This is such … not good stuff for Vince McMahon.
The XFL and WWE headman has had quite a few weeks, with a few of his business ventures being front and center and backpage on Monday. First, the XFL filed for Chapter 11 bankruptcy, something that seemed to be a forgone conclusion just days after the league reportedly terminated its officials and a conference call relayed that the XFL was suspending operations.
Later in the day, McMahon got a bit of good news, as the state of Florida deemed WWE an “essential business,” allowing the sports entertainment giant to continue to produce live shows from the WWE Performance Center in Orlando. Florida Gov. Ron DeSantis deemed that entertainment personnel — including sports figures — are allowed to proceed, given that no arenas or stadiums are filled with fans.
Monday’s culmination of mixed news has been brewing for well over a month. Obviously, the XFL termination and WWE’s handling of WrestleMania have been byproducts of the coronavirus pandemic, and have garnered criticism from all corners of the media sphere, from fans to detractors alike.
The news of WWE’s standing as an essential business has been met with criticism, and WWE in turn getting ready to produce live programming has been more questionable. After all, asking employees to work and travel in a contact sport when the coronavirus pandemic is still raging across the nation is a questionable business practice at best. Even with several of the company’s lead talents pulling out from WrestleMania 36 (including main eventer Roman Reigns), it raises the question as to how long WWE and McMahon will be able to get by the ire of the public, media and big-name detractors.
The answer might be: not long. In addition to the folding of the XFL, reports on Monday also broke that puts WWE at the receiving end of a class-action lawsuit in relation to its working relationship with Saudi Arabia and its continuously plummeting stock prices.
In another Monday twist, reports revealed that WWE was a partial owner of Class B stock in the XFL, despite urgings from Vince McMahon in 2018 that WWE and the XFL would be entirely separate entities. Pro Football Talk speculates that this could open up a whole can of worms for McMahon if the company hadn’t disclosed that information to its investors.
The report indicates that McMahon owned 100 percent of the Class A stock, and 23.5 percent of its Class B stock was owned by WWE. It all gets a bit technical, but the main idea is that McMahon “gifted” stock to Alpha Entertainment, a separate company owned by McMahon and that owned the XFL, to get XFL naming rights and copyrights in return. Though there’s still some skepticism as to whether WWE actually purchased stock in Alpha Entertainment, its name is still in the ledger as a stockholder.
While there was no clear crossover between WWE and the XFL as McMahon deemed, the timing of the report is certainly curious. Last week, McMahon dumped about 15 percent of his stock in WWE, getting around $80 million in cash up front after agreeing to relieve it in four years.
For a long time WWE has been able to operate in its own little bubble with lots of the outside world not paying attention to what McMahon does, because wrestling is a cheap form of entertainment largely rejected by today’s mainstream media and pop culture. The problem with that is that McMahon has also undertaken some questionable business practices with minimal media coverage: contract manipulation, taking questionable payouts from foreign governments to stage shows and, the latest, holding live programming during a global pandemic to appease his audience.
While a lot of those wrestlers (read as: sports entertainers) are thankful for the platform that has WWE provided, the tales spun and truths expelled from former employees such as Brodie Lee (real name Jonathan Huber) and Jon Moxley (real name Jonathan Good) have painted a less-than-wholesome picture of WWE’s current behind-the-scenes affairs, with McMahon at the forefront of those issues.
McMahon is notorious for being a hands-on owner, so there’s certainly something to be said for the way he operates his businesses. Recent news reaffirms that. After all, he did turn WWF (later WWE) into a global entertainment empire while putting nearly all of his competition out of business in the process.
Now, we’ll see whether McMahon can grab the ropes and work himself out of a potentially risky situation.
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