(Bloomberg) — Endeavor Group Holdings Inc. has agreed to buy World Wrestling Entertainment Inc. for an enterprise value of about $9.3 billion.
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The combined businesses will be valued at more than $21 billion, the companies said in a statement on Monday. Endeavor will have 51% control of the new company, and existing WWE shareholders will have a 49% interest. The company will be led by Ariel Emanuel, Endeavor’s Chief Executive Officer.
WWE shares fell nearly 5% in premarket trading in New York. They have already risen 33% this year, giving them a market value of about $6.8 billion as investors anticipated the sell-off. Effort increased by 1.1%.
Endeavor has been going after WWE for the past few months, eager to merge the wrestling league with its Ultimate Fighting Championship and become the undisputed king of combat entertainment. Emanuel aims to leverage his company’s existing expertise and resources in negotiating media rights and staging shows around the world to increase sales and cut costs at WWE.
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“This is a rare opportunity to create a global live sports and entertainment pure game built for where the industry is going,” Emanuel said.
McMahon is the rest
Vince McMahon, the 77-year-old controlling shareholder of WWE, has run WWE for four decades. Even after the deal, he will remain involved in the business, as will the company’s CEO, Nick Kahn. McMahon described the deal as “undoubtedly the best decision for our shareholders and other stakeholders.”
McMahon rejoined himself as executive chairman in January to oversee a strategic review of the company. He left the company last year after it was revealed he had paid millions of dollars to settle sexual misconduct allegations. While he was away, company leadership began discussing strategic options ahead of the next round of negotiations with the companies that broadcast WWE matches on TV.
WWE is a rare gift in the media industry. Although it is scripted entertainment, it offers a live audience to its events like a sporting event. Fox Corp. and Comcast Corp. They pay hundreds of millions of dollars a year for the rights to show matches. The sale is being finalized on the heels of WrestleMania, one of the biggest events on WWE’s calendar. This year’s festival takes place over two days in Los Angeles.
Emanuel and his leadership team over the years have transformed Endeavor from its roots representing Hollywood actors into a multifaceted media company. They represent athletes, sell media rights to sporting events and own live events across sports and fashion. They also run a sports-racing technology company.
The company went public in 2021 after fending off an initial public offering in 2019. Its shares closed Friday just 7 cents below the $24 IPO price, giving the company a market value of $11.3 billion.
The UFC is Endeavor’s most valuable asset, and now Emanuel has doubled down on combat sports.
WWE is a business like few others. It is a combination of sports and entertainment. 80,000 fans filled Sophie Stadium in Los Angeles over two nights for the company’s annual wrestling match. Fans cheered the hosts on the outdoor stage during a pre-game show. Many of them sported gold championship belts that cost hundreds of dollars.
IT worker Pedro Calhau from Portugal attended his first wrestling match. He spent $400 on a belt he wore over his shoulder.
“It’s like a soap opera, it’s like theater,” Callhau said outside the stadium. “For us, it’s an exodus.”
He said he thought $9 billion was a fair price, adding, “I hope they give some back to the fans.”
Morgan Stanley & Co. LLC and Goldman Sachs & Co. LLC is serving as financial advisors to Endeavor and Latham & Watkins LLP is serving as legal advisor to Endeavor. The Reign Group serves as WWE’s lead financial advisor. JP Morgan and Moelis & Company LLC are also acting as financial advisors to WWE.
–With assistance from Christopher Palmeri and Katie Roof.
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