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Entertainment

WWE board investigates secret $3 million hush payment by Vince McMahon

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Vince McMahon attends a press conference at MetLife Stadium on February 16, 2012 in East Rutherford, New Jersey.

Michael N. Todaro | Getty Images

World Wrestling Entertainment’s board is investigating a $3 million hush-money settlement that CEO Vince McMahon paid a woman over an alleged affair, The Wall Street Journal reported Wednesday, citing documents and people familiar with the matter.

The agreement, which was struck in January, is intended to prevent the woman, who had worked as a paralegal for the company, from discussing her relationship with McMahon or making critical statements about the chief executive, the Journal added.

A WWE spokesman told the newspaper that the company is cooperating with the board’s investigation and that the relationship between McMahon and the woman was consensual.

McMahon, 76, is married to Linda McMahon, who served as CEO of WWE and as Small Business Administration chief in the administration of former President Donald Trump, who is a WWE Hall of Famer.

The report said the board’s investigation, which started in April, also revealed nondisclosure pacts related to misconduct claims from other women who had worked at WWE. These agreements involved McMahon and WWE talent executive John Laurinaitis, who wrestled under the name Johnny Ace, the Journal added.

WWE didn’t immediately respond to a request for comment from CNBC.

The board retained Simpson Thacher & Bartlett LLP, a New York-based law firm, to conduct the investigation, a source told the Journal. The firm didn’t immediately respond to a request for comment from CNBC.

McMahon’s lawyer, Jerry McDevitt, was not immediately available for comment. McDevitt told the Journal that the former employee didn’t make any harassment claims against McMahon. He also said that WWE didn’t pay her any money, the paper said.

The news comes at a pivotal time for the wrestling-entertainment company. In May, executive Stephanie McMahon, the daughter of Vince and Linda McMahon, took a leave of absence from most of her responsibilities at the company. “WWE is a lifelong legacy for me and I look forward to returning to the company that I love after taking this time to focus on my family,” she tweeted at the time.

WWE has also been the subject of speculation over a potential sale and its media rights. It has deals with Fox, USA Network, Hulu and NBCUniversal’s Peacock streaming service. The Hulu deal expires this year.

The company is publicly traded, but McMahon owns the majority of WWE’s voting shares. He took over the company from his father, also named Vince McMahon, in 1982. Under the younger McMahon’s oversight, the WWE, then known as the World Wrestling Federation, became a global juggernaut. In the decades since, the company has spawned superstars such as Hulk Hogan, Bret “The Hitman” Hart, Dwayne “The Rock” Johnson and Dave Bautista.

This is far from McMahon’s first brush with controversy. In 1993, he was indicted on federal charges related to anabolic steroids, which he and several professional wrestlers in the WWF stable used. He was acquitted of the charges in 1994. McMahon and the company also came under fire in 1999 for continuing a show after superstar Owen Hart, a brother of Bret’s, fell to his death from an arena’s rafters while staging a stunt. The company eventually agreed to pay the Hart family $18 million over the wrestler’s death.

Read the full Wall Street Journal report here.

Disclosure: NBCUniversal is the parent company of CNBC.

– CNBC’s Candice Choi contributed to this report.



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World

Russian gas customers in Europe may accept Putin’s payment terms

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Gas distributors in Germany and Austria told CNN Business that they were working on ways to accept a Russian ultimatum that final payments for its gas must be made in rubles, while complying with EU sanctions.

President Vladimir Putin said last month that “unfriendly” nations would have to pay rubles, rather than the euros or dollars stated in contracts. Buyers could make euro or dollar payments into an account at Russia’s Gazprombank, which would then convert the funds into rubles and transfer them to a second account from which the payment to Russia would be made.

Germany’s Uniper said on Thursday it would continue to pay for Russian gas in euros but added that it believes a “payment conversion compliant with sanctions law” is possible.

“Uniper is in talks with its contractual partner about the concrete payment modalities and is also in close coordination with the German government,” the company said in a statement.

A Uniper spokesperson told newspaper Rheinische Post on Thursday that the company would make payments into a Russian bank in euros, instead of a bank based in Europe.

