World Wrestling Entertainment (WWE) and Ultimate Fighting Championship (UFC) have agreed to merge and create a newly combined wrestling entertainment company.
The new entity will be called “NewCo,” until it is named at a later date, and will be listed on the New York Stock Exchange as TKO.
TKO, which will house both WWE and UFC, will have a 51/49 control split in favor of Endeavor.
UFC owner Endeavor is currently worth $12.1 billion, while WWE is valued at $9.3 billion, a more than 33 percent premium to the company’s market cap at the end of last week.
Endeavor to Have Majority Stake in New Wrestling Enterprise
Meanwhile, Endeavor CEO Ari Emanuel will be the new CEO, while WWE majority owner and executive chairman Vince McMahon will become the new executive chairman of their new joint wrestling entertainment corporation.Nick Khan, WWE’s co-CEO and president and chief revenue officer, will remain in his position at his half of the wrestling brand, along with UFC president Dana White, who will continue in his current role.
The board of directors will consist of 11 members, who will be appointed at a later date, six appointed by Endeavor and five by WWE.
“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.”
The new company promises to deliver an estimated $50–100 million in annualized run-rate cost synergies, mostly through back-office consolidation.
Endeavor acquired a controlling stake in UFC in 2016, and bought out the company' remaining shareholders in 2021, for total control of the world’s largest mixed martial arts brand.
UFC signed a five-year deal in 2019 with ESPN, which gained all of its media rights to became the exclusive home of its pay-per-view fight matches.
The ESPN deal will come up for negotiations at the end of 2023, around the same time when WWE’s agreement with NBCUniversal and Fox for its television rights expires.
WWE Chairman Makes a Comeback From Previous Scandal
McMahon stepped down as the head of WWE in July 2022, after it was revealed that he had paid off certain women regarding several allegations of sexual misconduct.He later paid back WWE $17.4 million for the hush money he allegedly took out of the company’s accounts, according to an extended internal investigation, on March 23.
Despite his resignation as chairman and CEO, McMahon remained WWE’s largest shareholder.
He soon regained his chairman role in January—and took it back from his daughter Stephanie McMahon, the interim chairwoman and co-CEO along with Khan.
“My return will allow WWE, as well as any transaction counterparties, to engage in these processes knowing they will have the support of the controlling shareholder,” he concluded.
The deal with Emanuel offers McMahon a potential big comeback after his brief disgrace in the entertainment industry and a golden opportunity of America’s largest wrestling brand.
“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,” said McMahon.
“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. I, along with the current WWE management team, look forward to working closely with Ari and the Endeavor and UFC teams to take the businesses to the next level,” he continued.
