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Can the new WWE+UFC venture by Endeavor avoid a TKO (technical knockout)?

September 14, 2023

TKO (Technical Knock Out) a knockout declared by the referee who judges one fighter unable to continue. Carlo De Marchis pens down this month’s business index.

Let’s talk about TKO, the new publicly traded combat sports and entertainment powerhouse.

Facts and forecasts

Endeavor owns 51% of the newly formed TKO putting together WWE and UFC. They bought UFC for $4 billion in 2016, WWE is publicly traded at $8.37 billion. The new outfit generated over $2.4 billion in revenue in 2022 with a 10% annual growth rate since 2019, according to Endeavor. Expected annual operating synergies of $50-$100 million, not unrealistic as UFC did $70 million savings in two years under Endeavor.

People and places

Ari Emmanuel, mighty CEO of both TKO and Endeavor, same as Mark Shapiro COO for both. Dana White is UFC CEO, and Nick Khan ex-CEO is now WWE President. Controversial enough Vince McMahion is Chairman, not sure it’s a great idea based on the many conduct issues.

Merging companies and cultures is not easy, especially as they start from different places with different vibes – Las Vegas for UFC and Stamford, Connecticut for WWE.

Product and growth

This deal creates the new super-destination of combat sports with a combined content IP, production strength, audience footprint and marketing power that is enviable.

Creating mega platforms around content and media seems to be a trend but also the recipe for sustainable business in this space, so TKO seems well positioned in that regard.

WWE and UFC media rights, soon to be renewed, are a clear avenue for growth, if we assume the joint proposition will be even more appealing to media companies, as well as expanding the footprint even more internationally.

The obvious challenge is about merging (to whatever extent) and like any operation of this size – and we have seen many recently – the risks are well known.

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