Endeavor Group Holdings Inc. has finalized its previously announced deal with World Wrestling (NYSE:TKO) Entertainment Inc., creating a $21.4 billion sports entertainment company, TKO Group Holdings Inc. The newly formed entity, which houses both WWE and the Ultimate Fighting Championship (UFC), is trading on the New York Stock Exchange under the ticker symbol "TKO".
On Tuesday, shares of TKO Group opened at $102 per share on their first day of trading. The merger unifies more than 700 million UFC fans and 1.2 billion WWE fans worldwide under one banner, with the aim to cross-promote and deepen penetration into their overlapping fan bases.
Endeavor holds a 51% controlling interest in TKO Group, while existing WWE shareholders retain a 49% stake. "With UFC and WWE under one roof, we will provide unrivaled experiences for more than a billion passionate fans worldwide,” said Ariel Emanuel, CEO of Endeavor and TKO Group.
Jefferies analyst Randal Konik expressed positive sentiments towards the UFC-WWE combination. “We like the assets of UFC and WWE in a world where linear TV is losing market share to streaming, thus live sports content is in high demand,” he wrote in a note to clients. Konik also highlighted the upcoming rights expirations for both WWE and UFC as presenting "meaningful upside opportunities to the cash flows of both UFC and WWE in their own rights," which he believes will further drive EBITDA margins incrementally higher for each franchise.
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