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WWE’s McMahon served with subpoena by federal agents

Published: August 2, 2023, 1:07pm

Federal law enforcement agents executed a search warrant and served a federal grand jury subpoena to WWE Executive Chairman Vince McMahon last month, according to a regulatory filing. McMahon is also taking medical leave from the sports entertainment company following recent spinal surgery.

WWE said in the filing with the Securities and Exchange Commission that while government investigations into McMahon remain ongoing, no charges have been brought in them.

The company said it has received voluntary and compulsory legal demands for documents, including from federal law enforcement and regulatory agencies, concerning the investigation and related subject matters.

“WWE has cooperated throughout and fully understands and respects the government’s need for a complete process,” the company said in a statement.

The Wall Street Journal had reported last year that the WWE was investigating an alleged $3 million payment from McMahon to a departing female employee following a consensual affair. WWE’s investigation into the misconduct allegations was completed last year.

“In 2022, WWE formed a special committee to review allegations of misconduct against me,” McMahon said in a statement. “That review was concluded in November 2022 following an extensive investigation. Throughout this experience, I have always denied any intentional wrongdoing and continue to do so. I am confident that the government’s investigation will be resolved without any findings of wrongdoing.”

The announcement of McMahon’s surgery was made by CEO Nick Khan during the company’s second-quarter earnings call on Wednesday.

Khan said McMahon had major spinal surgery nearly two weeks ago and is taking the leave in order to focus on his recovery. He did not specify the duration of the leave.

For the quarter, World Wrestling Entertainment Inc. earned $52 million, or 67 cents per share. Stripping out one-time costs, earnings were 91 cents per share. That was 2 cents shy of what analysts polled by Zacks Investment Research expected.

Revenue totaled $410.3 million, a quarterly record. That topped Wall Street’s estimate of $398.5 million. Revenue from live events jumped 51% for the period ended June 30.

WWE, which announced with Endeavor in April that it was combining with UFC, said that it saw an increase in ticket sales for live events, both domestically and overseas. It also reported an uptick in advertising and sponsorship revenue.

WWE’s combination with UFC will result in a new publicly listed company called TKO Group Holdings. The deal is still expected to close in the second half of the year.

While the deal with Endeavor continues to move forward as anticipated, WWE is continue to focus on its domestic media rights for its weekly television programs. WWE currently has “Smackdown” airing on Fox and “Raw” and “NXT” airing on USA Network. Aside from Fox and NBC Universal, which owns USA Network, there have been several media reports that other well-known companies are possibly interested in the media rights, including Disney and Amazon.

“As expected, there was significant interest from the marketplace and these conversations are progressing well,” Khan said during the call.

Viewership for “Smackdown” rose 26% in the 18-49 demographic during the quarter, while “Raw” viewership climbed 19%. “NXT,” which has increasingly started to incorporate some of its top name stars like Seth Rollins and Rhea Ripley onto the show, surged 49% in the 18-49 demographic.