UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14C INFORMATION

INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

 

Check the appropriate box:

 

☐	Preliminary Information Statement

 

☐	Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))

 

☒	Definitive Information Statement

World Wrestling Entertainment, Inc.

(Name of Registrant as Specified in Its Charter)

Payment of Filing Fee (Check all boxes that apply):

 

☒	No fee required.

 

☐	Fee paid previously with preliminary materials.

 

☐	Fee computed on table in exhibit required by Item 25(b) of Schedule 14A (17 CFR 240.14a-101) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

 

 

INFORMATION STATEMENT/PROSPECTUS AND NOTICE OF ACTION BY WRITTEN CONSENT

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY

TO THE STOCKHOLDERS OF WORLD WRESTLING ENTERTAINMENT, INC.

August 22, 2023

To Our Stockholders:

On behalf of the board of directors of World Wrestling Entertainment, Inc., a Delaware corporation, which we refer to as “WWE,” we are pleased to enclose the information statement/prospectus relating to the proposed transaction between WWE and Endeavor Group Holdings, Inc., which we refer to as “Endeavor,” pursuant to which WWE and Endeavor propose to combine the businesses of WWE and Zuffa Parent, LLC, a Delaware limited liability company and a subsidiary of Endeavor, which owns and operates the Ultimate Fighting Championship (“UFC”) and which we refer to as “HoldCo,” which combined business will be managed by a newly public listed company that is currently named New Whale Inc., a Delaware corporation and direct, wholly owned subsidiary of WWE, which we refer to as “New PubCo,” which will be implemented through a sequence of transactions (the “Transactions”). Upon completion of the Transactions, HoldCo plans to change its name to “TKO Operating Company, LLC” and New PubCo plans to change its name to “TKO Group Holdings, Inc.”

On April 2, 2023, Endeavor, WWE, Endeavor Operating Company, LLC, a Delaware limited liability company and a wholly owned subsidiary of Endeavor, which we refer to as “EDR OpCo,” HoldCo, New PubCo, and Whale Merger Sub Inc., a Delaware corporation and a direct, wholly owned subsidiary of New PubCo, which we refer to as “Merger Sub,” entered into a transaction agreement, which, as the same may be amended from time to time, we refer to as the “transaction agreement.” In connection with the transaction agreement, WWE formed New PubCo and Merger Sub. The Transactions include (i) an internal reorganization of WWE (the “Pre-Closing Reorganization”), (ii) following the Pre-Closing Reorganization, the merger of Merger Sub with and into WWE, with WWE surviving the merger as a direct, wholly owned subsidiary of New PubCo (the “merger”)—as a result of the merger, (x) each outstanding share of WWE’s Class A common stock, par value $0.01 per share (the “WWE Class A common stock”) and (y) each outstanding share of WWE’s Class B common stock, par value $0.01 per share (the “WWE Class B common stock,” and together with the WWE Class A common stock, the “WWE common stock”) that is outstanding immediately prior to the effective time of the merger (the “effective time”), but excluding any cancelled WWE shares (as defined herein), will, in each case, be converted automatically into the right to receive one share of New PubCo Class A common stock, par value $0.00001 per share (the “New PubCo Class A common stock”), (iii) following the merger, the conversion of the surviving corporation in the merger to a Delaware limited liability company (“WWE LLC”) (the “conversion”), which will be wholly owned by New PubCo immediately prior to the WWE transfer, (iv) following the conversion, (x) the contribution by New PubCo of all of the equity interests in WWE LLC to HoldCo in exchange for 49.0% of the membership interests in HoldCo on a fully diluted basis after giving effect to any issuance of membership interests in HoldCo in connection with such exchange (such contribution, the “WWE transfer”, and such membership interests, the “WWE Transfer Consideration”) and (y) the issuance to EDR OpCo and certain of its subsidiaries of a number of shares of New PubCo Class B common stock, par value $0.00001 per share (the “New PubCo Class B common stock”), representing, in the aggregate, 51.0% of the voting power of New PubCo on a fully diluted basis and no economic rights in New PubCo, in exchange for a payment equal to the par value of such New PubCo Class B common stock.

Upon the effective time, each issued and outstanding share of WWE common stock (other than cancelled WWE shares) will be converted automatically into one validly issued, fully paid and non-assessable share of New PubCo Class A common stock, which we refer to as the “transaction consideration,” and all such converted shares will then cease to exist and will no longer be outstanding. WWE Class A common stock currently trades on the NYSE under the ticker symbol “WWE.” On March 31, 2023, the closing price of WWE Class A common stock was $91.26 per share.

Upon completion of the Transactions, including the merger, subsidiaries of Endeavor are expected to collectively own 51.0% of the voting power of New PubCo and 51.0% of the economic interests in HoldCo, with former securityholders of WWE common stock indirectly owning 49.0% of the economic interests in HoldCo, 49.0% of the voting power of New PubCo and 100.0% of the economic interests in New PubCo, in each case, on a fully diluted basis. As a result, New PubCo will be a “controlled company” under the corporate governance rules of the NYSE applicable to listed companies, and therefore will be permitted to, and intends to, elect not to comply with certain corporate governance requirements thereunder. See “Risk Factors—Risks Related to New PubCo’s Organization and Structure—New PubCo will be exempt from certain corporate governance requirements since it will be a “controlled company” within the meaning of NYSE rules, and as a result its stockholders will not have the protections afforded by these corporate governance requirements.” beginning on page 64 of this information statement/prospectus. Endeavor will be able to control any action requiring the general approval of New PubCo’s stockholders, including the election of the New PubCo Board, the adoption of amendments to its certificate of incorporation and stockholder amendments to its bylaws, and the approval of any merger or sale of substantially all of its assets, subject to the terms of the governance agreement described in “Summary of Certain Agreements Related to the Transactions—Governance Agreement” beginning on page 181 of this information statement/prospectus. Shares of New PubCo Class A common stock are expected to be listed for trading on the New York Stock Exchange, which we refer to as the “NYSE,” under the ticker symbol “TKO.”

At a meeting of the board of directors of WWE, which we refer to as the “WWE Board,” the WWE Board unanimously adopted resolutions (i) determining that it was advisable and in the best interests of WWE and the WWE stockholders to enter into the transaction agreement and to consummate the Transactions, (ii) approving the execution, delivery and performance of the transaction agreement and the consummation of the Transactions and (iii) resolving to recommend that WWE stockholders adopt the transaction agreement.

The adoption of the transaction agreement and, therefore, the approval of the Transactions, including the merger, required the affirmative vote of holders of at least a majority of the voting power of the shares of WWE common stock entitled to vote on such matters. On April 2, 2023, Vincent K. McMahon (“Mr. McMahon”), who, as of the date thereof, was the record holder of 69,157 shares of WWE Class A common stock and 28,682,948 shares of WWE Class B common stock, representing approximately 81.0% of the aggregate voting power of the issued and outstanding shares of WWE common stock on such date, delivered a written consent, which we refer to as the “Written Consent,” adopting and, therefore, approving the transaction agreement and the Transactions, including the merger. Accordingly, the delivery of the Written Consent was sufficient to adopt the transaction agreement and, therefore, approve the Transactions, on behalf of WWE stockholders. WWE has not solicited and is not soliciting your adoption of the transaction agreement or approval of the Transactions, including the merger.

No further action by any Endeavor stockholder or WWE stockholder is required under applicable law, and neither Endeavor nor WWE will solicit the votes of their respective stockholders for the adoption or approval of the transaction agreement or the Transactions, including the merger. Neither Endeavor nor WWE will call a special meeting of their respective stockholders for purposes of voting on adoption or approval of the transaction agreement or the Transactions, including the merger. This information statement/prospectus and notice of action by written consent is being provided to you for informational purposes only and shall be considered the notice required under Section 228(e) of the DGCL. You are not being asked for a proxy, and you are requested not to send a proxy.

Endeavor and WWE are not required to complete the Transactions, including the merger, unless a number of conditions are satisfied or waived, which we refer to as the “closing conditions,” including: (i) the expiration of the waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) obtaining other applicable regulatory approvals, (iii) the absence of any order or legal requirement that enjoins, restrains or otherwise prevents the consummation of the Transactions, (iv) the effectiveness of New PubCo’s registration statement on Form S-4, of which the accompanying information statement/prospectus forms a part, and the absence of any stop order or other proceeding that suspends or otherwise threatens such effectiveness, (v) the registration, and the authorization of listing on the NYSE, of New PubCo Class A common stock, and (vi) the consummation of the Pre-Closing Reorganization. The closing date of the Transactions will be at least 20 calendar days after the mailing of the accompanying information statement/prospectus to WWE stockholders, in accordance with Rule 14c-2(b) promulgated under the Exchange Act.

We encourage you to read the entire accompanying information statement/prospectus carefully, in particular the risk factors set forth in the section entitled “Risk Factors” beginning on page 33 of the accompanying information statement/prospectus.

On behalf of WWE, thank you for your consideration and continued support.

Nick Khan

Chief Executive Officer

World Wrestling Entertainment, Inc.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Transactions, including the merger, or the securities to be issued in connection therewith, passed upon the adequacy or accuracy of the accompanying information statement/prospectus or determined if the accompanying information statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

The accompanying information statement/prospectus is dated August 22, 2023, and is first being mailed to WWE stockholders on or about August 22, 2023.

REFERENCES TO ADDITIONAL INFORMATION

This information statement/prospectus incorporates important business and financial information about WWE from other documents that WWE has filed with the U.S. Securities and Exchange Commission, which is referred to as the “SEC,” and that are contained in or incorporated by reference into this information statement/prospectus. For a listing of documents incorporated by reference into this information statement/prospectus, please read the section entitled “Where You Can Find More Information” beginning on page 310 of this information statement/prospectus. This information is available for you to review through the SEC’s website at www.sec.gov.

