WWE to be sold to owner of UFC: What is the Endeavor Group?
Endeavor Group, which owns the Ultimate Fighting Championship and is helmed by Hollywood power broker Ari Emanuel, will take a majority controlling interest in the WWE. The two companies will combine to form a new publicly traded enterprise valued at $21.4 billion
The Endeavor Group Holdings Inc. (EDR) logo hangs from the New York Stock Exchange on the morning of its public listing at the NYSE in New York City, April 29, 2021. Reuters
World Wrestling Entertainment will be sold – to the company that owns the Ultimate Fighting Championship.
Endeavor Group, helmed by Hollywood power broker Ari Emanuel, has taken a majority controlling interest in the WWE.
The two companies will now combine to form a new publicly traded enterprise valued at $21.4 billion.
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The news comes in the backdrop of the WWE holding Wrestlemania in Los Angeles – its biggest shows of the year.
Let’s take a closer look:
What will happen?
Endeavor Group Holdings Inc will take a 51 per cent stake in the new unnamed company, while WWE shareholders will maintain a 40 per cent stake.
The company pegs the value of the UFC at $12.1 billion and WWE’s value at $9.3 billion.
The new company plans to trade on the New York Stock Exchange under the “TKO” ticker symbol. Its board will have 11 members, with six being appointed by Endeavor and five being appointed by WWE.
Endeavor in 2016 purchased the UFC in a $4.2 billion deal. It picked up the rest of the company when it went public in 2021.
Emanuel has transformed Endeavor, which has its roots in representing film and television talent, into a sports and entertainment powerhouse with more than 20 acquisitions.
He has invested in bull riding events, fashion shows and the Miami Open and Madrid Open tennis competitions.
Emanuel, who will head up the new business, said in a press release, “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.”
WWE executive chairman Vince McMahon will continue in his role at the new company.
“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,” McMahon said in a prepared statement Monday.
McMahon recently returned to the WWE as an employee and as a member of the board after stepping away in July 2022 due to reports that he paid millions of dollars in hush money to women.
Stephanie McMahon, who ran the company as chairwoman when her father exited, resigned a week after he returned in January.
Her husband Paul Levesque, who wrestled as HHH, remains in charge of creative – for now.
Queried by CNBC about a return to an involvement with WWE creative, McMahon responded: “Yes and no.”
“I don’t want to be in the creative process again, just oversee it. I’ll just be in business. I was prepared to drop everything and leave the company forever, but Ari Emanuel told me that I was not going to allow it.”
The company in January said it would explore strategic options that could include a sale.
McMahon also provided some idea of where the focus of the new company will be, saying that it will look to maximize the value of combined media rights, enhance sponsorship monetization, develop new forms of content and pursue other strategic mergers and acquisitions to further bolster their brands.
Negotiations for the WWE’s media rights deals with USA and Fox are slated to begin imminently.
Nick Khan and Dana White will remain presidents of UFC and WWE respectively.
Ties already exists talent wise between WWE and UFC, with stars such as Brock Lesnar and Ronda Rousey crossing over between the two businesses.
WWE in new era
The deal between Endeavor and WWE catapults WWE into a new era, after functioning as a family-run business for decades. 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 World Wrestling Federation and later World Wrestling Entertainment, hosted its first WrestleMania in 1985.
McMahon, in an interview with CNBC, addressed the notion that there was doubt among some WWE fans and industry experts that he would ever make a deal for the business.
“It’s the right time to do the right thing. And it’s the next evolution of WWE,” he said.
The announcement of the WWE sale arrives after McMahon, the founder and majority shareholder of WWE, returned to the company in January and said that it could be up for sale.
Rumors swirled about who would possibly be interested in buying WWE, with Endeavor, Disney, Fox, Comcast, Amazon and Saudi Arabia’s Public Investment Fund all in the mix.
McMahon acknowledged to CNBC that there were several suitors for WWE, but that combining with Endeavor is the right move.
“It makes all the sense in the world for all these synergies that we have to extract all of the value that we can out of the marketplace,” he explained.
Media industry analysts viewed WWE as an attractive target given its global reach and loyal fanbase, which includes everyone from minors to seniors and a wide range of incomes.
Last year, WWE booked revenue of $1.3 billion.
The company is also a social media powerhouse. It surpassed 16 billion social video views in the final quarter of last year. It has nearly 94 million YouTube subscribers and has more than 20 million followers on TikTok. Its female wrestlers comprise five out of the top 15 most followed female athletes in the world, across Facebook, Twitter & Instagram, led by Ronda Rousey with 36.1 million followers.
WWE had more than 7.5 billion digital and social media views in January and February of this year, up 15% from the same time frame a year ago.
“We like the assets of UFC and also WWE in a world where linear TV is losing market share to streaming, thus live sport content is in high demand,” wrote Jeffries analyst Randal Konik said 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 per cent this year, but fell five per cent at the opening bell Monday. Shares of Endeavor, based in Beverly Hills, California, slipped less than 1 per cent.
With inputs from agencies
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