Sports and entertainment group Endeavor has today (Monday) entered into a definitive agreement with World Wrestling Entertainment to form a new publicly listed company consisting of the WWE and Ultimate Fighting Championship brands.
As part of the deal, Endeavor will hold a 51% controlling interest in the new company, while existing WWE shareholders will hold a 49% interest. Endeavor owns UFC and the deal with WWE significantly bolsters its presence in the combat sports sector.
The transaction values UFC at an enterprise value of $12.1bn (£9.8bn/€11.1bn) and WWE at an enterprise value of $9.3bn. On a combined 2022 fiscal year-end basis, UFC and WWE achieved revenue of $2.4bn and a 10% annual revenue growth since 2019.
Ariel Emmanuel, chief executive of Endeavor, said: “This is a rare opportunity to create a global live sports and entertainment pureplay built for where the industry is headed. 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.”
Vince McMahon, executive chairman of WWE, added: “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.
“Together, we will be a $21bn-plus live sports and entertainment powerhouse with a collective fan base of more than a billion people and an exciting growth opportunity. The new company will be well positioned to maximise the value of our combined media rights, enhance sponsorship monetisation, 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.”
Emmanuel will lead the new company as chief executive and will also continue in his role at Endeavor. McMahon will serve as executive chairman of the board, while Mark Shapiro will be president and chief operating officer of both Endeavor and the new company.
UFC president Dana White will continue in his role and Nick Khan will serve as president of WWE. The board of directors at the new company will consist of 11 members who will be appointed at a later date, six of whom will be appointed by Endeavor and five of whom by WWE.
UFC and WWE expect to deliver an estimated $50m to $100m in annualised run rate cost synergies by leveraging Endeavor’s back office and infrastructure. Endeavor also expects significant growth across revenue areas including domestic and international rights, ticket sales and yield optimisation, event operations, sponsorship, licensing and premium hospitality.
UFC and WWE will each contribute cash to the new company so that it holds approximately $150m.
News of the deal was first reported yesterday (Sunday) as WWE concluded its WrestleMania event at SoFi Stadium, home of the NFL’s Los Angeles Rams and Chargers.
WrestleMania 39 attracted 161,892 fans over two nights, with the attendance marking a record for an event held at SoFi Stadium.
In January, WWE announced that the event had broken the all-time gate record for WrestleMania – almost three months before it took place – as the figure surpassed $18m.