WWE is combining with UFC to form a new company
By Jordan Valinsky, CNN
World Wrestling Entertainment is merging with Endeavor Group, the parent company of competitor UFC, to form a new publicly traded company.
The deal values the newly combined company at over $21 billion: UFC is worth $12.1 billion and WWE is valued at $9.3 billion. Endeavor shareholders will own 51% of the newly combined company, while WWE shareholders are getting 49%.
“This is a rare opportunity to create a global live sports and entertainment pureplay built for where the industry is headed,” said Ariel Emanuel, CEO of Endeavor, in a statement. Emanuel, a Hollywood powerhouse agent, will be the CEO of the new company and retain his chief executive title at the agency.
Vince McMahon will retain his current WWE title of executive chairman at the new company, which doesn’t yet have name. He said in a statement that the new company “will be well positioned to maximize the value of our combined media rights.” He also said the new company could expand by pursuing other mergers and acquisitions “to further bolster our strong stable of brands.”
WWE shares fell nearly 10% in early trading and Endeavor slumped about 2%. The companies expect to save $50 million to $100 million in costs once the deal is complete, which is expected to close in the second half of this year. It will trade on the New York Stock Exchange under the ticker symbol “TKO.”
The new company’s board of directors will have 11 members named at a later date, with six of them appointed by Endeavor and the remaining picked by the WWE.
Endeavor, which also owns Hollywood’s biggest talent agency William Morris Endeavor, became the outright owner of the UFC in 2021. Shares of the company are up more than 10% for the year. Revenue for its sports unit, which houses the UFC, grew 20% last year to $1.3 billion thanks in part to increased media rights fees.
A rocky end to WWE’s independence
Monday’s deal marks the end of WWE as a family-owned business. Vince McMahon bought the company from his father in the early 1980s and transformed it into an entertainment empire with several weekly live events. In 2021, the company struck a deal with NBCUniversal’s streaming service Peacock for a reported $1 billion to air many of its shows.
McMahon, the company’s largest shareholder, was forced to retire as its CEO last year following a hush money and sexual harassment scandal. Following his departure, WWE disclosed multiple expenses that Vince McMahon hadn’t previously reported, totaling $19.6 million. That forced the company to revise its financial statements for 2019, 2020 and 2021.
Although many of the payments are related to the company’s investigation of his alleged sexual misconduct with former employees, Vince McMahon reportedly made undisclosed payments of $5 million to former President Donald Trump’s charity, the Donald J. Trump Foundation, in 2007 and 2009, according to the Wall Street Journal.
The Journal reported in July 2022 that McMahon paid more than $12 million to four women to cover up “allegations of sexual misconduct and infidelity.”
He returned in January as a board member and said he was exploring “strategic alternatives” for its shareholders, including a sale. The WWE made more than $1.29 billion in revenue in 2022 and its shares up more than 30% for the year.
Appearing in a pre-recorded interview on CNBC, Emanuel said he and McMahon have a several decade-long friendship that will make the partnership a success, and defended keeping the embattled WWE leader.
“Oh my god, yes,” Emanuel when asked if he wanted McMahon, and called him a “visionary.”
McMahon said he didn’t need much convincing to stay. “I love what I do. I loved building the WWE. All of my life, it’s my passion. To have an opportunity like this… can’t be better than that.”
This story has been updated to include more details of the sale.
The-CNN-Wire
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