The recent acquisition of World Wrestling Entertainment (WWE) by Endeavor and the subsequent formation of TKO Group Holdings has led to a shift in focus among investors and content distributors towards All Elite Wrestling (AEW)
Endeavor’s Acquisition of WWE: Endeavor acquired WWE and its subsidiary, the Ultimate Fighting Championship (UFC), in a unique transaction where WWE and UFC were spun into a new company, TKO Group Holdings. Endeavor received a 51% stake in TKO, while existing WWE shareholders retained 49%.
Impact on AEW: AEW, owned by Tony Khan, is considered the second-largest wrestling promotion globally. It has been successful in terms of television viewership, pay-per-view sales, and live event attendance.
Timing of TV Rights: AEW’s current television deal with Warner Bros. Discovery (WBD) is set to expire at the end of 2023, making it an attractive asset for networks and streaming platforms looking for content during the ongoing Writers Guild of America (WGA) and Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) strikes.
Potential for Outside Investors: While there is no indication that AEW is actively seeking outside investors, the article suggests that it would make sense for AEW to consider such options. Like any business, growth in professional wrestling often requires capital, and the market for AEW is currently robust.
Valuation Considerations: The article discusses the potential valuation of AEW. Using WWE’s valuation as a reference point, AEW’s valuation could be around $620 million USD if based on revenue multiples. However, factors like future television rights deals and brand recognition may affect AEW’s valuation.
Challenges for AEW: AEW has seen some challenges, including a decline in television ratings and live event attendance in 2023. These trends may impact negotiations for the next television deal.
Attractiveness to Capital: Despite challenges, AEW remains an attractive target for capital, given the broader interest in professional wrestling, the potential for outside investment, and the evolving content landscape.
In summary, the business of professional wrestling is attracting attention from investors and content distributors, and AEW’s potential for growth and its upcoming television rights deal make it an intriguing entity in the evolving sports entertainment landscape.
