Bankruptcy, murder and murky financials: The truth behind the WWE owner Trump just appointed as an economic adviser

Greg Evans
Thursday 16 April 2020 08:30
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Donald Trump has announced that he will be consulting sports commissioners throughout the United States to get sports up and running again as soon as possible to boost the economy.

During Wednesday's coronavirus task force press briefing, the president confirmed that he will be speaking to the people at the head of the NFL, NBA, MLB, NHL and UFC after admitting that he was "tired of watching baseball games that are 14 years old."

Trump also included that "the great" Vince McMahon, the owner of World Wrestling Entertainment, will be one of the people he is consulting on this issue.

For many it's well known that Trump and McMahon are good friends. McMahon is one of the few people that the POTUS follows on Twitter and Trump also made several appearances on WWE television, when he was still a reality TV star and not a politician.

Trump did not disclose what he would be discussing with these individuals but McMahon's inclusion is curious as WWE is yet to cease any operations, and is still producing weekly television shows, albeit without a live audience.

The troubling WWE response to coronavirus

Since the coronavirus pandemic began to be seen as a serious threat in mid-March, WWE has been broadcasting from their 'Performance Centre' in Orlando, Florida, which has received mostly negative reviews from fans and reporters, bemoaning the lack of atmosphere in the arena. This feedback notwithstanding, if Trump was paying attention he might think twice about consulting McMahon on restarting the economy.

Up until last week, WWE had taped all of its shows from the Florida facility, including Wrestlemania, the biggest show of the year. News broke on Monday that WWE was going to resume live programming despite measures being in place that prevent any mass gatherings in Florida. This is obviously a controversial move and although there will not be a crowd, this shouldn't distract from the fact that the wrestlers and the production team will be putting themselves at serious risk of contracting coronavirus by virtue of being in such close proximity of others.

It later emerged that WWE had been deemed to be an 'essential business' by Republican Florida Governor Ron DeSantis, highlighting the need for 'new content' from sports industries such as wrestling and NASCAR racing.

Ties to the Trump campaign

It has since been suggested that there could be more to this than simply a need for content. McMahon's wife, Linda McMahon, is a former member of the Trump administration having served as the Small Business Administrator from 2017 to 2019. She now runs a pro-Trump Superpac called 'America First Action' which reportedly had agreed to donate $18.5m to Trump's reelection campaign in Florida.

This could all be a coincidence but this sizable sum of money was confirmed on the same day that WWE announced that they would be returning to live television.

The timing of these two announcements soon got alarm bells ringing about WWE pulling favours with politicians to keep their show on the air amid growing financial concerns. Wrestlers were reportedly unhappy, as according to SB Nation WWE had already taped shows up until May, which they could have aired instead of live shows, allowing talent to go home and self isolate in safety.

For the McMahons, this is the least of their worries in a week dogged with background problems, the release of dozens of members of staff, bankruptcy and accusations of covering up a murder.

Alleged involvement in historic murder

This week the Vice documentary series Dark Side of the Ring aired an episode looking into the 1983 murder of Nancy Argentino, who was alleged to have been killed by her boyfriend, Jimmy 'Superfly' Snuka, one of the WWE's biggest stars of the 1980s and a subsequent Hall of Fame inductee.

Although Snuka was eventually charged with involuntary manslaughter and third-degree murder in 2015, the judge dismissed the charges against the wrestler as he was deemed "not mentally fit to stand trial".

Snuka died in 2017 but during the documentary, it is alleged that McMahon accompanied Snuka to his second interview with detectives. Shortly after this meeting, the case was seemingly forgotten about and wasn't reopened until 2013. According to the assistant district attorney at the time, Robert Steinberg, McMahon had pulled strings during this meeting. He is quoted by Complex as saying:

I remember Vince McMahon being what Vince McMahon has always been — very effusive. He was very protective, a showman. He was the mouthpiece, trying to direct the conversation.

WWE and McMahon are yet to release a statement on this issue.

Bankruptcy

Elsewhere, McMahon has been dealing with the financial repercussions that coronavirus has taken not just on his wrestling business but also his football company.

Yes, Vince McMahon has an alternative American football league, called XFL which he launched for a second time this year after it notoriously flopped during its original incarnation in 2001. The 2020 version of the league had gotten off to a better start but the Covid-19 outbreak meant that the season had to come to an end on 8 March after just a few weeks of games.

By 10 April, the league was forced to lay off its employees and athletes and then filed for bankruptcy on 13 April and began the process of looking for a buyer. The XFL has reportedly listed both assets and liabilities in the range of $10-50m.

The Sun reports that McMahon had sold £18m worth of WWE stock to relaunch the league.

Firings

This bad week for McMahon and the WWE was compounded on Thursday, when the company announced that dozens of wrestlers, coaches, commentators and writers had even been released or furloughed by the company in the midst of the pandemic, leaving many without work and without the chance to say goodbye to their colleagues.

Wrestlers Bray Wyatt and Ivar posted tweets, shortly after it was confirmed the former's father and latter's wife had been released. Another star, Drake Maverick, posted a tearful video explaining that he had been fired but was still due to compete in a pre-announced tournament, that will be taking place in the next few weeks. More releases are expected to come but it has already been reported that WWE has potentially saved between $703,000 and $4m with these cuts.

However, many have been left questioning why these firings were made.

Questions over finances

On 15 April, WWE reported on its corporate website that it has considerable corporate reserves in place "to manage the challenges ahead."

Additionally, the Company has substantial financial resources, both available cash and debt capacity, which currently total approximately $0.5bn, to manage the challenges ahead. Management continues to believe the fundamentals of the Company’s business remain strong and that WWE is well positioned to take full advantage of the changing media landscape and increasing value of live sports rights over the longer term.

It would then appear that WWE made these cuts not because of coronavirus but to simply maintain a profit margin. Journalist and WWE financial expert Brandon Thurston reported that despite the loss of revenue it is predicted that WWE would still make a record-setting profit in 2020, thanks to television deals. On Wrestlenomics, Thurston writes:

Ultimately, I concluded that if WWE doesn’t run live events at any point for the rest of the year, WWE’s revenue would be impacted by as much as $218m and operating income would be impacted by $42m. In such a scenario, I estimated WWE would still report record-setting profits in 2020, with an operating income of $121m and total revenue of $927 m – largely supported by continued TV rights fees, which I don’t believe are at risk.

Therefore it would suggest that WWE's choice to fire these individuals wasn't made out of necessity. Furthermore, unlike other sports businesses, it doesn't seem that WWE has considered alternatives measures to protect jobs, such as cutting salaries or rethinking the structure for its highest earners.

Still, with all this being said, it marks a very dark week for Vince McMahon and the WWE, and despite Trump's beaming proclamation of the man, the president should perhaps do some reading before he begins to consult him on "restarting the economy".

WWE has been contacted for comment.

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