Investors seek hundreds of millions of dollars in damages in the Delaware Chancery Court lawsuit, claiming World Wrestling Entertainment Inc. should’ve taken other potential bidders more seriously in its 2023 merger with Ultimate Fighting Championship.
Additional testimony is expected in the trial beginning Monday from former WWE board members and Ari Emanuel, CEO at the time of the merger of Endeavor Group Holdings Inc., which is now the controlling shareholder of the UFC and WWE’s parent company.
Thousands of pages of depositions, text conversations, and other documents unsealed before trial offer a window into how the deal came together. What’s missing, however, looms over the trial and could affect lawsuits over issues involving these companies and some of their leaders.
A Chancery Court judge seized on records showing McMahon and WWE leaders changed their Signal auto-delete settings, determining the erasures were intentional. The judge ordered sanctions that will make it harder for them to rebut claims the $21 billion merger was manipulated so that McMahon could retain control of WWE.
“When you see spoliation, there is a degree of arrogance,” said University at Buffalo School of Law professor Christine Bartholomew. Judges don’t like to see that, and “if you’re working and running the organization from the starting point of ‘we won’t get caught if we do something wrong,’ that’s not great” for shareholders either, she said.
WWE didn’t respond to requests for comment.
The four-day trial comes as President
Missing Messages
Fans separately challenging WWE’s shifting premium live events to an ESPN streaming service told a federal judge June 1 that Vice Chancellor J. Travis Laster’s sanctions bolstered their opposition to arbitration and a stay of discovery. Their filing in the US District Court for the District of Connecticut pointed to WWE attorneys’ assertions that there’s “just no reason to believe that evidence is going to be destroyed or witnesses are going to disappear.”
Even before McMahon and WWE leaders were penalized May 27, disputes over evidence allegedly deleted or withheld had arisen in lawsuits involving UFC’s CEO and Endeavor. Carl Icahn, a Swedish bank, and hedge funds challenging Endeavor’s buyout sought a court-appointed mediator to resolve discovery stalemates with Silver Lake LLC. UFC president and CEO Dana White testified in February that he didn’t know why certain text messages sought in a former fighter’s antitrust lawsuit went missing.
“Once you pull back and look at it on an industry level, what’s happening in these cases in isolation really start depicting a much more problematic landscape than any case in isolation would suggest,” Bartholomew said.
Judges elsewhere may conclude the WWE merger dispute in Delaware is too far removed to be relevant in separate antitrust claims against UFC, sexual misconduct allegations against McMahon, or a challenge to Endeavor’s take-private sale. But spoliation rulings aren’t easy for plaintiffs to win, and litigators in other cases in the WWE’s orbit are watching for any finding that might match their narrative of an industry where the players have so much power in the market that “they don’t have to act competitively,” she said.
“They’ve already had spoliation in one case, and then if you say, ‘Look, they destroyed documents in this other case,’ that’s going to help the argument of misconduct across all” the related companies, Bartholomew said.
The UFC Deal
The 2023 merger followed McMahon’s return to WWE, overcoming qualms from some board members, after allegations that he sexually harassed and abused female subordinates for decades.
McMahon agreed to repay $17.4 million that WWE spent investigating those claims. He resigned as executive chairman of TKO Group Holdings, the parent company of UFC and WWE, in January 2024, after another sexual misconduct allegation emerged. The merger ultimately proved successful for shareholders, with TKO’s stock price rising to $198.64 per share as of June 3, from $103.05 when the deal closed Sept. 12, 2023.
The sanctions mean Laster will hear testimony with the assumption that key claims are true, including: McMahon’s decisionmaking regarding the merger was influenced by Emanuel’s promises that he would remain at WWE and have legal support for federal investigations into allegations of sexual misconduct; McMahon decided to pursue a deal with Endeavor before WWE began a strategic review process; and McMahon worked with WWE CEO Nick Khan and their financial adviser to steer negotiations toward Endeavor.
In a SEC filing, WWE said Endeavor’s conditions for the deal included McMahon serving as executive chair of the newly-formed TKO “until his death, resignation or incapacity.” According to a voicemail transcript produced in discovery, Emanuel promised McMahon indemnification amid federal investigations into the sexual misconduct allegations.
It’s not surprising a deal involving McMahon and Emanuel resulted in litigation, said Stephen Ross, a sports law professor at Penn State’s Dickinson School of Law. Emanuel, who’s not a defendant in the shareholder lawsuit, has a reputation for being “relentless” and McMahon is known to be “aggressive” and “far less likely to listen to legal advice that says, ‘If you do this, there’s a risk you could lose in court.’”
McMahon described Emanuel in similar terms. In a deposition probing their relationship, McMahon was reminded that he thanked Emanuel for some soup.
“Was that friend soup or was that let-me-buy-your-company soup?” a shareholder attorney asked.
McMahon replied that Emanuel was “relentless whether or not it’s giving you soup, you know, or anything that he thought he can have an edge on.”
The case is In re World Wrestling Ent. Inc. Merger Litig., Del. Ch., No. 2023-1166, trial 6/8/26.
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