Germany has reduced its consumption of Russian gas to 35% of imports from 55% before the war in Ukraine, but says it needs to keep buying from Moscow at least until next year to avoid a deep recession.

Uniper said that it cannot cope without Russian gas in the short term.

“This would have dramatic consequences for our economy,” it said in its statement.

Austrian energy firm OMV (OMVJF) said on Thursday that it had considered the new payment request from Russian gas giant Gazprom and was “now working on a sanctions-compliant solution.”
Putin on Wednesday made good on his threat to cut off countries that refuse the new payment terms. Gazprom announced it had suspended gas supplies to Bulgaria and Poland because they had refused to pay in rubles, stoking fears that other EU countries — including major gas importers Germany and Italy — could be next.

Sanctions loophole?

There could be a workaround. The European Commission issued guidance to EU member states last week saying that is “appears possible” that buyers could comply with the new Russian rules without getting into conflict with EU law.

EU governments are likely to allow the payment mechanism to go ahead, Eurasia Group said in a note on Thursday.

Other analysts aren’t so sure, and say the process won’t be simple. European customers could inadvertently fall foul of sanctions if they use the Gazprombank mechanism.

“The conversion process to rubles may potentially involve sanctioned entities, and that may not be evident to the buyer,” Kaushal Ramesh, senior analyst at Rystad Energy, told CNN Business.

The new payment mechanism will likely take some time to implement, but Gazprom is expected to show flexibility with upcoming payment deadlines, Eurasia Group said.

— Robert North contributed to this report.

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US

Crucial Russian sovereign bond payment received by JPMorgan, processed -source

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File Photo: A view of the exterior of the JP Morgan Chase & Co. corporate headquarters in New York City May 20, 2015. REUTERS/Mike Segar

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NEW YORK, March 17 (Reuters) – Coupon payments on Russian sovereign bonds due this week were received by correspondent bank JPMorgan (JPM.N), processed and the bank then made an onwards credit to the paying agent Citi (C.N), a source familiar with the situation said on Thursday, an indicator that the country may have averted default.

The payment received was a U.S. dollar payment, the source said. After being credited to the paying agent, it would be checked and distributed on to various bondholders, the source said.

Russia said on Thursday it had made debt payments that were due this week. Russia was due to pay $117 million in coupon payments on Wednesday on two dollar-denominated sovereign bonds and some creditors had received payments, market sources separately told Reuters, also indicating it avoided what would have been its first external bond default in a century. read more

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The payments were widely seen as the first test of whether Moscow would meet its obligations after Western sanctions hobbled its financial dealings.

The source said that JPMorgan’s obligation as a foreign correspondent bank was to process payments, but that given the circumstances, also to check with authorities before doing so.

Sanctions imposed over Moscow’s invasion of Ukraine have cut Russia off from the global financial system and blocked the bulk of its gold and foreign exchange reserves, while Moscow has in turn retaliated – all of which complicate payments.

The bank checked with authorities before processing, the source said. Not to process the payment would have harmed bondholders, the source said.

Under the sanctions and restrictions announced last month, in response to Russia’s invasion of Ukraine, U.S. banks were prohibited from correspondent banking – allowing banks to make payments between one another and move money around the globe – with Russia’s largest lender, Sberbank, within 30 days. Washington and its partners also started barring some Russian banks from the SWIFT international payment system – a step that will stop lenders from conducting most of their financial transactions worldwide. read more

A March 2020 report by the Bank for International Settlements showed that correspondent banks have been “paring back their cross-border banking relations for the past decade.” The number of correspondent banks fell by 20% between 2011 and 2018, even as the value of payments increased, the report said.

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Reporting by Megan Davies;
Editing by Chizu Nomiyama and Andrea Ricci

Our Standards: The Thomson Reuters Trust Principles.

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US

Russia says it made a payment to avoid default

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That’s because the funds the country used to make the debt payments came from Russia’s frozen foreign assets, sanctioned because of its attack on Ukraine — so it remains unclear whether investors will receive their money.

Anton Siluanov, Russia’s finance minister, told state media Russia Today that the country had made good on its obligations to creditors. But the “possibility or impossibility of fulfilling our obligations in foreign currency does not depend on us,” Siluanov said, according to RT, warning that the payment might not go through if the United States disallows it.

