Deal unites two of the biggest names in wrestling and entertainment and caps a months-long sale process for WWE.
A new publicly traded company will house UFC and WWE brands, with Endeavor Group Holdings Inc (UFC’s owners) taking a 51 percent controlling interest in the new company.
Existing WWE shareholders will get a 49 percent stake.
The deal unites two of the biggest names in wrestling and entertainment and caps a months-long sale process for WWE, overseen by its co-founder and executive chairman Vince McMahon, who returned to the company’s board in January.
McMahon will retain his role in the new company, which does not yet have a name.
The companies put the enterprise value of UFC at $12.1bn and WWE’s value at $9.3bn.
“This is a once-in-a-lifetime opportunity to bring together two leading pure-play sports and entertainment companies,” Endeavor CEO Ari Emanuel said in an investor presentation, describing the deal as a “transformational step” for Endeavor.
Emanuel said he will lead as chief executive officer while continuing in his role at Endeavor.
Today, @Endeavor announced it has signed an agreement to form a $21+ billion global live sports and entertainment company made up of @UFC and @WWE. https://t.co/lPrkBmKJXm pic.twitter.com/ZBk95c5exU
— Endeavor (@Endeavor) April 3, 2023
Shares of WWE fell 4.5 percent in trading before the bell, while Endeavor was up four percent.
The new company will be listed under ticker symbol “TKO” on the New York Stock Exchange, the companies said.
Hollywood power broker Emanuel has transformed Endeavor, which has its roots in representing film and television talent, into a sports and entertainment powerhouse with more than 20 acquisitions.
He has invested in bull-riding events, fashion shows and the Miami Open and Madrid Open tennis competitions.
Endeavor said it would run the same playbook it employed with the UFC, the world’s largest martial arts organisation, improving operating efficiency, negotiating lucrative media deals and striking licencing deals.
The UFC has seen its revenue grow by more than one and a half times and its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortisation) double since 2017, a year after Endeavor took a controlling interest in the company. Endeavor bought out the remaining shareholders in 2021.
Under the deal that a source said was internally referred to as Project Stunner, UFC and WWE will also contribute cash to the new company so it holds nearly $150m.
The agreement values each share of WWE at $106, representing a premium of 16 percent to the company’s Friday closing and giving WWE an enterprise value of $9.3bn.
In January, WWE said it would explore strategic options that could include a sale, shortly after McMahon’s return to the company.
McMahon had retired in July last year as the company’s CEO and chair following an investigation into alleged misconduct. Co-CEO Stephanie McMahon, who ran the company on her own when her father exited, resigned a week after he returned in January.