Vince McMahon Is Back, But Is He a Heel for the WWE?

The wrestling giant’s owner reappoints himself to the company board in order to lead a possible sale, but there’s a risk that he becomes a drag on the brand for buyers

Former WWE CEO Vince McMahon’s stunning return to the company he founded has upended the wrestling giant’s fortunes. At McMahon’s prodding, the company is now leading “a review of its strategic alternatives” as WWE finds itself grappling with uncertainty.

The question facing WWE shareholders is not only whether McMahon and the company can execute a sale, or who the buyer might be, but also whether McMahon will emerge (to use some wrestling terms) as a “face,” generating outsize value for shareholders and retiring gracefully, or as a “heel,” throwing a wrench into what could otherwise be a smooth process by inserting himself back on top of his empire.

Using his controlling stake in the company, McMahon on Jan. 5 installed himself and two former executives on the WWE board of directors. The WWE subsequently told investors that it would look into its options, ahead of its media rights negotiations.

But whether McMahon will help or harm any potential dealmaking remains uncertain. While he is the founder, former chief executive and longtime creative force behind the company, there might yet be new details surrounding his resignation last year that could impact a potential deal.

According to copies of letters sent during the Christmas and New Year holidays between McMahon and the WWE board that were reviewed by THR, the WWE was wary of McMahon returning in any official capacity.

In a letter to McMahon dated Dec. 27, the WWE board suggested that while the investigation into his conduct at the company was over, there was new information that might still come out. The board wrote that his return to the company “while government investigations into your conduct by the U.S. Attorney’s

Office and SEC are still pending would not be prudent from a shareholder value perspective.”

McMahon retired amid the board investigation, which examined allegations that he had sexual relationships with employees at the company and subsequently paid women millions of dollars as part of their severance packages. If there is real risk of more unflattering or inappropriate information coming out, some potential buyers or media partners (Netflix and Comcast come to mind) may prefer not to engage if he’s involved.

McMahon, for his part, told the board in a

New Year’s Eve letter that “the special committee of the Board has concluded its investigation and presumably all of its material findings have been publicly disclosed by the Company.”

McMahon’s outsize personality, his role as founder and the tight relationship between the WWE brand and his own brand could, however, make for a nice fit with Endeavor, which led an investment and subsequent acquisition of UFC, which is closely associated with Dana White. And while video of White and his wife slapping each other in a Mexican resort has gone viral (with no response from Endeavor as of press time), there is no indication of obvious disagreement between Endeavor’s Ari Emanuel and the UFC chief, who continues to run the mixed martial arts business.

Indeed, a source speculated that Emanuel is one of the few suitors who would be willing to deal with McMahon, warts and all. And it is likely that members of his family — Vince’s daughter, Stephanie McMahon, is serving as co-CEO, and WWE’s head of creative is Paul Levesque, McMahon’s son-in-law — will need to stick around after any potential sale, with the WWE so reliant on its creative expertise.