UFC and WWE combine to form $21.4 billion sports entertainment company

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

A new publicly traded company will house the UFC and World Wrestling Entertainment brands, with Endeavor Group Holdings Inc. taking a 51% majority stake in the new company. Current WWE shareholders will hold a 49% stake.

The companies value the enterprise value of the UFC at $12.1 billion and that of WWE at $9.3 billion.

The new venture, which has yet to be named, will be led by Endeavor CEO Ari Emanuel. Vince McMahon, WWE Executive Chairman, will fulfill the same role to the new company. Dana White will continue as UFC President and Nick Khan will be WWE President.

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

He also hinted at the direction of the new company, saying it will seek to maximize the value of combined media rights, improve sponsorship monetization, develop new forms of content and pursue further mergers. and strategic acquisitions to further strengthen their brands.

Talent ties already exist between WWE and UFC, with stars such as Brock Lesnar and Ronda Rousey crossing paths between the two companies.

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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 brought 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 World Wrestling Federation and later World Wrestling Entertainment, held its first WrestleMania in 1985.

McMahon, in an interview with CNBC, raised the idea that there were doubts among some WWE fans and industry pundits that he would ever strike a deal for the company. “Now is the right time to do the right thing. And that’s the next evolution of WWE,” he said.

The WWE sale announcement comes after WWE founder and majority shareholder McMahon returned to the company in January and said it could be put up for sale.

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

McMahon acknowledged to CNBC that there are multiple contenders in WWE, but combining with Endeavor is the right move.

“It makes perfect sense for all of these synergies that we need to extract all the value we can from the market,” he explained.

Media industry analysts viewed WWE as an attractive target given its global reach and loyal fan base, which includes everyone from minors to seniors and a wide income range.

The company held its flagship event, WrestleMania, over the weekend. Last year, WWE made $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 YouTube subscribers and over 20 million subscribers on TikTok. Its female wrestlers include five of the 15 most followed female athletes in the world, on Facebook, Twitter and Instagram, led by Ronda Rousey with 36.1 million followers.

WWE recorded over 7.5 billion views across digital and social media in January and February 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 of directors will have 11 members, including six appointed by Endeavor and five appointed by WWE.

“We love the strengths 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,” the Jeffries analyst said. , Randal Konik, in a note to clients.

The transaction, which has been approved by the Endeavor and WWE Boards of Directors, is expected to close in the second half. It still needs to get regulatory approval.

Shares of Stamford, Connecticut-based World Wrestling Entertainment Inc. are up 33% this year but fell 5% at the opening bell on Monday. Shares of Endeavor, based in Beverly Hills, Calif., fell less than 1%.

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