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TKO Group Holdings — the new corporate merger between UFC and WWE — saw a successful first day of trading on the New York Stock Exchange with the closing price up 2.6 percent from its opening.
With the merger now complete that will combine assets from the MMA powerhouse with the pro-wrestling organization, TKO opened the day trading at $102 per share, which was effectively a price taken over from WWE’s stock that was previously available until the merger. At closing, TKO sat at $103.25 per share after trending upward throughout the day.
Meanwhile, Endeavor Group Holdings closed at $22.66 per share, an increase of 2.28 percent after the company removed the UFC from its balance sheet for the merger with WWE. Endeavor will now mainly focus on its agency business along with live event production as well as remaining sports properties such as Professional Bull Riders.
Endeavor maintains 51 percent ownership in the new TKO Group Holdings with Ari Emanuel acting as CEO for both companies. The other 49 percent in TKO Group Holdings belongs to existing WWE shareholders in a minority role.
Under the new company’s umbrella, Emanuel serves as CEO while Vince McMahon set as the executive chairman of the board for TKO. Dana White’s position has changed from UFC president to UFC CEO, and Nick Khan will remain WWE president.
In anticipation of the new merged company, Seaport Research Partners media analyst David Joyce gave TKO a “buy” rating, stating “we have been writing with enthusiasm about the combination of Buy-rated Endeavor’s UFC and Neutral-rated WWE to form the new TKO Group Holdings that just started trading.”
Joyce added that the combined companies will have an opportunity for growth together, especially with “more scale in order to leverage into incremental global fan engagement, media rights fees and event volumes.”
Media rights fees will become a key component to the new merged company with UFC and WWE. Both have broadcast deals coming to a close in the next few years. It’s possible TKO could look for a combined package for UFC and WWE, or potentially leverage them separately. Whatever the result, it’s expected the returns on media rights deals will be massive.
TKO president and COO Mark Shapiro also added the company will eventually look to acquisitions to further growth, which could mean buying other MMA or pro-wrestling outfits.
“We will ultimately be in the marketplace looking for other sports properties that we can bolt onto the flywheel enhanced by Endeavor,” Shapiro told CNBC.
There’s no timetable yet on when those acquisitions might happen, but TKO appears aggressive when it comes to plans for the future.
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