As analysts tallied up the pros and cons, Endeavor touted that the combination could secure $50 million-$100 million in annual operating synergies.
The leak of the planned deal on April 2 “should ease investor skepticism concerning Vince McMahon’s seriousness about selling the company,” emphasized Wolfe Research analyst Peter Supino in a report written before the official deal announcement. “Many, including your Wolfe Research media team, have wondered whether Vince would really sell.“
That sentiment was elaborated on by others on the Street. “The combined entity will have more leverage as far as media right negotiations, licensing opportunities and the like,” FBN Securities analyst Robert Routh noted in a report. “As a result, on a pro forma basis it is expected the combined TKO will be able to grow revenue faster and at a higher margin than either Endeavor Group or WWE could as stand alone entities.
Whether the new firm is indeed able to pin down similar benefits is an open question. But Lublin pointed to a combined cost base of $1 billion, excluding direct operating expenditures. Half of that management sees as “addressable,” he explained. And he concluded: “We see significant operating synergies throughout the ecosystem.”
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