Everything we do (and don’t) know about the UFC-WWE merger

The combat sports landscape is about to undergo a seismic shift.

Two of the biggest live event and broadcast promoters in the combat space, the UFC and WWE, will be merged into one company, an unprecedented and stunning business move.

Endeavor, the UFC’s parent company, announced Monday it would be acquiring WWE’s pro-wrestling brand and that the UFC’s MMA company will be combined into one publicly traded company. The deal values the UFC at $12.1 billion and WWE at $9.3 billion, making the valuation of the new entity $21.4 billion. It will be one of the biggest players in all of sports and entertainment.

Endeavor will own 51% of the new company, while current WWE shareholders will own 49%. The deal is expected to close later this year.

Longtime WWE promoter Vince McMahon will stay on as the new company’s executive chairman. Dana White will remain president of the UFC, and Nick Khan will remain as president of WWE. Ari Emanuel, the Endeavor CEO, will oversee it all.

The new company does not yet have a name, and many questions remain unanswered, but the impact of the UFC and WWE combining forces could be massive. Our ESPN combat sports insiders Mike Coppinger and Marc Raimondi take a look here at what all of this could mean now and in the future.

How can the two work together? Will there be crossover?

Raimondi: First, don’t expect either product to change drastically, if at all. The real integration is more likely to be done behind the scenes, outside the view of most fans. Endeavor sees the opportunity to leverage the strengths of both in one entity. But that doesn’t mean undisputed WWE Universal champion Roman Reigns is going to come in and challenge Jon Jones for the UFC heavyweight title. WWE CEO Nick Khan held a meeting with company staff Monday afternoon and essentially told employees that Endeavor isn’t going to be meddling much in WWE’s business.

It does seem likely that Endeavor will see some “redundancies” in both companies, meaning there is likely to be a pooling of resources in different areas such as finance or live events or marketing or ad sales. One of the first things Endeavor did when it bought the UFC in 2016 was start cutting costs, which included widespread layoffs. Sources told me on Monday that people in both the UFC and WWE have concerns about what this merger could mean for their futures.

Perhaps fans will notice some promotional integration. You might see more WWE stars showing up in the crowd at UFC events, or posting about the UFC on social media, and vice versa. There will likely be UFC advertisements on WWE programming and the other way around. There could be charity or event appearances combined with WWE wrestlers and UFC fighters.

But nothing that will necessarily horn in on each product. WWE fans and UFC fans like what they’re already watching, and in most cases, they don’t want the other brand infiltrating that.

How will this impact wrestler/fighter pay?

Raimondi: Several UFC fighters tweeted Monday asking what this means for their pay. The answer is probably nothing. Like when Endeavor bought the UFC in 2016 for more than $4 billion, the percentage of revenue going to fighters did not increase. Endeavor sought to cut costs and free itself of debt after such a massive acquisition. This is likely to be no different. It will be interesting to see if WWE will pony up the needed millions to keep some talent from jumping to AEW, which is a stronger competitor than the UFC has in the MMA space, with all due respect to Bellator, PFL and others.

Does this impact media rights? Will WWE go back to a PPV model?

Raimondi: It will absolutely impact them. Media rights are one of the big drivers of the merger — and the timing of it. WWE’s television deal with Fox for SmackDown expires in the fall of next year. The same goes for WWE’s TV contract with USA Network (owned by Comcast/NBC) for Raw. WWE also has a deal with Comcast for its vast content library and monthly “premium live events,” such as WrestleMania, to be on the Peacock streaming service that extends through 2025, the year the UFC’s rights deal with ESPN ends.

The timing could line up for a media rights deal with a major company encompassing the UFC and WWE under one broadcast roof. Khan said as much in an interview with Axios on Monday. What could also be very interesting in the future is a combined streaming service, a one-stop shop in which you can watch WrestleMania and the UFC’s big pay-per-view events in the same place.

