According to POST Wrestling, a 75-page briefing was filed on Friday ahead of the trial set to begin next week. In this briefing, the plaintiffs argue that the defendants breached their fiduciary duty in the handling of the TKO merger and claim that WWE was undervalued in that merger. The plaintiffs contend that WWE shareholders “should have received at least 52.8% of the equity in TKO Group Holdings,” rather than the 49% that was ultimately agreed upon.
This filing follows an expert report by financial economist James L. Canessa, retained by the plaintiffs, which estimates that damages to shareholders range from $446 million to $949 million.
The briefing alleges that Vince McMahon “never intended” his retirement, announced in July 2022, to be permanent. According to the report, within hours of his announcement, he spoke with TKO’s Ari Emanuel, who had long expressed interest in acquiring WWE. It also claims that Emanuel met with McMahon, Stephanie McMahon, and Nick Khan on August 10, 2022, to propose a merger between WWE and Endeavor, despite McMahon having just announced his retirement following revelations of “hush money” payments made to four women over a 12-year period.
Furthermore, the briefing highlights the longstanding relationship between McMahon and Emanuel, even including an image McMahon sent to Emanuel on his birthday, which featured the poster from the comedy film *Step Brothers* with their faces Photoshopped onto it. The deal for Endeavor to acquire WWE was informally agreed upon in March 2023, with a 51% to 49% split in ownership, meaning shareholders received only 49% of the shares instead of the 52.8% the lawsuit claims they were entitled to. The central argument is that Endeavor and WWE agreed to this deal despite the possibility that other arrangements could have provided better value for shareholders.
The plaintiffs allege that McMahon, Emanuel, and the Raine Group coordinated the timing of the merger to benefit Endeavor by finalizing it before the most recent media rights negotiations. The plaintiffs believe this strategy suppressed WWE’s value, which would have necessitated a majority stake in TKO for both WWE and its shareholders, rather than the minority stake that was ultimately decided upon. The briefing also refers to Khan, Triple H, and Frank Riddick III as “loyalists” to McMahon, who received generous bonuses of $15 million (Khan) and $5 million (Triple H and Riddick).
As previously reported by PWMania.com, the lawsuit was filed in November 2023 and contends that the TKO merger caused damages to WWE shareholders. The lawsuit names McMahon, Khan, Triple H, George Barrios, and Michelle Wilson as defendants, asserting that WWE’s investigation into McMahon regarding sexual misconduct allegations was a “sham” designed to manipulate the sale process to Endeavor for McMahon’s benefit. The trial is scheduled to start on Monday in the Delaware Court of Chancery.
