TKO: WWE and UFC Set to Merge, Forming New $21B Entertainment Brand

Endeavor Group Holdings and World Wrestling Entertainment (WWE) have announced plans to form a new, publicly listed company consisting of the global sports entertainment brands, Ultimate Fighting Championship (UFC) and WWE. Upon close of the deal, Endeavor will hold a 51% controlling interest in the new company and existing WWE shareholders will hold a 49% interest.  

At the core of its strategy, the new company will combine the global reach, scale and omnichannel distribution of both sport and entertainment brands, which achieved a $2.4 billion revenue at the close of FY2022 with 10% annual revenue growth rates since 2019.  

“This is a rare opportunity to create a global live sport and entertainment pureplay built for where the industry is headed,” says Ariel Emanuel, chief executive officer, Endeavor. “For decades, Vince [McMahon] and his team have demonstrated an incredible track record of innovation and shareholder value creation. We are confident that Endeavor can deliver significant additional value for shareholders by bringing UFC and WWE together.”  

“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 several ventures, I believe that this is without a doubt the best outcome for our shareholders and other stakeholders,” says Vincent K. McMahon, executive chairman, WWE.  

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“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,” says McMahon. “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 bolster our strong stable of brands further. The current WWE management team and I look forward to working closely with Ari and the Endeavor and UFC teams to take the businesses to the next level.”  

The transaction values UFC at an enterprise value of $12.1 billion and WWE at an enterprise value of $9.3 billion. The transaction represents a contribution price of WWE of approximately $106 per share (before any post-closing dividend). Additionally, UFC and WWE will each contribute cash to the new company so that it holds roughly $150 million.   

Under the terms of the transaction, existing WWE shareholders will roll all existing equity into the new entity that will be the parent company of UFC and WWE (named “NewCo” until the brand is formally named) and intends to list on the New York Stock Exchange under the ticker symbol “TKO.”