WWE Board of Directors Investigating CEO Vince McMahon’s Secret M Hush Pact, Sources Say

WWE Board of Directors Investigating CEO Vince McMahon’s Secret $3M Hush Pact, Sources Say

The board of directors of World Wrestling Entertainment Inc. WWE 4.95% is investigating a secret $3 million agreement that longtime board chairman Vince McMahon agreed to pay to a departing employee with whom he allegedly had an affair, according to documents and Individuals familiar with the board investigation.

The January 2022 separation agreement bars the now-former employee, who was hired as a paralegal in 2019, from discussing her relationship with or disparaging Mr. McMahon, the people said.

The board’s investigation, which began in April, has uncovered other, older non-disclosure agreements covering allegations by former female WWE employees of wrongdoing by Mr. McMahon and one of his top executives, John Laurinaitis, WWE’s director of talent relations. include, the people said. The Journal could not determine how many previous agreements were examined.

The board’s outside counsel was still gathering information about the other NDAs this week but has determined the payments totaled millions of dollars, the people said.

The eight independent directors on the board have hired the New York-based law firm Simpson Thacher & Bartlett LLP to conduct the investigation, one of the people said. The board’s preliminary findings are that Mr. McMahon used personal funds to pay the former female employees who signed the agreements, including those involving allegations against Mr. Laurinaitis, that person said.

More broadly, the law firm also evaluates WWE’s compliance and human resources programs and corporate culture, the person said.

A WWE spokesman said the company, which operates the world’s most famous wrestling business, is fully cooperating with the board investigation and the relationship with the ex-lawyer was amicable. He added that the company takes the allegations seriously and is dealing with them appropriately.

Messrs. McMahon and Laurinaitis did not directly respond to requests for comment.

WWE Board of Directors Investigating CEO Vince McMahons Secret 3M

Stephanie McMahon, her husband Paul Levesque, Dwayne “The Rock” Johnson and Vince McMahon at a WrestleMania event in 2013. Ms. McMahon and Mr. Levesque are members of the WWE Board of Directors, which is chaired by Mr. McMahon.

Photo: Taylor Hill/Getty Images

In a letter to The Wall Street Journal, Mr. McMahon’s attorney, Jerry McDevitt, said that the former paralegal had not made any claims of harassment against Mr. McMahon and that “WWE had not paid any monies” to the ex-employee. on their departure.”

WWE reported record revenue of $1.1 billion and net income of $180.4 million last year, with the majority of its revenue coming from content rights sales, including a five-year exclusive agreement with the Peacock streaming platform by NBCUniversal in 2021, valued at $1 billion.

WWE also has TV licensing deals with Fox Corp. and NBCUniversal, and recently secured its first standalone international distribution deal with Disney Plus Hotstar in Indonesia. Fox Corp. and News Corp, the Wall Street Journal’s parent company, share common ownership.

WWE also strives to close more international deals and negotiate closer to home. The company’s contract with Hulu, which streams WWE’s Monday Night Raw, expires later this year. Walt Disney Co. holds a majority stake in the streaming platform.

The 12-member board includes several WWE executives and members of the McMahon family, including Mr. McMahon, who is chairman; his daughter Stephanie McMahon; her husband Paul Levesque, better known as wrestler Triple H; and WWE President Nick Khan. Man Jit Singh, a former Sony Pictures Home Entertainment executive, is the lead independent director and is leading the investigation, according to people familiar with him.

Ms. McMahon stepped down from her role as WWE’s Chief Brand Officer last month, writing in a LinkedIn post that she “would take this time to focus on my family,” but that she plans to return.

Although his stock is publicly traded, Mr. McMahon effectively controls the company, WWE securities filings show, as he owns a majority of the company’s Class B stock, giving him a majority of shareholder voting rights. The Class B shares carry 10 times the voting rights of Class A shares available to regular investors and are owned solely by Mr. McMahon, his family and trusts benefiting individual family members, the filings show.

Board members learned of the $3 million agreement in a series of anonymous emails they received from someone who said the former WWE attorney was a friend.

The first email, sent to board members on March 30, claimed Mr McMahon, 76, initially hired the woman on a salary of $100,000 but increased it to $200,000 after he had started a sexual relationship with her. The email to the board also claimed Mr McMahon gave her to Mr Laurinaitis “like a toy”. The board is investigating the allegations in the email, people familiar with the investigation said.

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Vince McMahon, center, with Paul Levesque, better known as Triple H, and Shawn Michaels at a 2009 WWE Monday Night Raw show in Las Vegas.

Photo: Ethan Miller/Getty Images

“My girlfriend was so scared that she quit after Vince McMahon and attorney Jerry paid her millions of dollars to shut up,” read the first email to the board, referring to Mr. McMahon’s longtime Attorney, Mr. McDevitt, who negotiated the deal. According to people familiar with the board request.

Mr. McDevitt, a Pittsburgh-based partner at the law firm of K&L Gates, has represented WWE and Mr. McMahon for decades. He defended her against federal charges of distributing and conspiring to distribute steroids to WWE wrestlers in the 1990s. A jury acquitted Mr. McMahon and WWE in 1994. WWE is partnering with production company Blumhouse to bring The United States Vs. Vince McMahon, a television series about the steroid case.

Directors received a copy of the $3 million agreement from one of Mr. McMahon’s attorneys on June 12, a person familiar with the investigation said. The non-disclosure agreement included an upfront payment of $1 million to the former employee, with the remaining $2 million spread over five years, people familiar with the deal said.

The former employee, 41, had fallen on hard times before joining the company and spoke of needing extra money, according to people who spoke to her while she worked at WWE. She said she went to law school but never passed the bar exam, and told colleagues her career was sidetracked while caring for an ailing parent, they said.

The former employee left the legal department in 2021 to become Mr Laurinaitis’ assistant, according to people familiar with the investigation.

Early in the investigation, attorneys for WWE independent directors, Mr. McMahon and Mr. Laurinaitis, called for complaints or allegations to be made about any of the executives’ relationships with employees of the company, one of the people said.

In recent days, investigators learned of the other non-disclosure agreements involving allegations against Messrs McMahon and Laurinaitis, the person said.

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In 1994, a jury acquitted WWE and Vince McMahon, shown with his wife Linda McMahon, of federal charges of distributing steroids to WWE wrestlers and conspiring.

Photo: Mark Lennihan/Associated Press

Mr. Laurinaitis, a former wrestler whose ring name was Johnny Ace, has been with WWE since 2001 in various roles, most recently as the company’s top talent recruiter. His biography on the WWE website describes him as “one of Mr. McMahon’s most trusted associates.”

Mr. McMahon bought Capitol Wrestling Co., the holding company then known as the World Wrestling Federation, from his father in 1982, company records show. In partnership with his wife, Linda McMahon, who served as head of the Small Business Administration in the Trump administration, Mr. McMahon built the company into a behemoth of the 1980s professional wrestling boom, transforming artists like Hulk Hogan, “Rowdy” . Roddy Piper and Jesse Ventura to household names.

Decades later, WWE continues to portray Mr. McMahon as critical to the company’s success. Mr. McMahon “leads the creative team that develops the storylines and characters for our programs (including our television, WWE Network and other programs),” Das reported Company in a regulatory filing that lists the potential loss of the CEO as a risk factor for investors.

write to Joe Palazzolo at [email protected] and Ted Mann at [email protected]

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