WWE Files Update On Relationship With XFL, Amendment To Vince McMahon's WWE Employment Agreement
WWE's latest SEC filing reveals that the company recently entered into transactions with Alpha Entertainment, the company Vince McMahon created to run the XFL. As noted, Vince is bringing back the football league with the launch planned for 2020.
Below is part of the filing that details the relationship between WWE and the XFL:
"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."
It was revealed back in a May SEC filing that WWE was listed as a minority owner for the league. It was believed that WWE and the XFL would run separate for the most part but we know that John Saboor, WWE's Senior Vice President of Special Events, had been reaching out to people about potential teams.
Vince McMahon sold $100 million worth of WWE stock back in December to help launch the Alpha Entertainment company. Vince told The New York Times that he is very committed to the re-launch. He said, "I am very committed to this, and it's going to take more than $100 million to do this league."
It was reported back in June that Vince told insiders how he expected to spend close to $500 million in the three years of operations.
An amendment to Vince's Employment Agreement with WWE was also included with the SEC filing, noting that Vince (the Executive) is to devote "substantially all of his full working time" to business related to WWE (the Company). Below is that part of the filing:
"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."