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Vince McMahon Scandal: Major Questions Answered

Vince McMahon, Stephanie McMahon and Nick Khan

***UPDATED ON JUNE 17***

 

On June 15th, news broke via the Wall Street Journal that Vince McMahon was being investigated by the WWE Board of Directors.

The report made several claims about Vince McMahon that could have ramifications in the wrestling world for years to come. Here we break down what we know and answer all the major questions.

What is Vince McMahon being investigated for?

The WWE board is investigating claims that Vince McMahon paid a former employee – a paralegal – $3 million in hush money to keep their (consensual) affair under wraps.

The board’s investigation thus far has also found other examples of historic non-disclosure agreements relating to claims of misconduct made by ex-WWE female employees, relating to McMahon and Head of Talent Relations John Laurinaitis.

McMahon is said to have used his personal money to pay off the employees, but there is also the issue of the paralegal’s salary doubling from $100,000 to $200,000 per year during her time with the company – the board will need to determine whether this was a justified increase or relating to her relationship with Vince.

How did the story get out?

Although the board has known about the situation since April, they were only given a copy of the $3 million agreement on June 12. In the days that followed, the story was leaked – seemingly by a member of the WWE board as they were the only ones privy to the information – to the powerful and influential Wall Street Journal.

It did not come from anyone on the WWE roster – the wrestlers and staff members learned of the story when it broke, the same as everyone else.

Why would someone on the board leak the story?

It’s impossible to determine the motive without knowing who was responsible.

The fact is, the story got out there because someone in a position of power in WWE wanted it out there. Exactly why remains to be seen.

Who is on the WWE Board?

There’s 12 board members in total:

  • Vince McMahon, Chairman of the Board of Directors & CEO, WWE
  • Nick Khan, President & Chief Revenue Officer, WWE
  • Stephanie McMahon, Chief Brand Officer, WWE
  • Paul Levesque, Executive Vice President, Global Talent Strategy & Development, WWE
  • Steve Koonin, CEO, Atlanta Hawks & State Farm Arena
  • Ignace Lahoud, CEO of Majid Al Futtaim – Leisure, Entertainment & Cinemas
  • Erika Nardini, CEO, Barstool Sports
  • Steve Pamon, President, Verzuz
  • Connor Schell, Founder & CEO, Words + Pictures
  • Man Jit Singh, Former President of Home Entertainment, Sony Pictures Entertainment
  • Jeffrey R. Speed, Former Executive Vice President and Chief Financial Officer, Six Flags, Inc.
  • Alan M. Wexler, Senior Vice President of Innovations and Growth, General Motors

Did this have anything to do with Stephanie McMahon’s departure?

There’s no way of confirming that currently, but it certainly seems to add up.

Stephanie was (and still is) a member of the WWE Board, so she would have been made aware of the situation in April along with the other members. The timing of her departure and the surprising decision WWE made to bury her on the way out by proxy via a Business Insider article, certainly seems to suggest the two are linked.

Was the personal responsible the same member of the board who leaked the Vince story? It could be. We should stress, that’s merely speculation at this point, but where there’s smoke there’s nearly always fire.

What about Paul ‘Triple H’ Levesque and Shane McMahon?

Vince McMahon, Triple H and Stephanie McMahon

Shane McMahon’s release in January had nothing to do with these allegations – which were not known in the company at that point – and had everything to do with his attitude and behaviour backstage at the Royal Rumble.

Paul Levesque’s demotion in 2021 and his reduced role was similarly unrelated, down to NXT getting hammered by AEW on a weekly basis and being forced to move to Tuesday nights with its tail between its legs. His reduction of duties since then is down to his serious heart condition, which almost killed him. Levesque was told to reduce stress, so his workload was cut accordingly.

Is this all part of a Nick Khan power play to oust the McMahons and take over WWE himself?

It could be, but it seems unlikely.

WWE President Nick Khan is a shrewd operator, that goes without saying, and in a game of 4D chess with the McMahons he would certainly be capable of trumping them for his own means. But logically speaking, if this were a Khan ploy, what does he hope to gain from bringing the company’s reputation into repute and risking the collapse of WWE’s business relationships and stock price?

It would be a very high risk strategy and not one with a guarantee of succeeding. As easy as it is to point the finger at Khan because of his reputation for being a ruthless “shark”, when you break it down it does not make a whole lot of sense.

But doesn’t Khan want to sell WWE?

He certainly considers WWE a property that is available for sale to the right bidder at the right price, but so does Vince McMahon. For the past six years – since the UFC sale for $4 billion – WWE has been willing to listen to offers.

Nick Khan was not even with WWE when talks were first mooted about McMahon being open to a sale, so it’s not like Khan has come in, demanded a sale, and is facing pushback from McMahon. Again, this theory does not match up to reality.

Where does John Laurinaitis fit in to this?

John Laurinaitis

WWE’s Head of Talent Relations John Laurinaitis is also alleged to have had a relationship with the unnamed paralegal, whom according to reports was “handed to Laurinaitis like a toy” by Vince McMahon. As noted, other non-disclosure agreements have been unearthed by the investigation that implicate Laurinaitis as well.

Will Vince McMahon or John Laurinaitis be fired?

It would be a major surprise if John Laurinaitis kept his job. He will almost certainly be the fall guy for this, in the first instance.

It’s a lot more complicated with McMahon. Although he does not own the majority of WWE stock, he does hold the majority of the voting power and can veto any decision made by the board, including them asking him to step down. The only way Vince McMahon is likely to leave is if he resigns.

Historically, McMahon’s response to negative press is to bullishly fight fire with fire, not to back down. The only conceivable way that would happen is if stocks collapse, TV deals get cancelled and sponsors pull out – all of which is possible but unlikely.

