Donald Trump’s Small Business Pick Has A History Of Crushing Smaller Competitors

Linda McMahon helped turn WWE into a virtual monopoly accused of exploiting its workers.

WASHINGTON ― Linda McMahon, the former World Wrestling Entertainment chief executive whom President-elect Donald Trump has tapped to run the Small Business Administration, built her billion-dollar corporate empire by crushing many of WWE’s smaller competitors.

Trump has claimed that McMahon helped grow WWE from a “modest 13-person operation to a publicly traded global enterprise with more than 800 employees in offices worldwide” ― a statement that appears word-for-word on McMahon’s personal website.

But the real story is more complicated — and controversial.

The World Wrestling Federation, which later became WWE, and that McMahon had a hand in running for nearly three decades, was not exactly a small business when she and her husband, Vince, took it over from Vince’s father in 1982, said Dr. Scott Beekman, a historian at the University of Rio Grande and the author of Ringside: A History of Professional Wrestling in America.

“They might have had 13 employees when they took over, but that doesn’t mean they weren’t running monthly shows at the premier palace in the nation,” Beekman said, referring to Madison Square Garden, where Vince McMahon’s father had begun staging wrestling matches even before the couple assumed control of the business. The company already controlled wrestling across the mid-Atlantic and Northeast region. “It was a far larger operation” than the term small business would suggest, Beekman said.

At the time, the WWF fit into a patchwork of small- and medium-sized wrestling organizations that operated on a regional basis and largely tried to keep from infringing on each other’s territory. The majority of those organizations worked in concert under the National Wrestling Alliance, a governing body that covered many independent wrestling businesses, and adhered to a pact that kept them from moving into each other’s regions or poaching rival talent.

The McMahons, however, envisioned a national wrestling empire, and at times showed little concern for the fates of rival promoters who stood in their way. Their not-so-small business swallowed up many of the other existing regional wrestling organizations and established what is effectively a monopoly over the industry.

Vince McMahon has bragged about pushing his competitors out of business.

“WWE's "relentless warfare" on smaller wrestling companies "all but destroyed its serious competition," according to Sports Illustrated.”

In the old days, there were wrestling fiefdoms all over the country, each with its own little lord in charge,” Vince McMahon told Sports Illustrated in 1991. “Each little lord respected the rights of his neighboring little lord. No takeovers or raids were allowed. There were maybe 30 of these tiny kingdoms in the U.S. 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.”

In 1984, on a day known to wrestling fans as “Black Saturday,” WWE took over the popular regional Georgia Championship Wrestling company and assumed its national TV slot. The company’s “relentless warfare” on smaller wrestling companies — which included moving into their territory, buying them out and luring away stars — “all but destroyed its serious competition,” according to Sports Illustrated. WWE then managed to hold off — and eventually outlast — World Championship Wrestling, its only major national competitor. WWE acquired it in 2001.

The National Wrestling Alliance and other smaller wrestling companies still exist today. But they hardly compete with WWE, which is now “effectively a monopoly,” Beekman said.

As an effective monopoly, WWE has a lot of power over its workers, who may not have better options if they want to stay in the industry. Linda McMahon served as CEO from 1997 to 2009, and during her time with WWE, she pushed for exemptions from state athletic regulations, arguing that wrestling should be treated more like entertainment, rather than a sport. The company also argued that wrestlers are independent contractors, not employees, because they do not have corporate responsibilities. This allowed WWE to avoid requirements that it provide wrestlers health insurance, for example.

Before the passage of the Affordable Care Act, people in high-risk professions such as professional athletes had a hard time getting insured at all. If they were able to get insurance, it was likely very expensive. According to PW Insider, a wrestling news outlet, WWE didn’t require wrestlers to obtain medical coverage until 2011.

Three wrestlers sued WWE in 2008, alleging that because WWE had exercised “total control” over all aspects of their employment, including forbidding the wrestlers from having a separate occupation, they were essentially employees and should have been granted benefits accordingly. (That lawsuit was dismissed.)

“I just don’t see, given the whole set of circumstances, how anyone with a straight face can conclude this is not an employee,” argued Robert Solomon, a law professor at the University of California, Irvine, who has worked on workers’ compensation issues. Treating wrestlers like contractors, he added, has taken “advantage of laborers.”

A spokesman for WWE declined to comment. The Trump transition team and McMahon did not respond to requests for comment.

WWE has stated that the organization pays to treat injuries that occur in-ring, as well as drug rehabilitation. They have also pointed to the corporate wellness program — which includes drug testing — when answering critics who say they haven’t done enough to combat steroid use.

Classifying wrestlers as independent contractors, a practice that has not changed, is especially controversial because the sport is so risky. At least 65 wrestlers died between 1997 and 2004, according to a USA Today investigation. In 17 of the cases, medical examiners noted the use of steroids, painkillers or other drugs. (The report did not look at how many were contracted with WWE.)

McMahon and WWE have long denied they are to blame for wrestler deaths. In a congressional hearing in 2007, McMahon said that although one death is too many, “we didn’t feel a responsibility for those talent who had died because we had nothing to do with what had occurred with them, whatever lifestyle they had chosen or how ― you know, what had caused their death.”

The McMahons went before Congress to testify as part of a committee’s investigation into allegations regarding illegal drug use, a few months after star wrestler Chris Benoit, who had drugs in his system, killed his family and took his own life. But Linda McMahon said she had never learned that anyone associated with WWE had used steroids or illegal drugs from 1996 to 2006: “I don’t recall that I did.”

WWE had also been previously accused of not doing enough to prevent steroid use. Vince McMahon was federally indicted in 1993 on charges that he conspired to give anabolic steroids to wrestlers. Wrestler Terry Gene Bollea ― better known as Hulk Hogan ― later testified that he would call Vince’s executive secretary and ask her to place orders for him, and that he would pick the steroids up along with his paycheck. Vince was ultimately acquitted.

Linda McMahon, a longtime Trump supporter who gave $5 million to the Trump Foundation between 2007 and 2009 and donated $7 million to a pro-Trump super PAC, is likely to be less controversial than some of the president-elect’s other picks, which include a chief strategist who headed a website that promotes white nationalist views. But if confirmed, she will lead a federal agency that has important responsibilities that include running a large loan guarantee program for small businesses, providing assistance with disaster relief, and helping companies navigate thorny issues like health care regulations. The SBA, which McMahon once supported folding into the Commerce Department, acts as an advocate for small businesses. Her views on health care and the treatment of independent contractors are relevant to the job, and some small business owners who will have to deal with her are worried.

“We need a leader who truly understands the struggles of small business owners and has the technical expertise to navigate the maze of complex programs to steer the SBA in the right direction,” said Amanda Ballantyne, national director of the the Main Street Alliance, a national network of small business coalitions. “We fear that Linda McMahon does not meet this criterion and is ill-equipped to address the needs of our members and their fellow small business owners.”

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