Ari Emanuel: Endeavor’s Vince McMahon-Dana White/WWE-UFC combination will be ‘pretty unstoppable’
A blockbuster merger in the sports and entertainment worlds was announced Monday.
Endeavor, the parent company of the UFC, has acquired the WWE and will form a new two-headed sports entertainment company anchored by the two megabrands. Dana White will remain UFC president. Vince McMahon will stay as WWE’s executive chairman.
The new company will be overseen by Ari Emanuel, CEO at Endeavor, which will have a 51 percent controlling interest of the new company. Current WWE shareholders will control the other 49 percent. The deal is valued at $21.4 billion.
Ahead of the deal, Emanuel and McMahon sat down with CNBC’s David Faber to talk about the merger. Check out quotes from their broadcast interviews below.
Emanuel on WWE's market valuation
(Thinking the WWE is undervalued is) exactly why we did this, because I think we weren’t getting the pure value. I don’t think the WWE was getting (the true value). Combined, it’s rarefied air, the two of us, and I think the analysts will be able to (see that). It’s good for the shareholders of WWE and for the shareholders of Endeavor. And then when you look back, I don’t believe that the Endeavor shareholders were getting pure play for the rest of the asset that we had. I think for the first time, you now have the ability to do that in both situations, and that’s a win-win, which is what Vince and I have always talked about.
Emanuel on WWE's $9.3 billion price
We paid a fair price, and I’ll tell you why. We paid a little bit (extra) for control premium with our cost cuts, their new deals coming up – which is right now – and our cost savings that we think we can extract from the business right now and grow the business with all of our levers, whether it be international sales, domestic sponsorship, gambling, all the things that we do. I think it’s right. When I bought IMG, everybody said I overpaid. It was actually one of the cheapest deals in sports. For sure, when I bought the UFC, at $4.2 billion, they were like, ‘Crazy.’ We’ve tripled the EBITDA (earnings before interest, taxes, depreciation and amortization) in that period of time. And now with this, this is going to be UFC 2.0 as it relates to all the things in the flywheel that we can bring to the table. (This has) unbelievably attractive economics. The balance sheet’s incredible. Our debt ratio is less than three times. Our free cash flow conversion is unbelievable. So I think when people look at this business on a combined basis and also look at the remaining assets for both shareholders, it’s incredible.
Emanuel on keeping McMahon on
I would’ve body slammed him if he thought he was going to leave. Here’s a man who has seen around the corners at every beat over the last 40 years of this business and has a vision for where this business (is going) way before a lot of people see it. Him now being able to utilize what we have built in our flywheel, I’m the luckiest guy in the world because I’ve got Vince McMahon, a visionary that sees around corner. I’ve got Dana White and what we’ve built. That’s pretty unstoppable.
Oh my God, yes. Oh my God (I wanted him to stay)
I wasn’t going to let him (leave). We have a relationship for 23 years. There’s a trust. There’s a friendship. When you’re going into business and going forward, I think that’s important. I’m glad he chose us because it was a very competitive situation. For us, it’s an honor, and also we’re so lucky because of his vision about where the business is and where it’s going.
Emanuel on potential for disagreements
Here’s what we said, and I said it to him: If we disagree on something that we want to do, guess what? We’re not doing it. It’s the relationship I have with Silver Lake – I would never put that (at risk). And it’s the relationship I have with Dana. Dana’s got the say as it relates to the UFC, Vince as it relates to the WWE. He’s going to have the say. We have nothing to do with the creative process. That’s Vince’s, and that’s Dana’s situation. All the back stuff, we’re going to try and do what we do. I think that’s what (McMahon) wants. But if there’s a disagreement, that’s called a relationship. We will work it out. That’s how we have it.
Emanuel on McMahon returning as a WWE character
(It’s) purely his choice – purely.
McMahon on going with Endeavor
This is the biggest thing Ari Emanuel and Vince McMahon have ever done. Combining forces like this is – there’s nothing like this. There’s never been anything like this. People will be talking about this for a long time.
Sure, there were (other suitors). Everyone was very interested in us, and I appreciate that. But the synergies that Ari brings (are) totally different than everyone else.
McMahon on ending 70 years of family control
It’s the right time. It’s the right time to do the right thing, and it’s the next evolution of WWE. I could probably do what Ari is right now with the UFC, but it would take me 10 years. By the time I would grab those 10 years, (Emanuel) would be 10 years ahead agaan. It makes all the sense in the world for all these synergies that we have to extract all of the value we can out of the marketplace.
McMahon on why WWE's price was higher than market valuation
I’m a visionary. Deservedly so, (we got $9.3 billion).
McMahon on staying with the company
(Emanuel didn’t have to convince me) that much. I love what I do. I’ve loved building WWE. All my life, it’s my passion, and to have an opportunity to have it grow like this and an exponential standpoint – it can’t be better than that.
McMahon joking about potential disagreements with Emanuel
What happens (if I have a disagreement with Emanuel)? Well, what happens there is we have a little contest in the ring. All right, OK … I outweigh Ari by 100 pounds. I think that’s the answer. … Let me make it clear: I thought (Ari) worked for me.
McMahon staying involved in WWE creative process
Yes and no. On a higher level, yes. In the weeds – which, you always love to get in the weeds in the past – no. (I) can’t do that.
McMahon on potential for the return of the Mr. McMahon character
That’s not going to happen.
McMahon on selling even if he didn't have a scandal
Absolutely. Why? Because it makes sense. Nothing’s ever happened like this before. I’m always looking at what’s best for our stockholders, what’s best for the company. This is the best thing that’s happened in a long, long time. All of the WrestleManias combined – there have been 39 including (Sunday) – doesn’t really equal the magnitude of what we will do together.
(My scandal) didn’t (speed things up) – in and of itself, no. But it’s great that we can combine all of this news together at the same time.
McMahon on potential sadness after the sale
No, it’s a great day. Things have to evolve. We have family business. It all has to evolve for all the right reasons, and this is the right business decision thus far – is the right family decision.
McMahon on his legacy
Let me just say, I’ve made mistakes, obviously, both personally and professionally through my 50-year career. I’ve owned up to every single one of them and then moved on. I’m not sure the legacy (I’ll leave). I’m not going to write it, so I don’t know. I want to say it’s someone who had an extraordinary amount of fun, great passion for what they did, and wound up doing the biggest deal he’s ever done in his life (with Endeavor).
