The merger between UFC and WWE has been completed, putting an end to Vince McMahon’s historic era. Endeavor and WWE made the announcement that impending deal has closed leading to the formation of TKO Group Holdings.
WWE and UFC merge
With the merger between WWE and UFC, the formation of TKO boasts more than 1 billion fans across the globe. Variety has reported that the shares in TKO will begin trading Tuesday (Sept. 12) on the New York Stock Exchange under the ticker symbol “TKO.”
Endeavor holds a 51% controlling interest in the new company and existing WWE shareholders hold a 49% interest on a fully diluted basis. After the merger, WWE shares will cease trading on the NYSE and WWE closed up 2.7% Monday, to $100.65/share.
Former CEO of WWE, Vince McMahon takes the role of executive chairman of TKO Group. Under the new deal, McMahon will own 16.4% of the economic interests in TKO (and 16.4% of the voting power in the new entity. McMahon had shockingly stepped down as WWE’s chief executive last year amid string of contoversies. However, he returned to the company in January 2023 as executive chairman to head up efforts to sell WWE.
UFC’s parent company Endeavor has noted that the TKO deal will result in an estimated $50 million to $100 million in annualized run-rate cost synergies, including by migrating WWE to Endeavor’s back-office infrastructure.
TKO will “leverage Endeavor’s expertise” in areas including domestic and international media rights, ticket sales and yield optimization, event operations, global partnerships, licensing and premium hospitality “to drive revenue growth,” the companies said.
“The creation of TKO marks an exciting new chapter for UFC and WWE as leaders in global sports and entertainment,” Endeavor CEO Ariel Emanuel, who also serves 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 unrivaled experiences for more than a billion passionate fans worldwide.”
TKO had $2.43 billion in revenue last year (with UFC representing $1.14 billion of that and WWE accounting for $1.29 billion) and net income of $351.8 million after accounting adjustments. TKO is set to assume $2.73 billion in debt from UFC, taking that off Endeavor’s balance sheet. Meanwhile, Endeavor’s debt-to-equity ratio will be about 2.8X while TKO will be 2.5X levered.
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