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UFC Parent Endeavor to Buy WWE in $9.3 Billion Deal

UFC and WWE will be combined into a global live sports and entertainment company valued at more than $21 billion

Rumors swirled this weekend that Ultimate Fighting Championship (UFC) parent company Endeavor was considering the purchase of World Wrestling Entertainment (WWE). Today, Endeavor confirmed the deal, valuing WWE at $9.3 billion. Led by CEO Ari Emanuel, Endeavor will combine WWE and mixed martial arts league UFC to form a new, publicly traded company that will form an unrivaled global live sports and entertainment company. Endeavor will hold a 51% controlling interest, and existing WWE shareholders will hold the remaining 49% interest in the new company.

“This is a rare opportunity to create a global live sports and entertainment pureplay built for where the industry is headed,” said Emanuel in an April 3, 2023 news release. “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.”

Emanuel will serve as CEO for the new company as well as continue in his current role as CEO of Endeavor. Vince McMahon will serve as executive chairman of the new company, and Mark Shapiro will continue to serve as Endeavor’s president and chief operating officer. Dana White will remain the president of UFC, and Nick Khan will serve as the president of WWE.

“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+ 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,” McMahon added.

Details of the deal

UFC is currently valued at $12.1 billion and WWE is valued at $9.3 billion for a combined total of $21.4 billion. UFC and WWE will each contribute cash to the new company, so that it starts with approximately $150 million. The new combined company expects to see significant growth both domestically and internationally in terms of media rights, ticket sales, events, sponsorships, licensing and premium hospitality. According to CNBC, WWE has been looking for a buyer for the last few months after McMahon returned to the company in January. He left last summer as the result of a scandal.

It will take some time for the new company to maximize licensing opportunities, however. Licensing of WWE’s linear TV deals with NBCUniversal and Fox both expire next year. WWE’s streaming deal with Peacock doesn’t end until 2026. UFC has a five-year contract with ESPN which will expire next year.

Once combined, the new company is estimated to deliver $50 million to $100 million in annual run rate cost savings. The deal has been unanimously approved by Endeavor’s executive committee and by WWE’s board of directors. The acquisition will be subject to the customary closing conditions and regulatory approvals. It is expected to close in the second half of 2023.

WWE stock

As of 6:43 p.m. Eastern, WWE stock was valued at $89.30 per share, down slightly from Friday’s value of $91.26 per share.

Source: Google

Insider Take

UFC and WWE may not be a match made in heaven, but they are complementary live sports and entertainment entities that will likely do well together. They will benefit from cost savings, crossover audiences and decades of experience in the two arenas. Assuming they pass all regulatory hurdles, the combined company may become a force to be reckoned with in terms of competing for viewer and fan attention.

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