Endeavor’s UFC, WWE to Merge; Ari Emanuel to Serve as CEO, Vince McMahon as Executive Chair

Endeavor Group Holdings World Wrestling Entertainment made things official on Monday, unveiling a definitive agreement to form a new, publicly listed company consisting of two “iconic, complementary” global sports and entertainment brands: UFC and WWE. Endeavor will hold a 51 percent controlling interest in the new company, with existing WWE shareholders holding a 49 percent interest.

The new company will be led by Endeavor CEO Ari Emanuel as CEO, who will also continue filling the same role at the remaining Endeavor business, WWE executive chairman Vince McMahon as executive chairman and Mark Shapiro as president and chief operating officer of both Endeavor and the new company. Dana White will continue in his role as president of UFC, with WWE CEO Nick Khan holding the same president title as White but at WWE. The board of directors of the new firm will consist of 11 members who will be appointed at a later date, with six to be named by Endeavor and five designated by WWE.

The deal is expected to close in the second half of the year. “Together, UFC and WWE will have global reach, impressive scale and omnichannel distribution,” the companies said. “On a combined 2022 fiscal year-end basis, UFC and WWE achieved revenue of $2.4 billion and a 10 percent annual revenue growth rate since 2019.”

The companies are projecting an estimated $50 million-$100 million in annualized cost synergies. Those are targeted by “leveraging Endeavor’s back office and robust infrastructure,” the companies said. “Endeavor also expects significant growth across revenue areas, including domestic and international media rights, ticket sales and yield optimization, event operations, sponsorship, licensing and premium hospitality.”

In that context, Endeavor touted its “success at UFC, including increasing commercial opportunities that have driven more than 2x adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) growth since its acquisition in late 2016.”

The new publicly traded company’s ticker symbol will be TKO, which is short for “technical knockout” in combat sports.

“This is a rare opportunity to create a global live sports and entertainment pureplay 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 additional value for shareholders by bringing UFC and WWE together.”

Added McMahon: “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.”

He also highlighted: “Together, we will be a $21-plus billion live sports and entertainment powerhouse with a collective fanbase of more than a billion people and an exciting growth opportunity. 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.”

The price tags underlying the deal will draw investor attention. It puts an enterprise value of $12.1 billion on UFC and $9.3 billion on WWE. The transaction also puts a price of approximately $106 per share on WWE, before any post-closing dividend. UFC and WWE will each contribute cash to the new company so that it holds approximately $150 million. 

The transaction has been unanimously approved by both companies’ boards of directors. The deal is still subject to the satisfaction of customary closing conditions, including regulatory approvals.