It’s official. On Monday, the Las Vegas-based UFC (Ultimate Fighting Championship) acquired WWE (World Wrestling Federation). Merging these two companies will create a $21.4 billion sports entertainment company.
The UFC Back Story
In 2001 The Fertitta brothers (Frank and Lorenzo) bought the Ultimate Fighting Championship for $2 million and created Zuffa LLC.
Who are the Fertitta Brothers? They own and operate what is known as Station Casinos. Now officially called Red Rock Resorts. They are the largest chain of “locals” casinos and resorts in the Las Vegas Valley.
These resorts cater more to the local population. Besides the usual gambling and sports books, they also have family-friendly amenities like bowling alleys, movie theaters, and horse arenas.
They also own what is known as Wildfire Gaming. Smaller local bars also have gambling in them.
At the time of the purchase, the organization was cage-fighting with few rules. The winner is the last man standing. They were almost bankrupt and were banned in several states.
Going from $2 million and going bankrupt in 2001, the Fertitta brothers built it up to be a worldwide sports brand. Making what is known as Mixed Martial Arts (MMA) a legitimate and respected sport.
Hitting the Jackpot
In 2016, the brothers sold 90% of the organization to investment company WME|IMG. As a result, each brother walked away with what was reported to be an 8% stake in the company as well as almost $870 million in post-tax cash.
At the time of the sale, this was considered the single biggest transaction in sports history. In 2016, the NFL Dallas Cowboys had almost the same valuation!
A new publicly traded company will house the UFC and WWE brands, with Endeavor Group Holdings Inc. (UFC) taking a 51% controlling interest in the new company. Existing WWE shareholders will hold a 49% stake.
The companies put the value of UFC at $12.1 billion and WWE’s value at $9.3 billion.