WWE sold to Endeavor, Vince McMahon speaks about transaction

[Big Red Machine]

https://www.pwtorch.com/site/2023/04/03 ... ansaction/

By Sean Radican, PWTorch columnist (Twitter: @SR_Torch)

April 3, 2023


Yesterday’s report from CNBC that WWE was going to be sold to Endeavor to form a new company with UFC has been made official.

WWE issued a press release today confirming the news coming out of yesterday’s report from CNBC that Endeavor would acquire WWE and merge the company with UFC to create a new company. Endeavor will control 51 percent of the stock and WWE shareholders will control 49 percent.

The new company hasn’t been named yet. It will be lead by Endeavor CEO Ari Manueal. Vince McMahon, who returned to WWE in January to help facilitate the sale, will be the executive chairman, Nick Khan will be president of WWE. Dana White will continue as UFC president.

McMahon was quoted in the press release saying UFC and WWE will combine to form a $21 billion dollar powerhouse:

Given the incredible work that Ari and Endeavor have done to grow the UFC brand – nearly doubling its revenue over the past seven years – and the immense success we’ve already had in partnering with their team on a number of ventures, I believe that this is without a doubt the best outcome for our shareholders and other stakeholders.

“Together, we will be a $21+ billion live sports and entertainment powerhouse with a collective fanbase of more than a billion people and an exciting growth opportunity. The new company will be well-positioned to maximize the value of our combined media rights, enhance sponsorship monetization, develop new forms of content and pursue other strategic mergers and acquisitions to further bolster our strong stable of brands. I, along with the current WWE management team, look forward to working closely with Ari and the Endeavor and UFC teams to take the businesses to the next level.

The new company will be traded publicly as “TKO” on the New York Stock Exchange. The board will have 11 members. Six members will be appointed by Endeavor and five will be appointed by WWE.

The sale transaction has been approved by both boards of WWE and Endeavor. It is expected to close in the second half of 2023. The sale still needs regulatory approval.

You can read the entire press release on WWE’s sale below:

ENDEAVOR ANNOUNCES UFC AND WWE TO FORM A $21+ BILLION GLOBAL LIVE SPORTS AND ENTERTAINMENT COMPANY
04/03/2023
New, Publicly Listed Company to be 51% Owned by Endeavor and 49% by Existing WWE Shareholders

Endeavor to Contribute UFC into Company at Enterprise Value of $12.1 Billion

BEVERLY HILLS, Calif. & STAMFORD, Conn.–(BUSINESS WIRE)– Endeavor Group Holdings, Inc. (NYSE: EDR) (“Endeavor”) and World Wrestling Entertainment, Inc. (NYSE: WWE) (“WWE”) today announced that they have signed a definitive agreement to form a new, publicly listed company consisting of two iconic, complementary, global sports and entertainment brands: UFC and WWE. Upon close, Endeavor will hold a 51% controlling interest in the new company and existing WWE shareholders will hold a 49% interest in the new company.

Together, UFC and WWE will have global reach, impressive scale and omnichannel distribution. 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.

“This is a rare opportunity to create a global live sports and entertainment pureplay built for where the industry is headed,” said Ariel Emanuel, CEO of Endeavor. “For decades, Vince and his team have demonstrated an incredible track record of innovation and shareholder value creation, and we are confident that Endeavor can deliver significant additional value for shareholders by bringing UFC and WWE together.”

“Given the incredible work that Ari and Endeavor have done to grow the UFC brand – nearly doubling its revenue over the past seven years – and the immense success we’ve already had in partnering with their team on a number of ventures, I believe that this is without a doubt the best outcome for our shareholders and other stakeholders,” said Vincent K. McMahon, Executive Chairman of WWE.

McMahon continued, “Together, we will be a $21+ billion live sports and entertainment powerhouse with a collective fanbase of more than a billion people and an exciting growth opportunity. The new company will be well positioned to maximize the value of our combined media rights, enhance sponsorship monetization, develop new forms of content and pursue other strategic mergers and acquisitions to further bolster our strong stable of brands. I, along with the current WWE management team, look forward to working closely with Ari and the Endeavor and UFC teams to take the businesses to the next level.”

The new company will be led by Emanuel (Chief Executive Officer), who will also continue in his role as Chief Executive Officer of Endeavor, McMahon (Executive Chairman of the Board) and Mark Shapiro, who will be President and Chief Operating Officer 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 of whom by WWE.

Together, UFC and WWE expect to deliver an estimated $50 million to $100 million in annualized run rate cost synergies by leveraging, among other things, Endeavor’s back office and robust infrastructure. Endeavor also expects significant growth across revenue areas including domestic and international media rights, ticket sales and yield optimization, event operations, sponsorship, licensing and premium hospitality. Endeavor’s success at UFC, including increasing commercial opportunities that have driven more than 2x Adjusted EBITDA growth since its acquisition in late 2016, demonstrates the significant value creation opportunity and upside potential of having UFC and WWE under one roof.

Transaction Details and Approvals

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.

Under the terms of the transaction, existing WWE shareholders will roll all existing equity into the new entity that will be the parent company of UFC and WWE (“NewCo” until it is named at a later date) and intends to list on the New York Stock Exchange under the ticker symbol “TKO”. The listing of NewCo will expand the collective investor base to allow for broad market participation across Endeavor and NewCo.

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 the satisfaction of customary closing conditions, including receipt of required regulatory approvals. The transaction is expected to close in the second half of 2023.

This marks the successful conclusion of WWE’s strategic alternatives review process. WWE embarked on this process to take advantage of the company’s unique position in the entertainment ecosystem as well as the inflection point coming with its media rights renewals, both of which were widely recognized in the marketplace through this process.

[Big Red Machine]

Well... it actually happened.

[cero2k]

Well... it actually happened.

The thing I'm both surprised and disappointed was that it was sold to Endevour and not a weirder option like Disney or SA

[Big Red Machine]

Well... it actually happened.

The thing I'm both surprised and disappointed was that it was sold to Endevour and not a weirder option like Disney or SA

How long do you think until Vince and Dana have a fist-fight?

[cero2k]

The thing I'm both surprised and disappointed was that it was sold to Endevour and not a weirder option like Disney or SA

How long do you think until Vince and Dana have a fist-fight?

lol yes, that was the first thing that came to mind, how long before they do the UFC vs WWE story

[Big Red Machine]

The thing I'm both surprised and disappointed was that it was sold to Endevour and not a weirder option like Disney or SA

How long do you think until Vince and Dana have a fist-fight?

lol yes, that was the first thing that came to mind, how long before they do the UFC vs WWE story

I meant a shoot fight developing from an argument in a boardroom.