Endeavor, TKO Consolidate Sports Assets, Hoping They’re Better Together

Endeavor has made a significant move with its sports assets, striking a $3.25 billion deal to sell On Location, Professional Bull Riders, and IMG to TKO Group Holdings, the parent company of World Wrestling Entertainment and Ultimate Fighting Championship. 

On one level, the move is simply a corporate shift from one related entity to another, as Endeavor is also the majority owner of TKO, which split off into a separate holding 13 months ago. But the transaction also consolidates the company’s key sports assets in a single, publicly traded company while the rest of Endeavor continues its ongoing process, dating to last year, to become private with the aid of private equity giant Silver Lake. 

That effort to go private stemmed in large part from a long-held frustration by Endeavor executives that the public equity markets have failed to recognize the full extent and strength of the company’s diverse business. But Endeavor now believes the sports assets will be better served, and more attractive to investors, bundled together in a larger, public holding. To that end, TKO stock, even before this transaction, is up by 57% this year. 

“PBR, On Location, and IMG are industry-leading assets that meaningfully enhance TKO’s portfolio and strengthen our position in premium sports globally,” TKO president and COO Mark Shapiro said in a statement. “Within TKO, they will help power the growth of our revenue streams and position us to capture even more upside from some of the most attractive parts of our sports ecosystem: media rights, live events, ticket sales, premium experiences, brand partnerships, and site fees. These assets were already built into our business strategy at TKO.”

Growing Focus

In addition to the prior combat sports emphasis of TKO, the latest acquisitions bring that company exposure into numerous other sports, particularly the NFL and Olympics through On Location, the live experiences and hospitality company. On Location has held a dominant position in the Super Bowl ticket market for many years.

The Endeavor-TKO sports deal is expected to close in the first half of 2025, subject to regulatory and shareholder approvals. Following the transaction, Endeavor will still own 59% of TKO. In addition to this deal, TKO’s board authorized a $2 billion share purchase program and a $75 million quarterly cash dividend. 

“This underscores our continued focus on delivering sustainable long-term value for our shareholders,” said TKO executive chair and CEO Ari Emanuel. 

There are other shifts happening within the overall Endeavor portfolio, too, as the company previously said it is seeking buyers for its sports gambling and technology businesses OpenBet and IMG Arena. Those operations do not align with the media and live events model central to the rest of the TKO assets.

With this TKO deal, both Emanuel and Shapiro have agreed to waive certain asset sale bonuses they each were entitled to potentially receive. Emanuel was previously in line for a $25 million bonus, and Shapiro was due $100 million. But those forfeitures reflect the internal nature of this overall transaction.