New, Publicly Listed Company to be 51% Owned
by Endeavor and 49% by Existing WWE Shareholders
Endeavor to Contribute UFC into
Company at Enterprise Value of $12.1 Billion
Endeavor Group Holdings, Inc. (NYSE: EDR) (“Endeavor”) and World
Wrestling Entertainment, Inc. (NYSE: WWE) (“WWE”) today announced
that they have signed a definitive agreement to form a new,
publicly listed company consisting of two iconic, complementary,
global sports and entertainment brands: UFC and WWE. Upon close,
Endeavor will hold a 51% controlling interest in the new company
and existing WWE shareholders will hold a 49% interest in the new
company.
Together, UFC and WWE will have global reach, impressive scale
and omnichannel distribution. On a combined 2022 fiscal year-end
basis, UFC and WWE achieved revenue of $2.4 billion and a 10%
annual revenue growth rate since 2019.
“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. “For decades, Vince and his
team have demonstrated an incredible track record of innovation and
shareholder value creation, and we are confident that Endeavor can
deliver significant additional value for shareholders by bringing
UFC and WWE together.”
“Given the incredible work that Ari and Endeavor have done to
grow the UFC brand – nearly doubling its revenue over the past
seven years – and the immense success we’ve already had in
partnering with their team on a number of ventures, I believe that
this is without a doubt the best outcome for our shareholders and
other stakeholders,” said Vincent K. McMahon, Executive Chairman of
WWE.
McMahon continued, “Together, we 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. The
new company will be well positioned to maximize the value of our
combined media rights, enhance sponsorship monetization, develop
new forms of content and pursue other strategic mergers and
acquisitions to further bolster our strong stable of brands. I,
along with the current WWE management team, look forward to working
closely with Ari and the Endeavor and UFC teams to take the
businesses to the next level.”
The new company will be led by Emanuel (Chief Executive
Officer), who will also continue in his role as Chief Executive
Officer of Endeavor, McMahon (Executive Chairman of the Board) and
Mark Shapiro, who will be President and Chief Operating Officer of
both Endeavor and the new company. Dana White will continue in his
role as President of UFC and Nick Khan will serve as President of
WWE. The Board of Directors will consist of 11 members who will be
appointed at a later date, six of whom will be appointed by
Endeavor and five of whom by WWE.
Together, UFC and WWE expect to deliver an estimated $50 million
to $100 million in annualized run rate cost synergies by
leveraging, among other things, Endeavor’s back office and robust
infrastructure. Endeavor also expects significant growth across
revenue areas including domestic and international media rights,
ticket sales and yield optimization, event operations, sponsorship,
licensing and premium hospitality. Endeavor’s success at UFC,
including increasing commercial opportunities that have driven more
than 2x Adjusted EBITDA growth since its acquisition in late 2016,
demonstrates the significant value creation opportunity and upside
potential of having UFC and WWE under one roof.
Transaction Details and Approvals
The transaction values UFC at an enterprise value of $12.1
billion and WWE at an enterprise value of $9.3 billion. The
transaction represents a contribution price of WWE of approximately
$106 per share (before any post-closing dividend). Additionally,
UFC and WWE will each contribute cash to the new company so that it
holds approximately $150 million. At closing, Endeavor intends to
sweep all excess cash at UFC, and shareholders of the new company
(other than Endeavor) are expected to receive a post-closing
dividend.
Under the terms of the transaction, existing WWE shareholders
will roll all existing equity into the new entity that will be the
parent company of UFC and WWE (“NewCo” until it is named at a later
date) and intends to list on the New York Stock Exchange under the
ticker symbol “TKO”. The listing of NewCo will expand the
collective investor base to allow for broad market participation
across Endeavor and NewCo.
The transaction has been unanimously approved by the Executive
Committee of the Board of Directors of Endeavor and by the Board of
Directors of WWE. The transaction is subject to the satisfaction of
customary closing conditions, including receipt of required
regulatory approvals. The transaction is expected to close in the
second half of 2023.
This marks the successful conclusion of WWE’s strategic
alternatives review process. WWE embarked on this process to take
advantage of the company’s unique position in the entertainment
ecosystem as well as the inflection point coming with its media
rights renewals, both of which were widely recognized in the
marketplace through this process.
