Ari Emanuel and Top TKO Executives’ Lucrative Salaries Revealed Post UFC-WWE Merger
In the aftermath of the UFC-WWE merger, top executives within TKO are set to enjoy substantial salaries and bonuses, in addition to their compensation from Endeavor. This financial revelation stems from an analysis of UFC’s finances over the last six months, as disclosed in TKO’s recent S-1 filing (reported by Bloody Elbow).
The UFC has undeniably played a pivotal role in bolstering Endeavor’s financial landscape. Notably, it constitutes the lion’s share of their Owned Sports Property segment and contributes significantly to Endeavor’s EBITDA. This financial reliance became particularly crucial during the COVID-19 pandemic, with Ari Emanuel acknowledging that the UFC accounted for a staggering “about 70 percent of [their] revenue in the COVID year.”
During 2020, when Endeavor held 50.1% ownership of the UFC, the UFC disbursed $312.3 million in distributions. This included $300 million to shareholders and an additional $12.3 million in tax distributions. In 2021, following Endeavor’s acquisition of 100% ownership, the UFC made a remarkable payout of $1.096 billion, partly due to a $600 million loan extended by the UFC to Endeavor.
This was succeeded by another $270.3 million in distributions in 2022. Consequently, over a three-year span, the UFC provided Endeavor with over $1.5 billion in vital financial support, a lifeline during a period when Endeavor faced significant losses.
Even after merging with the WWE to form TKO Group Holdings, the UFC continues to yield dividends. TKO Group Holdings recently announced a special one-time dividend, with Endeavor holding a substantial 76,712,059 shares. However, investors have been cautioned not to expect further cash dividends in the foreseeable future, with “capital appreciation, if any, will be your sole source of gains.”
Additionally, besides reaping profits from the UFC, Endeavor Group Holdings and its subsidiaries profit from various services provided to the UFC. These services include the use of Endeavor Streaming, production, consulting services, and commissions fees, totaling $2.5 million in the previous year. Since obtaining the UFC in 2016, Endeavor has received an annual management fee of $25 million, set to increase to $35 million next year. The WWE is also poised to pay Endeavor a $25 million service fee starting next year, followed by an annual 1% increment.
While Endeavor has undoubtedly benefited from the UFC’s consistent revenue stream, executives are poised to further enrich themselves with TKO. Ari Emanuel, the CEO of Endeavor, will continue in his role while concurrently serving as TKO’s CEO, with a separate, highly lucrative compensation package.
Ari Emanuel’s TKO employment agreement outlines an annual base salary of $3 million for 2023, potentially subject to upward revisions approved by the Board. For this year, he is eligible for a guaranteed annual cash bonus of $1.75 million, slated to increase to a target of $7 million next year. Additionally, akin to UFC fighters, Ari Emanuel may receive discretionary bonuses determined by the governing board. In 2023, he is eligible for an equity award of restricted stock units valued at $2.5 million, with annual equity awards from 2024 onward targeted at $10 million.
Upon TKO’s registration with the Securities and Exchange Commission (SEC), Ari Emanuel stands to gain a transaction bonus of $20 million. He is also set to receive a one-time equity award, calculated as $40,000,000 divided by the closing price of TKO common stock on the effective date.
More salaries from UFC-WWE merger
Mark Shapiro, who assumes the role of COO at TKO, is poised for a generous compensation package. His annual base salary is established at $2.5 million, complemented by a target annual bonus of $5.5 million, contingent on performance metrics. Shapiro also remains eligible for separate cash bonuses at the company’s discretion and additional discretionary bonuses determined by the Governing Body. As TKO launches, he is set to receive a transaction bonus of $5 million and a one-time equity award, which comprises stock valued at $6,250,000.
In addition to these lucrative arrangements, Mark Shapiro’s employment agreement includes provisions for private aircraft use, commuting expenses, and substantial severance payments.
The UFC-WWE merger has undoubtedly reshaped the financial landscape for both Endeavor and its top executives, ushering in a new era of wealth and opportunity within TKO Group Holdings.
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