You may request copies of this information statement/prospectus and any of the documents incorporated by reference into this information statement/prospectus (other than certain exhibits or schedules to those documents) or other information concerning WWE, without charge, by telephone or written request directed to:

Attention: Investor Relations

World Wrestling Entertainment, Inc.

1241 East Main Street

Stamford, Connecticut 06902

(203) 352-8600

If you request any such documents, WWE will mail them to you by first class mail, or another equally prompt means, after receipt of your request.

ABOUT THIS INFORMATION STATEMENT/PROSPECTUS

This information statement/prospectus, which forms part of a registration statement on Form S-4 (File Nos. 333-271893 and 333-271893-01) filed with the SEC by WWE and New Whale Inc., a wholly owned subsidiary of WWE and which is referred to as “New PubCo,” constitutes a prospectus of WWE and New PubCo under Section 5 of the Securities Act, with respect to the shares of New PubCo Class A common stock to be issued to WWE stockholders pursuant to the transaction agreement (other than such shares that are expected to be beneficially owned by the stockholders of WWE that executed and delivered the Written Consent, as defined in this information statement/prospectus), and the 3.375% Convertible Senior Notes due 2023 (the “Convertible Notes”) issued by WWE and the shares of New PubCo Class A common stock that will be issuable upon conversion of the Convertible Notes following the consummation of the Transactions. Immediately following consummation of the Transactions described in this information statement/prospectus, the Convertible Notes issued by WWE will become convertible into the transaction consideration described in this information statement/prospectus for each share of WWE common stock into which the Convertible Notes were convertible immediately prior to the consummation of the Transactions. In connection with the Transactions, WWE, New PubCo and the trustee under the indenture governing the Convertible Notes (the “Indenture”) are expected to enter into a supplemental indenture (to be effective upon the completion of the Transactions) pursuant to which, among other things, New PubCo will be added as a co-issuer of the Convertible Notes and assume, as co-obligor, jointly and severally with WWE, the obligations of WWE under the Convertible Notes and the Indenture.

Information contained in or incorporated by reference into this information statement/prospectus relating to WWE, New PubCo and Merger Sub has been supplied by WWE. Information contained in this information statement/prospectus relating to Endeavor, EDR OpCo and HoldCo has been supplied by Endeavor. You should rely only on the information contained in or incorporated by reference into this information statement/prospectus. No person has been authorized to provide you with information that is different from what is contained in, or incorporated by reference into, this information statement/prospectus, and, if given or made by any person, such information must not be relied upon as having been authorized. This information statement/prospectus is dated August 22, 2023, and you should not assume that the information contained in this information statement/

 

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prospectus is accurate as of any date other than such date. Further, you should not assume that the information incorporated by reference into this information statement/prospectus is accurate as of any date other than the date of the incorporated document. Neither the mailing of this information statement/prospectus to stockholders of WWE nor the issuance of New PubCo common stock pursuant to the transaction agreement will create any implication to the contrary.

 

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FREQUENTLY USED TERMS

In this information statement/prospectus, unless the context otherwise requires:

“ancillary agreements” refers to, collectively, the HoldCo operating agreement, the Initial WWE LLC operating agreement and the governance agreement;

“cancelled WWE shares” refers to each share of WWE common stock that is owned by WWE as treasury stock or otherwise, but excluding for the avoidance of doubt any share of WWE common stock held by any WWE Employee Plan or trust related thereto (other than, for the avoidance of doubt, any share of WWE common stock reserved for issuance under either of the WWE Equity Plan or the WWE ESPP), or held, directly or indirectly by Endeavor, the EDR subscribers, HoldCo or any wholly owned subsidiary of Endeavor immediately prior to the effective time;

“Closing” refers to the closing of the merger;

“Code” refers to the Internal Revenue Code of 1986, as amended;

“common units” refers to membership interests of HoldCo;

“conversion” refers to the conversion of the surviving corporation in the merger, WWE, to a Delaware limited liability company;

“DGCL” refers to the General Corporation Law of the State of Delaware;

“EDR subscribers” refers to, collectively, EDR OpCo, January Capital Sub, LLC, a Delaware limited liability company and subsidiary of Endeavor, and January Capital HoldCo, LLC, a Delaware limited liability company and subsidiary of Endeavor;

“Employee Plan” refers to any compensation, employment, consulting, independent contractor, salary, bonus, commission, vacation, deferred compensation, incentive compensation, stock purchase, equity or equity-based, phantom equity, severance pay, termination pay, death benefit, disability benefit, hospitalization, medical, dental, vision, health and welfare, life or other insurance, flexible benefits, supplemental unemployment benefit, profit-sharing, pension or retirement, change of control, transaction bonus, retention, perquisite, relocation, repatriation or expatriation plan, policy, practice, program, agreement, arrangement or Contract and each other “employee benefit plan” (as such term is defined in Section 3(3) of ERISA), or arrangement, whether or not subject to ERISA and whether written or unwritten;

“Endeavor common stock” refers to the Class A common stock, Class X common stock and Class Y common stock of Endeavor, collectively;

“Endeavor Employee Plan” refers to an Employee Plan sponsored, maintained, contributed to, or required to be contributed to, by Endeavor or any of its subsidiaries with respect to which Endeavor or any of its subsidiaries has any direct or indirect present or future liability (excluding equity or equity-based compensation plans, programs, agreements, arrangements or contracts, workers’ compensation, unemployment compensation, and other government programs) with respect to any HoldCo Associate (other than a HoldCo Employee Plan);

“ERISA” refers to the Employee Retirement Income Security Act of 1974, as amended;

“Exchange Act” refers to the U.S. Securities Exchange Act of 1934, as amended;

“fully diluted basis” means on a basis calculated, (a) with respect to HoldCo, assuming the full cash exercise (and not net settlement) of all outstanding options, warrants and other rights and obligations (including any promised equity awards and assuming the full issuance of the shares underlying such awards) to acquire interests of HoldCo (without regard to any vesting provisions and, with respect to any promised awards whose issuance is conditioned in full or in part based on achievement of performance goals or metrics, assuming achievement

 

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at target) and the full conversion, exercise, exchange or settlement of all issued and outstanding securities convertible into or exercisable, exchangeable or settleable for or in interests of HoldCo, not including any interests of HoldCo reserved for issuance pursuant to future awards under any option, equity bonus, share purchase or other equity incentive plan or arrangement of HoldCo (other than promised awards described above) and (b) with respect to New PubCo, assuming the full cash exercise (and not net settlement but, for the avoidance of doubt, including the conversion of the Convertible Notes (to the extent not converted prior to Closing)) of all outstanding options, warrants, restricted stock units, performance stock units, dividend equivalent rights and other rights and obligations (including any promised equity awards and assuming the full issuance of the shares underlying such awards) to acquire voting interests of New PubCo (without regard to any vesting provisions and, with respect to any promised awards whose issuance is conditioned in full or in part based on achievement of performance goals or metrics, assuming achievement at target performance) and the full conversion, exercise, exchange, settlement of all issued and outstanding securities convertible into or exercisable, exchangeable or settleable for voting interests of New PubCo, not including any voting interests of New PubCo reserved for issuance pursuant to future awards under any option, equity bonus, share purchase or other equity incentive plan or arrangement of New PubCo (other than promised awards described above), and in each case of clauses (a) and (b), any other interests or shares, as applicable, of such entities that may be issued or exercised. For the avoidance of doubt, this definition assumes no net settlement or other reduction in respect of withholding tax obligations in connection with the issuance, conversion, exercise, exchange or settlement of such rights and obligations to acquire interests of HoldCo or New PubCo as are described in the foregoing clauses (a) and (b);

“GAAP” refers to the United States generally accepted accounting principles;

“governance agreement” refers to that certain governance agreement, to be entered into by and among Endeavor, the EDR subscribers, HoldCo, Mr. McMahon and New PubCo in connection with the completion of the Transactions;

“HoldCo Associate” refers to each current or former officer or other employee, or individual who is a current or former independent contractor, consultant, or director, of or to HoldCo or any of its subsidiaries;

“HoldCo Employee Plan” refers to an Employee Plan sponsored, maintained, contributed to, or required to be contributed to, by HoldCo or any of its subsidiaries;

“HoldCo operating agreement” means that certain Third Amended and Restated Limited Liability Company Agreement of HoldCo, dated as of May 3, 2021;

“HSR Act” refers to the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

“independent” refers to, in the context of New PubCo directors, (a) being qualified as an independent director under the listing standards of the NYSE, or any other principal market on which the common stock is listed or quoted for trading and (b) not being (x) an affiliate, equity security or interest holder, partner, member (in the case of each of the foregoing other than in respect of less than 5% of the voting or economic interest of the applicable Person) of HoldCo, Endeavor, New PubCo or any of their respective affiliates and (y) any employee, director, officer, or an immediate member of family (as applicable) of any person described in (x) or of HoldCo, Endeavor, or any of their respective affiliates. This definition only applies to use of term regarding New PubCo directors;

“Initial WWE LLC operating agreement” refers to that certain Limited Liability Company Agreement, to be entered into by and between WWE LLC and New PubCo in connection with the completion of the Transactions;

“IRS” refers to the Internal Revenue Service;

“merger” refers to the merger of Merger Sub with and into WWE, with WWE surviving the merger as a direct, wholly owned subsidiary of New PubCo;

“New PubCo Board” refers to the board of directors of New PubCo;

 

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“New PubCo bylaws” refers to the amended and restated bylaws of New PubCo, which at the effective time will be in effect in substantially the form included as Annex C to this information statement/prospectus;

“New PubCo charter” refers to the amended and restated articles of incorporation of New PubCo, which at the effective time will be in effect in substantially the form included as Annex B to this information statement/prospectus;

“New PubCo common stock” refers to the New PubCo Class A common stock and New PubCo Class B common stock, collectively;

“Other WWE equity securities” refers to equity securities of WWE other than WWE common stock, including restricted stock units, performance stock units, stock options, warrants, the Convertible Notes and other equity instruments;

