Endeavor Confirms WWE-UFC Deal to Create a $21 Billion Sports Entertainment Company
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Endeavor Group Holdings and World Wrestling Entertainment said Monday that they had signed a definitive agreement to form a new, publicly listed company consisting of two complementary, global sports and entertainment brands: UFC and WWE.
The deal was reported to be close over the weekend by financial media CNBC and Bloomberg.
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Upon closing, Endeavor will hold a 51% controlling interest in the new company and existing WWE shareholders will hold a 49% interest.
“Together, UFC and WWE will have global reach, impressive scale and omnichannel distribution,” Endeavor said in a statement.
The new company will be led by Ari Emanuel (CEO), who will also continue in his role as CEO of Endeavor, Vince McMahon (executive chairman of the board) and Mark Shapiro, who will be president and COO of both Endeavor and the new company. Dana White will continue in his role as president of UFC and Nick Khan will serve as president of WWE. The board of directors will consist of 11 members who will be appointed at a later date, six of whom will be appointed by Endeavor and five by WWE.
On a combined 2022 fiscal year-end basis, UFC and WWE achieved revenue of $2.4 billion and a 10% annual revenue growth rate since 2019, they reported.
The transaction values UFC at an enterprise value of $12.1 billion and WWE at an enterprise value of $9.3 billion. The transaction represents a contribution price of WWE of approximately $106 per share (before any post-closing dividend). Additionally, UFC and WWE will each contribute cash to the new company so that it holds approximately $150 million. At closing, Endeavor intends to sweep all excess cash at UFC, and shareholders of the new company (other than Endeavor) are expected to receive a post-closing dividend.
The companies reported that the transaction has been unanimously approved by the executive committee of the board of directors of Endeavor and by the board of directors of WWE. The transaction is subject to regulatory approvals and is expected to close in the second half of 2023.
The formal announcement comes one day after WrestleMania 38, WWE’s flagship pay-per-view that aired over two nights on April 1 & 2.
It also comes approximately three months after McMahon’s return to WWE management. The longtime head of the sports entertainment giant announced his retirement from WWE in July 2022 amidst an investigation into sexual misconduct allegations, only to return in January and install himself as executive chairman and to explore the potential sale.
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