World Wrestling Entertainment (WWE) is teaming up with the parent company of rival UFC, Endeavor Group, to form a new publicly traded company.
Due to the transaction, the newly combined company is valued at close to $21 billion: UFC is worth $12.1 billion, while WWE is at $9.3 billion.
After the merger, Endeavor shareholders will own 51% of the new company, while WWE owners would hold 49%.
Vince McMahon will maintain his current role as executive chairman of the new business, which has not yet been given a name.
The new business “will be well positioned to maximize the value of our combined media rights,” he added in a statement.
Additionally, he said that the new business may grow by looking at additional mergers and acquisitions “to further bolster our strong stable of brands.”
Early trading saw a decline of over 10% in WWE shares and about 2% in Endeavor. Upon completion of the acquisition, which is anticipated to happen in the second half of this year, the firms anticipate cost savings of $50 million to $100 million. The ticker symbol for it on the New York Stock Exchange will be “TKO.”
Eleven members will make up the board of directors for the new business; six of them will be chosen by Endeavor and the other five by the WWE.
In 2021, Endeavor, which also owns William Morris Endeavor, the largest talent agency in Hollywood, acquired full ownership of the UFC. Almost 10% of the company’s shares have increased in value this year.
The UFC is housed in its sports division, which saw a 20% increase in revenue to $1.3 billion last year, in part due to higher media rights fees.
The merger on Monday signals the end of WWE as a family-owned company. Early in the 1980s, Vince McMahon acquired the business from his father and turned it into an entertainment conglomerate with a number of regular live events. The business agreed to a deal with NBCUniversal’s Peacock streaming service in 2021 to air many of its episodes for an estimated $1 billion.
The company’s top shareholder, McMahon, was forced to step down as CEO last year as a result of a hush money and sexual harassment scandal. Vince McMahon hadn’t previously reported a number of costs totaling $19.6 million, which WWE revealed after he left. The company was compelled by this to update its financial statements for the years 2019, 2020, and 2021.