“We have the money, we made the payment, now the ball is in America’s court,” he said.

A spokesman for the Treasury said the United States would allow the payments to go through.

The two coupons Russia must pay on the maturing dollar-denominated eurobonds serve as the first test of Russia’s ability to pay its debts while the world heaves massive sanctions on its economy.

If the US blocked the payment, Russia said it would try to pay in rubles rather than dollars. But that action could constitute a default, Fitch Ratings said Tuesday.

It highlights the crunch Russia is in: The nation has the money to pay its debts. It just can’t access about half of those funds after the West placed unprecedented sanctions on its foreign reserves, totaling about $315 billion, according to Siluanov.

If the Russian government defaults, investors’ losses could start to mount.

Western investors are less exposed to Russia than they used to be. Sanctions following the annexation of Crimea in 2014 already encouraged them to reduce their exposure. But international banks are owed about $121 billion by Russian entities, according to the Bank for International Settlements.

JPMorgan estimates that Russia had about $40 billion of foreign currency debt at the end of last year, with about half of that held by foreign investors. So a default would be bad news for Russia, which will have to meet its obligations in its practically worthless currency, lacking access to foreign financing. But the global markets probably won’t get hurt too badly.

More payments are coming due soon. A much larger $2 billion payment scheduled for early April could create even bigger headaches for Moscow.

— CNN’s Lindsay Isaac, John Harwood and Julia Horowitz contributed to this report

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Business

Boris Johnson pushes for Russia to be ejected from Swift payment system

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Boris Johnson, UK prime minister, is pushing “very hard” for Russia to be ejected from the Swift international payments system, a move that would deliver a heavy blow to the country’s banks and its ability to trade beyond its borders.

However, Olaf Scholz, German chancellor, warned Johnson on Thursday that his country would not support such a dramatic move and neither would the EU, according to officials close to sanctions negotiations. A German official declined to comment, saying only that “all options are still on the table”.

Johnson has faced criticism in the UK for deploying what critics described as “peashooter” sanctions in response to the first stage of Russian aggression in Ukraine; he is now trying to push western colleagues to deploy very tough reprisals.

“The PM is very keen on this — he’s pushing it very hard,” said one British official, referring to his efforts to eject Russia from Swift. Johnson also raised the idea at a meeting with City of London executives on Wednesday.

But Downing Street conceded that any move regarding Swift could only be done with international agreement, a position shared by the Biden administration. “We have to do it together,” the British official said.

Johnson was expected to push for international support for Russia to be cut out of the Swift system in a call with G7 leaders later on Thursday.

The US has so far suggested that it was too early to consider the move, while saying that no option was off the table.

Daleep Singh, a deputy White House national security adviser, earlier this week said there were “other severe measures we can take that our allies and partners are ready to take in lockstep with us, and that don’t have the same spillover effects”.

The EU is locked in discussions over how to approach the issue. While Baltic countries and Poland are among those who are advocating a hawkish line on the topic, other member states are more wary.

Swift has long been on the table as an option within the EU’s sanctions package, but it was not seen as a likely part of any early round of measures, and was instead held in reserve for extra deterrence. But the scale of Russia’s invasion of Ukraine has prompted a debate about whether to speed up its use.

Milos Zeman, Czech president, on Thursday said that he wanted to impose harder EU sanctions on Russia, including ejecting its banks from Swift, arguing that it was important to isolate Vladimir Putin, Russia’s president.

EU leaders will convene on Thursday evening in Brussels to discuss the bloc’s sanctions package.

Removing Russia from Swift would be a heavy blow to its biggest banks and would hamper the country’s ability to trade outside its borders. It would also stymie Russia’s ability to recoup international profits from its oil and gas exports, which account for more than 40 per cent of its revenue.

Swift, a Belgian co-operative, is used by more than 11,000 banks and financial institutions worldwide and handles 42mn messages a day, facilitating trillions of dollars worth of transactions. Russia accounted for 1.5 per cent of transactions in 2020.

Being cut off from Swift would not prevent Russian banks from carrying out cross-border transactions, but doing so would become more costly and arduous. Foreign dealings would rely on the use of less efficient communication tools, such as email and telex.

