Vince McMahon Sells Portion Of TKO Stock, Investigation May Have “Adverse Impact” According To Report
According to a press release by TKO Group Holdings, Vince McMahon is looking to sell 8.4 Million shares of Class A stock in the company, which holds a market value of USD$700 Million. This is 30% of the 28 Million shares McMahon holds in the company. Class A stock warrants significant voting power compared to Class B stock and lower.
Part of the press release relevant to the topic can be read below:
NEW YORK–(BUSINESS WIRE)– TKO Group Holdings, Inc. (NYSE: TKO) (“TKO” or the “Company”), a premium sports and entertainment company, today announced that one of its stockholders, Mr. Vincent K. McMahon (the “Selling Stockholder”), intends to offer for sale in an underwritten secondary offering 8,400,000 shares of the Company’s Class A common stock, par value $0.00001 (the “Class A Common Stock”), pursuant to the Company’s shelf registration statement filed with the Securities and Exchange Commission (the “SEC”), of which the Company intends to repurchase from the underwriter approximately $100.0 million of shares of our Class A Common Stock.
The Selling Stockholder will receive all of the net proceeds from this offering. No shares are being sold by the Company. In connection with the offering, Ariel Emanuel, the Company’s Chief Executive Officer and director, Mark Shapiro, the Company’s President, Chief Operating Officer and director, and certain other of the Company’s directors have indicated an interest in purchasing up to $1.0 million, $1.0 million and $850.0 thousand, respectively, of the Company’s Class A Common Stock offered in the offering at the public offering price
TKO Group Holdings Press Release, via Business Wire 10/11/23
This announcement comes soon after an SEC Filing from TKO Group Holdings, detailing the hush money allegations and subsequent investigation of McMahon, finalising the report with the prediction that any further allegations that may be made while McMahon is an active member of the board could have an adverse impact on the company:
The special committee of independent members of WWE’s Board of Directors’ investigation into allegations of misconduct by Mr. McMahon, and any further allegations and investigations may have an adverse financial and operational impact on our business performance. On June 17, 2022, WWE and its then Board of Directors announced that a special committee of independent members of its Board of Directors (the “Special Committee”) was formed to investigate alleged misconduct by WWE’s then-Chief Executive Officer, Vincent K. McMahon. On July 22, 2022, Mr. McMahon resigned from all positions held with WWE but remained a stockholder with a controlling interest. On January 9, 2023, WWE’s Board of Directors elected Mr. McMahon as Executive Chairman thereto, and Mr. McMahon subsequently returned to WWE.
TKO Group Holdings SEC Filing 3/11/23
On July 25, 2022, based on the findings of the Special Committee investigation, WWE announced that it had determined that certain payments that Mr. 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 WWE’s consolidated financial statements. WWE subsequently identified two additional payments totaling $5.0 million unrelated to the alleged misconduct by Mr. McMahon that led to the Special Committee investigation, that Mr. McMahon made in 2007 and 2009 that were not appropriately recorded as expenses in the WWE’s consolidated financial statements. Together, these unrecorded expenses total $19.6 million (the “Unrecorded Expenses”). All payments underlying the Unrecorded Expenses have been or will be paid by Mr. McMahon personally. WWE determined that, while the amount of Unrecorded Expenses was not material in any individual period in which the Unrecorded Expenses arose, the aggregate amount of Unrecorded Expenses would be material if recorded entirely when identified in the second quarter of 2022.
TKO Group Holdings SEC Filing 3/11/23
Accordingly, WWE revised 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 2021 and 2022. In light of the Unrecorded Expenses and related facts, WWE concluded that its internal control over financial reporting was not effective as a result of one or more material weaknesses. Although the Special Committee investigation was completed, WWE also received, and the Company may receive in the future, regulatory, investigative and enforcement inquiries, subpoenas, demands and/or other claims and complaints arising from, related to, or in connection with these matters.
TKO Group Holdings SEC Filing 3/11/23
Subsequent to WWE’s restatement for the Unrecorded Expenses, WWE was informed of certain additional claims, which have been settled by Mr. McMahon. When the amounts became probable and estimable in the fourth quarter of 2022, including consideration of events that occurred subsequent to December 31, 2022, WWE recorded an additional $7.4 million of expenses. Mr. McMahon has made or will make all related payments personally. Professional costs resulting from WWE’s Special Committee’s investigation have been significant and are expected to continue to be significant as the Company continues to incur costs arising from ongoing and/or potentially new regulatory, investigative and enforcement inquiries, subpoenas and demands and claims. We expect Mr. McMahon to reimburse the Company for reasonable expenses incurred in connection with the investigation.
TKO Group Holdings SEC Filing 3/11/23
Although we are not aware that significant business has been lost to date, it is possible that a change in the perceptions of our business partners could occur as a result of the investigation or other matters described above. In addition, as a result of the investigation or other matters described above, certain other operational changes, including without limitation other personnel changes, have occurred and may continue to occur in the future, which may have adverse financial and operational impacts on our business. Any adverse impacts as a result of the investigation and related matters, and any further allegations or investigations, could exacerbate any of the risks described herein.
TKO Group Holdings SEC Filing 3/11/23
Mr. McMahon’s membership on our Board could have adverse financial and operational impacts on our business. Mr. McMahon’s membership on our Board could expose us to negative publicity and/or have other adverse financial and operational impacts on our business. His membership also may result in additional scrutiny or otherwise exacerbate the other risks described herein. Any of these outcomes could directly or indirectly have adverse financial and operational impacts on our business.
TKO Group Holdings SEC Filing 3/11/23