“Pre-Closing Reorganization” refers to an internal reorganization of WWE;

“securityholders” refers to holders of the shares of WWE, Endeavor or New PubCo common stock or holders of WWE, Endeavor or New PubCo restricted stock units, performance stock units, stock options, warrants, the 3.375% Convertible Senior Notes due 2023, or other equity instruments, as the context requires;

“stockholders” or “holders” refers to holders of the shares of WWE common stock, Endeavor common stock or New PubCo common stock, as the context requires;

“stockholders agreement” refers to the stockholders agreement, dated as of April 2, 2023, by and between Endeavor and Mr. McMahon;

“VWAP” means as of an applicable date, the volume weighted average price per share of the applicable security on such security’s principal trading market (as reported by Bloomberg L.P. (or its successor) or, if not available, by another authoritative source determined by New PubCo) from 9:30 a.m. (New York City time) on the relevant trading day to 4:00 p.m. (New York City time) on such date;

“WWE Associate” refers to each current or former officer or other employee, or individual who is a current or former independent contractor, consultant, or director, of or to WWE or any of its subsidiaries;

“WWE credit facility” refers to the Amended and Restated Credit Agreement, dated as of May 24, 2019, by and among WWE, as borrower, the subsidiary guarantors from time to time party thereto, the lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent (as amended, restated, supplemented or otherwise modified from time to time);

“WWE Employee Plan” refers to an Employee Plan sponsored, maintained, contributed to, or required to be contributed to, by WWE or any of its subsidiaries;

“WWE Equity Awards” refers to WWE RSUs and WWE PSUs;

“WWE Equity Plan” refers to WWE’s 2016 Omnibus Incentive Plan;

“WWE ESPP” refers to WWE’s 2012 Employee Stock Purchase Plan;

“WWE PSU” refers to a restricted stock unit with respect to WWE Class A common stock (whether granted by WWE pursuant to the WWE Equity Plan, assumed by WWE in connection with any merger, acquisition, or similar transaction, or otherwise issued or granted by WWE) whose vesting is conditioned in full or in part based on achievement of performance goals or metrics and for which the applicable performance period has not been completed as of the applicable determination date;

“WWE RSU” refers to a restricted stock unit with respect to WWE Class A common stock (whether granted by WWE pursuant to the WWE Equity Plan, assumed by WWE in connection with any merger, acquisition, or similar transaction, or otherwise issued or granted by WWE), other than a WWE PSU;

 

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“WWE transfer” refers to the contribution by New PubCo of all of the equity interests in WWE LLC to HoldCo; and

“WWE Transfer Consideration” refers to 49.0% of the membership interests in HoldCo on a fully diluted basis after giving effect to any issuance of membership interests in HoldCo in connection with the exchange of the WWE transfer for such membership interests.

Whenever reference is made in this information statement/prospectus to ownership of 51.0%, 49.0% or any other percentage of the voting or economic interests of HoldCo or New PubCo, such reference assumes that such calculation is made in accordance with the “fully diluted basis” definition. This means, in certain circumstances, New PubCo would be issued less than 49.0%, and subsidiaries of Endeavor would collectively be issued more than 51.0%, of the economic interests in HoldCo as of the completion of the Transactions, including the merger. The proportion of the voting power of New PubCo issued to former securityholders of WWE common stock and to subsidiaries of Endeavor, in each case collectively, would be similarly impacted at the completion of the Transactions, including the merger. For example, to the extent that WWE equity awards do not vest and settle, the WWE Transfer Consideration allocable to those WWE equity awards that are either vested and not yet settled or unvested (calculated in accordance with the definition of “fully diluted basis”) will reduce the number of membership interests in HoldCo received by New PubCo on the closing date by an equivalent amount and will not be issued to New PubCo unless and until the applicable WWE equity award (as converted in accordance with the terms of the transaction agreement) is so settled or becomes vested and is settled in accordance with its terms, as applicable. In all cases, however, the former securityholders of WWE common stock would be issued 100.0% of the economic interests in New PubCo as of the completion of the Transactions, including the merger.

Certain sections in this information statement/prospectus refer to a number of shares of New PubCo common stock immediately following the completion of the Transactions, including the merger, including for the purposes of stating the beneficial ownership of certain persons and the number of shares underlying certain securities. Unless otherwise specified, such calculations are based upon the information included in this information statement/prospectus.

 

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TABLE OF CONTENTS

 

QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS			1
SUMMARY			9
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			31
RISK FACTORS			33
INFORMATION ABOUT WWE, NEW PUBCO AND MERGER SUB			81
THE TRANSACTIONS			83
SUMMARY OF THE TRANSACTION AGREEMENT			145
SUMMARY OF CERTAIN AGREEMENTS RELATED TO THE TRANSACTIONS			180
BUSINESS OF WWE			186
BUSINESS OF UFC			187
MANAGEMENT DISCUSSION AND ANALYSIS OF WWE			196
MANAGEMENT DISCUSSION AND ANALYSIS OF UFC			197
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION			213
COMPENSATION PROGRAMS OF NEW PUBCO AFTER THE TRANSACTIONS			229
MANAGEMENT AND DIRECTORS OF NEW PUBCO AFTER THE TRANSACTIONS			234
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			246
INTERESTS OF AFFILIATES IN THE TRANSACTIONS			247
CERTAIN BENEFICIAL OWNERS OF WWE COMMON STOCK			254
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES			255
DESCRIPTION OF NEW PUBCO’S CAPITAL STOCK			257
COMPARISON OF STOCKHOLDER RIGHTS			261
DESCRIPTION OF CONVERTIBLE NOTES			277
NO DISSENTERS’ OR APPRAISAL RIGHTS			306
EXPERTS			307
HOUSEHOLDING OF INFORMATION STATEMENT/PROSPECTUS MATERIALS			308
LEGAL MATTERS			309
WHERE YOU CAN FIND MORE INFORMATION			310
CONSOLIDATED FINANCIAL STATEMENTS OF ZUFFA PARENT, LLC			F-1
Annex A - Transaction Agreement			A-1
Annex B - Form of Amended and Restated Certificate of Incorporation of New Whale Inc.			B-1
Annex C - Form of Amended and Restated Bylaws of New Whale Inc.			C-1
Annex D - Stockholders Agreement			D-1
Annex E - Form of Governance Agreement			E-1
Annex F - Form of Services Agreement			F-1
Annex G - Form of Registration Rights Agreement			G-1
Annex H - Form of Amended and Restated Operating Agreement of Zuffa Parent, LLC			H-1
Annex I - Opinion of Raine Securities LLC			I-1
Annex J - Opinion of J.P. Morgan Securities LLC			J-1
Annex K - Opinion of Moelis & Company LLC			K-1

 

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QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS

The following questions and answers are intended to briefly address some commonly asked questions regarding the transaction agreement and the Transactions, including the merger. You are encouraged to carefully read the remainder of this information statement/prospectus, its annexes and the documents that are referred to in this information statement/prospectus and to pay special attention to the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” beginning on pages 33 and 31, respectively, of this information statement/prospectus, because the information contained in this section may not provide all the information that might be important to you with respect to the transaction agreement and the Transactions, including the merger. For further information, please read the section entitled “Where You Can Find More Information” beginning on page 310 of this information statement/prospectus.

 

Q:	Why am I receiving this information statement/prospectus?

 

A:

On April 2, 2023, Endeavor, EDR OpCo, HoldCo, WWE, New PubCo and Merger Sub entered into the transaction agreement, pursuant to which WWE and Endeavor propose to combine the businesses of WWE and HoldCo, which owns and operates UFC, which combined business will be managed by New PubCo, a new publicly listed company, once the Transactions, including the merger, are implemented.

In connection with the transaction agreement, WWE formed two wholly owned subsidiaries, New PubCo and Merger Sub. Subject to the terms and conditions of the transaction agreement, (i) WWE will undertake the Pre-Closing Reorganization, (ii) following the Pre-Closing Reorganization, Merger Sub will merge with and into WWE, with WWE surviving the merger as a direct, wholly owned subsidiary of New PubCo, (iii) following the merger, the surviving corporation will be converted to WWE LLC, a Delaware limited liability company, which will be wholly owned by New PubCo, immediately prior to the WWE transfer and (iv) following the conversion, New PubCo will (a) contribute all of the equity interests in WWE LLC to HoldCo in exchange for 49.0% of the membership interests in HoldCo on a fully diluted basis after giving effect to any issuance of membership interests in HoldCo in connection with such exchange and (b) issue to EDR OpCo and certain of its subsidiaries a number of shares of New PubCo Class B common stock, par value $0.00001 per share, representing, in the aggregate, 51.0% of the voting power of New PubCo on a fully diluted basis and no economic rights in New PubCo, in exchange for a payment equal to the par value of such New PubCo Class B common stock. As a result of the Transactions, including the merger, subsidiaries of Endeavor are expected to collectively own 51.0% of the voting power of New PubCo and 51.0% of the economic interests in HoldCo, with former securityholders of WWE common stock indirectly owning 49.0% of the economic interests in HoldCo, 49.0% of the voting power of New PubCo and 100.0% of the economic interests in New PubCo, in each case, on a fully diluted basis. In addition, New PubCo will be renamed “TKO Group Holdings, Inc.” immediately following the completion of the Transactions, including the merger.

Upon completion of the Transactions, including the merger, former securityholders of WWE common stock will own shares of New PubCo Class A common stock, which is expected to be listed for trading on the NYSE under the ticker symbol “TKO.” For further information on the rights of such shares, please read the section entitled “Summary of the Transaction Agreement— Transaction Consideration; Conversion of Shares; Exchange of Certificates” beginning on page 147 of this information statement/prospectus.

We have included in this information statement/prospectus important information about the Transactions, including the merger, and the transaction agreement (a copy of which is attached as Annex A). You should carefully read this information and the documents referred to therein in their entirety.

