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World Wrestling Entertainment and UFC merge to form TKO, a new New York-listed company controlled by Ari Emanuel’s Endeavor Group that is expected to generate more than $1 billion in annual revenue, Because its target audience is the growing number of MMA fans around the world.
In an interview with the Financial Times, the CEO of Emanuel, Endeavor and TKO said that UFC and WWE will host 350 live events globally each year, reaching 1 billion fans around the world.
“TKO is well-positioned to capitalize on the growing demand for premium sports content and live events,” he said. “You can’t underestimate the value of live sports in the television ecosystem.”
TKO Group will begin trading on the New York Stock Exchange on Tuesday, with Endeavor holding a 51% controlling interest and WWE shareholders holding 49%.
The listing comes just five months after Endeavor acquired WWE, the professional wrestling group led for decades by Vince McMahon, something Emanuel has learned about live sports and first-hand experience. The latest big bet. In recent years, he has amassed a body of work ranging from the Frieze Art Fair to the Professional Bullfighting League.
According to investors, the combined company is expected to generate more than $1 billion in earnings before interest, taxes, depreciation and amortization and have revenue of at least $2.5 billion.
The company is also expected to benefit from higher prices for TV sports rights deals, analysts said. WWE signed a $1 billion rights deal with NBC’s Peacock streaming network in 2021 and will renew it in 2026.
“We believe that with artificial intelligence, the world will have more free time than ever before,” Emanuel said. “I think the weekend will be like college – starting on Thursday night. You need experience.”
The UFC has been a cash cow for Endeavor, with the company’s standalone enterprise value estimated at $12.1 billion. After Formula 1, the UFC has had the highest viewership growth of any sport over the past five years, Morgan Stanley said. It also has the advantage of being a global sport without the need for a management team or franchise, which helps it generate the highest profit margins among its peers, the investment bank added.
WWE was a decades-old family-owned company that, until this year’s deal with Endeavor, produced stars such as Hulk Hogan and Dwayne “The Rock” Johnson.
The SEC has been investigating McMahon last year after he was accused of paying millions of dollars to women to keep quiet about alleged extramarital affairs. He has denied wrongdoing and will serve as executive chairman of the new company.
“The investigation is ongoing,” Emanuel said. “That’s all we can say about that.”
The combined company is expected to benefit from Endeavor’s other businesses, including sponsorship, ticketing and hospitality groups, as well as William Morris Talent Agency.
Endeavor is losing an estimated $25 million a month due to the strike by the Hollywood Writers and Screen Actors Guild. Emanuel said if there isn’t a breakthrough between the studios and unions in the next two to three weeks, a deal is unlikely “until the end of the year.”
“There are a lot of people who are nervous because this affects the economy on both sides,” he said. “Everyone is hurting right now. Hopefully they can stick it out and come to a deal.”
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