TKO Group, the company behind WWE and UFC, will not be affected by Silver Lake’s purchase of Endeavor Group Holdings, according to Reuters.
Takeover terms – a $13bn power slam
The significant transaction was confirmed by Silver Lake earlier this week and has since been reported on extensively across various business news outlets, including Reuters and Bloomberg.
Reports suggest that Silver Lake will take Endeavor private as a result of the deal. Terms will see the NYSE-listed group purchased by Silver Lake, a private equity firm, for £27.50 per share, amounting to a total valuation of $13bn.
Silver Lake was already a 31% shareholder in Endeavor, and as a result of the transaction, will delist the company from the NYSE. However, Endeavor has asserted that TKO Group’s position will be unchanged and the company will continue to trade publicly.
This is not Silver Lake’s first investment in the sports arena. The California company has also staked funds into the CIty Football Group, owners of Manchester City FC, the Australian A League and Diamond Baseball Holdings, the operator of over 20 Minor League Baseball teams.
Endeavor and TKO’s combat sports journey
TKO Group was set up by Endeavor in 2023 to manage UFC and WWE, which it had acquired in 2021 and 2023 respectively. In the case of UFC, the company had been a majority shareholder in the MMA promotion since 2016, and secured full ownership five years later.
In the case of WWE, Endeavor purchased the world’s largest professional wrestling organisation in 2023 for $9.3bn following public controversies involving Chairman Vince McMahnon. Plans were then detailed for a merger of UFC and WWE under one parent company.
This then led to the creation of TKO Group in September 2023, with UFC and WWE operating as two separate divisions of the company. At the time of formation, TKO was valued at over $21bn.
Since this formation, WWE and UFC have remained market leaders in their respective fields of professional wrestling and professional MMA, although the latter is facing increasing competition from the likes of the PFL – which expanded via its takeover of Bellator last year – and ONE Fighting Championship (ONE FC).
Fighting fortunes
The takeover and merger of UFC and WWE has proven a fruitful course of action for Endeavor, largely due to the aforementioned market leadership both companies have, with lucrative media rights deals and other commercial deals in place.
Despite its competitors, the UFC remains the clear leader in MMA and has secured significant visibility via broadcasting partnerships with ESPN and TNT Sports, whilst revenue has been further boosted by sponsorships with the likes of Bud Light and Stake.com.
The WWE on the other hand has also been making significant commercial inroads of late. A massive 10-year $5bn deal was recently penned with Netflix, ensuring substantial exposure for the company on one of the world’s largest streaming networks.
Both companies continue to generate solid returns for Endeavor. In the group’s latest financial results, UFC revenue rose 13% year-on-year from $1.14bn to $1.29bn, whilst WWE revenue also increased 3%, from $1,292bn to $1.326bn.
With TKO’s corporate trajectory apparently to remain unchanged as Endeavor goes private, the commercial strategies of the UFC and WWE, under respective Presidents Dana White and Nick Khan, will follow the same pathway.
