TKO Group Holdings, the parent company of the UFC, saw its stock prices surge after settling two antitrust lawsuits, preventing them from going to trial, and agreeing to pay out $335 million, which is expected to be tax-deductible.
Well, here’s some news for ya! TKO Group Holdings, the big daddy of UFC, saw its stock prices skyrocket on Wednesday. Why, you ask? Well, it turns out they’ve settled not one, but two antitrust lawsuits. And the best part? Neither of ’em is going to trial.
By the time the market closed at 4:30 p.m. ET, TKO’s stock had shot up by a whopping 7.84 percent. That’s $6.35 per share, folks! The price leaped from $81.15 per share to $87.37. So, in layman’s terms, investors were basically throwing a party because these lawsuits are wrapping up without any courtroom drama.
So, what’s the damage? Well, UFC agreed to cough up $335 million for these two lawsuits. The fighters were trying to prove that UFC was playing dirty, using “monopsony power” and all. They claimed UFC used exclusive contracts, coercion, and acquisitions to wipe out competitors and keep a tight grip on the sport.
Now, here’s an interesting tidbit. In a document submitted to the Securities and Exchange Commission on Wednesday, TKO said they expect the settlement amount to be tax-deductible. Handy, right?
Of course, the judge still needs to give the thumbs up to this resolution. But both sides involved in the lawsuit have already shaken hands after weeks of mediation.
This brings an end to the antitrust lawsuits. The first one was filed way back in 2014. The $335 million settlement, which will probably be tax-deductible, means UFC won’t feel much of a financial pinch. The company’s been raking in record revenue year after year, including a cool $1.3 billion in 2023.
And the future’s looking bright, too. UFC’s revenue figures are likely to shoot up even more over the next couple of years. They’re gearing up for a new broadcast rights deal that could be worth twice as much as their previous seven-year contract with ESPN, which runs through 2025.
Wall Street analysts have been singing TKO’s praises for a while now. Especially since World Wrestling Entertainment, the other half of the merged company, recently landed new TV deals. One of them is a jaw-dropping $5 billion contract with Netflix for WWE Monday Night Raw. With the antitrust lawsuits settled and a new TV deal in the works, TKO’s looking pretty irresistible to investors.