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In this article, we will discuss how to invest in the Ultimate Fighting Championship (UFC). It is one of the biggest combat sports leagues in the world. The league hosts fight cards almost every weekend in the US, Mexico, Brazil, Europe, and, more recently, the Emirates.
Fans can attend these events in person or purchase a pay-per-view (PPV) subscription for fights and additional content surrounding the athletes and UFC life. Those same fans might wonder if they can own a portion of the UFC.
In April 2021, shares were available for purchase. However, it was done via Endeavor Group Holdings Inc. (NYSE: EDR). This company used to own UFC, as well as other major televised events and entertainment industries.
In 2023, the UFC merged with WWE to form a new company. It is called TKO Group Holdings and trades under the ticker TKO.
UFC Stock (TKO) Introduction
Endeavor purchased World Wrestling Entertainment (NYSE: WWE) and created a company worth more than $21 billion. This transaction combined talent, entertainment, and live sports. Let’s find out more about UFC, WWE, and Endeavor Holdings.
The UFC was founded in 1993. A group of investors and fighters, including Rorion Gracie, sought to create a real-life Street Fighter or Mortal Kombat. They wanted to allow diverse fighters worldwide to show their fighting talents.
Boxing already had a stage, fans, and a very impressive talent pool, such as Mike Tyson and Muhammad Ali, to name a few. UFC wanted to become the next big fighting league. That could make UFC stock more popular with investors.
The first few years were difficult, as with many new companies. Convincing fighters to join a league and compete in front of millions of fans isn’t as easy as it seems. In 2001, the Fertitta brothers purchased the company for $2 million.
UFC’s current president, Dana White, became the president. Fast forward to 2016, when Endeavor Group acquired 50.1% of the company, becoming the majority shareholder for $4 billion. The sale represented nearly a 200,000% gain for the Fertitta brothers.
UFC Superstars
By 2016, the UFC had many global superstars, including Anderson Silva, Brock Lesnar, and Georges St-Pierre. It wasn’t as difficult to attract new talent anymore. Back to Endeavor. The group already controls many entertainment companies; more on that will be discussed in the next section. Its goal with UFC was to control 100% of it and to go public.
In 2019, it was a few days short of going public, but unfavorable market conditions led the owners to pull the plug. Two years later, in 2021, Endeavor went public and used the proceeds to acquire the remaining UFC stake for $1.75 billion. Many UFC fighters bought shares in the company.
UFC Stock Network of Holdings
In the previous section, I mentioned that Endeavor (UFC stock) owns many entertainment companies. Are you familiar with any of them?
Miss Universe
One of the most popular was the Miss Universe pageant. Despite a decline in popularity, the yearly pageant attracts nearly half a billion viewers and is broadcast in 190 countries.
It’s hard to undermine the popularity of this event, but economically, it became less and less favorable by the year. That is why Endeavor (UFC stock) sold the organization for approximately $20 million.
IMG
Next on the list is IMG, a global leader in managing athletes and fashion icons. IMG represents talent and has a presence in various leagues, including the Premier League, UEFA Champions League, the European Championship, Major League Baseball, and others.
It advises and owns teams as well as organizes events and media events. IMG is a very important player in the sports industry. This includes UFC stock.
OpenBet
We continue with one of Endeavor’s latest acquisitions, sports betting company OpenBet. The acquisition was finalized and paid to Light & Wonder Inc. (NASDAQ: LNW). Endeavor is seeking to expand its sports portfolio through a gambling application.
OpenBet processes bets on behalf of DraftKings, FanDuel, SkyBet, and more. The company is growing and contributing to Endeavor’s (UFC stock) success.
WWE
In early 2023, a deal was struck between Endeavor (the parent company of UFC stock) and WWE. In the second half of 2023, a new company, listed under the stock ticker (NYSE: TKO), was formed once all regulatory hurdles were satisfied.
Endeavor shareholders will represent 51%, and WWE will be 49%. The new company is expected to have an estimated value exceeding $21 billion. Once the transaction is complete, a one-time dividend will be paid. Dana White, Vince McMahon, and other major leaders will remain in their respective roles.
WWE’s wrestling may not be real, but its revenue exceeded $1 billion last year. Celebrities from various industries, including Snoop Dogg, Bad Bunny, Shaquille O’Neal (also known as Shaq), Logan Paul, and Kim Kardashian, among others, regularly participate in its events.
The merger will likely enable UFC superstars to perform alongside them and attract an even bigger crowd. Let’s see what SmackDown events will be like after the transaction.
Is UFC Stock a Good Investment?
Is UFC stock a good investment for the long term? In 2019, Endeavor as a whole experienced a 26% growth. Unfortunately, in 2020, revenue dropped 24%. Consequently, the bottom line suffered, and the company reported a net loss of $655 million.
In 2022, Endeavor had over $5 billion in debt and less than $1 billion in cash. This can be worrying in the long term. This resulted from ambitious purchases from IMG, UFC, and now WWE.
In its most recent quarterly report, revenue totaled $1.26 billion, led by a record year for UFC. Despite a positive EPS, revenue has been falling. The company is positioning itself as a middleman for streaming services, which is likely to drive growth in the upcoming quarters.
Endeavor is looking to bounce back and capitalize on the sports and betting industry to accelerate growth and repay its debts. The next quarters will be crucial for its long-term outlook.
UFC Revenue
| Year | Revenue ($bn) |
|---|---|
| 2024 | 1.3 |
| 2023 | 1.3 |
| 2022 | 1.14 |
| 2021 | 1.03 |
Pandemic
We can still remember the pandemic days around the world when many businesses were closed and patiently waiting to reopen. Some companies, such as UFC, have successfully scheduled events abroad, notably on Yas Island in the United Arab Emirates (UAE).
Despite this good thinking, revenues remained well below pre-pandemic levels. What about the other businesses under Endeavor?
Final Thoughts on UFC Stock
To conclude, if you want to trade UFC stock, you can do so under (NYSE: TKO). Endeavor owns companies that complement each other’s businesses and a recognizable leadership group. We can find one of their events in cities worldwide almost every week. Can its stock become as popular as its events? Time and good financial decisions will reveal the truth.
Frequently Asked Questions
The UFC stock parent company ticker is EDR.
EDR owns the UFC and WWE among other sports entertainment companies.
Endeavor owns UFC stock.
