UFC’s parent company is set to merge with WWE, putting the reality of mixed-martial arts and the sports-entertainment theater of professional wrestling under one organization.
Endeavor Group Holdings, helmed by Ari Emanuel, and Vince McMahon’s WWE will form a $21 billion entertainment company yet to be named. A Monday morning announcement from WWE indicates that Endeavor will own 51 percent and WWE shareholders will retain the rest. WWE has a companywide value of $9.3 billion, according to the announcement, and UFC’s value sits at $12.1 billion.
Part of the appeal is packaging together two year-round athletic brands that already have years of experience hosting live events and broadcasting/streaming, according to a presentation given to investors Monday.
Emanuel will lead the company as CEO and remain head of Endeavor. McMahon will serve as executive chairman of the board. Dana White, UFC’s president, will continue to lead the MMA brand.
WWE announced in January that it was looking to sell some or all of the company.
Rumors immediately started to fly. One of the earliest was that WWE might sell or partner with the Saudi Arabian sovereign wealth fund. The Saudis have had a financial relationship with WWE since 2014. The sovereign wealth fund last year paid WWE about $100 million for two performances in the Saudi commercial hub of Jiddah.
But a relationship with UFC makes more sense, experts say.
Advertisement
Both companies can minimize expenses and work together to negotiate TV/streaming deals, according to Brandon Thurston, editor of the business-focused Wrestlenomics blog.
There’s another new factor, he said: “It’ll probably be good for shareholders.” The new company will sell stock under the ticker symbol TKO — a boxing term for “technical knockout.”
A study by analysis firm LightShed predicted how Endeavor could use a trust to spin UFC into a new entity that then acquires WWE while decreasing the amount of taxes it would be required to pay. That type of trust, called a reverse Morris, is how AT&T spun off its WarnerMedia’s assets and merged them with Discovery Inc.
Experts don’t see the move as an odd partnership. UFC and WWE have shared stars, including Ronda Rousey, Brock Lesnar, CM Punk, Matt Riddle.
In the past three decades, UFC has become synonymous with mixed-martial arts, which fuses Brazilian jujitsu, kickboxing and other sports for a full-contact combat competition. WWE, meanwhile, is the publicly traded company that sets the agenda for the far more scripted — but still dangerous — world of professional wrestling. It also serves as the storehouse for its history, with untold hours in its catalogue.
Advertisement
The values for these deals are based on a wrestling company’s TV contracts and libraries of recorded matches. That was the case nearly 20 years ago, when McMahon bought Ted Turner’s biggest rival WCW — along with its tapes. McMahon for years has acquired footage from defunct wrestling companies. The WWE cache includes wrestling from eight decades, much of which is available internationally, on NBC Universal’s Peacock streaming service.
The five-year contract between WWE and Peacock was signed in March 2021, Thurston said. UFC’s current and archived programming can be found on ESPN.
UFC promotes sporting contests including boxing, while WWE is closer to a carnival act. That funfair forged wrestlers Dwayne “The Rock” Johnson and John Cena into Hollywood stars who are now household names.
The news comes as WWE wraps up its biggest event of the year — WrestleMania.
Advertisement
It was a weekend filled with what WWE does best: Performers with world-class athletic acumen entertained millions around the world with bombastic spectacle and muscular storytelling.
As much as they ogle at the athletic feats, what wrestling fans love is how the characters change — some worsen and some become better, while others struggle and a select few triumph every week on television. Storylines can last minutes or years. It creates an atmosphere of never knowing what’s next.
Professional wrestling — with its scripted outcomes and soap-operatic storylines — has long carried the stigma of being fake. Aside from the physicality, what’s undeniably real is the income.
WWE ended 2022 with $195.6 million in net income, according to a February SEC filing. Much of the company’s value comes from its television contracts, through which weekly programming is broadcast in 25 languages. Professional wrestling is available in 180 countries, according to WWE’s website, via NBC’s Peacock app.
Advertisement
Beyond the contracts and the numbers, Thurston said, fans of professional wrestling are largely ready for an era without McMahon.
The deal is expected to be completed at the end of the year. That leaves uncertainty about what happens with McMahon, arguably the most powerful man in professional wrestling.
“Can he stay out of this? I don’t know,” Thurston said.
He said many who love professional wrestling celebrated when McMahon retired — and jeered when he returned months later — because they were ready for him to give creative control to those with more progressive and exciting thoughts about the form’s creative direction.
“Wrestling fans are going to continue to be suspicious about how much he’s going to be involved in creative,” Thurston said.
McMahon created the modern landscape of professional wrestling through business deals that undercut regional wrestling fiefdoms and brought them under his rule.
Advertisement
That began four decades ago. Now, at age 77, McMahon still commands wrestling.
It’s unclear how he will handle the new corporate arrangement.
“It’s very unlikely that Vince would want to give up power,” author Josie Riesman told The Washington Post in late March.
Riesman’s new book “Vince McMahon and the Unmaking of America” explores McMahon’s influence on professional wrestling and American culture, and a big part of her research involved the executive’s accusations of sexual misconduct and millions of dollars’ worth of alleged hush-money settlements.
The sexual misconduct accusations — reported previously by the Wall Street Journal — led the board of directors to discover the alleged $15 million in payoffs. That prompted the U.S. Securities and Exchange Commission to investigate whether the money should have been reported as a publicly traded entity.
Advertisement
McMahon announced his retirement in July following the scandal. In January, he orchestrated his return to the company, changing bylaws to install friendly board members and selling the company he founded. After McMahon’s return, his co-CEO daughter left the company — a real-life drama that would have been appropriate in front of WWE cameras.
“They will never address that issue,” she said. “They will do everything they can never to address the substance of the sexual abuse and only the financial.”
Riesman says McMahon’s aim is not about the money.
“What’s motivating him and has motivated him since he was very young is proving himself and being the top dog,” Riesman said.
ncG1vNJzZmivp6x7uK3SoaCnn6Sku7G70q1lnKedZK%2B2v8innKyrX2d9c3%2BOaWtoaGNkxLixjLCpnqukobavs4yunZxllaOxpq3VqKlo