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Business

US judge bars Martin Shkreli from drug industry, orders $64.6 million payment

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A U.S. judge on Friday barred Martin Shkreli from the pharmaceutical industry for life and ordered him to pay $64.6 million after he famously raised the price of the drug Daraprim and fought to block generic competitors. (Carlo Allegri, Reuters)

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WASHINGTON — A U.S. judge on Friday barred Martin Shkreli from the pharmaceutical industry for life and ordered him to pay $64.6 million after he famously raised the price of the drug Daraprim and fought to block generic competitors.

U.S. District Judge Denise Cote in Manhattan ruled after a trial where the U.S. Federal Trade Commission and seven states had accused Shkreli, the founder of Vyera Pharmaceuticals, of using illegal tactics to keep Daraprim rivals out of the market.

Shkreli drew notoriety in 2015 after hiking Daraprim’s price overnight to $750 per tablet from $17.50. The drug treats toxoplasmosis, a parasitic infection that threatens people with weakened immune systems.

In a 130-page decision, Cote faulted Shkreli for creating two companies, Vyera and Retrophin, designed to monopolize drugs so he could profit “on the backs” of patients, doctors and distributors.

She said the Daraprim scheme was “particularly heartless and coercive,” and a lifetime industry ban was needed because of the “real danger” that Shkreli could become a repeat offender.

“Shkreli’s anticompetitive conduct at the expense of the public health was flagrant and reckless,” the judge wrote. “He is unrepentant. Barring him from the opportunity to repeat that conduct is nothing if not in the interest of justice.”

After the ruling, FTC Chair Lina Khan tweeted the decision, calling it a “just outcome.”

Shkreli’s lawyers did not immediately respond to a request for comment.

Shkreli is serving a seven-year prison sentence for securities fraud. He did not attend the trial held last month.

Vyera was founded in 2014 as Turing Pharmaceuticals, and acquired Daraprim from Impax Laboratories in 2015.

Regulators accused Vyera of protecting its dominance of Daraprim by ensuring that generic drugmakers could not obtain samples for cheaper versions, and keeping potential rivals from buying a key ingredient.

The seven states joining the FTC case included California, Illinois, New York, North Carolina, Ohio, Pennsylvania and Virginia.

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Business

Tesla to accept dogecoin as payment for merchandise, says Musk

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Dec 14 (Reuters) – Tesla Inc (TSLA.O) chief Elon Musk said on Tuesday the electric carmaker will accept dogecoin as payment for merchandise on a test basis, sending the meme-based cryptocurrency up 24%.

“Tesla will make some merch buyable with Doge & see how it goes,” Musk said in a tweet.

Dogecoin, , popular among retail investors, raced up to $0.20 after the tweet. Musk’s tweets on the cryptocurrency, including the one where he called it the “people’s crypto”, have helped the meme coin soar 5,859% over the past year, according to data from Coinbase website.

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Musk did not specify what merchandise, which starts from $50 and goes as high as $1,900, could be bought with dogecoin.

Tesla sells apparel, ‘Giga Texas’ belt buckles and mini models of its vehicles as well as quirky limited-edition items such as the ‘Cyberwhistle’, which is modeled after its much-awaited Cybertruck. It recently launched a quad bike ‘Cyberquad’ for kids, also modeled after the truck.

Musk, a cryptocurrency supporter, has often endorsed dogecoin and said it is better for transactions, most recently in an interview to the Time magazine, which named him “Person of the Year” for 2021 on Monday.

“Bitcoin is not a good substitute for transactional currency,” he said.

Musk had asked users in May if they wanted Tesla to accept dogecoin in a Twitter poll. He had called dogecoin a ‘hustle’ during his guest-host spot on the “Saturday Night Live” comedy sketch TV show in May.

Musk, who has over 66 million followers on Twitter, has been highly engaged in this year’s retail trading frenzy, tweeting about cryptocurrencies and helping send their prices soaring.

The EV maker stopped accepting bitcoin for car purchases, less than two months after the company began to accept the world’s biggest digital currency for payment.

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Reporting by Nivedita Balu and Medha Singh in Bengaluru; Editing by Krishna Chandra Eluri

Our Standards: The Thomson Reuters Trust Principles.



