Wrestling Entertainment, Inc., a global live sports and entertainment powerhouse after the SoFi Superconducting Event of the Year 2017
A new company will house the World Wrestling Entertainment and the UFC brands, with the company taking a controlling interest. Existing WWE shareholders will hold a 49% stake.
“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, in a statement. Emanuel, a Hollywood power house agent, will be the CEO of new company and retain his chief executive title at the agency.
The announcement of the WWE sale arrives after McMahon, the founder and majority shareholder of WWE, returned to the company in January and said that it could be up for sale.
In premarket trading, the shares of World Wrestling Entertainment fell by more than 5%. The companies are expecting to save at least $50 million to $100 million once the deal is complete.
The board of directors of the new company will have 11 members at a later point with six of them appointed by the company and the rest by the World Wrestling Entertainment.
McMahon, the company’s largest shareholder, was forced to retire as its CEO last year following a hush money and sexual harassment scandal. Vince McMahon had previously reported a total of $18.7 million in expenses, which was disclosed after his departure. The company had to make changes to its financial statements for 2020.
Both companies expect the agreement to close in late 2023. Combining sports entertainment with fervent, loyal audiences will be a powerful result. The biggest live event of the year just wrapped up at So Fi Stadium and it was a huge success. In the stadium, the company claims it reached a total of 161,892 people. The event featured WWE’s top superstars and celebrities like Logan Paul — who is somehow batting a thousand at putting on impressive pro wrestling matches — and Snoop Dogg.
Disney, Fox, Uniprise and Saudi Arabia’s Public Investment Fund are said to be in the running to buy the company that broadcasts World Wrestling Entertainment.
McMahon said that together, they 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.
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.
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 stated in an interview with CNBC that there was doubt among some people that he would make a deal for the business. “It’s the right time to do the right thing. And it’s the next evolution of WWE,” he said.
It makes sense for all of the synergies that we have to extract the most value from the marketplace.
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It was seen by media analysts as an attractive target, given its global reach and loyal fan base that includes everyone from minor to senior citizens.
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 has more than 20 million followers on TikTok. Its female wrestlers comprise five out of the top 15 most followed female athletes in the world on a number of popular social media platforms, led by the athlete who has 36.1 million followers.
In a note to clients, Jeffries analyst Randal Konik said that live sport content is in high demand due to the declining popularity of linear TV.
The transaction is targeted to be completed in the second half of the year. Regulatory approval is still needed.
Shares of World Wrestling Entertainment Inc., based in Stamford, Connecticut, are up 33% this year, but fell 5% at the opening bell Monday. Shares of Endeavor, based in Beverly Hills, California, slipped less than 1%.