Vince McMahon, the longtime head of wrestling giant WWE, resigned Friday after a former staffer filed a lawsuit accusing him of heinous acts, including sexual assault and trafficking.
The staffer, Janel Grant, alleges that McMahon lured her with promises of a career at World Wrestling Entertainment in exchange for sex, beginning in 2019. Her lawsuit details graphic instances of physical and emotional abuse, and says McMahon trafficked her to other men within the company.
The horrors laid out in Grant's lawsuit are too disturbing to fully recount here. (The Wall Street Journal, which broke the news of the lawsuit last week, posted the publicly available document here.)
McMahon denied the allegations. In a statement Friday, McMahon, who is 78, said that he resigned as executive chairman of TKO Group, WWE's parent company, "out of respect for the WWE Universe."
So, here's the thing: TKO, the public company created by the merger last year of WWE and UFC, already knew McMahon was a massive liability. It said so itself, in black and white, in its regulatory filings.
And yet, McMahon was still allowed to return to the company last year, having weathered other allegations of misconduct.
Publicly traded companies are required to tell shareholders about any risks that pose existential threats to their stakes in the company. These risks typically include legal actions, shifting consumer demand and other run-of-the-mill corporate concerns, my colleagues Kyle Feldscher and David Goldman write.
It's frankly extraordinary to include the company's chairman as a risk, but that's exactly what TKO did.
In its filing with the US Securities and Exchange Commission, TKO said that McMahon "could have adverse financial and operational impacts on our business."
Those concerns were hardly a secret.
Although the company hasn't gone into much detail about the results of its own investigation into the earlier allegations, the Wall Street Journal has reported that McMahon funneled millions of dollars from the company to make hush-money payments to cover up affairs with multiple former employees. He also reportedly spent millions of company dollars to donate to the Donald J. Trump Foundation in 2007 and 2009.
McMahon, a notorious micromanager known for putting his own spin on virtually every aspect of his company, announced his retirement during that investigation, in July of 2022. But his retirement lasted just a few months, and he was back the following year to help oversee the merger with UFC.
TKO did not respond to CNN's questions about why it allowed McMahon to return to the company.
What's next?
This time, it seems, a McMahon comeback looks a lot less likely. Grant is just one of several former employees McMahon is accused of paying hush money to while he was running the company. He remains under federal investigation.
TKO, which inked a $5 billion deal with Netflix just days before Grant sued McMahon, just wants to move on.
In an email to staff and in a statement to the media, TKO addressed only McMahon's job status with the company but did not discuss the specifics of the allegations. WWE President Nick Khan said simply that McMahon tendered his resignation from his executive chairmanship and board member positions.
Comments
Post a Comment