Daniel Kaplan of The Athletic is reporting that Vince McMahon and WWE cashed out nearly $1.35 million before closing the XFL’s doors. At the time, when the XFL was rebooted McMahon he told the public that the XFL and WWE were separate entities. Later we learned via the Bankruptcy filing that the relationship was part of a ‘Shared Services’ agreement between the two companies.
“Those outlays, three days before XFL parent company Alpha filed Chapter 11 bankruptcy, went to none of the many hundreds of now creditors who have filed claims totaling about $22.4 million, whether they be players, coaches, ad agencies or stadium operators. Except for one: WWE Entertainment, XFL founder Vince McMahon’s own company. According to Alpha bankruptcy filings this week, on that day the XFL paid WWE $602,707.75 for services. Including a payment on March 31, after McMahon had set the wheels in motion for the bankruptcy, the XFL paid WWE, which did back-office work and marketing for the fledgling league, $1.35 million. “Daniel Kaplan
Kaplan goes on to say that WWE was so involved with the league that they were designing the XFL Championship Trophy.
“Another former XFL official said the WWE’s role went beyond finance and accounting, but to marketing as well. WWE was even designing the trophy for the never held XFL championship game, this source said.”
WWE defended itself saying;
“Shared services helped us efficiently jump start operations before we staffed up and they have helped us proceed through Chapter 11. Any claim to the contrary is totally uninformed and naive.”
It should be noted that the XFL and McMahon paid its players and employees for the season before shutting down. The article failed to mention the $6,398,793.54 paid to all its employees, staff, and players on April 9th. Something the AAF did not do when they shutter their league in 2019 after 8 games.
So who gets paid when and if the XFL sells?
“If the XFL were to be sold, the first $9 million — if the sale fetches that much — would go to McMahon. In late March, rather than put in more equity, he lent the money to the XFL, thereby becoming the first in line creditor. “
The $9 million put in on March 25th by Vince McMahon was 3 days after the league sent its Thank You message to fans for a great season. With the season cut in half, this capital gave the league some breathing room to decide the next course of action.
With 20 potential buyers and 6 more interested parties on the way according to Houlihan Lokey, the investment bank involved in the sale. Let’s hope the XFL can fetch more than $9 million.
More than likely if the XFL sale happens, McMahon will get a fraction of the money he put in back. The big unanswered question will always be, should he have furlough his employees or declared Chapter 11. McMahon declared he was out of the running of the XFL two weeks ago.
XFL upon closing and laying off over 400 made sure to pay WWE, my story https://t.co/P6pHvjivod— Daniel Kaplan (@KaplanSportsBiz) June 4, 2020
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