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Vince McMahon’s World Wrestling Entertainment has agreed to merge with UFC to form a new publicly traded company controlled by Endeavor Group, the companies announced Monday morning.
Endeavor will own a 51% stake in the new combat sports and entertainment company, while WWE shareholders will have the remaining 49%, according to the terms of the agreement. The deal values WWE at $9.3 billion and UFC, which is owned by Endeavor, at $12.1 billion, the companies said in a press release.
Shares of WWE fell Monday morning, while Endeavor’s rose slightly.
Ari Emanuel will act as chief executive of both Endeavor and the new company, the companies said. McMahon, likewise, will be executive chairman, while Endeavor President and COO Mark Shapiro will also work in the same roles at the new company. Dana White will remain as president of UFC, and WWE CEO Nick Khan will stay on as president of the wrestling business.
“This is going to be UFC 2.0,” Emanuel said in an interview that aired Monday on CNBC’s “Squawk on the Street.”
The board will consist of 11 people, six appointed by Endeavor and five by WWE. The merged company’s name will be announced at a later time. The company will trade on the New York Stock Exchange under the ticker TKO.
Ari Emanuel speaks onstage during the 2017 LACMA Art + Film Gala Honoring Mark Bradford and George Lucas presented by Gucci at LACMA on November 4, 2017 in Los Angeles, California.
Stefanie Keenan | Getty Images Entertainment | Getty Images
The announcement confirmed an earlier CNBC report. It also came a day after WWE wrapped up its flagship live event, WrestleMania, in California. The company has spent the past several months looking for a buyer. McMahon returned to the company as chairman in January to oversee the process. Shares of WWE are up more than 33% this year as of Friday’s closing bell, giving it a market value of more than $6.79 billion.
Deal logic
The agreement would pair two of the biggest sports entertainment brands in the world.
Despite notable differences – WWE features scripted matches and soap opera-like storylines, while UFC showcases authentically brutal mixed martial arts fighting – the organizations share similarities in terms of content and culture. Several UFC fighters, including Ronda Rousey and Brock Lesnar, have already wrestled for WWE.
UFC champion and superstar Conor McGregor lauded news of the pending deal Sunday evening. “Incredible. What a powerhouse!” he said in one tweet, following up with another tweet displaying an image of him brandishing UFC and WWE championship belts.
End of family business
Emanuel told CNBC he asked McMahon to stay with the combined company as executive chairman. McMahon said he didn’t have to be convinced to stick around with what’s been a family business for decades.
McMahon’s father founded WWE in its original incarnation during the middle of the 20th century. McMahon, who bought the company from his father in 1982, is the controlling shareholder. Over the past four decades, WWE has grown into a global phenomenon, spawning breakout stars such as Hulk Hogan, Dwayne “The Rock” Johnson, Dave Bautista and John Cena.
McMahon, 77, retired from the company in July following a string of revelations that he paid several women millions of dollars over the years to keep them quiet about alleged affairs and misconduct. His daughter, Stephanie McMahon, became co-CEO alongside Khan. Paul Levesque, who’s both Stephanie McMahon’s husband and the wrestler known as Triple H, took over creative duties from Vince McMahon.
Dana White appears at the UFC 282 post-fight press conference on December 10, 2022, at the T-Mobile Arena in Las Vegas, NV.
Amy Kaplan | Icon Sportswire | Getty Images
After Vince McMahon came back in January, Stephanie McMahon stepped down and Khan fully assumed the CEO role. The elder McMahon recently locked in a two-year employment contract, according to a securities filing.
McMahon told CNBC he won’t be “in the weeds” with WWE’s creative decisions when the companies merge.
Khan in recent weeks has been making the media rounds to discuss the potential sale. He told CNBC’s Morgan Brennan on Thursday that it’s been a robust process and it’s drawn many interested buyers.
WWE offers Endeavor’s shareholders a muscular media and live events business, as well as decades worth of intellectual property. The company generated $1.29 billion in revenue last year, driven mainly by its $1 billion media unit.
UFC, meanwhile, has paid off for Endeavor. Last year, the MMA league helped its parent company’s sports business make $1.3 billion in revenue. Endeavor’s market cap stood at about $10.53 billion as of Friday’s close.
WWE also fits well with the cultures of Endeavor and UFC, which also reflect their leaders’ hard-edged styles. McMahon, Emanuel and White are known for their outsized personalities, and each has their share of devoted allies and and harsh critics.
White is no stranger to scandal, either. Earlier this year, video emerged showing the UFC boss slapping his wife during a public argument at a New Year’s Eve party in Mexico. He later apologized.
Disclosure: Peacock, the streaming service owned by CNBC parent NBCUniversal, carries WWE events such as WrestleMania.
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