There has been additional reporting regarding the unrecorded expenses related to Vince McMahon that WWE discovered and has led to adjustments to past financial reporting.
On Monday morning, WWE issued an 8-K filing that revealed $14.6 million in unrecorded payments related to Vince McMahon, which the company determined should have been reported.
McMahon has been the focus of an internal investigation by WWE’s board of directors following the revelation of multiple non-disclosure agreements signed by females formerly associated with the company. The reporting on the NDAs by the Wall Street Journal uncovered over $12 million in payments issued over the years related to allegations of sexual misconduct by McMahon including one accusation of McMahon coercing a former female talent into performing oral sex with the female later demoted and released by the company.
The first reported NDA last month involved a former paralegal with the company, who entered into a settlement with McMahon for $3 million earlier this year. McMahon’s attorney Jerry McDevitt stated at the time that McMahon used personal funds for the settlement. The existence of the settlement was revealed by someone close to the ex-paralegal, who contacted members of the WWE’s board of directors in late March of this year by email.
After the 8-K filing was issued, the wording left it vague regarding whether company money was part of the outstanding sum, or whether it was McMahon’s personal funds.
Tony Maglio of Indie Wire is reporting that the money for the payments was from McMahon’s personal funds. Maglio states that WWE will report the amount as a one-time expense, similar to a severance payment, which will not affect reported profitability. Maglio added that there was a “qualitative benefit” to the payments because even though McMahon used his own money, they benefited the company by withholding the information the women had and could negatively impact WWE’s business dealings.
With the uncovering of the $14.6 million expenses, WWE is revising its financial statements going back to 2019, although it is not expected to have a notable impact given the disparity in the overall financial picture.
WWE included a stern message in its filing regarding the weaknesses in the financial reporting:
In light of the Unrecorded Expenses and related facts, the Company expects to conclude that its internal control over financial reporting was not effective as a result of one or more material weaknesses. The Company continues to evaluate the appropriate accounting treatment for the Unrecorded Expenses, as well as its internal control over financial reporting, and its ultimate conclusions on these topics may differ from what the Company currently anticipates.
The filing also noted that WWE has received and may continue to receive investigative, regulatory, and enforcement inquiries in regards to the payments that were discovered.
Vince McMahon resigned from his position with the company on Friday and is being replaced by Stephanie McMahon-Levesque and Nick Khan as co-CEOs, while Paul Levesque will assume all creative responsibilities previously held by McMahon.
As of noon Eastern on Monday, WWE stock is trading at $72, which is up nearly nine percent since trading began today.
John Pollock will be joined by Dave Meltzer of the Wrestling Observer Newsletter at 1 p.m. ET to discuss this story on the POST Wrestling YouTube channel.
