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World Wrestling (WWE) and Endeavor Group Ink $21 Billion Deal
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World Wrestling Entertainment, Inc.’s focus on expanding original content and creating new, driving subscriber count, raising content rights fees and monetization of video content across digital and DTC platforms bodes well. In latest developments, the company together with Endeavor Group Holdings, Inc. (EDR - Free Report) have agreed to establish a new, publicly listed company comprising two complementary, global sports and entertainment brands – UFC and WWE. On the closure of this deal, Endeavor will hold a 51% controlling stake in the new company while the existing WWE shareholders will own a 49% interest. This move reflects the successful conclusion of World Wrestling’s strategic options review process.
On a combined basis, the new company will be about $21 billion live sports and entertainment powerhouse with a collective fanbase of more than a billion people. This company will be well poised to optimize the value of the combined media rights, boost sponsorship monetization, build new forms of content and capture strategic buyouts to enrich the brand portfolio. UFC and WWE together will have a global reach, robust scale and omni-channel distribution. On a combined 2022 fiscal year-end basis, UFC and WWE accomplished revenues of $2.4 billion with a 10% yearly revenue growth rate since 2019.
Let’s Delve Deeper
According to the terms of the deal, present WWE shareholders will roll all the existing equity into the new company, which will be the parent entity of UFC and WWE. The new company will be listed on the New York Stock Exchange under the ticker symbol – TKO. The transaction, which is likely to conclude in second-half 2023, is unanimously approved by the Executive Committee of Endeavor’s board and WWE’s board. This deal is subjected to the satisfaction of customary closing conditions with the receipt of necessary regulatory approvals.
Image Source: Zacks Investment Research
The aforesaid transaction values UFC at an enterprise value of $12.1 billion while WWE’s enterprise value to be $9.3 billion. The deal represents a contribution price of WWE of roughly $106 per share prior any post-closing dividend. Moreover, UFC and WWE will each contribute cash to the combined entity for roughly $150 million. Upon closure, Endeavor plans to sweep all excess cash at UFC while shareholders of the new company apart from Endeavor are likely to receive a post-closing dividend.
We note that the newly formed entity will be led by Emanuel as its Chief Executive Officer, who will also continue his role of Endeavor’s Chief Executive Officer, McMahon as the Executive Chairman of the board and Mark Shapiro will be the president and Chief Operating Officer of both Endeavor and the new company.
On a combined basis, UFC and WWE will deliver an estimated $50-$100 million as annualized run-rate cost synergies. Endeavor anticipates growth across revenue areas consisting of the domestic and international media rights, ticket sales and yield optimization, event operations, sponsorship, licensing and premium hospitality.
What’s More?
Shares of this Zacks Rank #3 (Hold) company have risen 23.9% in the past three months, outperforming the industry’s 0.5% gain. The company anticipates generating record revenues in 2023. This suggests an increase in media rights fees for the flagship weekly programing and premium live events as well as a full live event touring schedule and higher advertising and sponsorship revenues. WWE projected adjusted OIBDA in the range of $395-$410 million for 2023.
Image: Bigstock
World Wrestling (WWE) and Endeavor Group Ink $21 Billion Deal
World Wrestling Entertainment, Inc.’s focus on expanding original content and creating new, driving subscriber count, raising content rights fees and monetization of video content across digital and DTC platforms bodes well. In latest developments, the company together with Endeavor Group Holdings, Inc. (EDR - Free Report) have agreed to establish a new, publicly listed company comprising two complementary, global sports and entertainment brands – UFC and WWE. On the closure of this deal, Endeavor will hold a 51% controlling stake in the new company while the existing WWE shareholders will own a 49% interest. This move reflects the successful conclusion of World Wrestling’s strategic options review process.
On a combined basis, the new company will be about $21 billion live sports and entertainment powerhouse with a collective fanbase of more than a billion people. This company will be well poised to optimize the value of the combined media rights, boost sponsorship monetization, build new forms of content and capture strategic buyouts to enrich the brand portfolio. UFC and WWE together will have a global reach, robust scale and omni-channel distribution. On a combined 2022 fiscal year-end basis, UFC and WWE accomplished revenues of $2.4 billion with a 10% yearly revenue growth rate since 2019.
Let’s Delve Deeper
According to the terms of the deal, present WWE shareholders will roll all the existing equity into the new company, which will be the parent entity of UFC and WWE. The new company will be listed on the New York Stock Exchange under the ticker symbol – TKO. The transaction, which is likely to conclude in second-half 2023, is unanimously approved by the Executive Committee of Endeavor’s board and WWE’s board. This deal is subjected to the satisfaction of customary closing conditions with the receipt of necessary regulatory approvals.
Image Source: Zacks Investment Research
The aforesaid transaction values UFC at an enterprise value of $12.1 billion while WWE’s enterprise value to be $9.3 billion. The deal represents a contribution price of WWE of roughly $106 per share prior any post-closing dividend. Moreover, UFC and WWE will each contribute cash to the combined entity for roughly $150 million. Upon closure, Endeavor plans to sweep all excess cash at UFC while shareholders of the new company apart from Endeavor are likely to receive a post-closing dividend.
We note that the newly formed entity will be led by Emanuel as its Chief Executive Officer, who will also continue his role of Endeavor’s Chief Executive Officer, McMahon as the Executive Chairman of the board and Mark Shapiro will be the president and Chief Operating Officer of both Endeavor and the new company.
On a combined basis, UFC and WWE will deliver an estimated $50-$100 million as annualized run-rate cost synergies. Endeavor anticipates growth across revenue areas consisting of the domestic and international media rights, ticket sales and yield optimization, event operations, sponsorship, licensing and premium hospitality.
What’s More?
Shares of this Zacks Rank #3 (Hold) company have risen 23.9% in the past three months, outperforming the industry’s 0.5% gain. The company anticipates generating record revenues in 2023. This suggests an increase in media rights fees for the flagship weekly programing and premium live events as well as a full live event touring schedule and higher advertising and sponsorship revenues. WWE projected adjusted OIBDA in the range of $395-$410 million for 2023.
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The Zacks Consensus Estimate for AMCX’s current financial year sales suggests growth of 6.5% from the year-ago reported figure.