Endeavor Group Holdings is making WWE and UFC into a tag team, with a deal creating a new public company that will operate both combat sports franchises and will be 51% owned by Endeavor and 49% owned by WWE shareholders.
The deal values the new company at $12.1 billion. The combination of WWE and UFC had revenue of $2.4 billion in 2022.
The new company will be led by Ari Emanuel as CEO. Emanuel will also continue in his role as CEO of Endeavor. WWE executive chairman Vince McMahon will be executive chairman of the board and Mark Shapiro will be president and chief operating officer of both Endeavor and the new company. Dana White will continue in his role as president of UFC and Nick Khan will serve as president of WWE. The board of directors will consist of 11 members who will be appointed at a later date, six of whom will be appointed by Endeavor and five of whom by WWE.
“This is a rare opportunity to create a global live sports and entertainment pure-play built for where the industry is headed,” Emanuel said. “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 had announced plans to explore strategic alternatives in January, signaling that McMahon, who had grown the company, was ready to sell.
The deal was timed as WWE media rights come up for renewal. It has deals with NBCUniversal and Fox for its weekly shows Monday Night Raw on USA Network and Friday Night SmackDown on Fox, while live events currently appear on NBCU’s Peacock streaming service. UFC’s events are carried on The Walt Disney Co.’s ESPN and ESPN Plus.
McMahon retired as chairman and CEO of WWE last July amid a probe of payments he made to a WWE employee with whom he allegedly had an affair. McMahon returned to the company as executive chairman and repaid the company $17.4 million to cover the payments and the investigation into the misconduct.
“Given the incredible work that Ari and Endeavor have done to grow the UFC brand — nearly doubling its revenue over the past seven years — 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.
Under terms of the deal, Endeavor will contribute its UFC unit to the new company. The transaction values WWE at about $106 a share. UFC and WWE will contribute cash to the new company, which will hold $150 million. Shareholders of the new company, excluding Endeavor, are expected to receive a post-closing dividend.
By combining, the companies expect to be able to create cost synergies of $50 million to $100 million. Endeavor also said it expects significant growth across revenue areas including domestic and international media rights, ticket sales and yield optimization, event operations, sponsorship, licensing and premium hospitality.
The transaction has been unanimously approved by the executive committee of Endeavor’s board of directors and by the board of directors of WWE.
The deal is expected to close in the second half of 2023, the companies said. ▪️