Please note that the delivery of the Written Consent is sufficient to adopt and approve the transaction agreement and the Transactions (including the merger) on behalf of stockholders of WWE. You are not being asked for a proxy, and you are requested not to send a proxy.

 

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Q:	Why is WWE proposing the Transactions?

 

A:

The WWE Board has unanimously approved the transaction agreement and the transactions contemplated thereby, and determined that the transaction agreement and the transactions contemplated by the transaction agreement, are in the best interest of WWE and its stockholders. WWE believes that the Transactions, including the merger, will benefit WWE stockholders. For further information, please read the sections entitled “The Transactions—WWE’s Reasons for the Transactions; Recommendation of the WWE Board of Directors” beginning on page 98 of this information statement/prospectus.

 

Q:	What will WWE stockholders receive in the Transactions?

 

A:

At the effective time, each issued and outstanding share of WWE Class A common stock and WWE Class B common stock (other than cancelled WWE shares) will be converted automatically into one validly issued, fully paid and non-assessable share of New PubCo Class A common stock, and all such converted shares will then cease to exist and will no longer be outstanding. For further information, please read the section entitled “Summary of the Transaction Agreement— Transaction Consideration; Conversion of Shares; Exchange of Certificates” beginning on page 147 of this information statement/prospectus.

 

Q:	What will holders of WWE equity awards receive in the Transactions?

 

A:

At the effective time, each award of WWE RSUs and WWE PSUs, including any dividend equivalent rights granted with respect thereof, that is outstanding immediately prior to the effective time will be converted into an equivalent award of restricted stock units or performance stock units of New PubCo, respectively, on the same terms and conditions as were applicable under the award of WWE RSUs or WWE PSUs immediately prior to the effective time (including any provisions for acceleration); provided, that, any applicable performance-vesting conditions will be equitably adjusted, as necessary, including by the WWE Compensation Committee in good faith, following consultation and reasonable consideration of comments from Endeavor and in a manner consistent with past practice, to take into account the effects, if any, of the Transactions, including the merger.

Prior to the effective time, the WWE Board (or an appropriate committee thereof) will take necessary actions such that any offering period under the WWE ESPP during which the effective time would otherwise have occurred will be deemed to have ended on the fifth business day prior to the closing date and each outstanding purchase right under the WWE ESPP will automatically be exercised on such date.

For further information, please read the section entitled “Summary of the Transaction Agreement— Transaction Consideration; Conversion of Shares; Exchange of Certificates” beginning on page 147 of this information statement/prospectus.

 

Q:	Should I send in my share certificates now for exchange?

 

A:

No, you should not send in your WWE share certificates now for exchange. At the effective time, each WWE share certificate will automatically be converted into an equivalent number of shares of New PubCo Class A common stock. Following the effective time, stockholders may request to exchange their WWE stock certificates for New PubCo stock certificates by contacting New PubCo’s transfer agent (as defined below). For further information, please read the section entitled “Summary of the Transaction Agreement— Transaction Consideration; Conversion of Shares; Exchange of Certificates” beginning on page 147 of this information statement/prospectus.

 

Q:	Who will serve on New PubCo’s board of directors and as management?

 

A:	The New PubCo Board will consist of 11 members who will be determined prior to the Closing, five of whom will be selected by WWE (the “WWE Designees”), of whom (x) two will be members of the WWE management team (one of whom will be Mr. McMahon) and (y) three will be independent, and six of whom

 

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will be selected by Endeavor (the “EDR Designees”), of whom (x) three will be members of the Endeavor management team or Endeavor directors (one of whom will be Ariel Emanuel (“Mr. Emanuel”)) and (y) three will be independent. As such, while New PubCo will be a controlled company, a majority of New PubCo directors will be independent.

Following the Closing, New PubCo is expected to be led by Mr. Emanuel as Chief Executive Officer (who is expected to also continue in his role as Chief Executive Officer of Endeavor); Mr. McMahon as Executive Chair of the New PubCo Board; Mark Shapiro (“Mr. Shapiro”) as President and Chief Operating Officer (who is expected to also continue in his role as President and as Chief Operating Officer of Endeavor); Andrew Schleimer (“Mr. Schleimer”) as Chief Financial Officer; and Seth Krauss (“Mr. Krauss”) as Chief Legal Officer (who is expected to also continue in his role as Chief Legal Officer of Endeavor). For further information, please read the section entitled “Management and Directors of New PubCo After the Transactions” beginning on page 234 of this information statement/prospectus.

 

Q:	What equity stake will WWE stockholders hold in New PubCo and HoldCo?

 

A:

WWE stockholders will receive one share of New PubCo Class A common stock for each share of WWE common stock that they hold. As of the Closing, subsidiaries of Endeavor are expected to collectively own 51.0% of the voting power of New PubCo and 51.0% of the economic interests in HoldCo, with former securityholders of WWE common stock indirectly owning 49.0% of the economic interests in HoldCo, 49.0% of the voting power of New PubCo and 100.0% of the economic interests in New PubCo, in each case, on a fully diluted basis. Assuming that WWE’s capitalization at the Closing is the same as it was on August 4, 2023, the stockholders of New PubCo would have the following voting power and interests (percentages may not sum to 100% due to rounding):

 

		Economic Interests in HoldCo								Voting Power of New PubCo								Economic Interests in New PubCo
Securityholder		Fully diluted (i.e., all Other WWE equity securities are converted into New PubCo Class A common stock)				No Other WWE equity securities are converted into New PubCo Class A common stock				Fully diluted (i.e., all Other WWE equity securities are converted into New PubCo Class A common stock)				No Other WWE equity securities are converted into New PubCo Class A common stock				Fully diluted (i.e., all Other WWE equity securities are converted into New PubCo Class A common stock)				No Other WWE equity securities are converted into New PubCo Class A common stock
Endeavor Operating Company, LLC			43.7	%			44.5	%			43.7	%			44.5	%			0.0	%			0.0	%
January Capital Holdco, LLC			3.6	%			3.7	%			3.6	%			3.7	%			0.0	%			0.0	%
January Capital Sub, LLC			3.7	%			3.8	%			3.7	%			3.8	%			0.0	%			0.0	%
Subsidiaries of EDR Total			51.0	%			51.9	%			51.0	%			51.9	%			0.0	%			0.0	%
WWE equity securities held by Mr. McMahon			16.4	%			16.6	%			16.4	%			16.6	%			33.5	%			34.6	%
WWE equity securities held by WWE directors and executive officers other than Mr. McMahon			1.2	%			0.1	%			1.2	%			0.1	%			2.5	%			0.2	%
WWE equity securities held by Ms. McMahon(1)			0.3	%			0.3	%			0.3	%			0.3	%			0.7	%			0.7	%
WWE equity securities held by Ms. McMahon Levesque(2)			1.1	%			1.1	%			1.1	%			1.1	%			2.2	%			2.3	%
Total WWE equity securities held by WWE directors and executive officers (including Mr. McMahon), Ms. McMahon and Ms. McMahon Levesque(1)(2)			19.1	%			18.2	%			19.1	%			18.2	%			39.0	%			37.8	%

 

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		Economic Interests in HoldCo								Voting Power of New PubCo								Economic Interests in New PubCo
Securityholder		Fully diluted (i.e., all Other WWE equity securities are converted into New PubCo Class A common stock)				No Other WWE equity securities are converted into New PubCo Class A common stock				Fully diluted (i.e., all Other WWE equity securities are converted into New PubCo Class A common stock)				No Other WWE equity securities are converted into New PubCo Class A common stock				Fully diluted (i.e., all Other WWE equity securities are converted into New PubCo Class A common stock)				No Other WWE equity securities are converted into New PubCo Class A common stock
WWE common stock held by other WWE stockholders			29.4	%			29.9	%			29.4	%			29.9	%			59.9	%			62.2	%
Other WWE equity securities held by other WWE securityholders			0.5	%			0.0	%			0.5	%			0.0	%			1.1	%			0.0	%
WWE Securityholders Total			49.0	%			48.1	%			49.0	%			48.1	%			100.0	%			100.0	%

 

(1)	Based on an Amendment No. 4 to Schedule 13D, filed August 18, 2016. All disclosure in respect of the equity ownership of Linda McMahon (“Ms. McMahon”) in this information statement/prospectus is based on such filing.

(2)	Based on a Form 4 filed July 22, 2022 and an Amendment No. 1 to Schedule 13D filed December 8, 2015. All disclosure in respect of the equity ownership of Stephanie McMahon Levesque (“Ms. McMahon Levesque”) in this information statement/prospectus is based on such filings.

New PubCo will be the sole managing member of HoldCo.

For further information, please read the section entitled “The Transactions—Ownership of New PubCo after the Transactions” beginning on page 86 of this information statement/prospectus, and the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 213 of this information statement/prospectus.

 

Q:	How do I calculate the value of the transaction consideration?

 

A:

WWE stockholders will receive one share of New PubCo Class A common stock for each share of WWE common stock that they hold. Upon completion of the Transactions, including the merger, subsidiaries of Endeavor are expected to collectively own 51.0% of the voting power of New PubCo and 51.0% of the economic interests in HoldCo, with former securityholders of WWE common stock indirectly owning 49.0% of the economic interests in HoldCo, 49.0% of the voting power of New PubCo and 100.0% of the economic interests in New PubCo, in each case, on a fully diluted basis. The value of the transaction consideration the WWE stockholders will receive in the Transactions, including the merger, will therefore depend on the combined value of HoldCo and WWE at the effective time.

The values of WWE common stock and of HoldCo have fluctuated since the date of the announcement of the transaction agreement and will continue to fluctuate from the date of this information statement/prospectus until the date the Transactions, including the merger, are completed. Because the ownership percentages described above will not be adjusted to reflect any changes in the values of WWE common stock or HoldCo, the value of the transaction consideration may be higher or lower than the value of the WWE common stock on earlier dates. Therefore, until the completion of the Transactions, including the merger, the WWE stockholders will not know or be able to determine the value, on a fully diluted basis, of the New PubCo Class A common stock that they will receive pursuant to the transaction agreement.