As for returning to a pay-per-view model for WWE’s “premium live events,” it’s surely on the table. While slightly different, the UFC has succeeded with ESPN+ pay-per-view shows. WWE is arguably leaving money on the table by not charging extra for big events like WrestleMania. It would not be shocking if WrestleMania and other tentpole WWE shows such as SummerSlam and Royal Rumble are behind a double paywall in the future.

What can the UFC learn from WWE?

https://www.instagram.com/p/CqkyvDGOQH8/

Coppinger: It’s difficult to envision the UFC business being affected much by the merger, but there are surely aspects the MMA promotion can borrow from WWE’s infrastructure, chiefly the event production.

While UFC boasts a top-notch live-event experience, ranging from the lighting to the music and overall feel, there’s arguably nothing in sports or entertainment that can match the bells and whistles of WrestleMania.

Over the past weekend in Los Angeles, WWE delivered once again with an incredible gold set that spanned the entire side of the stadium and a massive entrance ramp leading to the ring. The gold entrance ramp featured rotating images of the wrestlers on the card, and some of them received special entrances.

Cody Rhodes was accompanied by a spectacular fireworks display after he rose to the ramp through a below-stage lift. Logan Paul made his way to the entrance ramp from the rafters. And then there was WWE’s top star, Roman Reigns, who was led to the ring by several pianists playing his entrance theme before pyro lit up the sky.

Those sorts of entrances haven’t been incorporated into the UFC yet, but perhaps could be for the right event.

Could this new group pursue boxing as well?

Coppinger: With the world’s preeminent pro-wrestling promotion and MMA league now under one roof — which will trade on the New York Stock Exchange as TKO — it only makes sense that boxing, the third major combat sport, would be heavily explored.

After all, if the UFC is now valued at $12.1 million and WWE at $9.3 billion, those involved might seek to add a third tentpole in boxing that can realize exponential value over time.

When asked if the new company would enter the fragmented boxing industry, Khan told ESPN that the current focus is on full integration between the UFC and WWE. Khan formerly represented Hall of Fame boxers Manny Pacquiao and James Toney, and also negotiated Top Rank’s deal with ESPN while he was an agent at CAA.

Khan was also instrumental in the making of the second and third fights between Tyson Fury and Deontay Wilder and formerly represented legendary boxing trainer Freddie Roach.

In December, Khan and then co-CEO Stephanie McMahon expressed interest in potentially entering the sport of boxing while speaking at a conference in Las Vegas. White, too, has discussed entering the boxing space.

Last month, Dana White revealed plans to launch a boxing promotion in the next one to two years. He explored the possibility of a Zuffa Boxing promotion in the past but didn’t proceed with the plans.

“I don’t know if I can fix the sport,” White said. “But I think I can put on fights that people want to see, and I can make boxing interesting again and build a brand around it.”

How will Vince McMahon’s role impact WWE from a creative perspective?

Coppinger: Since he purchased the then-WWF in 1982, Vince McMahon has been ultra hands-on with his product.

McMahon oversaw the business side for all those years and was responsible for crafting storylines and producing WWE’s weekly TV programs. He even served as a commentator during the 1980s and early ’90s.

When he retired last summer, McMahon left titan-sized shoes to fill. Khan was elevated from president to co-CEO and eventually sole CEO, while McMahon’s son-in-law, WWE Hall of Famer Paul “Triple H” Levesque, was named chief content officer.

With Triple H driving the creative direction of WWE, the storylines evidently changed. New stars were created. Underutilized and underrated talents were pushed, and wrestlers shared that they received much more freedom concerning their characters and promos.

After McMahon returned in January as executive chairman, speculation grew that his fingerprints were touching some storylines. Now that McMahon is set to be entrenched as executive chairman going forward with the new spinoff company, he will undoubtedly have influence. But McMahon told CNBC on Monday that influence will be “on a higher higher level, yes … in the weeds, no. Can’t do that.”

He hasn’t returned to screen since he stepped away. And it was Triple H — despite the presence of McMahon — who lead-produced his first WrestleMania this weekend and opened Raw on Monday with a post-merger speech. But now that McMahon’s place in his company is secure moving forward, it remains to be seen just how much say he wants to have over creative.

Source: Read Full Article