WWE says it discovered two additional payments totaling $5 million on top of the $14.6 million that former CEO Vince McMahon paid in “unrecorded expenses” from 2006 through 2022.
“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,” the WWE stated in a securities filing Tuesday.
In addition, the company disclosed that all of the underlying unrecorded expenses “were or will be paid by Mr. McMahon personally.” The WWE is facing investigations related to the payments, which were allegedly to former female employees with whom McMahon had sexual relationships.
The previously undisclosed payments, made in 2007 and 2009, bring the total in alleged agreements to resolve claims of misconduct against McMahon to $19.6 million.
In July, McMahon retired from the company after stepping aside from his from his duties as CEO and chairman of the sports entertainment powerhouse amid an “investigation into alleged misconduct” by him and John Laurinaitis, head of talent relations.
A month earlier, The Wall Street Journal had reported multimillion-dollar settlements paid to women who had affairs with McMahon. The company instigated an investigation earlier this year after the board of directors was contacted by someone who knew a now-former employee, who was hired as a paralegal in 2019. The inquiry unearthed other nondisclosure agreements involving claims of misconduct against McMahon. The number of settlements is unknown.
In the filing, WWE said that it preliminarily determined that the amount in unrecorded expenses was not material in any individual period in which they arose but that the aggregate amount would be 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,” it said in the securities filing. “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.”
WWE also noted in the Aug. 9 filing that it “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.” It did not respond to requests for comment.