WWE Sells to Endeavor

WWE Sells to Endeavor
A World Wrestling Entertainment match.

World Wrestling Entertainment Inc. and Ultimate Fighting Championship, which is owned by Beverly Hills-based Endeavor Group Holdings Inc., have merged to create a new entertainment giant. The company will be listed on the New York Stock Exchange under the ticker TKO. Its name has not yet been announced.

“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,” WWE executive chairman Vincent K. McMahon said in a statement.

The transaction reportedly gave UFC an enterprise value of $12.1 billion and WWE an enterprise value of $9.3 billion. Endeavor president Mark Shapiro said the new company would seek to capitalize on consumers’ interest in live events, and their desire to bet on matches.

UFC and WWE said they would each contribute cash to the company to ensure that, upon closing, it will hold about $150 million in its balance. Endeavor will have a 51% controlling interest in the company, and the remaining 49% will go to WWE shareholders.

This marks the first time that WWE has not been majority-controlled by the McMahon family. WWE in its original form was founded by McMahon’s father, and has produced stars including Dwayne “The Rock” Johnson and John Cena.

“This is a once-in-a-lifetime opportunity to bring together two leading pure-play sports and entertainment companies,” Endeavor Chief Executive Ari Emanuel said.

Emanuel will be the CEO of the new company, while McMahon will be its executive chairman. McMahon was reinstated as executive chairman of WWE in January after retiring last summer amid investigations into alleged sexual misconduct. Upon his return to the company, WWE reportedly began exploring a potential sale.

The value of rights to stream live events, such as wrestling and mixed martial arts, has risen dramatically in recent years. Apple TV+ struck a 10-year, $2.5 billion agreement with Major League Soccer last summer. YouTube TV, which is owned by Google, signed a seven-year deal with the National Football League in December for its “Sunday Ticket” game package of games, for which it will reportedly pay the NFL about $2 billion per year.

WWE’s current TV rights deals with NBCUniversal Media LLC and Fox Corp. expire in 2024, and its streaming deal with NBCUniversal-owned Peacock will expire in 2026. UFC entered into a five-year TV agreement for about $1.5 billion with the Entertainment and Sports Programming Network in 2019, which was extended through 2025. An Endeavor spokesperson said that WWE and UFC plan to pursue separate media rights negotiations once their respective contracts expire, but didn’t rule out the possibility of a joint streaming deal in the future.

“Given the incredible work that (Emanuel) and Endeavor have done to grow the UFC brand … and the immense success we’ve already had in partnering with their team on a number of ventures, I believe that this is without a doubt the best outcome for our shareholders and other stakeholders,” McMahon said in a statement.

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