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Endeavor Group Holdings and World Wrestling Entertainment (WWE) have announced the formation of a new, publicly listed company worth over $21 billion, which will combine the two iconic global sports and entertainment brands, the UFC and WWE. Endeavor will hold a 51% controlling interest in the new company, while existing WWE shareholders will hold a 49% interest. The new company will be led by Endeavor CEO Ariel Emanuel, WWE Executive Chairman Vince McMahon, and President and COO of both Endeavor and the new company, Mark Shapiro.
Together, the UFC and WWE expect to deliver $50 million to $100 million in annualized run-rate cost synergies by leveraging Endeavor’s back office and infrastructure. Endeavor also expects significant growth across revenue areas, including domestic and international media rights, ticket sales and yield optimization, event operations, sponsorship, licensing, and premium hospitality. The success Endeavour has had at UFC, which has seen more than 2x Adjusted EBITDA growth since its acquisition in late 2016, demonstrates the value creation opportunity and upside potential of having UFC and WWE under one roof.
1) Vince McMahon tells CNBC he will be involved in creative “on a higher level,” but not “in the weeds.”
2) Can we talk about Vince’s new look? pic.twitter.com/lc5pl2hxnM
— Jimmy Traina (@JimmyTraina) April 3, 2023
The transaction values UFC at an enterprise value of $12.1 billion and WWE at an enterprise value of $9.3 billion. The transaction represents a contribution price of WWE of approximately $106 per share (before any post-closing dividend). At closing, Endeavor intends to sweep all excess cash at UFC, and shareholders of the new company (other than Endeavor) are expected to receive a post-closing dividend.
The new company will be listed on the New York Stock Exchange under the ticker symbol “TKO”. The transaction is expected to close in the second half of 2023, subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals. The transaction has been unanimously approved by the Executive Committee of the Board of Directors of Endeavor and by the Board of Directors of WWE.
“This is a rare opportunity to create a global live sports and entertainment pureplay built for where the industry is headed. For decades, Vince and his team have demonstrated an incredible track record of innovation and shareholder value creation, and we are confident that Endeavor can deliver significant additional value for shareholders by bringing UFC and WWE together,” said Ariel Emanuel, CEO of Endeavor.
“Together, we will be a $21+ billion live sports and entertainment powerhouse with a collective fanbase of more than a billion people and an exciting growth opportunity. The new company will be well positioned to maximize the value of our combined media rights, enhance sponsorship monetization, develop new forms of content, and pursue other strategic mergers and acquisitions to further bolster our strong stable of brands. I, along with the current WWE management team, look forward to working closely with Ari and the Endeavor and UFC teams to take the businesses to the next level,” said Vincent K. McMahon, Executive Chairman of WWE.
