Update on Class-Action Lawsuit Against WWE Over WWE Stocks and Saudi Deal

As noted before, a class-action lawsuit was filed this past April against WWE by WWE stock holders over issues regarding the company’s financial deal with the Saudi Arabian government and allegations of improper business activities.

A consolidated amended version of this class-action lawsuit was recently filed by the Firefighters’ Pension System of the City of Kansas City, Missouri, which is also representing several other WWE stock holders.

One of the claims made in the amended lawsuit involves WWE failing to properly inform their investors of issues regarding talks with broadcast provider OSN for a new Middle Eastern television deal. The lawsuit stated that the company informed investors in June of 2018 that they were anticipating a big growth in revenues from new content deals for 2020. The lawsuit alleges that WWE either knew or “were deliberately reckless in not knowing” months prior that a deal with OSN would not be made as promised.

This portion of the lawsuit also alleges that WWE was sent a letter by OSN informing the company in November 2018 of their plans to exit the sports television business. The lawsuit stated that WWE failed to properly inform their investors of an agreement being made to terminate their deal early with OSN in March 31, 2019, which was originally set to expire in July 2019. The lawsuit also stated that WWE investors were only informed of this deal in July 2019.

Another claim made in the lawsuit regards allegations of the company hiding their financial issues with the Saudi Arabian government from investors.

This portion of the lawsuit alleges that WWE failed to inform their investors of the Saudi Arabian government being behind in payments and making misleading statements regarding a new television deal for the MENA (Middle East and North Africa) region. The lawsuit stated that despite WWE claiming an “agreement in principle” was made, no deal had been actually made due to both sides being very far apart in terms of monetary value. WWE is stated to have asked for $80 million per year under the assumption of generating 100 million subscribers for MBC while the Saudi government offered a lot less money due to them feeling that WWE could only generate 6.5 million subscribers at most.

The lawsuit also contained allegations that the plane incident from WWE’s Crown Jewel event last November in Saudi Arabia was caused by a hidden financial dispute between Vince McMahon and the Saudi Arabian government. This allegation included statements from a confidential witness (CW-2) who worked for the company from 2012 to 2020 and also worked at last year’s Crown Jewel event.

“CW-2 recalled that he was initially told the charter flight he was scheduled to leave on was delayed because the plane needed to be pulled around. After they boarded, they were removed from the airplane after 20-30 minutes. CW-2 explained that he spoke with a stewardess on the flight about the delay, who told him that “it seems someone doesn’t want us to leave the country.”

CW-2 further explained that the pilot sounded “distressed” when he informed the passengers that the flight was unable to take off. CW-2 recalled that then they were told that it was because of mechanical issues, but he recalled seeing a “ton” of guards wearing black “militia” attire and wearing guns that were blocking their exit and “staring at the wrestlers.”

CW-2 became aware that something was wrong and explained that a number of the other personnel were referring to the event as a “hostage” situation. CW-2 explained that he asked the Senior Director of Talent Relations, Mark Carrano, about what was going on and that Carrano told him that Crown Prince Mohammed bin Salman and McMahon had gotten into an argument over late payments in connection with the June 7, 2019 Super ShowDown event.

Carrano also informed CW-2 that McMahon had cut the live feed for the Crown Jewel event and that this had made the Crown Prince “very mad.”

The suit also outlines the level of stock being sold by company executives in “unusual and suspicious amounts totaling more than $280 million” while “outside investors suffered hundreds of millions of dollars in losses and economic damages as the price of the WWE stock collapsed when the truth finally began to be revealed over time.

Sources: Lawsuit filing, PostWrestling.com