New Details on WWE’s Role with XFL & Changes Made to Vince’s Contract

As noted before, Vince McMahon is currently in the process of relaunching the XFL with a potential return date of 2020. Vince McMahon started a new separate company, Alpha Entertainment, to run the league, with WWE listed as a minority owner.

Recent SEC filings revealed that WWE engaged in several new transactions with Alpha Entertainment to provide financial help for the XFL revival. The filings also said that WWE’s equity ownership of Alpha Entertainment is “insignificant” and “Alpha’s reported losses reduced [WWE’s] investment value to zero as of June 30, 2018.”

“On April 3, 2018, the Company entered into transactions with Alpha Entertainment, LLC (“Alpha”), an entity controlled by Vincent K. McMahon, granting Alpha rights to launch a professional football league under the name “XFL”. Alpha has announced that it expects that this launch will occur in early 2020. Under these agreements, WWE received, among other things, an equity interest in Alpha without payment by or other financial obligation to WWE. The investment will be accounted for under the equity method of accounting. WWE’s equity interest in the net assets of Alpha at the transaction closing date on April 3, 2018 was insignificant. During the three months ended June 30, 2018, WWE recorded its proportionate share of Alpha’s reported losses which reduced the investment value to zero as of June 30, 2018. In addition, WWE entered into a support services agreement to provide Alpha with certain administrative support services with the costs of such services billed to Alpha on a cost-plus margin basis. Amounts billed to Alpha for the three and six months ended June 30, 2018 were not significant.”

The filings also revealed recent changes were made to Vince McMahon’s official WWE contract to update his legal obligations to the company while he works on the XFL as a side project. Specifically, it requires “that the Executive will be required to devote substantially all of his full working time to the business and affairs of the Company.”

“1.3. Outside Activities. The Executive shall devote substantially all of his full working time to the business and affairs of the Company. Notwithstanding the preceding sentence, the Executive may engage in such other business and charitable activities that, in the good faith judgment of the Board, do not violate Section 8, create a conflict of interest or the appearance of a conflict of interest with the Company or materially interfere with the performance of his obligations to the Company under this Agreement. Notwithstanding the foregoing, nothing in this Agreement, including Sections 8.3 and 9.1(i), shall preclude or prevent the Executive from being a founder, owner, investor, officer, board member, advisor, spokesperson of or otherwise being affiliated with Alpha Entertainment, LLC in connection with its proposed professional football league business venture to be known as the XFL; provided, however, that the Executive will be required to devote substantially all of his full working time to the business and affairs of the Company.”

Source: WWE SEC Filing