WWE and UFC Merge! Trump & Biden will meet in the ring!
This is fricken awesome.
WWE, UFC Combined Company Makes Market Debut, Targets Demand for Sports
TKO plans to pursue future acquisitions of sports-focused companies, president of new company says
By Joe Flint, WSJ
Updated Sept. 12, 2023 11:28 am ET
A new publicly traded company formed by the combination of WWE and UFC is entering the ring in hopes of capitalizing on the migration of sports and live entertainment from traditional television to streaming.
TKO will begin trading Tuesday with the aim of making more content, including UFC fights, available via streaming services in the future, said Mark Shapiro, its president and chief operating officer. TKO, which stands for technical knockout in boxing, is an allusion to the fighting focus of both organizations.
“We are well-positioned to capitalize on the demand for live sports and entertainment across linear and digital, and we have enough content to do both,” Shapiro said. The combined company has high-profile rights deals with entertainment companies including Fox, Disney and Comcast for its Peacock streaming service.
WWE and UFC generate revenue from streaming and TV rights as well as ticket sales and merchandise tied to their popular lineups of celebrity fighters. Investors have cheered the advent of the combined new company in part because it can make money from traditional TV but isn’t entirely beholden to it as more consumers cut the cord in favor of streaming services.
TKO Group Holdings will trade on the New York Stock Exchange. Entertainment company Endeavor Group Holdings EDR 1.05%increase; green up pointing triangle owns 51% of TKO, while wrestling organization WWE owns the remaining 49%.
Endeavor also owns the WME talent agency, the IMG sports and events firm, and Professional Bull Riders. It trades on the New York Stock Exchange under the ticker symbol EDR.
The combination of the two fight-focused companies gave UFC an enterprise value of $12.1 billion and WWE an enterprise value of $9.3 billion. PHOTO: DAN HIMBRECHTS/SHUTTERSTOCK
Endeavor’s purchase of WWE, which its Hollywood talent agency has long represented, was closely watched because of the wrestling organization’s enduring fan base and strong demand among consumers, TV networks and streaming services alike for live sporting events.
The company plans to pursue potential future acquisitions of companies focused on other sports, Shapiro said.
“We see a real opportunity to fold in other leagues to add to the equation,” he said. The company plans to spend the next 18 months focused on integrating its holdings before exploring such acquisitions.
The combination of the two fight-focused companies gave UFC an enterprise value of $12.1 billion and WWE an enterprise value of $9.3 billion, the companies said in April when the deal was announced.
The company’s TV and streaming deals for WWE and UFC content expire within the next three years, which could give TKO an opportunity to increase the rights fees for the popular content. Streaming platforms eager to attract and retain customers view live sports as a way to keep customers engaged regularly for long viewing sessions.
Disney’s long-term deal for UFC content expires in late 2025. That pact, which provides fights for both ESPN and ESPN+, expires next year and is valued at $300 million annually, The Wall Street Journal reported.
Deals for WWE’s “SmackDown” and “Raw,” which air on Fox and NBCUniversal’s USA Network respectively, expire next year. The combined value of those deals is about $468 million annually, The Wall Street Journal previously reported.
Peacock’s five-year deal to stream WWE fare expires in 2026 and is valued at more than $1 billion.
WWE Chairman Vince McMahon will serve as executive chairman of TKO. Other board members include Jonathan Kraft, president of the Kraft Group, which owns the New England Patriots; former CBS Entertainment President Nancy Tellem; and Steve Koonin, chief executive of the Atlanta Hawks NBA franchise.
McMahon briefly left the WWE following a series of articles from The Wall Street Journal that detailed payments he had made for decades to suppress allegations of sexual misconduct.
Following the revelations, McMahon retired in July 2022 after 40 years. He returned in January to pursue a sale, the Journal previously reported.
Write to Joe Flint at Joe.Flint@wsj.com