The professional wrestling executive tapped by President Donald Trump to lead the Small Business Administration could face tough questions about her role in stifling small- and medium-size competitors as she and her husband built a multimillion-dollar business.
Linda McMahon, 68, a co-founder and former chief executive of World Wrestling Entertainment and a top Trump donor, will face lawmakers from the Senate Small Business and Entrepreneurship Committee in a confirmation hearing Tuesday.
If confirmed, McMahon would replace Maria Contreras-Sweet, a former bank executive and California Cabinet secretary, as administrator of the SBA. The agency, which partners with banks and credit unions to lend to small businesses, also serves as an advocate for 30 million small businesses.
McMahon plans to highlight her experience building and running the Stamford, Connecticut-based entertainment empire, according to her opening remarks posted on the committee’s website.
“Like all small business owners, I know what it’s like to take a risk on an idea, manage cash flow, navigate regulations and tax laws, and create jobs,” said McMahon, who staged two failed Senate bids.
But business groups say they are concerned about how McMahon dealt with mom-and-pop outfits when she was chief executive of WWE from 1997 to 2009.
“From what we know of Linda McMahon’s record, there’s a history of questionable competitive practices as she and her husband developed their massive business through gobbling up their competition,” said Amanda Ballantyne, director of the Main Street Allliance, which advocates on behalf of small businesses.
McMahon and her husband, Vincent, took over his father’s enterprise in 1982, at a time when professional wrestling was made up of three dozen regional promoters. Together, the McMahons assembled a national powerhouse, producing events across the country. It was not without critics. “The WWF’s relentless warfare has all but destroyed its serious competition,” Sports Illustrated declared in 1991.
By the time WWE went public in 1999, the company had 276 employees and $251.5 million in annual revenue. (In 2015, WWE had 800 employees and posted record revenue of $659 million.)
“There were wrestling fiefdoms all over the country, each with its own little lord in charge,” Vince McMahon said in the Sports Illustrated story. “And if I hadn’t bought out my dad, there would still be 30 of them, fragmented and struggling. I, of course, had no allegiance to those little lords.”
Trump’s Cabinet picks – many millionaires and billionaires with thin political resumes – have proven at odds with the populist message that won him the White House. McMahon is no exception.
“This selection is proof that President-elect Trump’s commitment to small businesses is about as ‘real’ as professional wrestling,” Rep. Nydia M. Velázquez of New York, the top Democrat on the House Small Business Committee, said in December.
“Linda has a tremendous background and is widely recognized as one of the country’s top female executives advising businesses around the globe,” Trump said in announcing her nomination.
Federal disclosures show that WWE has spent more than $1 million lobbying federal and state governments to deregulate the wrestling industry. In the 1980s, McMahon was instrumental in convincing state legislatures that professional wrestling should be treated as entertainment instead of as a sport. As a result, WWE bypassed safety regulations.
The company treats its wrestlers as independent contractors, not employees, which means wrestlers are often left without health care and retirement benefits. More than 50 former wrestlers filed a class-action lawsuit against WWE last year alleging that the company should be held responsible for repetitive head injuries endured on the job.
McMahon has faced Congress before, to defend her company when accusations swirled of “pervasive” drug and steroid use. In 2007, she told lawmakers that the WWE had suspended its random drug testing program a decade earlier for financial reasons. When the program was revived in 2006, 40 percent of the company’s wrestlers tested positive for steroid or drug use.
“It was just no longer cost effective to random test across the large pool of talent that we had,” McMahon told the lawmakers.
A WWE spokesman declined to comment. Representatives for McMahon did not respond to requests for comment.
“It’s a shameful human toll that made the McMahons near-billionaires,” said Irvin Muchnick, a journalist who has written extensively about traumatic brain injuries and wrestling. “WWE has essentially become a monopoly.”
McMahon was one of Trump’s early backers and contributed $7 million to support his campaign. The two have been chummy since the late 1980s when WWE held WrestleMania, an annual pay-per-view event, at Trump Plaza in Atlantic City, New Jersey.
“He was a wonderful promoter,” McMahon has said of Trump. “He really greased the wheels and made things very easy.”
Trump, who was inducted into the WWE Hall of Fame in 2013, has been a longtime supporter of the McMahons’ business and has appeared on their shows. In 2007, he shaved Vince McMahon’s head on national television after winning the “Battle of the Billionaires.” Moments later, Stone Cold Steve Austin slammed Trump to the ground with his signature move, the “Stone Cold Stunner.”
Two years later, shares of WWE tanked nearly 7 percent after USA Networks put out a fake news release saying Trump would be buying WWE’s flagship program, “Monday Night Raw.” Trump held a news conference to discuss the matter, which turned out to be staged for the sake of a wrestling storyline.
The McMahons also have given $5 million to the Trump Foundation, making them the charity’s largest donors other than Trump. In 2009, they bought a $4.1 million penthouse in the Trump Parc Stamford, a luxury high-rise in Connecticut.
“The financial relationship the McMahons have had with the Trumps for the past many years is cause for concern,” said Ballantyne of the Main Street Allliance. “This is essentially ‘pay for play.'”
Some small business groups say McMahon is disconnected from issues important to them such as access to capital and concerns related to health care and taxes.
“Linda McMahon has run an enterprise – although not a typical small business – but it’s unclear what she stands for and how she would address some of the critical issues that the SBA deals with,” said John Arensmeyer, chief executive of Small Business Majority, an advocacy group.