in recent years. The company has said that $5 million of those payments were unrelated to the allegations against McMahon. He made $5 million in contributions in 2007 and 2009 to former President Donald Trump’s then-charity, The Wall Street Journal reported last August. 

“There’s some transparency here, but there’s not full transparency,” said Klein, of the University of Delaware. “There’s transparency in that you know a special committee was appointed, transparency in knowing the special committee is now dissolved, transparency in knowing recommendations were made and that the committee has committed to implementing those recommendations. But there’s no transparency with respect to what those recommendations are.”

pschott@stamforadvocate.com; twitter: @paulschott