WWE, Endeavor-owned UFC will merge to create $28 billion entertainment giant

CALIFORNIA – World Wrestling Entertainment will combine with Endeavor Group-owned mixed martial arts franchise UFC to form a new, publicly listed entertainment giant valued at about US$21 billion (S$27.94 billion), the companies said on Monday.

The deal unites two of the biggest names in wrestling and entertainment and caps a months-long sale process for WWE, overseen by its co-founder and executive chairman Vince McMahon, who returned to the board in January.

“This is a once-in-a-lifetime opportunity to bring together two leading pure-play sports and entertainment companies,” Endeavor chief executive officer Ari Emanuel said on an investor call, describing the deal as a “transformational step” for Endeavor.

Emanuel said he would capitalise on Endeavor’s expertise in securing media deals, sponsorships and new forms of distribution to fuel growth at the new company, which he will lead as chief executive officer while continuing in his role at Endeavor.

Although the 62-year-old was one of the inspirations for the super-agent Ari Gold on the HBO show Entourage, he said he was not likely to appear as a character in the WWE’s story universe in the way that McMahon has.

“I’m a character already in my own mind,” he said. “I don’t need to share that with anybody.”

McMahon will retain his role in the new company, which will be majority owned by Endeavor with a 51 per cent stake, while WWE investors will own the rest.

Hollywood power broker Emanuel has transformed Endeavor, which has its roots in representing film and television talent, into a sports and entertainment powerhouse with more than 20 acquisitions. He has invested in bull riding events, fashion shows and the Miami Open and Madrid Open tennis tournaments.

Endeavor said it would run the same playbook it employed with the Ultimate Fighting Championship, the world’s largest martial arts organisation, improving operating efficiency, negotiating lucrative media deals and striking licensing deals.

The newly created company would seek to capitalise on consumers’ desire to participate in live experiences – a trend that has resumed since the height of the pandemic – and on their appetite to bet on sports, said Endeavor president Mark Shapiro, who will serve in the same capacity in the new company.

Under the deal that a source said was internally referred to as Project Stunner, UFC and WWE will also contribute cash to the new company, so it holds nearly US$150 million.

The agreement values each share of WWE at US$106, representing a premium of 16 per cent over Friday’s closing price and gives WWE an enterprise value of US$9.3 billion. Shares of WWE fell 4.5 per cent in trading before the bell, while Endeavor was up 4 per cent.

The new company will be listed under ticker symbol “TKO” on the New York Stock Exchange, the companies said.

In January, WWE said it would explore strategic options that could include a sale, shortly after McMahon’s return to the company.

The 77-year-old had retired last July as CEO and chair following an investigation into alleged misconduct. Co-CEO Stephanie McMahon, who took on the mantle when her father exited, resigned a week after he came back in January. REUTERS, NYTIMES