When Vince McMahon stepped into the New York Stock Exchange on Jan. 23, he was on hand to celebrate what was supposed to be a triumph for TKO Group Holdings, the company for which he was executive chairman, and the owner of the WWE, the wrestling promotion that McMahon turned into a multibillion-dollar business.
Earlier that morning the WWE announced a blockbuster 10-year, $5 billion deal with Netflix to stream Raw in the U.S. and almost all of its other live programming in other markets around the world. And Dwayne “The Rock” Johnson, one of the WWE’s biggest stars — turned global movie star — was set to ring the opening bell, in connection with an agreement to join TKO’s board of directors.
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Speaking to attendees in the NYSE’s ornate 6th floor board room that morning, Johnson accepted a gold TKO championship belt from McMahon and TKO CEO Ari Emanuel. “Life can be so incredible and so unpredictable,” Johnson said, noting his familial ties to the company. “I get a chance to sit at the table that my grandfather and my dad helped build … Ultimately, that thing that you’re building, ends up building you.” As Johnson rang the NYSE bell, Emanuel stood directly to his left, while McMahon was directly to his right. The past of the WWE on one side, and the future on the other.
The week was supposed to be capped off Jan. 27 at Tropicana Field in Tampa, Florida, where the company was to host one of its signature annual events, the Royal Rumble. But a bombshell lawsuit, followed by a fateful decision from a major sponsor, changed the course of the firm. By the time the Royal Rumble began, McMahon was gone from TKO, seemingly for good, as it sought to distance itself from McMahon’s alleged past transgressions, as it endeavored to make employees feel safe, and as it responded to an impact to the bottom line.
Those concerns culminated the evening of Jan. 26, when Emanuel and TKO president and COO Mark Shapiro called McMahon and told him it would be in the best interest of the company for him to resign. He agreed, and submitted his resignation. “He will no longer have a role with TKO Group Holdings or WWE,” WWE president Nick Khan wrote in a memo to staff at 8:30 p.m. that evening, announcing McMahon’s resignation to employees.
The turning point was a day earlier, when the lawsuit from a former WWE employee, Janel Grant, accused McMahon of sex trafficking and battery. While the broad claims of McMahon’s hush money payments and accusations of sexual misconduct were previously known, the specific, graphic details in Grant’s lawsuit were new. McMahon, for his part, said in response, “I stand by my prior statement that Ms. Grant’s lawsuit is replete with lies, obscene made-up instances that never occurred, and is a vindictive distortion of the truth. I intend to vigorously defend myself against these baseless accusations, and look forward to clearing my name.”
The business ramifications of the lawsuit became clear quickly, sources tell The Hollywood Reporter. Snack brand Slim Jim, which last year signed on for the WWE’s biggest sponsorship deal to date, paused its promotional activities in the wake of the suit. Slim Jim was slated to be a major sponsor of the Royal Rumble. “Slim Jim values integrity and respect in all of our partnerships,” the company said in a statement, adding that “This decision reflects our commitment to our brand values and responsibility to our community.”
The move was a tipping point. Endeavor took the UFC, which had long struggled in the sponsorship side of the business, and made it palatable to major brands like Bud Light, which inked a $100 million-plus deal with the company last year. The company has similar hopes for the WWE. In the wake of the lawsuit, McMahon’s presence posed a challenge to that strategy, as the Slim Jim decision demonstrated. The snack company reversed its decision after McMahon resigned, returning in time for the Royal Rumble.
The long-term TV deals with Netflix, NBCUniversal and The CW were not considered to be at risk, but with NBCUniversal’s rights for the WWE’s premium events coming up in 2026, and with UFC rights talks upcoming in 2025, keeping McMahon as executive chairman of TKO while the lawsuit unfolded could have been problematic. Sources say that TKO executives reached out to all of the company’s rights partners after the news broke, well aware of the need to keep them in the loop on what was happening.
The blockbuster Netflix deal also has an opt-out clause in five years, giving Netflix an exit should McMahon continue to weigh on the company. The timing of the Netflix deal, one source said, was “fortuitous,” speculating that had the suit been filed earlier, the deal could have been put in jeopardy. Netflix chief content officer Bela Bajaria, asked about McMahon and his relationship with the WWE during a Jan. 31 press conference, told reporters: “He’s gone. So he’s not there. He’s gone,” suggesting that the streaming giant was betting that its WWE deal would be a post-McMahon one.
According to multiple sources, the lawsuit and the graphic details included in it took senior leadership at TKO and company talent by surprise. Acknowledging that the lawsuit hung like a “dark cloud” over the weekend, Cody Rhodes, the WWE superstar who won the Royal Rumble match, added in a Jan. 27 press event that “as far as TKO, [WWE president] Nick Khan and the board clearly took it very seriously, acted immediately.”
While the lawsuit shook WWE, another source argues that McMahon’s past had finally caught up to him. After all, the wrestling executive had already exited the WWE once before, retiring in July 2022, after the initial allegations and board investigation came out. However, he remained the WWE’s controlling shareholder, and just a few months later used his ownership of the company to appoint himself and two allies to the board, and initiate a sales process.
And he did so even as the WWE board expressed concern in a letter to McMahon in December 2022 about what other details could come out in relation to the settlements and probes, citing “government investigations into your conduct by the U.S. Attorney’s Office and SEC.” McMahon ultimately returned to the company on Jan. 5, 2023, causing the WWE’s stock price to skyrocket, kicking off the sales process that eventually led to the deal with Endeavor.
Sources say that even while McMahon was no longer an active member of the executive team, he would weigh in on creative decisions, reaching out to employees by email and text with suggestions. While McMahon used his power as controlling shareholder to reinstall himself, the new TKO is firmly controlled by Endeavor, making any sort of official comeback unlikely. Just a couple of months after the TKO deal closed last September, McMahon filed with the SEC to sell some $700 million worth of stock in the company, a sizable chunk of his holdings. That being said, he still owns a big portion of the firm, representing about 10 percent of shares outstanding. It may not be enough to reappoint himself to the board, but enough to carry influence.
His long-term intentions with his economic interests in TKO must be a consideration as a shareholder,” wrote MoffettNathanson analyst Robert Fishman Jan. 29, adding that if he had to sell more stock to cover legal liabilities it “could put downward pressure on TKO stock.”
The legal exposure for the company may still exist, but having him gone can at least let the employees, executives and talent figure out its future without him being a drag on opportunities.
“Look, we just had an amazing week,” said WWE head of creative Paul Levesque, better known by his ring name, “Triple H,” speaking at the post-Royal Rumble press conference, when pressed on what he knew about McMahon’s conduct. “A 10 year, $5 billion Netflix deal. Rock joining our board. We just sold out the Royal Rumble, put 48,000 people in Tropicana Field. I choose to focus on the positive, and yes, there’s a negative, but I want to focus on that and just keep it to that.”
In his statement Jan. 26, McMahon said he made the decision to resign “out of respect for the WWE Universe, the extraordinary TKO business and its board members and shareholders, partners and constituents, and all of the employees and Superstars who helped make WWE into the global leader it is today.”
But, on Jan. 23, after Johnson rang the NYSE opening bell, Levesque and Khan gathered employees of the WWE in the atrium of their new Stamford, Connecticut, headquarters (it’s hard to miss with its 76-foot-wide American flag on the roof, or the 7-foot-tall WWE championship belt outside the front door). In a surprise appearance, Johnson joined them onstage to rally the troops. McMahon did not.
A version of this story appeared in the Feb. 7 issue of The Hollywood Reporter magazine. Click here to subscribe.
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