On March 31, 2023, which was the last trading day before the public announcement of the Transactions, the closing price on the NYSE was $91.26 per share of WWE Class A common stock. On August 18, 2023, which was the latest practicable date before the printing of this information statement/prospectus, the closing price on the NYSE was $112.33 per share of WWE Class A common stock.

 

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Changes in the market price of WWE common stock may result from a variety of factors that are beyond the control of WWE, including, but not limited to, changes in their businesses, operations and prospects, regulatory considerations, governmental actions, and legal proceedings and developments. You are encouraged to obtain up-to-date market prices for shares of WWE common stock.

 

Q:	What conditions must be satisfied to complete the Transactions, including the merger?

 

A:	Endeavor and WWE are not required to complete the Transactions, including the merger, unless a number of conditions are satisfied or waived, which we refer to as the “closing conditions.” These closing conditions include, among others:

 

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the adoption of the transaction agreement by WWE stockholders (which was satisfied by the delivery of the Written Consent);

 

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the completion of the Pre-Closing Reorganization;

 

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the absence of certain legal restraints that would prohibit or seek to prohibit the Transactions;

 

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the receipt of certain regulatory approvals (which was satisfied by the expiration of the waiting period under the HSR Act on June 16, 2023 and the receipt of all approvals, determinations, grants and confirmations with respect to regulatory authorities in the United Kingdom and Saudi Arabia on May 11, 2023 and May 30, 2023 respectively);

 

•

the approval for listing on the NYSE of the shares of New PubCo Class A common stock to be issued to WWE stockholders;

 

•

the ancillary agreements being in full force and effect;

 

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the absence, since the date of the transaction agreement, of any event, change, occurrence or development that has had a material adverse effect on the business, financial condition or results of operations of WWE or HoldCo;

 

•

delivery by Endeavor to WWE of certain required audited financial statements of HoldCo, and the operating income reflected in such financial statements not being less than a defined threshold (which was satisfied on April 23, 2023 by the delivery of such audited financial statements reflecting such level of operating income for the fiscal year ended December 31, 2022); and

 

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the prior mailing and effectiveness of the registration statement on Form S-4, of which this information statement/prospectus forms a part.

In addition, each of Endeavor’s and WWE’s respective obligations to complete the Transactions, including the merger, is subject to, among other conditions, the accuracy of the other party’s representations and warranties described in the transaction agreement (subject in most cases to “materiality” and “material adverse effect” qualifications) and the other party’s compliance with its covenants and agreements in the transaction agreement in all material respects.

For a more complete summary of the closing conditions that must be satisfied or waived prior to the Closing, please read the section entitled “Summary of the Transaction Agreement—Conditions to the Closing” beginning on page 173 of this information statement/prospectus.

 

Q:	When do you expect the Transactions, including the merger, to be completed?

 

A:

Endeavor and WWE are working to complete the Transactions, including the merger, as soon as possible. As described above, certain closing conditions must be satisfied or waived before Endeavor and WWE can complete the Transactions, including the merger. For further information, please read the section entitled “Summary of the Transaction Agreement—Conditions to the Closing” beginning on page 173 of this information statement/prospectus.

 

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Assuming timely satisfaction or waiver of the closing conditions, the Transactions, including the merger, are expected to close in the second half of 2023. The closing date of the Transactions, including the merger, will be at least 20 calendar days after the mailing of this information statement/prospectus to WWE stockholders, in accordance with Rule 14c-2(b) promulgated under the Exchange Act.

 

Q:	Is New PubCo expected to hold any assets other than the common units?

 

A:	In addition to the common units, New PubCo is expected to hold an amount of cash that will be distributed by WWE LLC to New PubCo in connection with the completion of the Transactions, as further described immediately below.

 

Q:	Does WWE expect to distribute cash to New PubCo?

 

A:

Yes, WWE is permitted to distribute cash to New PubCo prior to the completion of the Transactions. It is expected that an amount of cash, if any, in excess of the WWE Minimum Cash Requirement (as defined in the transaction agreement) will be distributed by WWE LLC to New PubCo. For further information, please read the section entitled “Summary of the Transaction Agreement—Cash Distributions” beginning on page 146 of this information statement/prospectus.

Following the completion of the Transactions, the WWE Designees will be permitted to declare, set a record date for and pay a one-time dividend on shares of New PubCo Class A common stock, funded by the cash distribution by WWE LLC to New PubCo prior to the closing of the Transactions. In the event of any such dividend being declared, all holders of New PubCo Class A common stock as of the applicable record date would receive such a dividend; accordingly, assuming that there are no changes to WWE’s capitalization from August 4, 2023 until the Closing, and that there are no changes to New PubCo’s capitalization from August 4, 2023 until the record date applicable to such dividend (other than in connection with the Transactions), immediately following the Closing, (i) assuming a fully diluted basis (i.e., all Other WWE equity securities have been converted into New PubCo Class A common stock) as of such record date, (1) Mr. McMahon would receive approximately 33.5% of the aggregate amount of any such dividend, (2) WWE directors and executive officers other than Mr. McMahon would receive their pro rata portion of approximately 2.5% of the aggregate amount of any such dividend, (3) Ms. McMahon would receive approximately 0.7% of the aggregate amount of any such dividend, (4) Ms. McMahon Levesque would receive approximately 2.2% of the aggregate amount of any such dividend, (5) all other former WWE stockholders would receive their pro rata portion of approximately 59.9% of the aggregate amount of any such dividend and (6) former holders of Other WWE equity securities (other than Mr. McMahon and other former WWE directors and executive officers) would receive their pro rata portion of approximately 1.1% of the aggregate amount of any such dividend, and (ii) assuming that no Other WWE equity securities have been converted into New PubCo Class A common stock as of such record date, (1) Mr. McMahon would receive approximately 34.6% of the aggregate amount of any such dividend, (2) WWE directors and executive officers other than Mr. McMahon would receive their pro rata portion of approximately 0.2% of the aggregate amount of any such dividend, (3) Ms. McMahon would receive approximately 0.7% of the aggregate amount of any such dividend, (4) Ms. McMahon Levesque would receive approximately 2.3% of the aggregate amount of any such dividend, (5) all other former WWE stockholders would receive their pro rata portion of approximately 62.2% of the aggregate amount of any such dividend and (6) all Other WWE equity securities (including those held by Mr. McMahon, which represent less than 0.1% of economic interests in New PubCo on a fully-diluted basis) that have been converted into equity securities of New PubCo (but which have not been converted into New PubCo Class A common stock) would be treated as specified in the agreements applicable to such securities, as described in this information statement/proxy statement and the public filings that WWE makes with the SEC that are incorporated by reference into this information statement/prospectus, as described in the section entitled “Where You Can Find More Information.” Percentages in the immediately preceding sentence may not sum to 100% due to rounding.

 

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Q:	What happens if the Transactions, including the merger, are not completed?

 

A:

If the Transactions, including the merger, are not completed for any reason, (1) WWE stockholders will not receive the transaction consideration, (2) WWE will remain an independent public company, (3) WWE Class A common stock will continue to be traded on the NYSE, (4) New PubCo, which is currently a direct, wholly owned subsidiary of WWE, will not become a publicly traded corporation, (5) the WWE RSUs and the WWE PSUs will not be converted into equivalent restricted stock units and performance stock units, respectively, of New PubCo, and (6) to the extent applicable, any then-current offering period under the WWE ESPP will remain outstanding through its original end date and will not be truncated.

As a result of the delivery of the Written Consent, no termination fees are payable in respect of the termination of the transaction agreement. For further information, please read the section entitled “Summary of the Transaction Agreement—Effect of Termination; Termination Fees; Expenses” beginning on page 177 of this information statement/prospectus.

 

Q:	What approval by WWE stockholders is required to adopt the transaction agreement and, therefore, approve the Transactions, including the merger?

 

A:

The adoption of the transaction agreement and, therefore, the approval of the Transactions, including the merger, required the affirmative vote of holders of a majority of the voting power of the shares of WWE common stock entitled to vote on such matters. On April 2, 2023, Mr. McMahon, who, as of the date thereof, was the record holder of 69,157 shares of WWE Class A common stock and 28,682,948 shares of WWE Class B common stock, representing approximately 81.0% of the aggregate voting power of the issued and outstanding shares of WWE common stock on such date, delivered a written consent adopting and, therefore, approving the transaction agreement and the Transactions, including the merger. Accordingly, the delivery of the Written Consent was sufficient to adopt the transaction agreement and, therefore, approve the Transactions, including the merger, on behalf of WWE stockholders. WWE has not solicited and is not soliciting your adoption of the transaction agreement or approval of the Transactions, including the merger. No further action by any other WWE stockholder is required under applicable law, and WWE will not solicit the vote of WWE stockholders for the adoption of the transaction agreement or approval of the Transactions, including the merger and will not call a special meeting of WWE stockholders for purposes of voting on the adoption of the transaction agreement or approval of the Transactions, including the merger. For this reason, the accompanying information statement/prospectus is being provided to you for informational purposes only. You are not being asked for a proxy, and you are requested not to send a proxy.

For further information, please read the section entitled “Further Stockholder Approval Not Required” beginning on page 142 of this information statement/prospectus.

 

Q:	What are the expected United States federal income tax consequences of the transactions for holders of WWE Class A common stock?

 

A:

For United States federal income tax purposes, the merger and the conversion are, taken together, intended to qualify as a reorganization under the provisions of Section 368(a) of the Code. Assuming that the merger and the conversion will be treated for U.S. federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Code, holders of WWE Class A common stock are not expected to recognize any gain or loss as a result of the merger and conversion.

