That former WWE CEO and chairman Vince McMahon is facing his greatest test since the federal government indicted him on conspiracy to distribute steroids in the early 1990s is undeniable.
McMahon announced his retirement after temporarily stepping down from two of the three major positions he holds (he is also head of WWE creative) in the wake of a scandal broken by the Wall Street Journal, which found that he had engaged in a sexual relationship with a WWE paralegal and subsequently paid her a $3 million NDA.
The WSJ found this was just the latest in a series of NDAs related to sexual behavior. McMahon had already taken leave from his roles as chairman and CEO, with daughter Stephanie McMahon stepping in on an interim basis after recently taking a leave of absence as chief brand officer, with that role being added to WWE president Nick Khan’s office.
Since joining WWE in 2020, Khan has utilized his links to the entertainment industry to significantly expand WWE’s presence on TV and streaming. Rights to WWE Network went to Peacock in the U.S. in 2021, with Disney+ Hotstar in Indonesia the first international sale for these rights in January 2022. The Peacock deal also included rights to new exclusive shows, the first being “WWE Evil,” which also aired on USA.
WWE markedly upped its partnership with A+E Networks, which began in 2019 with the commissioning of eight “Biography” specials on WWE legends, which in 2021 became A&E’s most watched series.
Things expanded in 2020 with the commissioning of “WWE’s Most Wanted Treasures,” also debuting in 2021. 2022 has seen this deal grow, with the two companies partnering on 130 hours of new programming across the two noted series as well as another new brand extension in “WWE Rivals.”
Then there is Netflix. Khan announced in the Q3 2020 earnings call that WWE and Netflix were partnering on a multipart documentary on Vince McMahon, which would be one of the streamer’s most expensive docs.
This was followed up in 2021 with two on-air product-placement deals with Netflix: when zombies from “Army of the Dead” attacked wrestlers during a special event; and a mini-storyline featured assets from “Red Notice.”
All this has led to increases in media revenue in recent years. Yet this is now at risk due to the recent revelations. Netflix is rumored to have scrapped its McMahon documentary, which was in postproduction, and effectively wrote off millions of dollars in investment. It’s unclear at the moment whether this will impact any future product placements or tie-ins with Netflix originals, but the smart money would be on a temporary cessation at the very least.
The latest season of “WWE Biography” on A&E Network premiered two days after the WSJ’s latest revelations. Just as in season 1, the premiere episode focused on one of the marquee stars of the late ‘90s yet saw massive decreases in viewership, with total audience down -45% and the 18-49 demo down -63%. In fairness, this was a summer debut versus an April one for the first season, but the figures won’t go unnoticed at the network.
Netflix’s reaction may cause consternation to top WWE officials, as streaming replay rights for “WWE Raw” and “WWE Smackdown” expire this year. Netflix aside, it’s unknown how other media companies, especially those with existing relationships with WWE, will react to McMahon maintaining a steady hand on the tiller even though he is no longer chairman and CEO.
This is due to two reasons. The first is that by maintaining his role as head of creative — a role for which VIP+ has questioned his suitability — McMahon continues to shape the overall direction of the weekly TV product, and thus the company.
The second is the sheer scale of voting power McMahon holds, with some four out of five votes in his hands alone. Even among the most powerful positions in the company, he is still able to determine the key decisions it makes.
The journalists working on the story for the WSJ have recently said they are continuing the investigation and believe there’s more to be found. McMahon’s behavior has already jeopardized WWE’s high-profile relationship with Netflix.
With the possibility of more revelations emerging and sponsors and media partners being forced to act, the pressure was on him to make a clean break with the company in terms of day-to-day roles.
Given his recent appearances on WWE programming and his choice to continue being head of creative, McMahon was likely forced from the top posts at a company he turned from a regional wrestling company to a global powerhouse (he remains the largest shareholder, however). But times have changed, and even though he was once able to outrun the federal government, this may be one scandal Vince McMahon is unable to dodge.
Note: This commentary was updated on July 22 to acknowledge his retirement announcement.