Who is Rita Chatterton?

Rita Chatterton is a former WWE referee whom Vince McMahon allegedly had a relationship with in the 1980s.

In 1992 when the company was in the midst of a series of scandals, including a sex scandal, Chatterton made accusations on the expose show Now It Can Be Told that her relationship with McMahon was not always consensual and that she was fired for refusing to comply.

This story has been widely discredited over the years, but her name has inevitably come up again in light of the recent allegations.

What’s the situation with Vince McMahon, John Laurinaitis and their respective partners?

Whilst Vince is still married to Linda McMahon, but according to Dave Meltzer, Vince and his wife have “not been together” for a while.

John Laurinaitis is married to Kathy Colace Laurinaitis, the mother of Brie and Nikki Bella.

How has WWE stock been impacted by this?

They’ve gone up, remarkably.

The story broke shortly after the stock market closed, with the stocks jumping in value just prior. That certainly seems to suggest insiders playing the market with the advance knowledge they had, but again, that’s pure speculation at this point.

How the market responds over the fear of losing Vince remains to be seen in the coming days. WWE’s revenue is guaranteed regardless of what happens to him though, so the impact should be a lot less dramatic than it might have been in the past.

Dave Meltzer broke his his thoughts on how Vince McMahon’s allegations could affect stockholders.

Who could replace Vince if he leaves WWE?

That’s the million-dollar question.

WWE does not have a robust succession plan in place since Paul Levesque and Stephanie McMahon – long mooted as the future heads of the company – were demoted/left their roles. Those with influence behind the scenes like Bruce Prichard and Jeff Jarrett are unlikely to be given the keys to the kingdom either.

WWE is a multi-billion-dollar global company, not a small-time wrestling promotion, and neither has experience in the corporate world to qualify them for such a position. It could be Nick Khan, lending credence to the theory that he is behind this, but that’s far from guaranteed.

Even without the scandal breaking, this is an issue that WWE has had for a while. WWE even admitted in their investor calls that the landscape would be significantly different should something happen to McMahon.

Realistically, the chances are that without McMahon at the helm, WWE would be sold.

Who could buy WWE?

Could NBC or Disney buy WWE?

If it were to be sold, WWE would command billions of dollars, leaving very few potential suitors.

NBC would be the obvious choice given what they currently pay for WWE programming via television deals and Peacock. To remove those annual fees completely and own the property entirely would be a very profitable venture for them in the long run, assuming WWE does not implode without McMahon at the helm.

Disney could also be interested as part of its ongoing quest to buy up properties for its streaming service Disney Plus.

Conceivably, others with strong financial backing and a desire to run a major wrestling promotion could be in the mix. Although improbably, someone like Dwayne Johnson or even Tony Khan could be in contention, if they were able to get the funding.

Will this have any impact on the proposed Netflix show covering McMahon’s life?

Probably. That show was mooted as a vehicle to babyface McMahon as it detailed his various conflicts and struggles over the years.

That’s a much harder sell with this hanging over him, although it does depend in part on how much traction the story gains and whether it becomes a major scandal or blows over.

Timeline of events:

March 3

Vince McMahon appears on the Pat McAfee Show and discusses running WWE with members of his immediate family in key roles, noting: “I’ve probably expected more from my family members” and “You have to do the right thing for business. If this person isn’t working out, they shouldn’t be part of the company.”

March 30

The WWE Board of Directors receives the first of several emails from a close friend of a woman who had worked for WWE as a paralegal from 2019 to 2022, initially on a salary of $100,00 per annum. The email alleges her salary was doubled after she began a sexual relationship with McMahon. The emails also claim McMahon passed her to John Laurinaitis “like a toy” when their relationship ended and that she was “so scared” when she left she was paid to keep quiet.

April 3

Vince McMahon wrestles his first match in a decade, defeating Pat McAfee in an impromptu match at WrestleMania 38.

May 19

Stephanie McMahon announces that she is taking a leave of absence from her role as Chief Brand Officer, noting on Twitter that she was “looking forward to returning”. It was reported that Nick Khan would be taking over her role and that several employees already in WWE would be sharing her day-to-day duties.

May 23

Contrary to reports about how Stephanie’s duties were going to be delegated, WWE posts a job listing to fill her position.

June 3

The corporate shake-up continues when Claire Atkinson reports in Business Insider that Claudine Lilien, WWE’s Head of Global Sales and Partnerships, was leaving the company.

June 6

Former Manchester United Chief Marketing Officer Catherine Newman was hired as the new WWE Executive Vice President and Head of Marketing. Although her job title is different, she was hired to replace Stephanie McMahon and take on her old duties.

June 12

The Wall Street Journal receives a copy of the NDA relating to the $3 million hush payment to the ex-WWE paralegal.

June 15

The Wall Street Journal reports that the WWE Board of Directors is investigating a secret $3 million settlement that Vince McMahon paid to a departing employee with whom he had an affair. A non-disclosure agreement relating to the payment was apparently agreed in January 2022. The board also uncovered several other non-disclosure agreements relating to Vince McMahon and Head of Talent Relations John Laurinaitis. The investigation is being headed by board member Man Jit Singh. McMahon’s lawyer Jerry McDevitt said no claims of harassment had been made against McMahon and that no money had been paid by the company itself.

June 17

WWE issues a press release stating that Vince McMahon has voluntarily stepped back from his responsibilities as CEO and Chairman of the Board until the conclusion of the investigation by a Special Committee of the Board into alleged misconduct. McMahon is replaced as interim CEO and interim Chairwoman by Stephanie McMahon. It is noted that McMahon will continue in his roles relating to WWE’s creative content.

You can stay up to date with the latest news as it unfolds here at Inside The Ropes.