UFC, WWE combine to form $21.4B sports entertainment company
WWE and the company that runs the Ultimate Fighting Championship will combine to form a $21.4 billion sports entertainment company.
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A new publicly traded company will house the UFC and World Wrestling Entertainment brands, with Endeavor Group Holdings Inc. will take a 51% controlling interest in the new company. Existing WWE shareholders will hold a 49% stake.
The companies valued the UFC at an enterprise value of $12.1 billion and WWE at $9.3 billion.
The new business, which doesn’t yet have a name, will be led by Endeavor CEO Ari Emmanuel. WWE Executive Chairman Vince McMahon will serve in the same role in the new company. Dana White will continue as the chairman of the UFC and Nick Khan will be the chairman in WWE.
“Together, we will be a $21+ billion live sports and entertainment powerhouse with a collective fanbase of over a billion people and an exciting growth opportunity,” McMahon said in a prepared statement Monday.
He also stated where the focus of the new company would be, adding that it would look to maximize the value of combined media rights, enhance sponsorship monetization, develop new forms of content, and pursue other strategic mergers and acquisitions. Will increase brand.
The relationship between WWE and UFC already exists, with stars like Brock Lesnar and Ronda Rousey crossing over between the two businesses.
The deal between Endeavor and WWE ushered WWE into a new era after decades of operating as a family-run business. McMahon purchased Capitol Wrestling from his father in 1982, and took the regional wrestling business to a national audience with the likes of 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 to World Wrestling Entertainment, hosted its first WrestleMania in 1985.
McMahon addressed the notion in an interview with CNBC that there was skepticism among some WWE fans and industry experts that he would ever make a deal for the business. “This is the right time to do the right thing. And this is the next evolution of WWE,” he said.
The announcement of the WWE sale comes after McMahon, the founder and majority shareholder of WWE, reached out to the company back in January and said it may be up for sale.
Rumors abounded about who might be interested in buying WWE, with a mix of Endeavor, Disney, Fox, Comcast, Amazon, and Saudi Arabia’s Public Investment Fund.
McMahon admitted to CNBC that there were many contenders for WWE, but the combination with Endeavor is the right move.
“All that makes sense in the world for these synergies is to extract the value we can from the market,” he explained.
Media industry analysts view WWE as an attractive target, given its global reach and loyal fan base, ranging from minors to seniors, and a wide range of incomes.
The company held its marquee event, WrestleMania, over the weekend. Last year, WWE booked a revenue of $1.3 billion.
The company is also a social media powerhouse. It crossed 16 billion social video views in the last quarter of last year. It has around 94 million YouTube subscribers and more than 20 million followers on TikTok. Its female wrestlers include five of the top 15 most followed female athletes worldwide on Facebook, Twitter and Instagram, with 36.1 million followers.
WWE had over 7.5 billion digital and social media views in January and February this year, up 15% from the same time frame a year ago.
The new company plans to trade on the New York Stock Exchange under the ticker symbol “TKO”. Its board will consist of 11 members, six of whom will be appointed by Endeavor and five by WWE.
“We like the UFC and WWE assets in a world where linear TV is losing market share to streaming, thus live sports content is in high demand,” Jefferies analyst Randall Konick wrote in a note to clients. “
The transaction, which was approved by the boards of Endeavor and WWE, is targeted to close in the second half of the year. It still needs regulatory approval.
Shares of World Wrestling Entertainment Inc., based in Stamford, Connecticut, are up 33% this year but fell 5% at the opening bell on Monday. Shares of Endeavor, based in Beverly Hills, California, slipped less than 1%.
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