Ari Emanuel & Mark Shapiro On the Financials Of WWE & UFC Merger

Ari Emanuel and Mark Shapiro spoke today about the financials around the UFC and WWE merger. The deal to acquire WWE closed on Tuesday with the two companies merging into TKO Group. Emanuel, the CEO of Endeavor, and Shapiro who is the company’s president, spoke on CNBC’s Squawk on the Street about the deal and you can see some highlights below (per Fightful):

Emanuel on the financials of the merger: “We had a range of 50 to 100 with regard to back office and costs. We’re on our way to kind of doing that. We did that with the UFC. We’re on our way here. There’s also savings as it relates to on the production side because of their production facility, our production facility at the UFC. This is a pure sports play. There’s nothing more important than sports content and live events. We do 350 live events with production. We have a billion in fanbase. The global reach of both is incredible, and you can’t underestimate the value of TV rights domestically and internationally, and also the sponsorship.

“I think the other thing that this does, in addition to just cost-saving, it enables us to kind of have a pure play and people look at EDR properly, where we have some datapoints last week, investing in CAA at 13,15 times. Formula1 buying Quint for 15 times, which is an experiential company. Without UFC inside EDR, everything’s valued at a little less. I think it’ll give everybody a pure play there also. Both companies have about less than three times leverage.”

Shapiro on the companies’ free cashflow-generating status: “Both companies will be a juggernaut in that respect. Free cash flow conversion to TKO will be about 61%, and of course Endeavor will be strong. Remember, when this thing started, we were just about eight times levered. Now we’re below a three, so healthy balance sheet, scale, growth, profitability.”

In a total knockout of a deal, @WWE & @ufc are merging into $TKO, a new sports entertainment company. CEO Ari Emanuel and COO Mark Shapiro join @davidfaber to discuss. pic.twitter.com/LyIh4smIto

— Squawk on the Street (@SquawkStreet) September 12, 2023