Endeavor Combines WWE & The UFC To Create A $21.4 Billion Business
Huddle Up is a 3x weekly newsletter that breaks down the business and money behind sports. If you are not already a subscriber, sign up and join 99,000+ others who receive it directly in their inbox each week. Today At A Glance:Endeavor announced this week that they are acquiring WWE and plan to merge the wrestling company with the UFC to create a combined entity worth $21.4 billion. Today’s newsletter breaks down the details of the deal, including how much each business is worth, where the synergies sit, and what the future might look like. This newsletter is also available via podcast on Apple or Spotify. Enjoy! Today’s Newsletter Is Brought To You By Sorare!
Sorare is one of the fastest-growing companies in sports. Backed by superstar athletes like Lionel Messi, Kylian Mbappé, Rudy Gobert, Aaron Judge, and Serena Williams, they have built blockchain technology that allows fans to collect officially licensed NFT-backed player cards. Sorare, which started in Europe with fantasy football games, recently launched exclusive licensing deals with the MLB/MLBPA and NBA/NBPA to create a custom fantasy game for each sport. The concept is simple: Sorare lets you buy, sell, trade, and earn digital trading cards of your favorite players. But rather than just looking at them as a digital collectible, you can use these trading cards to enter fantasy sports competitions for prizes & rewards. So use my link below for a free limited card — it’s free to get started! Friends, Endeavor wants to build the world’s largest sports & entertainment company. The Beverly Hills-based talent and media agency announced this week that they are acquiring World Wrestling Entertainment (WWE). The deal values WWE at an enterprise value of $9.3 billion, and Endeavor plans to combine the wrestling organization with the UFC (valued at $12.1 billion ) to create one single company. This combined entity doesn’t have a name yet but will be valued at $21.4 billion.
The UFC and WWE will collectively contribute $150 million in cash to the combined entity. The board of directions will include 11 people — 6 from Endeavor and 5 from WWE — and the deal is expected to officially close later this year. Endeavor will own 51% of the company, and current WWE shareholders will own 49%.
Now, this deal shocked many people — but it’s also been a long time coming. I wrote about the WWE’s rumored sale to Saudi earlier this year and even speculated that Endeavor could eventually acquire the company for more than $8 billion. My reasoning was simple: Ari Emmanuel and Endeavor acquired a majority stake in the UFC for $4.2 billion in 2016. They then transformed the business, drastically increasing media rights fees, sponsorships, licensing, and commercial pay-per-view. And the UFC went from a $4.2 billion valuation to a $12.1 billion valuation in 7 years. UFC Business Overview
And there is now a clear opportunity to do something similar with WWE.
Sure, WWE has had a tumultuous few years. There have been hirings and firings, multi-million dollar hush payments, and chairman Vince McMahon has faced more public backlash than just about any other sports executive over the last 2-3 years. But still, the business is humming along. For example, WWE posted a record $1.1 billion in revenue last year. WrestleMania 39 in Los Angeles last weekend had 162,000 attendees over two days and finished as the highest-grossing event in WWE history ($22M gate). And WWE’s stock is up more than 60% over the last 12 months alone.
But more importantly, this deal is about the future. WWE has some of the most valuable intellectual property in sports. I’m talking about 50+ years of content, characters, and stories — and once you add in their assets, premium live events, merchandise business, and more, it’s easy to see why Endeavor is so excited. Although, I don’t expect the UFC or WWE to look all the different. Endeavor will probably end up cutting some jobs as they pool together resources and make both companies more efficient — this is what they did when they acquired the UFC — but it’s not like UFC champion Jon Jones will start competing in WWE. Instead, Endeavor plans to derive value by simply rerunning the UFC playbook. “This is going to be UFC 2.0,” Endeavor CEO Ari Emmanuel told CNBC. “We have a track record of success with media rights. WWE has similar scale to UFC. In the universe of assets at this scale, the opportunity is rare and finite.” And Ari Emmanuel is right. The newly combined company has gained leverage through combined assets and will present a significant opportunity for media rights. WWE’s Peacock deal expires in 2026, and its TV deals for Smackdown (Fox) and Raw (USA) are up this year 2023. UFC’s deal with ESPN is up in 2025, and whether they end up combing the rights or not, this undoubtedly provides leverage in negotiations. So we’ll see what happens. My guess is that you start seeing cross-promotion of events relatively soon — like UFC advertising its PPV events during WWE matches and vice-versa. But the bigger synergies will take some time, and it’ll be interesting to see if Endeavor can multiply the enterprise value of WWE as they did with the UFC. I hope everyone has a great weekend. We’ll talk on Monday. Interested in advertising with Huddle Up? Email me. Your feedback helps me improve Huddle Up. How did you like today’s post? Loved | Great | Good | Meh | Bad Extra Credit: How The Masters Became A $150 Million Annual BusinessThe Masters is in full swing, and the business behind golf’s most popular tournament is fascinating. My newsletter from Wednesday has already been read by more than 100,000 people (thank you!), so make sure to check it out if you missed it before.  Huddle Up is a 3x weekly newsletter that breaks down the business and money behind sports. If you are not already a subscriber, sign up and join 99,000+ others who receive it directly in their inbox each week.
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