For a more complete discussion of the United States federal income tax consequences of the Transactions, including the merger, please read the section entitled “Material United States Federal Income Tax Consequences” beginning on page 255 of this information statement/prospectus. Tax matters can be complicated, and the tax consequences of the Transactions, including the merger and the conversion, to a particular holder of WWE common stock will depend on such holder’s particular facts and circumstances. All securityholders of WWE should consult with their own tax advisors to determine the specific United

 

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States federal, state, or local or foreign income or other tax consequences of the Transactions, including the merger and the conversion, to them.

 

Q:	Are stockholders of WWE entitled to dissenters’ or appraisal rights in connection with the Transactions?

 

A:

No. Under Delaware law, holders of shares of WWE common stock will not have dissenters’ rights or appraisal rights in connection with the Transactions, including the merger. For more information, please read the section entitled “No Dissenters’ or Appraisal Rights” beginning on page 306 of this information statement/prospectus.

 

Q:	Are there any important risks about the Transactions, including the merger, or WWE’s business of which I should be aware?

 

A:	Yes, there are risks involved. WWE encourages you to carefully read in its entirety the section entitled “Risk Factors” beginning on page 33 of this information statement/prospectus.

 

Q:	Who do I contact if I have further questions about the Transactions, including the merger, or the transaction agreement?

 

A:	WWE stockholders who have questions about the Transactions, including the merger, or the transaction agreement or who desire additional copies of this information statement/prospectus or other additional materials should contact:

Attention: Investor Relations

World Wrestling Entertainment, Inc.

1241 East Main Street

Stamford, Connecticut 06902

Telephone: (203) 352-8600

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This information statement/prospectus contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act. When used in this information statement/prospectus, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “outlook,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside WWE’s, Endeavor’s or New PubCo’s control and difficult to predict, and could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. These forward-looking statements generally include statements regarding the expected timetable for completing the Transactions, including the merger, the ability to complete the Transactions, including the merger, expected cost and revenue synergies, impacts and benefits of the Transactions, including the merger, projected financial information, future opportunities, expected cash distributions and other statements regarding New PubCo’s and WWE’s future expectations, beliefs, plans, objectives, results of operations, financial condition and cash flows, or future events or performance. WWE management has based these forward-looking statements largely on their current expectations and projections about future events and financial trends that management believes may affect New PubCo and WWE’s business, financial condition and results of operations.

These statements are neither promises nor guarantees and involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from what is expressed or implied by the forward-looking statements, including, but not limited to:

 

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difficulties with the integration and in realizing the expected benefits of the Transactions, including the merger;

 

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the ability to obtain regulatory approvals (and the timing of such approvals) and meet other closing conditions to the Transactions, including the merger;

 

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the inability to complete the Transactions, including the merger, or the potential for delay in completing the Transactions, including the merger;

 

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the occurrence of any event, change or other circumstance that could give rise to the termination of the transaction agreement or could otherwise cause the Transactions, including the merger, to fail to close;

 

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the unfavorable outcome of legal proceedings that may be instituted against WWE, Endeavor and their affiliates in connection with the Transactions, including the merger;

 

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the inability to capture all or part of the anticipated cost and revenue synergies;

 

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significant fees and expenses associated with negotiating and completing the Transactions, including the merger;

 

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potential liabilities that are not known, probable or estimable at this time;

 

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the inability to obtain or maintain the listing of New PubCo Class A common stock on the NYSE following the Transactions;

 

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the potential diversion of management and employee attention and focus during the pendency of the Transactions;

 

•

the risk that the public announcement of the transaction agreement may have negative effects on UFC and WWE’s revenues, customers, employees, operating results and share price;

 

•

the possibility that WWE will not have sufficient cash at the Closing to distribute cash to New PubCo such that New PubCo will have cash to pay a post-closing dividend to the securityholders of New

 

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PubCo Class A common stock, or that the amount of cash available for a post-closing dividend will be less than currently expected;

 

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the risk of adverse tax consequences of the merger and the conversion;

 

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the inability to retain WWE or UFC management, employees or talent during the pendency of the Transactions and thereafter;

 

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the possibility that New PubCo, WWE or Endeavor may be adversely affected by other economic, business and/or competitive factors; and

 

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other risks and uncertainties indicated from time to time in this information statement/prospectus relating to the Transactions, including the merger.

Consequently, all of the forward-looking statements contained or incorporated by reference in this information statement/prospectus are qualified by factors, risks and uncertainties, including those set forth under the headings titled “Risk Factors” beginning on page 33 of this information statement/prospectus and those set forth under the headings “Cautionary Statement Regarding Forward-Looking Statements,” “Risk Factors” and “Quantitative and Qualitative Disclosures About Market Risk” in WWE’s Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on February 2, 2023 and other filings with the SEC that are incorporated by reference into this information statement/prospectus. For further information, please read the section entitled “Where You Can Find More Information” beginning on page 310 of this information statement/prospectus.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this information statement/prospectus or the date of the applicable document incorporated by reference into this information statement/prospectus. WWE does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. As a result of these risks and others, actual results could vary significantly from those anticipated herein, and the financial condition and results of operations of New PubCo and WWE could be materially adversely affected.

 

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RISK FACTORS

This section describes various risks and uncertainties related to the Transactions, including the merger, and the businesses and results of operations of New PubCo, WWE and UFC. In addition to the other information included in, or incorporated by reference into, this information status/prospectus, the annexes attached to this information statement/prospectus, and the documents that are referred to in this information statement/prospectus, including the matters addressed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 31 of this information statement/prospectus, you should carefully consider the following risks related to the Transactions, including the merger. You should also read and consider the risk factors associated with the businesses of each of WWE and UFC because these risk factors may affect the operations and financial results of New PubCo. In the case of WWE, these risk factors may be found in its Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on February 2, 2023, which is incorporated by reference into this information statement/prospectus. For further information, please read the section entitled “Where You Can Find More Information” beginning on page 310 of this information statement/prospectus. In the case of UFC, these risk factors may be found below under the subsection entitled “Risks Relating to UFC’s Business.” Additional risks and uncertainties not presently known to WWE or UFC or that are not currently considered to be material may also adversely affect the Transactions, including the merger, or the businesses or results of operations of any of WWE, UFC or New PubCo.

Risk Factors Summary

The following is only a summary of principal risks that are applicable to the Transactions, including the merger, and the businesses of WWE, UFC and, after completion of the Transactions, including the merger, New PubCo. Such risks are discussed in more detail below and you should carefully read this Risk Factors section in its entirety.

Risks Relating to the Transactions

 

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WWE stockholders cannot be certain of the value of New PubCo Class A common stock to be paid to them as consideration for the Transactions, including the merger. As (x) on the one hand, the economic interest percentage of subsidiaries of Endeavor in HoldCo and the voting interest percentage of subsidiaries of Endeavor in New PubCo and (y) on the other hand, the economic interest percentage of New PubCo in HoldCo and the voting interest percentage of former securityholders of WWE common stock in New PubCo, will each not be adjusted to reflect any changes in the values of WWE common stock or HoldCo, the value of the transaction consideration may be higher or lower than the value of the WWE common stock on earlier dates.

 

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The parties must obtain certain regulatory approvals in order to complete the Transactions, including the merger; if such approvals are not obtained or are obtained with conditions, the Transactions may be prevented or delayed.

 

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WWE, UFC and New PubCo will incur significant transaction and merger-related transition costs in connection with the Transactions, including the merger, and will be subject to business uncertainties and contractual restrictions while the Transactions, including the merger, are pending.

 

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The transaction agreement limits WWE’s ability to pursue alternatives to the Transactions, including the merger.

 

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Executive officers and directors of WWE may have interests in the Transactions, including the merger, that are different from, or in addition to, the rights of their respective stockholders.

 

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The Transactions, including the merger, are subject to a number of closing conditions and, if these conditions are not satisfied, the transaction agreement may be terminated in accordance with its terms and the Transactions, including the merger, may not be completed. Failure to complete the Transactions, including the merger, could negatively impact the financial results of WWE and UFC and the stock price of WWE Class A common stock.

 

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Lawsuits may be filed against WWE, Endeavor, their affiliates and/or their respective boards of directors challenging the Transactions, including the merger. An adverse ruling in any such lawsuit could result in substantial costs and may delay or prevent the completion of the Transactions, including the merger.

Risks Relating to WWE’s Business

 

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There are a number of risks related to WWE’s business and industry. For further information, please read the section entitled “Risk Factors—Risks Relating to WWE’s Business” beginning on page 41 of this information statement/prospectus.

Risks Relating to UFC’s Business

 

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UFC’s ability to generate revenue from discretionary and corporate spending on events, such as corporate sponsorships and advertising, is subject to many factors, including many that are beyond UFC’s control, such as general macroeconomic conditions.

 

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UFC depends on key relationships with television and cable networks, satellite providers, digital streaming partners and other distribution partners, as well as corporate sponsors.

 

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UFC may not be able to adapt to or manage new content distribution platforms or changes in consumer behavior resulting from new technologies.

 

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Because UFC’s success depends substantially on its ability to maintain a professional reputation, adverse publicity concerning UFC, or UFC’s key personnel could adversely affect UFC’s business.

 

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The markets in which UFC operates are highly competitive, both within the United States and internationally.

 

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UFC depends on the continued services of executive management and other key employees, and of its parent company, Endeavor. The loss or diminished performance of these individuals, or any diminished performance by Endeavor, could adversely affect UFC’s business.

 

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Changes in public and consumer tastes and preferences and industry trends could reduce demand for UFC’s content offerings and adversely affect its business.

 

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Owning and managing events for which UFC sells media and sponsorship rights, ticketing and hospitality exposes UFC to greater financial risk. If the live events that UFC owns and manages are not financially successful, UFC’s business could be adversely affected.

Risks Relating to New PubCo after Completion of the Transactions

 

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Combining the business of WWE and UFC may be more difficult or more costly than expected and the benefits of combining the businesses may be lower than expected.

 

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The financial assumptions, estimates, projections and synergies considered by the WWE Board and its financial advisors may not be realized, which may adversely affect the market price of New PubCo Class A common stock following the completion of the Transactions, including the merger.