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Business

Evergrande debt deadline passes with no sign of payment -sources

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The company logo is seen on the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021. REUTERS/Aly Song/File Photo

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HONG KONG/SHANGHAI, Dec 7 (Reuters) – Some offshore bondholders of China Evergrande Group (3333.HK) did not receive coupon payments by the end of a 30-day grace period, four people with knowledge of the matter said, pushing the cash-strapped property developer closer to formal default.

Failure to make $82.5 million in interest payments that were due last month would trigger cross-default on the firm’s roughly $19 billion of international bonds and put the developer at risk of becoming China’s biggest-ever defaulter – a possibility that has loomed over the world’s second-largest economy for months.

Once China’s top property developer, with over 1,300 real estate projects and $300 billion of liabilities, Evergrande has been the poster child of a property crisis in China this year that has already ripped down nearly a dozen smaller developers.

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The government has repeatedly said Evergrande’s problems can be contained and moves to boost liquidity in the banking sector along with the firm’s plans to forge ahead with a restructuring of its overseas debt have helped reassure global investors.

“The market already had certain expectations about this (non-payment)”, said strategist Kenny Ng at Everbright Sun Hung Kai Securities. It “just waited to see when this will happen”.

“At the same time, investors are watching the development of Evergrande, including whether it is heading for debt restructuring or its creditor repayment plan,” Ng said.

On Monday, the developer said it had established a risk-management committee that included officials from state entities to assist in “mitigating and eliminating the future risks”. read more

That came after it earlier said creditors had demanded $260 million and that it could not guarantee funds to repay debt. That prompted authorities to summon its chairman and reassure markets that broader risk could be contained. read more

So far, any Evergrande fallout had been broadly contained in China and with policymakers becoming more vocal and markets more familiar with the issue, consequences of Evergrande’s troubles are less likely to be widely felt, market watchers have said. read more

State involvement and hope of managed debt restructuring helped lift Evergrande stock as much as 8.3% a day after diving 20% to a record closing low. Still, it ended Tuesday up only 1.1% while its bonds continued to trade at distressed levels.

Notes due Nov. 6, 2022, – one of two tranches with a coupon payment deadline that passed Monday midnight in New York – traded at 18.282 cents on the dollar, Duration Finance data showed, little changed from a day earlier.

SELL OFF

Founded in 1996, Evergrande epitomised a freewheeling era of borrowing and building. That business model was scuttled, however, by hundreds of new rules designed to curb developers’ debt frenzy and promote affordable housing.

Evergrande became just one of a number of developers subsequently starved of liquidity, prompting offshore debt default and credit-rating downgrades, and a plunge in the value of developers’ stocks and bonds.

Smaller peer Kaisa Group Holdings Ltd (1638.HK) – China’s largest offshore debtor among developers after Evergrande – also risks defaulting on a $400 million bond maturing on Tuesday having failed to make a deal with bondholders.

To avoid an overall default, bondholders owning over 50% of the 6.5% notes due Dec. 7 sent Kaisa draft terms of forbearance late on Monday to work toward a solution, a person with direct knowledge of the matter old Reuters. Kaisa started discussing forbearance with bondholders last week, the person said.

Another person with direct knowledge said discussions are at preliminary stages and that it will take time to finalise terms.

The people declined to be identified as the information was confidential.

Responding to Reuters’ request for comment, Kaisa said it is open to discussion on forbearance, without elaborating.

Sources previously told Reuters that the bondholders, had offered Kaisa $2 billion in funding last month but that no major progress on the offer was made. read more

Shares of Kaisa – the first Chinese developer to default on an offshore bond in 2015 – rose 1.1% on Tuesday.

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Reporting by Clare Jim and Scott Murdoch in Hong Kong and Andrew Galbraith in Shanghai; Editing by Sumeet Chatterjee and Christopher Cushing

Our Standards: The Thomson Reuters Trust Principles.

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Business

Company Now Accepts Cryptocurrency as Online Payment

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Photo: Scott Olson (Getty Images)

AMC, one of the biggest memestocks of them all, is embracing another meme power player: cryptocurrency. And its CEO is really excited about it.

