WWE officials offer update on sale, McMahon’s future

STAMFORD — WWE executives said Thursday that they were moving ahead with a review of “strategic alternatives” that could include a sale of the company — a process initiated by Vince McMahon, who last month dramatically returned to the sports-entertainment company as executive chairman after a short-lived retirement.

Launching the review was one of the main motivators for the comeback of McMahon, who had retired last July amid a company investigation of his alleged misconduct. He has also argued that his leadership was essential as WWE prepares for negotiations for media rights that will encompass its flagship shows, “Raw” and “SmackDown.”

“Though still early in the strategic-alternatives review, we intend to consider a broad range of options via a thorough process,” WWE Chief Executive Officer Nick Khan said on a call Thursday with investment analysts to discuss the company’s fourthquarter and full-year 2022 financial results. “There can be no assurance that the review being undertaken will result in any transaction. And we do not intend to make future announcements regarding the review until such a time that is appropriate.”

To enable his return, McMahon leveraged his status as the company’s controlling shareholder to remove three board members and bring in the company’s former co-presidents to replace two of them. Two other board members resigned because they opposed McMahon’s comeback.

A few days after McMahon announced his return, his daughter, Stephanie McMahon resigned as coCEO and from the company’s board of directors. She had served as co-CEO and chairwoman since her father’s retirement, but she said she was confident in the company’s future.

“Having Vince around has been great,” Chief Content Officer Paul “Triple H” Levesque, a 14-time world champion in the ring and the husband of Stephanie McMahon, said on the call. “We’re standing on the shoulders of giants. So having him back and involved, even at just the board level, comes with his incredible insight.”

Impact of investigation

McMahon announced his retirement last July 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.

An investigation by a special committee of WWE’s board of McMahon’s alleged misconduct has proved costly. WWE disclosed in its earnings report Thursday that it incurred $21.7 million in expenses in 2022, including $2.3 million in the fourth quarter, related to the probe of McMahon and another recently departed executive, John Laurinaitis. The report did not provide a detailed summary of the expenditures.

The investigation’s costs contributed to a year-overyear decline in WWE’s quarterly profit from about $61 million to around $39 million, although the decrease mainly resulted from higher operating expenses.

In November, the company announced that the investigation had been completed and that the committee had been disbanded. It also said that the company’s management was working with the board to implement the committee’s recommendations related to the investigation. The company has not publicly disclosed the recommendations.

Rising revenues

McMahon’s brief retirement 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.

The company’s fourthquarter revenues totaled about $325 million, a 5 percent year over year increase. The uptick was mainly due to an increase in network revenues related to the timing of “premium” live events, as well as “higher monetization of third-party original programming.”

Annual revenues totaled about $1.3 billion, an 18 percent increase from 2021. The company recorded a profit of nearly $196 million last year, compared with around $177 million in 2021.

The results did not affect WWE’s stock price because they were announced around the time that stock markets closed for the day. WWE shares closed Thursday at about $85 — down 1 percent from Wednesday, but up 18 percent since Jan. 5, the day that McMahon announced his comeback.

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