Ari Emanuel‘s Endeavor is shuffling its sports entertainment deck.
Endeavor’s majority-owned sports entertainment group TKO Group Holdings is purchasing IMG, On Location and Professional Bull Riders (PBR) from its parent company in a $3.25B all-equity deal.
TKO, created a year ago from the merger of the WWE and UFC, will now house more of Endeavor’s assets, with sports and media agency, producer and distributor IMG, hospitality company On Location and bull riding league PBR added to the group.
After the close of the deal, which today’s announcement said is expected in the first half of 2025, Endeavor will receive around 26 million common units of TKO Operating Company. It will also have an equal number of TKO’s Class B common stock. This will leave Endeavor owning approximately 59% of TKO, with other existing shareholders holding the other 41%. Endeavor noted the $3.25B price tag was “subject to purchase price adjustments to be settled in cash and equity.”
In further news, TKO’s board has authorized a share repurchase program of up to $2B of Class A common stock. A quarterly cash dividend program has been initiated, from which TKO shareholders will receive a quarterly pro rata share of $75M starting next March.
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The shuffling of sports assets follows the strategic decision last year to take Endeavor private, capping a two-year adventure. Wall Street never fully bought into the Endeavor story, given its disparate parts and the inherently volatile nature of the entertainment business. The pure-play TKO, by contrast, has been a stellar performer. Its shares have risen more than 60% in 2024 to date.
“Today’s announcements reflect the continued strength of our underlying business and our commitment to deploying capital through a balanced capital allocation strategy, including through our share repurchase program and quarterly cash dividend program,” said Emanuel, who is Executive Chairman and CEO of TKO and Chief Exec of Endeavor. “This underscores our continued focus on delivering sustainable long-term value for our shareholders.”
IMG is known for selling the media rights to many major sporting tournaments, represents numerous clients in the sporting world, and produces the likes of the English Premier League. Clients include the National Football League, International Olympic Committee, National Hockey League, Major League Soccer, ATP and WTA Tours, the All England Lawn Tennis & Croquet Club (Wimbledon), EuroLeague Basketball, DP World Tour, and The R&A, as well as UFC, WWE, and PBR.
Today’s deal does not include businesses associated with the IMG brand in licensing, models, and tennis representation, nor IMG’s full events portfolio. Adam Kelly will lead IMG as President.
On Location provides experiences for fans attending more than 1,200 sporting events, including the Super Bowl, Ryder Cup, NCAA Final Four, FIFA World Cup 26, and the 2026 and 2028 Olympic and Paralympic Games, in addition to year-round live events organized by UFC and WWE. Its president Paul Caine will continue to lead the organization.
PBR, meanwhile, organizes more than 200 annual live bull riding events. PBR CEO and Commissioner Sean Gleason will continue to lead the organization.
A special committee of independent TKO board directors has assessed the proposed deal and recommended it goes forwards. A definite agreement was then signed and approved by stockholders of the majority of outstanding voting interests.
Morgan Stanley & Co. LLC is serving as financial advisor to TKO. Latham & Watkins LLP is serving as legal advisor to Endeavor. Moelis & Company LLC is serving as financial advisor to the special committee and Skadden, Arps, Slate, Meagher & Flom LLP as legal advisor to the special committee.
Dade Hayes contributed to this report.
TKO Buying IMG, On Location & Professional Bull Riders From Endeavor
