Days after Donald J. Trump was reelected as president, one of his most high-profile venues was the Ultimate Fighting Championship event at Madison Square Garden.
Trump’s appearance in the front row was also notable because of the presence of some of his aides, such as Elon Musk, who sat next to him. However, few of those attending the match would have noticed. other man I was sitting next to the president-elect.
Yasir al-Rumayyan, the president of Saudi Arabia’s huge government asset management agency the Public Investment Fund, will be watching the match from ringside and is moving ever closer to attending. A company owned by the fund is close to forming a boxing league with TKO, owner of Ultimate Fighting Championship. A deal for a new tournament featuring the league’s exclusive up-and-coming boxers could be announced in the coming weeks, three people familiar with the matter said.
TKO said in a statement on Wednesday that it had “nothing to announce” but would “evaluate any unique and attractive opportunities that fit within our business portfolio and could create additional value for our shareholders.” said.
The wealth fund did not comment.
Possibility of investing in TKO It follows Saudi Arabia’s efforts to create a multibillion-dollar boxing league, which for decades has been split between rival promoters and fought for titles controlled by an alphabet soup of sanctioning bodies. The aim is to unite the world’s best boxers. The effort, while not completely abandoned, is complex and expensive even for a country like Saudi Arabia, which has spent billions of dollars over the past five years to field athletes in some of the world’s biggest sports. It turns out that it takes.
The investment in the new league will be made by Sera, a subsidiary of the Public Investment Fund. Hollywood talent agency Endeavor will be majority-controlled, and TKO, represented by Trump’s longtime friend and UFC empresario Dana White, will be the managing partner. In return, TKO will be offered stock and a portion of the proceeds, said the people, who asked not to be identified ahead of the official announcement.
Saudi Arabia has sponsored the biggest and richest boxing match in history in recent years. It has hosted major title fights, most recently between Oleksandr Usyk and Tyson Fury, which ended with Usyk becoming the first undisputed heavyweight champion in more than a generation. Such battles have proven nearly impossible to negotiate for years, but Turki al-Sheikh, a senior government official with close ties to Saudi crown prince Mohammed bin Salman, This was made possible thanks to millions of dollars.
Al-Sheikh, a former security guard, has become perhaps the most powerful man in boxing, and can be seen ringside and even inside the ring at the biggest fights. He also frequently receives messages of appreciation from some of the most famous fighters and boxing promoters. As “His Excellency””He promoted a partnership with Mr. White that transformed the UFC from a $2 million company to one worth more than $10 billion over the past 20 years. Negotiations have been underway for more than a year in the United States, Europe and Saudi Arabia.
Mr. Al Sheikh suggested in an interview He said he is planning a new boxing business. And he made no secret of his frustration with the way the sport is run, where the best fighters rarely face each other in their prime. In November, he purchased Ring Magazine, the 100-year-old bible of the sport, vowing to reestablish its excellence.
Al-Sheikh also partnered with the sanctioning body, the World Boxing Council, to boxing grand prixa tournament for young boxers.
For TKO, which owns both UFC and World Wrestling Entertainment, there is little risk in this venture given that Saudi Arabia is paying for it. TKO President Mark Shapiro mentioned M&A at an earnings conference in November, saying, “If we were to get involved in boxing, it would be through an organic method rather than an M&A.”
He added: “So we’re not writing a check.”
Once the acquisition is complete, TKO will earn nearly $30 million in annual management fees. Saudi Arabia is expected to pay significantly more for the league than any other country, according to details of the plan reviewed by The New York Times. The two games there will generate more than $40 million in compensation. Other matches are planned in the United States and Europe, where hosting fees are much lower.
TKO is also in talks with other parties, including other Arab countries, about the boxing league, one of the people familiar with the matter said.
TKO’s parent company, Endeavor, has had a sometimes strained relationship with Saudi Arabia, but this potential partnership suggests relations are largely on the mend. In 2019, after the murder of Saudi journalist Jamal Khashoggi, Endeavor returned $400 million that a Saudi sovereign wealth fund had invested in the company.
The timing would be perfect for Saudi Arabia to acquire a partner like White. He joined Meta’s board this week and has spoken at the past three Republican National Conventions. Trump regularly hosted events at his facility during the UFC’s early days and has attended many of its fights. Mr. Trump and Mr. Al Rumayan are also close, and the Saudi-owned LIV Golf Championship has held several events at Mr. Trump’s course, including one scheduled for April in Florida.
Saudi officials have described sports and entertainment as a key pillar of a strategy known as Vision 2030 to transform the economy away from dependence on oil exports, and as part of the country’s efforts to liberalize its society. are. Critics describe these efforts in other terms, characterizing them as a way to use sport to shift focus away from Saudi Arabia’s human rights record, a tool known as sportswashing.
TKO gains a partnership with the world’s largest sports investor. Saudi Arabia invests in teams, talent and events across a wide range of sports, most recently securing qualification to the 2034 Men’s Football World Cup, the most watched event on the planet.
The UFC’s U.S. media rights agreement with ESPN expires this year, and the network’s agreement with top boxing promoter Top Rank also expires this year. TKO may try to combine the rights of the new boxing league with the rights of the UFC in order to strengthen the fledgling boxing league.
However, applying the UFC’s strategy to boxing would be extremely difficult. Boxing is a much more heavily regulated sport than mixed martial arts, with the federal Muhammad Ali Act requiring the separation of manager and promoter roles in boxing and the disclosure of the person behind the purse.
Unlike the UFC, the most prominent boxers do not participate in the league. And they may not see any benefit to participating in it. The fragmented nature of boxing means that income potential is not maximized for promoters and managers, but top boxers earn significantly more than top MMA fighters.
At the UFC in October, Settled antitrust lawsuit Former combatants sued for $375 million, alleging the company illegally suppressed combatants’ pay. Documents filed as evidence in the lawsuit show that the UFC paid fighters less than 20 percent of their income.
In boxing, these numbers are reversed, with fighters combining for well over 50 percent of the revenue from any given fight.
