WWE Investors File Lawsuit Challenging Merger With UFC To Form TKO
The WWE-UFC merger is being contested by investors who believe former WWE Chairman Vince McMahon ignored other offers to take one that allowed him to force his way back in power within WWE despite sexual misconduct claims made against him prior to the sale of the company. According to The Hollywood Reporter, which cited unsealed documents from a Delaware court on November 22, 2023, McMahon pushed a "quick sale" of his company to Ari Emanuel, who the unsealed documents claim is a "close friend and longtime ally" of WWE's former chairman. The complaint names McMahon, Nick Khan, and Paul "Triple H" Levesque, among others, in the suit, which claims breach of contract and seeks to represent all stockholders who cashed out their shares in the merger of UFC and WWE.
According to the lawsuit, Emmanuel proposed a "sweetheart deal" that allowed McMahon to stay on as executive chairman of the TKO Group and "avoid scrutiny in connection with sexual misconduct allegations that could've ousted him from the company." In the complaint filed by investors, WWE board members "conjured up a shame sale process" designed to favor Endeavor and excluded any other bidder who wanted to oust McMahon from WWE. Two other deals with better cash terms were reportedly ignored, and McMahon and others who supported him on the board "timed negotiations" to favor the deal with Endeavor.
The complaint also outlined McMahon's tumultuous tenure in WWE, which saw him step down in July 2022 in the wake of the misconduct allegations, only to return to the company in January 2023, purportedly to help facilitate a company sale. Investors in the lawsuit claim McMahon immediately turned to Emanuel, who he "knew would allow him to remain at the helm" of the merged company. The investors say both the price and the process were unfair, alleging there were better deals for the company on the table. The suit argues that the $21 billion price tag undervalues McMahon's company, "far below the offers" that the board could have obtained from other bidders, and that "WWE only secured a budget for UFC's current fiscal year rather than insisting on a full set of multi-year projections, as is customary."
WWE did not respond to The Hollywood Reporter for comment.