Endeavor Group Holdings, owner of mixed martial arts company UFC, has inked an agreement to acquire World Wrestling Entertainment (WWE) and plans to merge the two sports brands into a single, publicly listed company that’s worth $21.4 billion.
According to Endeavor, the combined company will boast global reach with omnichannel distribution. The transaction is expected to close in the second half of 2023, with UFC valued at $12.1 billion and WWE at $9.3 billion.
“This is a rare opportunity to create a global live sports and entertainment pureplay built for where the industry is headed,” stated Endeavor CEO Ariel Emanuel. In 2016, Endeavor (then WME-IMG) bought UFC for about $4 billion.
The yet-to-be-named new company, to which UFC and WWE will each contribute contribute cash so it holds approximately $150 million at closing, will be listed on the NYSE under the ticker symbol “TKO.” Endeavor will hold 51% controlling interest in the company, while existing WWE shareholders will hold a 49% interest. Emanuel will run the company while continuing to serve as Endeavor CEO.
“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,” said WWE Executive Chairman Vince McMahon in a statement.
In terms of sports streaming opportunities, WWE President Nick Khan told Axios on Monday a combined rights deal hinges on whether the companies renew their existing linear and streaming agreements.
WWE has a linear rights deal with NBCUniversal and Fox that expires next year as well as a streaming deal with Peacock that lasts through 2026. UFC, on the other hand, has a five-year TV contract with ESPN that expires in 2025. UFC events also stream on ESPN+, though subscribers must pay extra to watch live pay-per-view events.
Khan didn’t speak of UFC’s negotiation plans, but he said to Axios, "the most important thing is that NBC and Fox, from a WWE point of view, feel respected in the process. So we're going to enter those conversations with them.”
He added NBCU and Fox have the right of first refusal, meaning they have priority in renewing their agreements with WWE, before WWE can seek a deal with a third party.
With Endeavor at the helm, UFC and WWE expect the new company to deliver around $50-$100 million in annual run rate cost synergies. Endeavor also has some sports streaming experience through its subsidiary Endeavor Streaming, which in the past year helped U.K. soccer club Tottenham Hotspur and the Professional Triathletes Organization launch their respective direct-to-consumer streaming services.
In an investor presentation supporting the deal, Endeavor cited third party market data projecting global live sports revenue will reach $74 billion by 2025. Ampere Analysis recently predicted SVOD services will increase their sports streaming spend by 64% this year to $8.5 billion.