TKO CEO Ari Emanuel and Dwayne “The Rock” Johnson communicate to CNBC on the New York Inventory Change (NYSE) in New York Metropolis, U.S., January 23, 2024.
Brendan Mcdermid | Reuters
TKO Group, the corporate that owns WWE and UFC, is increasing into sports-adjacent properties by buying three companies for $3.25 billion from its controlling proprietor, Endeavor Group.
The companies are Skilled Bull Riders, On Location, and IMG, the businesses introduced Thursday. The deal is all inventory, and Endeavor’s possession in TKO will improve from 53% to 59%.
The transaction expands TKO’s strategic ambitions by broadening its sports activities focus past the operation of leagues. Whereas the corporate does purchase a brand new league in PBR, the world’s largest bull driving league, it is also increasing into luxurious hospitality with On Location and media rights consultancy by IMG.
“Sports activities unify us and have by no means been in additional demand,” mentioned Mark Shapiro, the president and chief working officer of each Endeavor and TKO, in an interview. “At TKO, we’re primarily considering league possession if that exists and companies that may energy our present sports activities ecosystem. That might be ticket gross sales, hospitality, client merchandise, media rights experience. That is what we’re getting in IMG and On Location.”
Personal fairness agency Silver Lake introduced its intentions to take Endeavor personal earlier this 12 months. As a part of that transaction, Silver Lake wished to divest sure belongings, Shapiro mentioned. Endeavor got here to the TKO board with a proposal to promote the three companies. TKO organized a particular committee to look at the transaction, which it finally advisable to the board, Shapiro mentioned.
PBR places on greater than 200 occasions yearly for greater than 1 million followers. PBR CEO and Commissioner Sean Gleason will proceed to guide the group, TKO mentioned in an announcement.
On Location gives luxurious hospitality for main sporting occasions together with the Tremendous Bowl, the Ryder Cup, March Insanity, the FIFA World Cup and the Olympics.
IMG packages and sells media rights and model partnerships, offering strategic consultancy on the largest TV offers for the NFL, English Premier League, Nationwide Hockey League, Main League Soccer, UFC, WWE, and PBR. The acquisition of IMG doesn’t embody “companies related to the IMG model in licensing, fashions, and tennis illustration, nor IMG’s full occasions portfolio,” in keeping with the TKO assertion.
Along with the transaction, TKO additionally introduced it’s initiating an annual dividend of $300 million and has licensed a share buyback program of as much as $2 billion for its Class A standard inventory.