 

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New PubCo will be a holding company and its principal asset will be equity interests in HoldCo and, accordingly, New PubCo will be dependent upon distributions from HoldCo to pay taxes and other expenses.

 

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New PubCo will be controlled by Endeavor. The interests of Endeavor may differ from the interests of other stockholders of New PubCo.

 

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No trading market currently exists for New PubCo Class A common stock. The market price for shares of New PubCo Class A common stock may be affected by factors different from those affecting the

 

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market price for shares of WWE Class A common stock. The shares of New PubCo Class A common stock to be received by the WWE stockholders as a result of the Transactions will have rights that are different from the rights of shares of WWE Class A common stock.

Risks Relating to the Convertible Notes

 

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There are a number of risks related to an investment in the Convertible Notes, including that the Convertible Notes will be effectively subordinated to the secured debt and any liabilities of the subsidiaries of New PubCo and WWE, as Co-Obligors; the Convertible Notes are not protected by restrictive covenants; and the conversion rate of the Convertible Notes may not be adjusted for all dilutive events. For further information, please read the section entitled “Risk Factors—Risks Relating to the Convertible Notes” beginning on page 76 of this information statement/prospectus.

Risks Relating to the Transactions

WWE stockholders cannot be certain of the value of New PubCo Class A common stock to be paid to them as consideration for the Transactions, including the merger. As (x) on the one hand, the economic interest percentage of subsidiaries of Endeavor in HoldCo and the voting interest percentage of subsidiaries of Endeavor in New PubCo and (y) on the other hand, the economic interest percentage of New PubCo in HoldCo and the voting interest percentage of former securityholders of WWE common stock in New PubCo, will each not be adjusted to reflect any changes in the values of WWE common stock or HoldCo, the value of the transaction consideration may be higher or lower than the value of the WWE common stock on earlier dates.

WWE stockholders will receive one share of New PubCo Class A common stock for each share of WWE common stock that they hold. As of the Closing, subsidiaries of Endeavor are expected to collectively own 51.0% of the voting power of New PubCo and 51.0% of the economic interests in HoldCo, with former securityholders of WWE common stock indirectly owning 49.0% of the economic interests in HoldCo, 49.0% of the voting power of New PubCo and 100.0% of the economic interests in New PubCo, in each case, on a fully diluted basis. The value of the transaction consideration the WWE stockholders will receive in the Transactions, including the merger, will therefore depend on the combined value of HoldCo and WWE at the effective time.

The market value of the shares of New PubCo Class A common stock to be issued upon completion of the Transactions is unknown as no trading market currently exists. While there is a trading market for the WWE Class A common stock, the market price of WWE Class A common stock has fluctuated since the date of the announcement of the transaction agreement and will continue to fluctuate from the date of this information statement/prospectus until the date that the Transactions are completed, which could occur a considerable amount of time after the date of this information statement/prospectus. The market value of WWE Class A common stock at the time of the consummation of the Transactions, including the merger, may vary significantly from its price on the date of the transaction agreement or the date of this information statement/prospectus and may not be reflective of the market value of the New PubCo Class A common stock. Because the ownership percentages described above will not be adjusted to reflect any changes in the values of WWE common stock or HoldCo, the value of the transaction consideration may be higher or lower than the value of the WWE common stock on earlier dates. Therefore, until the completion of the Transactions, including the merger, the WWE stockholders will not know or be able to determine the value, on a fully diluted basis, of the New PubCo Class A common stock that they will receive pursuant to the transaction agreement.

WWE and Endeavor must obtain certain regulatory approvals in order to complete the Transactions, including the merger; if such approvals are not obtained or are obtained with conditions, the Transactions may be prevented or delayed or the anticipated benefits of the Transactions could be reduced.

The Closing is conditioned upon, among other things, the expiration or termination of the waiting period (and any extensions thereof) applicable to the Transactions, including the merger, under the HSR Act. Mr. McMahon and Endeavor, based on their control of WWE and HoldCo, respectively, each filed HSR Act

 

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Notification and Report Forms with respect to the Transactions on April 13, 2023. The waiting period under the HSR Act expired on June 16, 2023. At any time before or after the Transactions, including the merger, are completed, any of the Department of Justice, which we refer to as the “DOJ”, the Federal Trade Commission, which we refer to as the “FTC”, U.S. state attorneys general or private parties could take action under the antitrust laws in opposition to the Transactions, including the merger, including seeking to enjoin completion of the Transactions, including the merger, conditioning completion of the Transactions, including the merger, upon the divestiture of assets of WWE, Endeavor or their respective subsidiaries or imposing restrictions on New PubCo’s post-transaction operations.

Completion of the Transactions, including the merger, is also conditioned upon clearance or approval by antitrust authorities in Saudi Arabia, and if required by certain antitrust authorities, the United Kingdom and the European Union. With respect to Saudi Arabia, Endeavor and WWE jointly submitted an initial notification to the General Authority for Competition on May 3, 2023. On May 30, 2023, Endeavor and WWE received a non-objection letter (i.e., clearance) from the General Authority for Competition. With respect to the United Kingdom, Endeavor submitted a voluntary briefing paper to the CMA on May 2, 2023. The Transactions, including the merger, are conditioned upon clearance by the CMA, unless the CMA confirms that it has no further questions in response to the briefing paper and does not open an inquiry by the time all other closing conditions have been fulfilled. On May 11, 2023, Endeavor and WWE received confirmation from the CMA that it has no further questions at this stage. The Transactions, including the merger, are only conditioned upon clearance by the European Commission if the Transactions, including the merger, are referred to the European Commission pursuant to Article (22)(1) of the EU Merger Regulation prior to the date of satisfaction of all other conditions to completion of the Transactions, including the merger, (which has not occurred as of the date of this information statement/prospectus). At any time before or after the Transactions, including the merger, are completed, any of the antitrust authorities or private parties could take action under the applicable antitrust laws in opposition to the Transactions, including the merger, including seeking to enjoin completion of the Transactions, including the merger, conditioning completion of the Transactions, including the merger, upon the divestiture of assets of WWE, Endeavor or their respective subsidiaries or imposing restrictions on New PubCo’s post-transaction operations.

Any such requirements or restrictions sought by antitrust authorities could negatively affect the results of operations and financial condition of New PubCo following completion of the Transactions, including the merger. Any such requirements or restrictions may prevent or delay completion of the Transactions, including the merger, or may reduce the anticipated benefits of the Transactions, including the merger, which could also have a material adverse effect on New PubCo’s business and cash flows, financial condition and results of operations.

No assurance can be given that the required regulatory approvals will be obtained or that the required closing conditions will be satisfied, and, even if all such approvals are obtained and the conditions are satisfied, no assurance can be given as to the terms, conditions and timing of such approvals. For more information about the effects of a failure to complete the Transactions, including the merger, please read the risk factor below entitled “—Risk Factors Summary—Risks Relating to the Transactions— Failure to complete the Transactions, including the merger, could negatively impact the businesses or financial results of WWE and the stock price of WWE Class A common stock.” Also, please read the section entitled “Summary of the Transaction Agreement—Conditions to the Closing” beginning on page 173 of this information statement/prospectus for a discussion of the closing conditions and the section entitled “The Transactions—Regulatory Approvals” beginning on page 141 of this information statement/prospectus for a discussion of the regulatory approvals required in connection with the completion of the Transactions, including the merger.

WWE, UFC and New PubCo will incur significant transaction and merger-related transition costs in connection with the Transactions, including the merger.

New PubCo, WWE and UFC each expect that they will incur significant, non-recurring costs in connection with the completion of the Transactions, including the merger, and the integration of the operations of WWE and UFC. New PubCo, WWE and/or UFC may incur additional costs to maintain employee morale and to retain key employees. WWE and/or UFC will also incur significant fees and expenses relating to regulatory filings, legal, accounting, financial advisory and consulting fees and other costs associated with the Transactions, including the

 

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merger. Some of these costs are payable regardless of whether the Transactions, including the merger, are completed. Additionally, such costs could limit or eliminate New PubCo’s ability to make any post-closing cash dividend. As a result of the delivery of the Written Consent, no termination fees are payable in respect of the termination of the transaction agreement. For further information, please read the section entitled “Summary of the Transaction Agreement—Effect of Termination; Termination Fees; Expenses” beginning on page 177 of this information statement/prospectus.

WWE and UFC will be subject to business uncertainties and contractual restrictions while the Transactions, including the merger, are pending.

Uncertainty about the effect of the Transactions, including the merger, on employees, clients, customers, suppliers and vendors may have an adverse effect on the ongoing business operations of WWE or UFC and, consequently, have an adverse impact on the business operations of New PubCo. These uncertainties may impair WWE’s or UFC’s ability to retain and motivate key personnel and could cause customers and others that deal with WWE or UFC, as applicable, to defer or decline entering into contracts with WWE or UFC, as applicable, or make other decisions concerning WWE or UFC, as applicable, or seek to change existing business relationships with WWE or UFC, as applicable. Certain of WWE’s media rights contracts, credit agreements, vendor or supplier contracts, leases and financing-related agreements (including the WWE credit facility) contain change of control restrictions that may give rise to a right of termination or cancellation in connection with the Transactions, including the merger. In addition, if key employees depart because of uncertainty about their future roles and the potential complexities of the Transactions, including the merger, WWE’s and UFC’s businesses could be harmed. Furthermore, the transaction agreement contains restrictions on the ability of WWE and Endeavor to undertake certain actions or business opportunities outside the ordinary course of business prior to the completion of the Transactions, including the merger without the consent of the other party. Please read the section entitled “Summary of the Transaction Agreement—Covenants and Agreements” beginning on page 153 of this information statement/prospectus for a description of the restrictive covenants applicable to WWE and Endeavor.

The transaction agreement limits WWE’s ability to pursue alternatives to the Transactions, including the merger, which may discourage other companies from making a favorable alternative transaction proposal.

