Combat Sports Build An Impressive Media Entourage

The news wasn’t unexpected, given that it was teased relentlessly by media “leaks” over the weekend, while thousands of enthusiasts and media execs convened at SoFi Stadium in finally sunny Los Angeles for one of the preeminent live events of the year.  But the impact of the story that broke just a few minutes ago from Georg Szalai of THE HOLLYWOOD REPORTER was as strong as any body slam ever has been:

Endeavor Group Holdings World Wrestling Entertainment made things official on Monday, unveiling a definitive agreement to form a new, publicly listed company consisting of two “iconic, complementary” global sports and entertainment brands: UFC and WWE. Endeavor will hold a 51 percent controlling interest in the new company, with existing WWE shareholders holding a 49 percent interest.

The new company will be led by Endeavor CEO Ari Emanuel as CEO, who will also continue filling the same role at the remaining Endeavor, WWE executive chairman Vince McMahon as executive chairman and Mark Shapiro as president and chief operating officer of both Endeavor and the new company. Dana White will continue in his role as president of UFC, with WWE CEO Nick Khan holding the same president title as White but at WWE. The board of directors of the new firm will consist of 11 members who will be appointed at a later date, with six to be named by Endeavor and five designated by WWE.

I was a huge fan of the series ENTOURAGE, and my first exposure to any UFC personality was when an episode featured onetime light heavyweight champion Chuck Liddell.  While I’ve never been a huge wresling fan myself, I know quite a number of people who are, so I’m more than familiar with some of the more popular personalities of WWE, and negotiated quite a number of early syndication deals with members of Vince McMahon’s team, the seeds of what has become a decades-long relationship between wrestling and FOX, and competed valiantly with the far more popular connection of WWE and USA.  More recently, I came to better appreciate MMA through the eyes of some highly cherished friends who are unabased fans and, in one case, had a strong friendship and relationship with a sadly departed star.

So I believe I speak from both a knowledge base and with emotional empathy, and, of course, plenty of facts that back up that this combination of manpower and brainpower is as seismic as it is opportunistic.

First off, the combined entity will create immediately favorable results with the investment community, as Szalai continued:

The deal is expected to close in the second half. UFC and WWE are projecting an estimated $50 million-$100 million in annualized cost synergies.

The new publicly traded company’s ticker symbol will be TKO, which is short for “technical knockout” in combat sports.

“Together, UFC and WWE will have global reach, impressive scale and omnichannel distribution,” the companies said. “On a combined 2022 fiscal year-end basis, UFC and WWE achieved revenue of $2.4 billion and a 10% annual revenue growth rate since 2019.”

Both leagues now under the control  of Endeavor have significant media rights deals that have begun new rounds of negotiations, WWE clearly still connected to NBCU, including a more recently established alliance of its library episodes with Peacock, and UFC with ESPN, having helped establish it in the sorts of DTC efforts that many experts predict is a larger part of ESPN’s future.  And both leagues have upstart competitors aligned with two of the other top tier vertically integrated competitors, AEW with WDC and Bellator with Paramount Global.

WWE, while still dominant, has proven to be somewhat less popular with younger adults.  All Elite began to build a story during the early days of the pandemic, as this data published by Brandon Thurston of Wrestlenomics detailed.   While nearly a fourth of WWE’s adult audience is 18-34, more than a third are over 50.  By contrast, as MMA Facts reports, the appeal of their sport skews significantly younger:

The age demographic of MMA fans is around what you’d expect. Studies show the audience seems to be about 30% between the ages of 25 and 34 and another 30% between 35 and 44. There are also about 10% under 24 and 10% over 54.

The heavily represented 25 to 44 age bracket is highly sought after among marketers. This demographic tends to have lots of disposable income and an openness to shaping new brand habits.

What both sports seem to share is a popularity skew with multicural audiences.  Statista provides the following recent data as evidence of their ethnic combatabilities:

TOP 2 BOX 26% 38% 36% 31%
BOTTOM 2 BOX 36% 34% 29% 29%
NON 39% 36% 36% 39%
AVID 12% 26% 18% 20%
CASUAL 22% 32% 27% 30%
NON 66% 42% 55% 50%

The WWE data is from January 2020 and measures degree of favorable perception; the UFC data is from September 2021 and measures level of interest.  The key takeaway is that both overindex with minority audiences, particularly with Hispanics.  WWE skews significantly better with whites.  And UFC clearly has upside with whites, as nearly two in three consider themselves not to be fans.

Believe me, the entities that wind up the winners with TKO will cross-pollinate the sports.  Already, per the website MARCA, there is buy-in from some of the more influential UFC stars:

It doesn’t seem like there will be a fight to get athletes on board with the idea, as the merger should bring additional benefits for athletes in both disciplines.

“UFC + WWE makes too much sense, great path to increasing fighter pay,” was the message from boxer and YouTuber Jake Paul.

UFC fighter McGregor also took to Twitter and posted a picture of himself holding both the WWE and UFC championship belts, which sparked quite a reaction from his fan base.  “Endeavor bout to scoop the WWE now also. Incredible. What a powerhouse!”

And while McMahon, who recently returned to the WWE fold with the full knowledge that this sale was imminent, retains a significant role with the company, at 77, he is not immortal.  And now he is aligned with perhaps the one showman who has been as impactful with his league as McMahon was with his, and at 54, Dana White’s got a lot more runway left.  The business sides of both companies–McMahon with former CAA uberagent Nick Khan and UFC with Mark Shapiro, who oversaw the evolution of ESPN and the unraveling of Dick Clark Productions prior to joining Endeavor, are now also aligned.  With the ties both have to the respective media conglomerates that convened in Inglewood this past weekend, it is all but assured that the battle to cover these sports and these particular leagues will all but eclipse any of the other upconing rights deals in play,

Here’s an unsolicited idea:  Why not have actors who represent NBCU, WBD, Paramount and Disney/ESPN battle it out in a ring–maybe a hexagon, since that’s the median between the four-sided wrestling ring and MMA’s octagon?  Have them engage in actual combat as well as financial negotiations.  Make it a damn tournament.  Give each entity their own shot at an event, using the resources of their multiple tentacles to promote it, as well as reach out to where each sports’ current soft spots lie,  Whichever one gets the largest measurable combination of audience and PPV revenue winds up with the largest portion of TKO’s future rights.

Looking for casting ideas?   Here’s a few ideas.  They’re all available, to the best of my knowledge.  And, hey, you even get someone to play Ari!!

You’re welcome.

Until next time…


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