WWE and UFC Parent Group TKO Takes Another Big Swing

You know it’s a bull market for sports when bull-riding leagues are raking it in.

On Thursday, TKO Group — a.k.a. the product of last year’s WWE-UFC merger — announced it will be dropping $3.25 billion to acquire a trio of sports and entertainment properties from Endeavor: IMG, On Location, and Professional Bull Riders, the world’s largest bull-riding league. Of course, media mogul Ari Emanuel serves as CEO for both Endeavor and TKO, so it’s safe to consider this a fair bit of media rights deck-shuffling (which begs the question — when will Emanuel go for poker rights?).

Not Their First Rodeo

The interlocked history of Endeavor, IMG, and TKO is enough to make your head spin faster than a pro wrestler’s on the receiving end of a Stone Cold Stunner. Endeavor acquired talent agency and media rights consultancy firm IMG for $2.4 billion in 2014 and UFC for $4 billion in 2016. By 2021, the group, backed by private equity giant Silver Lake, went public. Then, last year, it struck a deal to merge UFC with WWE, creating and publicly listing TKO in the process (Endeavor has a 51% stake, and WWE 49%).

In April, Silver Lake announced it would acquire all outstanding shares and take Endeavor private, with the expressed intention of divesting some of its assets. Ultimately, that just resulted in Emanuel skinnying down one part of his empire to beef up another:

• In addition to the historic IMG, TKO will take over On Location, a luxury hospitality group focused on major sporting events like the Super Bowl and March Madness, as well as PBR, which puts on some 200 live events each year.
• The $3.25 billion deal will be all equity, and see Endeavor’s ownership of TKO increase from 53% to 59%. The groups also said Thursday that IMG may still sell off some of its assets, such as the Miami Open tennis tournament and the Frieze art fair.

One Up, One Down: Endeavor’s retreat from the public market isn’t exactly surprising. Since its 2021 IPO, its stock has crawled up just 6%, with Wall Street largely cool to its disparate pieces across volatile industries. TKO, on the other hand, has seen its shares soar around 45% year-to-date.