Ari Emanuel’s martial arts group TKO eyes $1bn earnings as it lists in New York

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The combination of World Wrestling Entertainment and UFC into TKO, a new New York-listed company controlled by Ari Emanuel’s Endeavor group, is expected to generate more than $1bn in annual earnings as it targets a growing global audience of mixed martial arts fans.

Together, UFC and WWE will put on 350 live events worldwide each year and reach 1bn fans worldwide, Emanuel, Endeavor and TKO chief executive, told the Financial Times in an interview.

“TKO is ideally positioned to capitalise on the growing demand for premium sports content and live events,” he said. “You can’t underestimate the value of live sports in the TV ecosystem.”

TKO Group will begin trading on the New York Stock Exchange on Tuesday, with Endeavor holding a 51 per cent controlling interest and WWE shareholders 49 per cent.

The listing comes just five months after Endeavor acquired WWE, the pro wrestling group led for decades by Vince McMahon — the latest of Emanuel’s big bets on live sports events and in-person experiences. In recent years he has amassed a portfolio that ranges from the Frieze Art Fair to the Professional Bull Riders league.

The combined companies are expected to generate more than $1bn in annual earnings before interest, taxes, depreciation and amortisation on at least $2.5bn in revenue, according to an investor presentation.

The company is also expected to benefit from the escalating prices for TV sports rights deals, analysts said. WWE signed a $1bn rights agreement with NBC’s Peacock streaming network in 2021, which will be up for renewal in 2026.

“We think the world is going to have more free time than ever with AI,” Emanuel said. “I think the weekends are going to be like in college — it starts Thursday night. You will need experiences.”

The UFC has been a cash-spinner for Endeavor, which was estimated to have a standalone enterprise value of $12.1bn. After Formula One, UFC has experienced the highest growth in attendance of any sport over the past five years, according to Morgan Stanley. It also has the advantage of being a global sport without teams or franchises to manage, which has helped it generate the highest profit margins of its industry peers, the investment bank added.

WWE, a family business for decades until this year’s deal with Endeavor, has produced stars including Hulk Hogan and Dwayne “The Rock” Johnson.

The Securities and Exchange Commission has been investigating McMahon following allegations last year that he paid millions of dollars to women to keep them quiet about alleged affairs. He has denied wrongdoing and serves as executive chair of the new company.

“There’s an ongoing investigation,” Emanuel said. “That’s all we can say about that.”

The combined companies are expected to benefit from tapping into Endeavor’s other businesses, which include sponsorship, ticketing and hospitality groups, as well as the William Morris talent agency.

Endeavor is losing an estimated $25mn a month because of the strikes by the Hollywood writers and screen actors unions. Emanuel said that if a breakthrough between the studios and unions does not happen in the next two to three weeks, then a deal is unlikely to materialise “until the end of the year.

“There’s a lot of nervous people because it’s affecting the economics on both sides,” he said. “Everybody’s hurting right now. Hopefully they can see through to getting to a deal.”