Sports entertainment powerhouse WWE reported its second-quarter earnings on Tuesday following several delays due to the discovery of what it had recently said were $19.6 million in previously unrecorded expenses paid by former chairman and CEO Vince McMahon between 2006 and 2022.
WWE also said in filings made late Monday and early on Tuesday that an investigation into McMahon and another ex-executive was “substantially complete” and repeated the $19.6 million figure for previously unrecorded expenses.
It also detailed $1.7 million in second-quarter costs associated with the probe, adding: “While we currently anticipate spending approximately $10 million during the remainder of the year related to this investigation, the related costs could exceed this estimate.” The company said that the $1.7 million was paid by McMahon.
The regulatory filing further noted that “the company re-evaluated the effectiveness of its internal controls over financial reporting and identified control deficiencies associated with the accounting errors, which the company has concluded represent material weaknesses in the company’s internal control over financial reporting as of March 31, 2022.”
As a result of the probe, the company restated past financial reports after in a recent regulatory filing saying that it had “determined that such amounts should have been recorded as expenses in each of the periods in which they became probable and estimable.” It said at the time 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. WWE also emphasized at the time that all of the underlying unrecorded expenses “were or will be paid by Mr. McMahon personally.”
McMahon retired from the company in July amid these discoveries after initially stepping aside from his duties due to an “investigation into alleged misconduct” by him and John Laurinaitis, WWE’s former head of talent relations. A month earlier, The Wall Street Journal had reported multimillion-dollar settlements paid to women who had affairs with McMahon, who retains a controlling stake in WWE.
A special committee of independent members of the WWE board has been conducting the investigation into the alleged misconduct. In a recent regulatory filing, WWE said 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.”
WWE is now led by McMahon’s daughter Stephanie McMahon as chairwoman and co-CEO and Nick Khan as co-CEO. Stephanie McMahon’s husband Paul Levesque, the retired wrestler known as HHH, is now in charge of WWE’s creative.