The UFC and WWE form new Powerhouse Sports Entertainment Group
The UFC and WWE have undergone a business milestone through their merger and launch of new company, TKO on Tuesday this week. The merger announced by Endeavor, the governing company of the UFC, and the WWE is now live on the New York Stock Exchange, under the ticker symbol “TKO”, and is expecting a hefty increase in cash flow to both sports. TKO, with an enterprise value of $21 billion, is set to boast more than 1 billion fans globally, reaching viewers in 180 countries, and producing more than 350 annual live events.
Endeavor will own 51% of the new company and WWE shareholders will own 49% of it. Former WWE controlling shareholder and chairman Vince McMahon will act as executive chairman of TKO, with Nick Khan, who also sits on the board, as WWE president. CEO Ari Emanuel becomes TKO’s chief executive.
McMahon said in a statement, “This is the culmination of a decades-long partnership between Endeavor and WWE across strategic initiatives including talent representation and media rights. Given our collaborative, trusted relationship and Endeavor’s incredible track record of success growing UFC, we believe WWE is optimally positioned for future growth and success as part of TKO. Our focus remains on delivering for our fans across the globe as we take the business to the next level alongside UFC and Endeavor.”
This merger is one of the biggest business deals both the UFC and WWE have been a part of and creates an interesting playing field for stakeholders. With the launch of TKO, WWE shares will cease trading on the New York Stock Exchange. WWE closed up 2.7% on Monday, to $100.65 per share. The value of TKO shares is closely tied to WWE’s stock price, taking into account the transition to this new offering. McMahon will own 16.4% of the commercial interests in TKO and 16.4% of the voting power.
Endeavor CEO Ari Emanuel, who also operates as CEO of TKO, said in a prepared statement. “Given their continued connectivity to the Endeavor network, we are confident in our ability to accelerate their respective growth and unlock long-term sustainable value for shareholders. With UFC and WWE under one roof, we will provide unrivalled experiences for more than a billion passionate fans worldwide.”
Although under one roof, fans are assured that there will still be a clear distinction between the UFC and the WWE sports entertainment as there is in the present. The day-to-day operations of UFC and WWE are expected to remain largely unaffected, offering stability and continuity for their respective fan bases. WWE President Nick Khan reflected on the concept of possible crossover from athletes in the sports, particularly UFC transitioning into WWE, and the opportunity for an extended fan base this will allow.
“UFC fighters are going to stay focused on the UFC and WWE superstars obviously do something different in our ring,” Khan said. “… But you also see in the UFC people with big personalities who, once their UFC run is done, once the UFC and the fighter says, ‘Hey, maybe now’s the time to call it a day,’ could those people have a longer life at WWE, an extended life with TKO? We think so.”
The possibility of organising joint major events in the same city opens up exciting prospects, enhancing the overall fan experience and increase the revenue for both sports. There’s been speculation of rolling the leagues together but that won’t happen straight away and there will be a decent amount of time before we witness any visible change.