CEO Adam Aron proudly tweeted on Friday that the company would now accept a slew of cryptocurrencies for online payment. Prefacing with “drumroll, please,” Aron announced that bitcoin, ethereum, bitcoin cash, and litecoin were welcome at AMC, adding that the movie theater chain also accepts Apple Pay, Google Pay, and PayPal.

“Big newsflash! As promised, many new ways NOW to pay online at AMC,” Aron wrote. “We proudly now accept: drumroll, please… Bitcoin, Ethereum, Bitcoin Cash, Litecoin. Also Apple Pay, Google Pay, PayPal. Incredibly, they already account for 14% of our total online transactions! Dogecoin next.”

He then retweeted a meme of himself photoshopped on a golden dogecoin.

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Importantly, Aron said cryptocurrency can be used for online purchases, so it doesn’t look like you’ll be able to use it to buy anything in-person at the moment. (As far as payment goes, the Verge points out that PayPal seems to be the only way to pay with cryptocurrency right now). AMC previously already allowed customers to purchase gift cards with cryptocurrency.

Aron’s announcement doesn’t come as a surprise. Over the past few months, he’s been insisting to shareholders that the company was working on accepting cryptocurrency for online payments. He even pulled a page out of Tesla CEO Elon Musk’s playbook and created two Twitter polls to ask the public whether AMC should accept dogecoin and shiba inu. (Coincidentally, Musk liked Aron’s dogecoin poll, which made the AMC CEO go full stan).

Why is Aron so into with cryptocurrency, you ask? It all comes down to the company’s new shareholders, the retailer investors who rallied together on Reddit’s r/wallstreetbets through memes to help keep the company afloat at the beginning of the year (and stick it to Wall Street). In June, Aron announced that these shareholders owned more than 80% of the company and promised to give them free popcorn.

“We work for them. I work for them,” Aron said in June. “By definition, their interests and passions are important to AMC, their ambitions and passions are important to me.”

One of those passions happens to be cryptocurrency, according to Aron. And he’s happy to oblige. That’s easier said than done, though.



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Business

Evergrande Meets Another Interest Payment Deadline

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China Evergrande, the troubled property giant, made interest payments on at least two of its bonds on Wednesday, a company bondholder said, a sign that it yet again managed to head off default.

Evergrande owed investors interest payments totaling nearly $150 million on three bonds, with the grace periods for those payments set to expire on Wednesday. Missing them would have triggered a default that could ripple through the Chinese economy: With some $300 billion in debt outstanding, the company’s inability to pay its debt would potentially hurt banks, property developers, and even home buyers in the country.

Instead, the company has managed to leap from one deadline to the next, meeting its obligations at the last minute — but often without explaining how or even publicly disclosing that it had done so. The company has tried to sell off parts of its empire to raise enough cash.

In October, when Evergrande said it had scrapped its effort to sell a $2.6 billion stake in its property services company to another developer, the company warned in a Hong Kong securities filing that there was “no guarantee” it would be able to meet its financial obligations or negotiate an extension with its creditors.

On Wednesday, the company met its interest payment deadline for bonds that mature in 2022 and 2023, the company bondholder said, speaking on condition of anonymity to discuss the matter.

The person did not specify if a payment on the third bond had also been made, but Bloomberg News reported that obligations for all three bonds were met, citing a spokesman for a clearing house.

The company didn’t respond to a request for comment.

Although Evergrande has managed to avoid default so far, its troubles have already begun to weigh on other Chinese developers, with the government tightening controls on borrowing and investors retreating from the sector.

At least six Chinese property developers have defaulted on foreign bonds in recent weeks, rattling domestic financial markets and raising the cost of borrowing for all Chinese companies. Property prices are slowing and fewer people are buying apartments, worsening the outlook for real estate.

Evergrande’s challenges could spread outside of China as well, as they ripple through global financial markets. On Monday, the Federal Reserve said troubles in China’s property sector could threaten the United States.

“Given the size of China’s economy and financial system as well as its extensive trade linkages with the rest of the world, financial stresses in China could strain global financial markets through a deterioration of risk sentiment, pose risks to global economic growth, and affect the United States,” the Fed said in its twice-yearly update on the American financial system.

Alexandra Stevenson contributed reporting.

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