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TKO, the merged UFC-WWE, aspires to grow beyond fighting

Ultimate Fighting Championship and World Wrestling Entertainment executives decided to name their new publicly traded company TKO to honor the companies’ expertise in fighting, but they have broader aspirations than just owning combat sports.

TKO began trading on the New York Stock Exchange on Tuesday, culminating a merger of two live-entertainment juggernauts that was announced in April. The combined company is 51% owned by Endeavor Group Holdings, which owns assets including UFC and Hollywood talent agency WME, and 49% owned by WWE shareholders. Shares rose 2.8% in midday trading.

The first 18 months of the company’s existence will revolve around integrating UFC and WWE, Mark Shapiro, TKO’s president and chief operating officer, said in an interview with CNBC. That includes eventually going to market together for international media rights and bringing together the company’s production efforts and back offices, Shapiro said.

After that, TKO plans to swing into acquisition mode to grow the company, he said.

“We will ultimately be in the marketplace looking for other sports properties that we can bolt onto the flywheel enhanced by Endeavor,” Shapiro said, adding the company has a strong desire to expand internationally.

Endeavor also owns Professional Bull Riders and two tennis tournaments — the Mutua Madrid Open and the Miami Open. The “flywheel” includes Endeavor’s representation of professional athletes through WME, its expertise in negotiating media rights, product licensing and enhancing live events to boost venue fees. Shapiro also envisions direct-to-consumer options with TKO that don’t exist yet.

WWE currently streams on NBCUniversal’s Peacock in a deal that concludes in 2026. Shapiro said other streaming entities have already expressed interest in bidding on the rights when that deal expires.

In the coming months, TKO executives will also negotiate new media deals for WWE “Raw” and “SmackDown” on traditional pay TV. NBCUniversal and Fox currently own those rights.

Who runs TKO?

Vince McMahon, 78, is the executive chairman of TKO and Ari Emanuel is the CEO. Shapiro made it clear who will be the company’s leader.

“Ari Emanuel is running the company,” Shapiro said. “Vince will play a role. He’s got experience and influence. But he understands the role of CEO is Ari’s. This is not a shared position.”

McMahon has earned a reputation as a force of personality, both as a WWE character and behind the scenes, in his more than 40 years running WWE. He’s also had some recent legal issues. On July 17, according to a recent filing, federal law enforcement agents served a federal grand jury subpoena on McMahon stemming from allegations of sexual misconduct. No charges have been brought in the investigation.

Shapiro noted Emanuel has already proven he can run a company along side a sports league co-founder with a big personality and checkered past. Dana White, UFC’s president, has dealt with a number of controversies in his personal life, including slapping his wife in a recorded video, while brashly and unapologetically staying in his job.

“Me leaving hurts the company. Hurts my employees. Hurts the fighters. Doesn’t hurt me,” said White during a media event earlier this year “Do I need to reflect? No, I don’t need to reflect. … I own this. I’m telling you that I’m wrong.”

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

WATCH: Vince McMahon explains why he sold WWE to Endeavor

Endeavor-UFC deal is the next evolution of WWE, says Vince McMahon

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