The New Combat Sports Superpower and Sports Wagers
Deal Background
It’s been a long time coming, but Vince McMahon’s World Wrestling Entertainment (“WWE”) has finally found a buyer for the business in Endeavor Group. Endeavor will own a 51% stake in the new publicly traded company, while existing WWE shareholders will own the remaining 49% of the company.[1] Ari Emanuel, CEO of Endeavor, will lead the new business. Vince McMahon, current executive chairman of WWE, will serve in the same role at the new company, and Dana White, current President of UFC, will also continue in the same role.[2] The companies put the enterprise value of the new business over $21 billion, with the UFC being valued at nearly $12 billion and the WWE being valued at around $9 billion.
A New Era for Combat Sports
Vince McMahon said in a prepared statement that the companies will look to maximize the value of their combined media rights, enhance sponsorship monetization, develop new forms of content and pursue other strategic mergers and acquisitions to further bolster the new business’ brands.[3]
The new company plans to trade on the New York Stock Exchange under the “TKO” ticker symbol. Its board will have 11 members, with six being appointed by Endeavor and five being appointed by the WWE.[4]
With the world’s leading pro-wrestling and mixed marital arts league now under one roof, it makes sense that the third major combat sport, boxing, would also be explored. Only time will tell if this becomes a reality.
Sports Betting for the WWE
Another interesting aspect of this deal comes in the form of sports betting. Does this new merger mean a revival in WWE’s efforts to implement legal sports gambling? Even before the merger, some thought that this was the case. In March 2023, CNBC published a report claiming that WWE was in talks with state gambling regulators to legalize betting on scripted match results.[5] Betting on scripted results seems odd at best, but it’s not unheard of. Accounting firms PwC and Ernst & Young have previously worked with awards shows, including the Academy Awards and the Emmys, to keep the results a secret.[6]
However, these reports quickly dissolved when both the Colorado and Michigan regulators responded stating that allowing sports betting wagers on WWE matches was not currently in the works. Colorado clearly stated that they were “not currently considering allowing sports betting wagers on WWE matches.”[7] Michigan responded that the Michigan Gaming Control Board had “not received a formal request regarding WWE events wagering.”[8]
In my view, there is one very simple reason for denying sports wagers on the WWE: the WWE was built on the idea of providing scripted entertainment. Without a pivot toward UFC-style live events (which the WWE has little reason to do), there are too many complications that exist for regulators to approve sports wagers on the WWE.
There is an abundance of people throughout WWE management and other affiliates that are aware of the outcome of each fight that makes the risk of insider trading incredibly high, relative to other sports. Even if the WWE can overcome this obstacle, there would be a huge burden associated with policing gambling infractions.
While it would be intriguing to see WWE betslips—and I’m sure fans would love it—it seems unlikely that any sports book will accept wagers. However, I hope I’m wrong, because it would energize the WWE, bring in new fans, and provide much needed tax dollars to those states that accept sports wagers. Either way, I’m excited for the new era of combat sports and can’t wait to see what’s to come.
Footnotes