Advisors
Morgan Stanley & Co. LLC and Goldman Sachs & Co. LLC are
serving as financial advisors to Endeavor, and Latham & Watkins
LLP is serving as legal advisor to Endeavor. The Raine Group is
acting as lead financial advisor to WWE. J.P. Morgan and Moelis
& Company LLC are also acting as financial advisors to WWE. The
Raine Group, J.P. Morgan, and Moelis & Company LLC each
rendered fairness opinions to the Board of Directors of WWE. Paul,
Weiss, Rifkind, Wharton & Garrison LLP is serving as legal
advisor to WWE, and Kirkland & Ellis LLP is serving as legal
advisor to WWE’s controlling stockholder, McMahon.
Webcast
Endeavor and WWE will make public a recorded audio webcast at
8:00 a.m. ET today discussing this transaction. The event and
accompanying presentation materials can be accessed at
investor.endeavorco.com or corporate.wwe.com/investors. The link to
the webcast, as well as a recording, will also be available on
those websites after the call concludes.
About Endeavor
Endeavor is a global sports and entertainment company, home to
many of the world’s most dynamic and engaging storytellers, brands,
live events and experiences. The company is comprised of industry
leaders including entertainment agency WME; sports, fashion, events
and media company IMG; and premier mixed martial arts organization
UFC. The Endeavor network specializes in talent representation,
sports operations & advisory, event & experiences
management, media production & distribution, experiential
marketing and brand licensing.
About UFC®
UFC® is the world’s premier mixed martial arts organization
(MMA), with more than 700 million fans and 228 million social media
followers. The organization produces more than 40 live events
annually in some of the most prestigious arenas around the world,
while broadcasting to over 900 million TV households across more
than 170 countries. UFC’s athlete roster features the world’s best
MMA athletes representing more than 80 countries. The
organization’s digital offerings include UFC FIGHT PASS®, one of
the world’s leading streaming services for combat sports. UFC is
owned by global sports and entertainment company Endeavor, and is
headquartered in Las Vegas, Nevada. For more information, visit
UFC.com and follow UFC at Facebook.com/UFC, Twitter, Snapchat,
Instagram and TikTok: @UFC.
About WWE®
WWE, a publicly traded company (NYSE: WWE), is an integrated
media organization and recognized leader in global entertainment.
The Company consists of a portfolio of businesses that create and
deliver original content 52 weeks a year to a global audience. WWE
is committed to family-friendly entertainment on its television
programming, premium live events, digital media, and publishing
platforms. WWE’s TV-PG programming can be seen in more than 1
billion homes worldwide in 25 languages through world-class
distribution partners including NBCUniversal, FOX Sports, BT Sport,
Sony India and Rogers. The award-winning WWE Network includes all
premium live events, scheduled programming and a massive
video-on-demand library and is currently available in more than 180
countries. In the United States, NBCUniversal’s streaming service,
Peacock, is the exclusive home to WWE Network. Additional
information on WWE can be found at wwe.com and
corporate.wwe.com.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains, and oral statements made from time
to time by our representatives may contain, forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements generally include
statements regarding the potential transaction between Endeavor and
WWE, including statements regarding the expected timetable for
completing the potential transaction, the ability to complete the
potential transaction, expected synergies, impacts and benefits of
the potential transaction, projected financial information, future
opportunities, expected cash distributions and other statements
regarding NewCo’s and WWE’s future expectations, beliefs, plans,
objectives, results of operations, financial condition and cash
flows, or future events or performance. Statements that do not
relate to matters of historical fact should be considered
forward-looking statements, including, without limitation, the
expected market opportunity, growth, financial performance,
realizable synergies and closing of the transaction. All statements
other than statements of historical facts contained in this
communication may be forward-looking statements. In some cases, you
can identify forward-looking statements by terms such as “may,”
“will,” “outlook,” “should,” “expects,” “plans,” “anticipates,”
“could,” “intends,” “targets,” “projects,” “contemplates,”
“believes,” “estimates,” “predicts,” “potential” or “continue” or
the negative of these terms or other similar expressions. The
forward-looking statements in this communication are only
predictions. Endeavor and WWE management have based these
forward-looking statements largely on their current expectations
and projections about future events and financial trends that
management believes may affect its business, financial condition
and results of operations. These statements are neither promises
nor guarantees and involve known and unknown risks, uncertainties
and other important factors that may cause actual results,
