Endeavor Group Holdings World Wrestling Entertainment officially announced everything on Monday, revealing a definitive agreement to form a new, publicly-listed company that includes two global sports and entertainment brands that “carry” iconic, complementary”: UFC and WWE. Endeavor will hold a 51% controlling interest in the new company, with existing WWE shareholders holding a 49% interest.
The new company will be led by Endeavor CEO Ari Emanuel as CEO, who will also go on to take on the same role at the remaining Endeavor business, WWE executive chairman Vince McMahon with as executive chairman and Mark Shapiro as chairman and chief executive officer of both Endeavor and the new company. Dana White will continue to serve as UFC president, with WWE CEO Nick Khan serving the same presidency as White but at WWE. The new company’s board of directors will include 11 members to be appointed at a later date, with six appointed by Endeavor and five by WWE.
The transaction is expected to close in the second half of this year. “Together, UFC and WWE will have global reach, impressive scale, and omnichannel distribution,” the companies said. “On a combined basis at the end of fiscal 2022, the UFC and WWE have posted $2.4 billion in revenue and a 10% annual revenue growth rate since 2019.”
Companies are projecting an estimated $50 million to $100 million in annual cost coordination. The companies said they were targeted by “taking advantage of Endeavor’s back office and strong infrastructure”. “Endeavour also expects significant growth in revenue areas, including domestic and international media rights, ticketing and profit optimization, event operations, sponsorships, licensing and hospitality. high-class.”
Against this backdrop, Endeavor praised its “success at the UFC, including increasing commercial opportunities that have driven adjusted earnings growth more than 2x before interest, taxes, amortization and withholding (EBITDA) since acquisition at the end of 2016.”
The new publicly traded company’s ticker symbol will be TKO, which stands for “knockdown technique” in combat sports.
“This is a rare opportunity to create a global live sports and entertainment game built for where the industry is headed,” said Emanuel. “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 added value to shareholders by bringing the UFC and WWE together.”
McMahon added: “Given the incredible work Ari and Endeavor have done to grow the UFC brand – nearly doubling revenue in the last seven years – and the tremendous success we have had in partnering with their team on several ventures, I believe this is definitely the best outcome for our shareholders and other stakeholders.”
“Together, we will become a more than $21 billion live sports and entertainment powerhouse with a collective fan base of more than a billion people and an opportunity to grow,” he said. interesting. The new company will be well positioned to maximize the value of our combined media rights, increase sponsorship monetization, develop new forms of content, and pursue mergers and acquisitions. another strategy to further reinforce the strong stability of our brands.”
The deal’s underlying price tags should capture investors’ attention. It puts an enterprise value of $12.1 billion for the UFC and $9.3 billion for WWE. The transaction also sets a price around $106 per share on WWE, before any dividends post-close. The UFC and WWE will each contribute cash to the new company so it holds about $150 million.
The transaction was unanimously approved by the boards of directors of both companies. The agreement is still subject to the usual termination conditions, including regulatory approval.