What Is the Status of the State of Connecticut’s WWE Investigation?

There are two open government investigations of the pro wrestling industry. One is dormant and probably will be revived only if Senator-elect Richard Blumenthal chooses to push for it. The focus of this post is the other one: the state of Connecticut’s audit of World Wrestling Entertainment’s alleged misclassification of its wrestlers as independent contractors, about which little is known.

The dormant investigation is at the federal level. In 2007, in the wake of the Chris Benoit double murder-suicide, Congressman Henry Waxman’s House Committee on Oversight and Government Reform investigated both WWE and its much smaller competitor, TNA, for their drug-testing and occupational health and safety standards. The probe culminated in extensive interviews of WWE executives and contractors by committee staff, but not in public hearings. In January 2009, Waxman, who was leaving Oversight and Government Reform to take the chair of the Energy and Commerce Committee, summarized his findings in a letter to the White House Office of National Drug Control Policy. Nothing wrestling-wise has been heard from Washington since that time.

Meanwhile, in WWE’s home state of Connecticut, where former CEO Linda McMahon just concluded an unsuccessful $50 million “self-funded” campaign for the Senate seat won by Blumenthal, reports surfaced this year that the company was under investigation for independent contractor abuse. Since the only on-the-record source on this at the time of the first published report (by Brian Lockhart of Hearst newspapers) was WWE itself, I was suspicious. There are “audits” of various levels of seriousness, and whether they mushroom into wider-scale and important investigations is another matter. That said, after talking to a number of sources, I am convinced that the state probe is for real and was not simply a preemptive leak by WWE to head it off and to abet the Linda McMahon campaign with the suggestion that her opponent, state Attorney General Blumenthal, might be abusing his office for political purposes.

Yet I am also struck by the fact that WWE, a publicly traded corporation, does not disclose a state investigation in its most recent quarterly 10-Q filing with the Securities and Exchange Commission. (For the 10-Q excerpt in which WWE discloses “Commitments and Contingencies,” see http://muchnick.net/wwefiling.pdf.) A state audit of independent contractor practices would seem to be material and disclosable.

In Lockhart’s original report, he quoted a Labor Department spokesman, Paul Oates, with a no-comment. Today I left a phone message for Oates, which was not returned.

Yesterday I faxed Blumenthal with a request for a statement on his intentions with respect to WWE investigations. I said that to my knowledge, his sole comment to date “came during your post-election news conference, and it was imprecise, focusing on steroids. In the two weeks since, I note that you have issued a number of statements on other matters you look forward to pursuing when you take office.” I have not heard back from Blumenthal.

More tomorrow.

Irv Muchnick