At present WWE and UFC are the undisputed heavyweight champions of their respective industries, but which is worth more and why?
Whilst Vince McMahon pioneered the playbook of all things sports entertainment, there are many who believe the UFC have taken the blueprint created by McMahon and actually improved on it, with Dana White even picking up the Wrestling Observer Newsletter’s promoter of the year award, a record 11 times (Seven more than McMahon).
UFC Sold For $4 Billion in 2016
Whilst it’s fun to compare the subjectivity of booking between Sports Entertainment and that of real sports, it’s the brass tacks of the finances that were looking at today. Whilst Vince McMahon once hypothesised that you can’t build stars if you can’t control the outcome of the bouts, the staggering sale price of the UFC in 2016 for $4 billion would beg to differ.
One difficulty we encounter with comparing valuations, is that the UFC was and always has been a privately owned LLC, initially through Zuffa and now post sale via the Endeavour group. This being the case, many of the metrics we would use to measure such wealth continue to remain private, unlike the public and more transparent, publicly traded WWE.
What we can do however is examine the 2016 sale price, scan their current deals, affiliations and assets and compare that with their Sports Entertainment counterpart.
Using a basic inflationary tool, USD valuations from 2016 will have approximately a 19% increase, which would show the 2016 valuation as $4.76 Billion in today’s market. What we also have to consider is that the timing of the sale was perfect. At the time the UFC was riding the wave of an extremely successful era built on the back of a small number of mega stars.
With Conor McGregor and Ronda Rousey at the peak of their MMA popularity and a cameo from the heavyweight PPV behemoth Brock Lesnar at UFC 200, the timing couldn’t have been better.
The execution of this marketing expansion was eerily similar to WWF’s Hogan era of the 80’s, both of which took their respective genres to new heights.
UFC President Dana White Claimed the UFC Could Now Be Worth $9-10 Billion
Now whilst the UFC arguably doesn’t have the same star power it once did, it does now have a $300 Million a year deal with ESPN, the long tail of multiple video games and a lucrative fight wear sponsorship with Venum. Not to mention, despite many feeling McGregor’s popularity has diminished amongst losses and controversy, the numbers do no agree.
Interestingly all 5 of the UFC’s top 5 PPV’s feature McGregor AND took place after the sale to WMG / Endeavour group. Without divulging exact revenues, President Dana White claims the company would go for somewhere between $9-$10 Billion if it were sold today.
And based on the above, it’s hard to argue.
Ultimately when it comes to a private holding, it is only worth what someone is willing to pay for it, so whilst it’s impossible to give an exact valuation, all things
considered, we feel a $9 Billion valuation is probably fair at this point.
Now let’s compare this to the Sports Entertainment behemoth that is WWE, where the valuation is a little simpler. Because WWE is publicly traded, we can look at a number of hard facts regarding revenue, profits and forecasting from annual reports.
WWE Market Cap Has Reached $7.54 Billion Before
We actually have some real-time figures on WWE stock value, but it comes with a rather large caveat. At the time of writing, WWE’s share price is $60.29 and has issued approximately 43 Million shares. Multiplying the share price by the exact shares issued returns a market cap of $2.6 Billion according to WWE’s corporate website and verified by Nasdaq.
Let’s explain why price doesn’t necessarily equal value. Technically anyone can go to a stock market exchange right now and start buying up WWE shares. However, in enough volume this will, you guessed it, sky rocket the value of the share price, which will positively impact the market cap. Also, good luck convincing Vince McMahon and the various equity groups with large holdings in the company to sell them for anything less than a premium. This is especially true when you consider the fact that in 2018, WWE’s market cap reached an
impressive $7.54 Billion.
WWE Leads the Way With Its Content Deals and Lifelong Fanbase
When considering WWE’s extensive collection of assets and potential for growth, various online outlets have estimated WWE’s value to be around the $5.71 Billion mark. But this does not factor in the additional bells and whistles that of value that would be added if a sale were to be seriously considered.
Remember, the UFC geared its events and marketing towards the peak of UFC 200 and it would be foolish to think WWE couldn’t do the same. Also, it’s no secret that Nick Khan is looking to optimise the balance sheet and take the company to new heights financially.
WWE just took over Dallas with an attendance of 156,352 fans at WrestleMania 38 and the company boasts a massive $1 Billion content deal with Peacock. Also, as well as having appeal to adults, WWE begins to cultivate it’s powerful fanbase from an extremely young age, more so than the UFC.
Is it that out of the question think that an investment group would be willing to pay a premium to acquire this active and powerful fanbase? To conclude, we believe that the much-speculated value of WWE at $5.71 Billion may actually be too low in the prospect of a sale. With the latest quarterly reports showing a 131% increase on year-on-year revenue and anticipation high awaiting the 2022 Q1 reports on May 5th, we believe this number has the potential to continue trending upwards.
Whilst many will argue that on paper the UFC is worth more than WWE, we will not be at all surprised if WWE could get very close to, if not even potentially surpass that magical $9 Billion valuation in the eyes of the right buyer.
To conclude, there is strong argument that the UFC is worth more right now, but all it takes is one look at WWE’s 2018 market cap to see that Vince McMahon’s empire has most likely been in the lead before. Whilst the UFC is enjoying financial prosperity, it will be no surprise if WWE valuation reaches another all-time high in the next few years.