Sports Events Giants WWE, UFC To Merge In $21B Deal
It’s a historic day in the sports events promotion industry. World Wrestling Entertainment (WWE), the world’s biggest wrestling promotion company,…
It’s a historic day in the sports events promotion industry. World Wrestling Entertainment (WWE), the world’s biggest wrestling promotion company, has struck a deal to merge with Ultimate Fighting Championship (UFC), the world’s largest mixed martial arts promotion company.
WWE, an independent publicly-traded company will combine with UFC, a subsidiary of entertainment giant Endeavor Group (NYSE: EDR). Endeavor will hold a 51% interest in the merged company while existing WWE shareholders will hold the remaining 49% stake.
- The agreement gives UFC an enterprise value of $12.1bn and WWE an enterprise value of $9.3bn, totaling $21.4bn.
- The merged corporate entity will trade on the New York Stock Exchange under the “TKO” symbol. Ari Emanuel, Endeavor’s current chief executive, will be the chief executive of the new company and WWE founder Vince McMahon will be the Executive Chairman. UFC President Dana White will retain his title and current WWE CEO Nick Khan will serve as President of WWE under the new company’s umbrella.
WWE and UFC are two big live events, but with notable differences; WWE’s wrestling matches are scripted, while UFC organizes real mixed martial arts fights. Yet, there still exist opportunities for a crossover between both events. Some superstars have notably switched from WWE to UFC and vice versa, e.g., Brock Lesnar and Ronda Rousey.
Both WWE and UFC earn revenue in similar ways; selling broadcasting rights to their events and from tickets and merchandise sales. WWE reported a $195mn net profit on $1.3bn in revenue in 2022, while Endeavor’s “owned sports properties” division, which houses UFC, brought in $1.3bn in revenue in 2022.
- A WWE sale isn’t surprising, given the company’s recent turmoil fueled by allegations of misconduct against founder Vince McMahon. In July 2022, the Wall Street Journal reported that McMahon paid $12mn to four women to keep allegations of sexual misconduct and infidelity secret. Soon after, WWE confirmed that it had traced $19.6mn of personal payments from McMahon and had to revise some financial statements to reflect them.
- Vince McMahon stepped down as WWE’s Chairman and CEO in 2022 amid the investigation into his alleged misconduct but returned as board Chairman in January 2023. He will retain that position at the more formidable UFC-WWE corporate entity.
Barring regulatory hurdles, the merger is expected to close in the second half of 2023.