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TKO Group Holdings exec Mark Shapiro said the company is “on the sideline” waiting to see if former Executive Chairman Vince McMahon will sell any more of his massive stock holding in the company.
Shapiro, who is president and COO of TKO and holds the same title at its majority owner, Endeavor Group Holdings, noted that McMahon still owns about 20 million shares in TKO despite selling more than 8 million last November. The proceeds from that sale exceeded $700 million.
McMahon abruptly exited as board chairman last month after a graphic lawsuit was filed by a former employee, accusing him of sex trafficking and sexual assault. Having built the WWE into a lucrative global business and cultural force over more than four decades, McMahon oversaw the merger of it with the UFC in a $21.4 billion combination that created TKO this year.
“He’ll do whatever he’s going to do, and we’re all on the sideline,” Shapiro said when asked about the situation on the company’s fourth quarter earnings call. “We’ll have a look, we’ll see. We have no idea on timing. We’re not having any discussion with him. He’s given us no point of view on his motive or his plans to sell or not sell, or if he does, how much. So, we’re going to wait around and find out just like you.”
The exec did not specifically address McMahon’s legal woes, but they came to light by virtue of the stock sale being noted by TKO CFO Andrew Schleimer during the call. Ari Emanuel, CEO of both Endeavor and TKO, did not offer any comment on McMahon.
Asked to clarify his forecast that the company intends to hold off on capital allocation until 2025, Schleimer said management expects to be in a “meaningful cash position” at the end of this year as it keeps its powder dry. Nevertheless, that stated plan “doesn’t eliminate” the possibility of investing some of that cash in the right circumstance. The exec acknowledged that one such scenario could potentially involve buying shares sold by McMahon as he funds his legal defense. Last fall, some of the shares surrendered by McMahon were purchased by the company and its management team.
Prior to the graphic lawsuit filed this year, McMahon had admitted to paying millions of dollars in hush money to a number of women. The latest suit, which has reportedly triggered an investigation by federal authorities, is likely to entail significant legal liabilities. Some analysts have speculated that the former WWE impresario could keep his legal bills paid by selling additional shares.
MacMahon last month called the suit by Janel Grant “replete with lies, obscene made-up instances that never occurred, and is a vindictive distortion of the truth.” He said he plans to “vigorously defend myself against these baseless accusations.”
