UFC parent and WWE merging, creating $21.4B sports entertainment company

WWE and the company that runs Ultimate Fighting Championship will combine to create a $21.4 billion sports entertainment company, the two companies announced Monday.

A new publicly traded company will be formed that houses the UFC and WWE brands. Endeavor Group Holdings will hold a 51% controlling interest in the new company once the deal is complete. Existing WWE shareholders will hold a 49% stake in the new company.

The companies put the enterprise value of UFC at $12.1 billion and WWE's value at $9.3 billion.

The new business, which does not yet have a name, will be led by Endeavor CEO Ari Emanuel. Vince McMahon, executive chairman at WWE, will serve in the same role at the new company. Dana White will continue as president of UFC and Nick Khan will be president at WWE.

"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," McMahon said in a prepared statement Monday.

He also provided some idea of where the focus of the new company will be, saying that it will look to maximize the value of combined media rights, enhance sponsorship monetization, develop new forms of content and pursue other strategic mergers and acquisitions to further bolster their brands.

A synergy already exists talent wise between WWE and UFC, with stars such as Brock Lesnar and Ronda Rousey crossing over between the two businesses.

The deal between Endeavor and WWE catapults WWE into a new era, after functioning as a family-run business for decades. McMahon purchased Capitol Wrestling from his father in 1982, and took the regional wrestling business to a national audience with the likes of wrestling stars such as Andre the Giant, Hulk Hogan and Dwayne "The Rock" Johnson. The company, which changed its name to World Wrestling Federation and later World Wrestling Entertainment, hosted its first WrestleMania in 1985.

McMahon's return as CEO

The announcement comes after McMahon, the founder and majority shareholder of WWE, returned to the company in January and said it could be up for sale.

McMahon, who turned WWE from a small company into a worldwide entertainment business, stepped back temporarily as CEO and chairman in mid-June and then retired a month later. He was facing an investigation into alleged misconduct at the time of his short-lived retirement. 

The Wall Street Journal reported in July McMahon agreed to pay more than $12 million in hush money to four women over the past 16 years to suppress allegations of sexual misconduct and infidelity.

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Rumors swirled about who might be interested in buying WWE, with chatter focusing on companies such as Endeavor, Disney, Fox, Comcast, Amazon and Saudi Arabia's Public Investment Fund.

Industry experts had viewed WWE as an attractive acquisition target given its global reach and loyal fanbase, which includes everyone from minors to seniors and people with a wide range of incomes.

Social media powerhouse

The company is also a social media powerhouse. It surpassed 16 billion social video views in the final quarter of last year. It has nearly 94 million YouTube subscribers and more than 20 million followers on TikTok. Its female wrestlers comprise five out of the top 15 most followed female athletes in the world, across Facebook, Twitter & Instagram, led by Ronda Rousey with 36.1 million followers.

WWE had more than 7.5 billion digital and social media views in January and February of this year, up 15% from the same time frame a year ago.

Shares of World Wrestling Entertainment Inc., based in Stamford, Connecticut, were down 3.9% Monday morning. Shares of Endeavor, based in Beverly Hills, California, were down half a percent.