TKO has given a clear statement regarding the departure of Vince McMahon who despite his exit, is said to have a significant amount of voting power.
McMahon stepped down from WWE one month ago due to the shocking allegations made against him in Janel Grant's lawsuit. McMahon has claimed that the litigation is rife with fabrications and has claimed he is completely innocent. Former WWE executive John Laurinaitis, who is named in the suit, has claimed he is a victim, not a predator, in this situation.
TKO Group Holdings Comments
In the 2023 Earnings filing, TKO Group Holdings had the following to say about McMahon in their "Legal Proceedings" division of the filing:
Vincent K. McMahon, who served as Executive Chair of the Company’s Board of Directors until January 26, 2024, controls a significant portion of the voting power of the issued and outstanding shares of the Company’s common stock.
Mr. McMahon has agreed to make future payments to certain counterparties personally. In accordance with the SEC’s Staff Accounting Bulletin Topic 5T, Miscellaneous Accounting, Accounting for Expenses or Liabilities Paid by Principal Stockholders (“Topic 5T”), the Company concluded that these amounts should be recognized by the Company as expenses in the period in which they become probable and estimable.
In connection with the acquisition of WWE, the Company assumed $3.5 million of liabilities related to future payments owed by Mr. McMahon to certain counterparties, of which $2.0 million was paid directly by Mr. McMahon during the period of September 12, 2023 through December 31, 2023.
"During the period of September 12, 2023 through December 31, 2023, the Company recorded $3.5 million of expenses associated with payments made directly by Mr. McMahon to certain counterparties. These costs are included within selling, general and administrative expenses in our consolidated statements of operations.
Additionally, during the period of September 12, 2023 through December 31, 2023, the Company recorded $3.5 million of costs associated with payments made directly by Mr. McMahon related to WWE’s global headquarters lease. These costs are included within finance lease right-of-use assets, net in our consolidated balance sheets. These payments are considered non-cash capital contributions and are included as a component of principal stockholder contributions in our consolidated statements of stockholders’/members’ equity.
"As of December 31, 2023, total liabilities of $1.5 million are included within accrued expenses in our consolidated balance sheets related to future payments owed by Mr. McMahon to certain counterparties.
What's Next for TKO?
With McMahon gone, Ari Emanuel has replaced the 78-year-old as the Executive Chair of TKO. Emanuel already serves as the company's CEO. Steven R. Koonin has been appointed the Lead Independent Director of the McMahon allegations and how it relates to TKO. Both appointments came into effect as of February 22.