performance or achievements to be materially different from what is
expressed or implied by the forward-looking statements, including,
but not limited to: the transaction will not be consummated; there
may be difficulties with the integration and in realizing the
expected benefits of the transaction; Endeavor and WWE may need to
use resources that are needed in other parts of its business to do
so; there may be liabilities that are not known, probable or
estimable at this time; the transaction may result in the diversion
of management’s time and attention to issues relating to the
transaction and integration; expected synergies and operating
efficiencies attributable to the transaction may not be achieved
within its expected time-frames or at all; there may be significant
transaction costs and integration costs in connection with the
transaction; the possibility that neither WWE nor Endeavor will
have sufficient cash at close to distribute to shareholders (or
that the amount of cash available for distribution will be less
than what the parties expect); unfavorable outcome of legal
proceedings that may be instituted against WWE and Endeavor
following the announcement of the transaction; and risks inherent
to the business may result in additional strategic and operational
risks, which may impact Endeavor’s, NewCo’s and WWE’s risk
profiles, which each company may not be able to mitigate
effectively. In addition, a number of important factors could cause
Endeavor’s or NewCo’s actual future results and other future
circumstances to differ materially from those expressed in any
forward-looking statements, including but not limited to those
important factors discussed in Part I, Item 1A “Risk Factors” in
Endeavor’s or WWE’s respective Annual Report on Form 10-K for the
fiscal year ended December 31, 2022, as any such factors may be
updated from time to time in its other filings with the Securities
and Exchange Commission (the “SEC”), accessible on the SEC’s
website at www.sec.gov, Endeavor’s investor relations site at
investor.endeavorco.com and WWE’s investor relations site at
https://corporate.wwe.com/. Forward-looking statements speak only
as of the date they are made and, except as may be required under
applicable law, neither Endeavor nor WWE undertakes no obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
Important Information For Investors And Stockholders
This communication is for informational purposes only and is not
intended to, and does not, constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any issuance or sale of
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended. In connection with the transaction, NewCo expects to file
a registration statement on Form S-4 with the SEC, which will
include an information statement of WWE and a preliminary
prospectus of NewCo. After the registration statement is declared
effective, WWE will mail to its stockholders a definitive
information statement that will form part of the registration
statement on Form S-4. This communication is not a substitute for
the information statement/prospectus or registration statement or
for any other document that WWE may file with the SEC and send to
its stockholders in connection with the transaction. INVESTORS AND
SECURITY HOLDERS OF WWE ARE URGED TO READ THE INFORMATION
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT WILL BE FILED WITH
THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and
security holders will be able to obtain free copies of the
information statement/prospectus (when available) and other
documents filed with the SEC by WWE through the website maintained
by the SEC at http://www.sec.gov. Copies of the documents filed
with the SEC by WWE will be available free of charge on WWE’s
website at https://corporate.wwe.com/.
Non-GAAP Financial Information
In addition to the financials presented in accordance with U.S.
generally accepted accounting principles (“GAAP”), this press
release includes certain non-GAAP financial information. Non-GAAP
metrics have limitations as analytical tools and you should not
consider them in isolation or as a substitute for or superior to
the most directly comparable financial measures prepared in
accordance with U.S. GAAP. There are a number of limitations
related to the use of non-GAAP metrics versus their nearest GAAP
equivalents. Other companies, including those in Endeavor’s and
WWE’s industry, may calculate non-GAAP metrics differently or may
use other measures to evaluate their performance, all of which
could reduce the usefulness of the non-GAAP metrics used in this
press release as tools for comparison. Endeavor and WWE urge you to
not rely on any single financial measure to evaluate the Company
and its business. See the presentation available on Endeavor’s
investor relations site at investor.endeavorco.com and WWE’s
investor relations site at https://corporate.wwe.com for a
reconciliation of these non-GAAP financial measures.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230402005066/en/
Investor Contacts: For Endeavor James Marsh
investor@endeavorco.com
For WWE Seth Zaslow seth.zaslow@wwecorp.com
Media Contacts: For Endeavor Brunswick Group
Endeavor@brunswickgroup.com
For WWE Chris Legentil chris.legentil@wwecorp.com
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