By Steve Gelsi
World Wrestling Entertainment Inc. said it wrapped up an internal probe into improper accounting and found that some $19.6 million of expenses made by its ex-CEO Vince McMahon were not recorded properly.
The sum included $14.6 million that McMahon agreed to pay women to settle allegations of sexual misconduct from 2006 to 2022, the Wall Street Journal reported, citing people familiar with the deals. The company found another $5 million of payments from 2007 to 2009 that were unrelated to the allegations.
Shares of WWE rose 2.4% after the company also beat Wall Street’s earnings target.
While the company is now done with its investigation of McMahon, it may still face repercussions from regulators.
“The company has 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,” the company said in a filing.
For now, however, the company’s special committee investigation is substantially complete.
McMahon left the company on July 22 .
“The company has 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 in the second quarter of 2022,” the company said.
On the earnings front, WWE said its second-quarter net income rose to $49 million, or 58 cents a share, from $29.2 million, or 34 cents a share in the year-ago quarter. Revenue grew to $328.2 million from $265.6 million in the year-ago period.
Analysts were expecting earnings of 57 cents a share and revenue of $324.4 million, according to a FactSet survey.
WWE said it’s revising its previously issued financial statements to record the unrecorded expenses for the years ended 2019, 2020 and 2021, as well as the first quarter of 2021 and 2022.
McMahon retired as CEO and chairman of WWE after reports by The Wall Street Journal of payouts to women who had alleged infidelity and sexual misconduct.
McMahon is still a stockholder and owns a controlling interest in the company.
Fresh federal probes into the infidelity allegations sparked the retirement of McMahon, the newspaper has reported, citing people familiar with the matter.