UFC, WWE merge to form $21.4 billion sports entertainment company

WWE and the company that operates the Ultimate Fighting Championship will merge to create a $21.4 billion sports entertainment company.

A new publicly traded company will house the UFC and World Wrestling Entertainment brands as Endeavor Group Holdings Inc. will take a 51% controlling stake in the new company. Existing WWE shareholders will own a 49% stake.

The companies put UFC’s enterprise value at $12.1 billion and WWE’s at $9.3 billion.

The new business, which does not yet have a name, will be led by Endeavor CEO Ari Emanuel. Vince McMahon, executive chairman of WWE, will serve in the same role in the new company. Dana White will continue to be the president of the UFC and Nick Khan will be the president of the WWE.

“Together, we will be a $21+ billion live sports and entertainment powerhouse with a collective fan base of more than one billion people and an exciting opportunity for growth,” McMahon said in a prepared statement Monday.

He also gave some insight into where the new company’s focus will be, saying it will seek to maximize the value of combined media rights, improve sponsorship monetization, develop new forms of content and pursue other strategic mergers and acquisitions to further strengthen its brands.

There is already talent synergy between the WWE and UFC, with stars like Brock Lesnar and Ronda Rousey switching between the two businesses.

The deal between Endeavor and WWE catapults WWE into a new era after operating as a family business for decades. McMahon purchased Capitol Wrestling from his father in 1982 and took the regional wrestling business to a national audience with wrestling stars such as Andre the Giant, Hulk Hogan and Dwayne “The Rock” Johnson. The company, which changed its name to the World Wrestling Federation and later World Wrestling Entertainment, hosted its first WrestleMania in 1985.

The WWE deal announcement comes on the heels of McMahonthe founder and majority shareholder of WWE, returned to the company in January and said it could be sold.

Rumors have swirled about who would likely be interested in buying WWE, with Endeavor, Disney, Fox, Comcast, Amazon and Saudi Arabia’s Public Investment Fund all in the mix.

Media industry analysts were watching WWE as an attractive target given its global reach and loyal fanbase that includes everyone from minors to seniors and a wide range of incomes.

The company held its landmark event, WrestleMania, during the weekend. Last year, WWE reported $1.3 billion in revenue.

The company is also a social media powerhouse. It surpassed 16 billion social video views in the last quarter of last year. He has nearly 94 million subscribers on YouTube and has more than 20 million followers on TikTok. Its fights feature five of the top 15 most followed female athletes in the world on Facebook, Twitter and Instagram, led by Ronda Rousey with 36.1 million followers.

WWE had more than 7.5 billion views across digital and social media in January and February of this year, up 15% from the same period a year ago.

The new company plans to trade on the New York Stock Exchange under the symbol “TKO.” Its board will have 11 members, with six appointed by Endeavor and five appointed by WWE.

“We like the assets of UFC and also WWE in a world where linear TV is losing market share to streaming, so live sports content is in high demand,” Jeffries analyst Randall Connick wrote in a note to clients.

The transaction, which was approved by the boards of Endeavor and WWE, is scheduled to close in the second half of the year. Still needs regulatory approval.

Shares of Stamford, Conn.-based World Wrestling Entertainment Inc. have risen 33% this year, but fell more than 6% before Monday’s open. Shares of Beverly Hills, Calif.-based Endeavor rose more than 4 percent.

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