The merger between UFC and WWE is finalized as Endeavor and WWE confirm the establishment of TKO Group Holdings, bringing together the wrestling entertainment giant and the MMA industry leader, UFC.
Starting on Tuesday, TKO will commence trading with the goal of expanding its content offerings, potentially including UFC fights, through streaming services in the coming times, according to Mark Shapiro, who serves as its President and Chief Operating Officer. The name TKO, derived from ‘technical knockout’ in boxing, symbolizes the shared emphasis on combat sports by both entities.
WWE and UFC derive income from streaming and television rights, alongside ticket sales and merchandise associated with their renowned roster of celebrity fighters. Investors have welcomed the formation of the merged company, in part because it can generate revenue from conventional television, while also being adaptable to the shift in consumer preferences away from cable towards streaming services.
The aspiration is that by joining forces as a consolidated entity, UFC and WWE can achieve greater strength than they could individually. TKO now proudly counts over 1 billion global fans and has a presence in 180 countries, hosting over 350 live events annually.
Endeavor retains a 51% controlling stake in the newly formed company, while existing WWE shareholders maintain a 49% stake on a fully diluted basis. Following the introduction of TKO, WWE shares will no longer be traded on the NYSE.
Endeavor anticipates that the TKO agreement will yield approximately $50 million to $100 million in annualized cost synergies, achieved in part by integrating WWE into Endeavor’s back-office infrastructure. While the cost-saving efforts may entail workforce reductions at UFC and WWE, specific details regarding job cuts have not yet been disclosed. Additionally, TKO will harness Endeavor’s proficiency in various aspects, such as domestic and international media rights, ticket sales and revenue optimization, event management, global partnerships, licensing, and premium hospitality, with the aim of boosting revenue growth, as outlined by the companies.
Endeavor is the parent company of WME talent agency, IMG sports and events firm, and Professional Bull Riders. It is publicly traded on the New York Stock Exchange with the ticker symbol EDR.
WWE Chairman Vince McMahon is appointed as the executive chairman of TKO. The board also comprises Jonathan Kraft, President of the Kraft Group, the owner of the New England Patriots; former CBS Entertainment President Nancy Tellem; and Steve Koonin, CEO of the Atlanta Hawks NBA franchise.
(Source: Todd Spangler | Variety | Joe Flint | CNBC)
