WWE has uncovered more previously undisclosed payments made by the now former CEO and Chairman, Vince McMahon.
In an SEC (Securities and Exchange Commission) that was filed Tuesday, WWE revealed that two additional payments that Vince McMahon agreed to make in 2007 and 2009. It was said the two new discovered payments add up to $5 million, which now brings the total amount of uncovered settlements at $19.6 million.
WWE said they have determined the payments should have been recorded in the company’s financial statements. With the two additional payments uncovered, WWE notified the SEC on Tuesday that it will be late in filing the company’s second quarter financial report for 2022. It was also said by WWE, that they will be revising their 2019, 2020, and 2021 financial reports and report for the first quarter of 2022 to account for the payments.
Furthermore, WWE state that all of the payments “were or will be paid by [Vince] McMahon personally.”
Per the SEC filing, the company anticipates that it will file its second quarter financial report “within the five day extension period provided under Rule 12b-25 of the Securities Exchange Act of 1934, as amended, but there can be no assurance that it will be able to do so.”
The full SEC filing is below:
On June 17, 2022, World Wrestling Entertainment, Inc. (the “Company”) and its Board of Directors announced that a special committee of independent members of the Board of Directors (the “Special Committee”) was conducting an investigation into alleged misconduct by the Company’s former Chairman and Chief Executive Officer, Vincent K. McMahon, who resigned from all positions held with the Company on July 22, 2022 but remains a stockholder with a controlling interest, and another executive, who is also no longer with the Company [John Laurinaitis]. On July 25, 2022, the Company announced that it has made a preliminary determination that certain payments that Vince McMahon agreed to make during the period from 2006 through 2022 (including amounts paid and payable in the future totaling $14.6 million) were not appropriately recorded as expenses in the Company’s consolidated financial statements. Since that time, the Company has determined that two additional payments totaling $5.0 million, unrelated to the allegations that led to the Special Committee investigation, that Mr. McMahon made in 2007 and 2009 should have been recorded in the Company’s consolidated financial statements. Together, these unrecorded expenses total $19.6 million (the “Unrecorded Expenses”). The Company has evaluated the Unrecorded Expenses and has determined that such amounts should have been recorded as expenses in each of the periods in which they became probable and estimable. All payments underlying the Unrecorded Expenses were or will be paid by Mr. McMahon personally. The Special Committee investigation remains ongoing.
Although the Company continues to evaluate the impact of the Unrecorded Expenses on previously issued financial statements, the Company has preliminarily determined that the amount of Unrecorded Expenses was not material in any individual period in which the Unrecorded Expenses arose, but that the aggregate amount of Unrecorded Expenses would be material if recorded entirely in the second quarter of 2022. Accordingly, the Company currently anticipates that it will revise its previously issued financial statements to record the Unrecorded Expenses in the applicable periods for the years ended December 31, 2019, 2020 and 2021, as well as the first quarter of 2022, when it issues its financial statements for the second quarter of 2022. In light of the Unrecorded Expenses and related facts thereto, the Company also expects to conclude that its disclosure controls and procedures and internal control over financial reporting were 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 disclosure controls and procedures and internal control over financial reporting, and its ultimate conclusions on these topics may differ from what the Company currently anticipates.
The Company has also received, and may receive in the future, regulatory, investigative and enforcement inquiries, subpoenas or demands arising from, related to, or in connection with these matters.
As a result of the circumstances described above, the Company is unable to file, without unreasonable effort and expense, its Form 10-Q for the quarterly period ended June 30, 2022 (the “Report”). The Company currently anticipates that it will file the Report within the five day extension period provided under Rule 12b-25 of the Securities Exchange Act of 1934, as amended, but there can be no assurance that it will be able to do so. The Company provided preliminary estimates of certain financial results that it expects to report for the quarter ended June 30, 2022 in a Current Report on Form 8-K filed on July 25, 2022 (SEC File No. 001-16131).