Updated at 12:47 pm EST
World Wrestling Entertainment (WWE) – Get Free Report shares surged higher Friday after founder Vince McMahon said he would return to the media and entertainment group following his retirement last year following a probe into so-called ‘hush money’ payments to a former employee.
McMahon will serve as executive chairman of WWE upon his return, the 76 year old said in a statement late Thursday, and steward the group’s media rights negotiations while leading its review of strategic alternatives. Former WWE co-Presidents Michelle Wilson and George Barrios were also named to the WWE board alongside McMahon’s return, the company said.
McMahon stepped-down from his role as group CEO in July, with his daughter Stephanie McMahon named as interim boss, after the Wall Street Journal said he had paid $3 million to a former group paralegal with whom he was having a consensual affair.
He was also alleged to have engaged in inappropriate behavior with women staff at the company, alongside similar allegations levied at WWE’s head of talent relations John “Johnny Ace” Laurinaitis.
“WWE is entering a critical juncture in its history with the upcoming media rights negotiations coinciding with increased industry-wide demand for quality content and live events and with more companies seeking to own the intellectual property on their platforms,” McMahon said in a statement. “The only way for WWE to fully capitalize on this opportunity is for me to return as Executive Chairman and support the management team in the negotiations for our media rights and to combine that with a review of strategic alternatives.”
“My return will allow WWE, as well as any transaction counterparties, to engage in these processes knowing they will have the support of the controlling shareholder,” he added.
WWE shares were marked 21.5% higher in early Friday trading to change hands at $87.52 each, a move that would value the Stamford, Connecticut-based group at around $6.5 billion.
Following McMahon’s departure in July, the WWE said it found around $14.6 million in unrecorded expenses made during by the former CEO over the past 15 years and told the Securities and Exchange Commission it would need to revise some of its financial statements as a result.
World Wrestling Entertainment generated $304.6 million in revenues over the three months ending in September, the group’s fiscal third quarter, up 19% from the same period last year, following a multi-year content partnership with A&E, the network partly-owned by Walt Disney Co. (DIS) – Get Free Report.
The group also improved its forecast for full-year operating profits to the “higher end” of between $370 – $385 million in early May, a tally it said reflected “growth in our Media segment as well as a shift in the timing of revenue related to certain licensing agreements.”
McMahon purchased his father’s World Wrestling Federation business for $500,000 in 1982, changed its name to World Wrestling Entertainment and lead its listing on the Nasdaq in October of 1999.
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