Endeavor Group Holdings Inc. (NYSE:EDR), the parent company of Ultimate Fighting Championship (UFC), has today announced a bid of $9.3 billion for World Wrestling Entertainment (NYSE: WWE); a move which would establish a giant in the world of combat sports and sports entertainment.
The acquirer, which additionally owns IMG Arena and administers Professional Bull Riders (PBR) and Euroleague, will possess 51% of the amalgamated business, with the remaining portion belonging to WWE shareholders. Additionally, the stock ticker of the newly constructed company is planned to be changed to “TKO”, in recognition of the term “technical knockout”.
Ari Emanuel will stay on as CEO of the corporation, with Dana White continuing his role as chief of UFC, and Nick Khan taking over as president of WWE. Vince McMahon, WWE Executive Chairman, will additionally have a pivotal position at the new firm, according to the statement.
“This is an exceptional chance to create a global live sports and entertainment enterprise designed for the direction that the industry is moving towards,” stated Emanuel in the press release. “For many years, Vince and his team have demonstrated an incredible record of progress and shareholder value creation, and we are sure that Endeavor can generate additional value for shareholders by merging UFC and WWE.”
The agreement, which is anticipated to generate annual savings between $50 and $100 million, is planned to close in the second half of this year.
Betting Potential of Endeavor and WWE Partnership
Aside from UFC’s increasing appeal to bettors, there are also some gaming implications in Endeavor’s offer for the most renowned wrestling association.
For instance, the buyer’s IMG Arena division provides data to sportsbook operators. Last year, Endeavor enhanced that business with the acquisition of the OpenBet sports wagering unit from the company then known as Scientific Games. OpenBet customers include DraftKings, FanDuel, William Hill, and WynnBet, among others.
In addition, there has been recent speculation that WWE approached Colorado, Indiana and Michigan about allowing wagering on its predetermined matches. Gaming regulators in those states later declared that either they had not been in contact with WWE or that they had no interest in permitting betting on events in which the result is pre-established.
“The transaction represents a contribution price of WWE of around $106 per share (prior to any post-closing dividend). Additionally, UFC and WWE will both contribute cash to the new company so that it holds an estimated $150 million. At closing, Endeavor intends to sweep all surplus cash at UFC, and shareholders of the new company (other than Endeavor) are expected to receive a post-closing dividend,” as stated in the statement.
Other Speculated Endeavor and WWE Deals
Among industry watchers, there is some supposition that Endeavor’s WWE procurement is structured after the buyer’s purchase of UFC, which was finished in 2021. That transaction allowed Dana White to cash out while retaining day-to-day operational control. It appears the same will be true of Vince McMahon as he will have a leadership role at the new company.
There is also talk that Endeavor may eventually decide to spin-off UFC and WWE into an independent publicly traded entity in order to unlock value for shareholders.
Despite how feasible such a transaction could be, there is no mention of it in the statement revealing Endeavor’s acquisition of WWE.