Weekly Column: What Does WME gain by Purchasing WWE?

In his capacity as a Columnist for California Sports Lawyer®, Founder Jeremy Evans has written a column analyzing the Endeavor (WME-IMG, UFC) purchase of World Wrestling Entertainment (WWE) and what it might mean for the entertainment and sports industries.

You can read the full column below.


Ari Emanuel’s and Patrick Whitesell’s Endeavor Group Holdings, Inc. (e.g., William Morris Endeavor and WME-IMG) has a deal in place to purchase Vince McMahon’s World Wrestling Entertainment, Inc. (WWE). The purchase price will be in the billions of dollars with WWE valued at $9.3 billion in 2023. The result will be Endeavor-owned and Dana White’s Ultimate Fighting Championship (UFC or Zuffa, Inc.) combining with WWE as an entertainment, media, and sports powerhouse as a spin-off public company.

The combination of important entertainment and sports businesses under one proverbial roof with Ari Emanuel at the head cannot be overstated. Endeavor has massive access to college sports through formerly Mark McCormack’s International Management Group (IMG). Endeavor had to sell 80% of its share to South Korean entertainment and retail company CJ ENM in formerly known Endeavor Content (now Fifth Season) as part of the last Writers Guild of America (WGA) strike and negotiations in 2019. Endeavor still owns 20% (the maximum amount under the new WGA rules with the state purpose of preventing vertical and horizontal merger antitrust issues where one company controls both the content creation, the talent, and the distribution (e.g., “packaging”, content sales). Endeavor also has WME, which is the talent agency, and is by itself, considered a top two talent agency in the world next to the Creative Artists Agency (CAA). Endeavor also owns the Professional Bull Riders (PBR), Endeavor Streaming (formerly NeuLion), and has partnerships or investments with Silver Lake Partners, Tencent, Turner Broadcasting (esports), Miss Universe Organization (Endeavor-owned), On Location (Endeavor-owned), Softbank, Fidelity Investments, Sequoia Capital, Fountainvest Partners, and MSD Capital. If that was not enough, Endeavor represents the National Football League (NFL) and the National Hockey League (NHL) in major negotiations.

What does all of this mean? There are potentially four areas of business improvement or issues to watch in this dealmaking endeavor, pun intended.

First, there will be more talent under one roof with the purchase. Traditional Hollywood entertainment talent, sports stars, college athletes, esports players, and now wrestling athletes and entertainers along with mixed martial artist fighters. Endeavor has quite literally covered the talent gamut.

Second, the UFC-WWE brand is about to cash in on some serious television and streaming dollars. According to Front Office Sports, WWE’s broadcast deals with FOX and NBC Universal are worth almost $500 million dollars and will expire in 2024. UFC has an exclusive broadcast and streaming deal with ESPN worth nearly $300 million per year and will expire in 2026. UFC will likely look to sign a short-term two-year deal unless both properties can be sold together for likely more than billion dollars a year or multiple billions of dollars in total value. Maybe even a standalone streaming platform where Endeavor Streaming plays a role in the distribution of UFC-WWE content.

Third, there are unlikely to be antitrust issues with a purchase of a complimentary (non-competing property). However, Endeavor would be wise to keep its traditional Hollywood entertainment and sports properties separate to avoid the issues seen with WGA (e.g., multiple levels of control over talent and distribution). Although, Endeavor is quite smart to control two non-union sports properties in UFC and WWE.

Lastly, with Dwayne “The Rock” Johnson and John Cena both making the switch from the WWE ring to the silver screen in Hollywood, there are many storylines, documentaries, television series, and feature films to be considered with the talent in both UFC and WWE. UFC will soon own the WWE copyright and may be in line to create and distribute a Vince McMahon documentary or feature film as well. Much more entertainment to come.


About Jeremy M. Evans:

Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clients in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.   

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Jeremy M. Evans is the CEO, Founder & Managing Attorney of California Sports Lawyer® representing entertainment, media, and sports clients and is licensed to practice law in California.