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Sunday, April 14, 2024
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Vince McMahon Lawsuit Questions Still Not Affecting WWE for Now

  • Since the initial suit was filed, in January, none of WWE’s current media and corporate partners have signaled any trepidation.
  • WWE is on a business roll with the return of Dwayne “The Rock” Johnson to the ring.
Joe Camporeale-USA TODAY Sports

With its television programs drawing strong ratings behind the return of Dwayne “The Rock” Johnson to the ring and a new deal with Logan Paul’s Prime Hydration, WWE has been on a business roll ahead of next month’s WrestleMania. The question lingering in the background during that time has been about the potential effect of a sex-trafficking lawsuit filed against former chair Vince McMahon in January. The fallout was hard to gauge in part because so much remained unknown about the suit, including the names of figures that it identified only as corporate officers.

The revelation this week that key WWE executives Nick Khan and Brad Blum were among those names—though neither is alleged to have participated in or known about abuse of any kind—has brought back to prominence questions about whether the lawsuit will affect the company’s dominant position in sports media and sponsorship. 

So far the answer appears to be “no.”  

Even before the latest disclosures, there were rising calls among some fans to boycott WWE. But with McMahon gone from the company, none of WWE’s current media and corporate partners have signaled any intent to exit or break their contracts. WWE’s meteoric growth in recent years has since January intersected with a series of allegations that a former WWE employee was retained as a “sexual slave” of McMahon, and a set of rights-holders who are primarily made up of generally risk-averse, publicly traded companies.

Among WWE’s major media and sponsorship deals: 

  • A newly signed 10-year deal with Netflix for flagship weekly show Raw, worth more than $5 billion and beginning next year 
  • A five-year, $1 billion deal signed with Comcast-owned NBCUniversal in 2021 in which the former WWE Network was folded into Peacock, including the WrestleMania franchise (that agreement expires in two years) 
  • A further involvement with NBCUniversal through a five-year, $1.4 billion agreement for the U.S. rights to SmackDown
  • A five-year pact, worth more than $100 million, with The CW Network for rights to WWE NXT, the pro wrestling company’s developmental circuit
  • A major new move into mat advertising through an eight-figure agreement with Prime Hydration, representing the largest sponsorship in WWE history 

Will the Tide Turn?

While many athlete sponsorship agreements have morality clauses that allow brands to exit upon the emergence of damaging information—such as what happened to Tiger Woods with his personal scandals—most sports rights deals are not structured the same way. WWE has consistently denied any wrongdoing, and by clearing up a mystery about which executives were named in the suit, the latest developments may offer reassurance to WWE’s partners—and potential future ones. 

Investors do not appear particularly moved by the latest news. Stock in WWE parent company TKO Group Holdings has shifted less than 1% this week, though shares are down more than 22% since hitting the market in September, with a marked fall later that first month on the heels of the SmackDown deal responsible for much of the overall decline.

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