The transaction agreement contains provisions that make it more difficult for WWE to enter into alternative transactions, including provisions that restrict WWE’s ability to, among other things, solicit, initiate or knowingly facilitate or knowingly encourage the submission of any proposal or offer that constitutes, or would reasonably be expected to constitute or lead to, any acquisition proposal (as defined below) from a third party. Further, on April 2, 2023, Mr. McMahon, who beneficially owned, as of that date, 69,157 shares of WWE Class A common stock and 28,682,948 shares of WWE Class B common stock, together representing approximately 81.0% of the aggregate voting power of the issued and outstanding shares of WWE common stock entitled to vote on such matters, delivered the Written Consent approving the transaction agreement and the Transactions, including the merger. As a result of the delivery of the Written Consent, no other action by the WWE stockholders is required to complete the Transactions, including the merger, and therefore the right of WWE to terminate the transaction agreement in response to a superior proposal was eliminated. For further information, please read the sections entitled “Summary of the Transaction Agreement—Covenants and Agreements—No Solicitation and Adverse Recommendation Change” beginning on page 160 of this information statement/prospectus.

While WWE and UFC believe these provisions are reasonable, customary and not preclusive of other offers, the provisions may have discouraged a third party that had an interest in acquiring all or a significant part of WWE from considering or proposing such an acquisition, even if such party were prepared to pay consideration with a higher per share value than the currently proposed merger consideration.

Furthermore, the requirement for WWE to pay a termination fee under certain circumstances could have resulted in a third party proposing to pay a lower per share price to acquire WWE than it may otherwise have

 

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proposed to pay because of the added expense of the termination fee that could have become payable by WWE to Endeavor in certain circumstances. As a result of the delivery of the Written Consent, no termination fees are payable in respect of the termination of the transaction agreement. For more information, please read the section entitled “Summary of the Transaction Agreement—Effect of Termination; Termination Fees; Expenses” beginning on page 177 of this information statement/prospectus.

Executive officers and directors of WWE may have interests in the Transactions, including the merger, that are different from, or in addition to, the rights of their respective stockholders.

Executive officers of WWE negotiated the terms of the transaction agreement and the services agreement, and the WWE Board approved the transaction agreement, the services agreement and the Transactions, including the merger. These executive officers and directors may have interests in the Transactions, including the merger, that are different from, or in addition to, those of stockholders of WWE. These interests include the continued employment of certain executive officers of WWE by New PubCo, the appointment of certain directors of WWE as directors of New PubCo, and the indemnification of WWE executive officers and directors by New PubCo and the surviving corporations. With respect to WWE executive officers and directors, these interests may also include the conversion of outstanding WWE equity awards into equity awards of New PubCo in the merger, enhanced change of control severance benefits and sale bonus awards. Furthermore, the New PubCo Board will consist of 11 members who will be determined prior to the Closing, five of whom will be selected by WWE, of whom (x) two will be members of the WWE management team (one of whom will be Mr. McMahon) and (y) three will be independent, and six of whom will be selected by Endeavor, of whom (x) three will be members of the Endeavor management team or Endeavor directors (one of whom will be Mr. Emanuel) and (y) three will be independent. As such, while New PubCo will be a controlled company, a majority of New PubCo directors will be independent. For a description of the interests of WWE executive officers and directors in the Transactions please read the section entitled “Interests of Affiliates in the Transactions—Interests of WWE Affiliates in the Transactions—Interests of WWE’s Directors and Executive Officers in the Transactions” beginning on page 247 of this information statement/prospectus.

The Transactions, including the merger, are subject to a number of closing conditions and, if these conditions are not satisfied, the transaction agreement may be terminated in accordance with its terms and the Transactions, including the merger, may not be completed. In addition, the parties have the right to terminate the transaction agreement under certain circumstances, in which case the Transactions, including the merger, would not be completed.

The Transactions, including the merger, are subject to a number of closing conditions and, if these conditions are not satisfied or waived (to the extent permitted by law), the Transactions, including the merger, will not be completed. These conditions include, among others: (i) the affirmative vote of holders of a majority of the voting power of the WWE common stock in favor of adopting the transaction agreement in the form attached to the transaction agreement (which was satisfied on April 2, 2023 upon the delivery of the Written Consent); (ii) the expiration of the waiting period under the HSR Act, as amended (which expired on June 16, 2023); (iii) obtaining other applicable regulatory approvals (all of which have been obtained as of the date of this information statement/prospectus); (iv) the absence of any order or legal requirement that enjoins, restrains or otherwise prevents the consummation of the Transactions; (v) the effectiveness of New PubCo’s registration statement on Form S-4, of which this information statement/prospectus forms a part, and the absence of any stop order or other proceeding that suspends or otherwise threatens such effectiveness; (vi) the registration, and the authorization for listing on the NYSE, of New PubCo Class A common stock; (vii) the mailing of the information statement contemplated by Rule 14c-2 of the Exchange Act by WWE to the stockholders of WWE, and the lapse of at least 20 calendar days from the date of completion of such mailing; (viii) the consummation of the Pre-Closing Reorganization; (ix) delivery by Endeavor to WWE of certain required audited financial statements of HoldCo, and the operating level of operating income reflected in such financial statements to be no less than 92.5% of the operating income reflected in the HoldCo Financial Statements for the fiscal year ended December 31, 2022 (excluding the impact of stock-based compensation expense) (which was satisfied on

 

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April 23, 2023 upon the delivery of such audited financial statements of HoldCo to WWE); (x) delivery by each of WWE and Endeavor to the other party duly executed counterparts of the applicable ancillary agreements required to be delivered at the Closing; and (xi) customary conditions regarding the accuracy of the representations and warranties and material compliance by the parties with their respective obligations under the transaction agreement. The consummation of the Transactions, including the merger, is not subject to a financing condition.

These closing conditions may not be fulfilled and, accordingly, the Transactions, including the merger, may not be completed. In addition, if the Transactions are not completed by January 2, 2024 (subject to extension to July 2, 2024 in certain circumstances), WWE or Endeavor may choose not to proceed with the Transactions, including the merger. Moreover, WWE and Endeavor can mutually decide to terminate the transaction agreement at any time prior to the Closing. In addition, each of WWE and Endeavor may elect to terminate the transaction agreement in certain other circumstances, as described in the section entitled “Summary of the Transaction Agreement—Termination” beginning on page 176 of this information statement/prospectus. If the transaction agreement is terminated in certain circumstances, WWE may incur substantial fees and WWE would not realize the anticipated benefits of the Transactions, including the merger. As a result of the delivery of the Written Consent, no termination fees are payable in respect of the termination of the transaction agreement. For further information, please read the section entitled “Summary of the Transaction Agreement—Effect of Termination; Termination Fees; Expenses” beginning on page 177 of this information statement/prospectus.

Failure to complete the Transactions, including the merger, could negatively impact the businesses or financial results of WWE and the stock price of WWE Class A common stock.

If the Transactions, including the merger, are not completed, the ongoing business of WWE may be adversely affected, and WWE will be subject to several risks and consequences, including, but not limited to, the following:

 

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WWE will be required to pay certain costs relating to the Transactions, including the merger, whether or not the Transactions, including the merger, are completed, such as significant fees and expenses relating to regulatory filings, legal, accounting, financial advisory, consulting and other advisory fees and expenses, employee-benefit related expenses and filing and printing fees;

 

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under the transaction agreement, WWE is subject to certain restrictions on the conduct of its business prior to completing the Transactions, including the merger, which may adversely affect its ability to execute certain of its business strategies; and

 

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matters relating to the Transactions, including the merger, may require substantial commitments of time and resources by WWE management and the expenditure of significant funds in the form of fees and expenses, which could otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to WWE as independent companies, as the case may be.

In addition, if the Transactions, including the merger, are not completed, WWE may experience negative reactions from the financial markets and from its customers and employees. WWE also could be subject to litigation related to a failure to complete the Transactions, including the merger, or to enforce its respective obligations under the transaction agreement. If the Transactions, including the merger, are not completed, WWE cannot assure their respective stockholders that the risks described above will not materialize and they may materially affect the business, financial results and stock prices of WWE.

As a result of the delivery of the Written Consent, no termination fees are payable in respect of the termination of the transaction agreement. For further information, please read the section entitled “Summary of the Transaction Agreement—Effect of Termination; Termination Fees; Expenses” beginning on page 177 of this information statement/prospectus.

 

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WWE may in the future be the target of securities class action and derivative lawsuits, which could result in substantial costs and may delay or prevent the completion of the Transactions, including the merger.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into transaction agreements in an effort to enjoin the relevant transactions or seek monetary relief. WWE may in the future be a defendant in one or more lawsuits relating to the transaction agreement and the Transactions, including the merger, and, even if any such future lawsuits are without merit or resolved in WWE’s favor, defending against these claims can result in substantial costs and divert management time and resources from pursuing the completion of the Transactions, including the merger, and from other potentially beneficial business opportunities. WWE cannot predict whether such lawsuits will be brought against WWE or the outcome of such lawsuits or others, nor can WWE predict the amount of time and expense that will be required to resolve such litigation. An unfavorable resolution of any such litigation surrounding the transaction agreement and the Transactions, including the merger, could delay or prevent the completion of the Transactions, including the merger, which may adversely affect WWE’s, UFC’s or, if the Transactions, including the merger, are completed but delayed, New PubCo’s business, financial position and results of operations.

WWE may waive one or more of the closing conditions without re-obtaining stockholder approval.

WWE has the right to waive, in whole or in part, certain of the conditions to its obligation to complete the Transactions, including the merger, to the extent permitted by law. Any such waiver may not require re-obtaining the approval of WWE’s stockholders (which has already been provided for WWE via the Written Consent), in which case WWE will have the ability to complete the Transactions, including the merger, without seeking additional stockholder approval. Any determination whether to waive any condition to the Transactions, including the merger, whether stockholder approval would be re-obtained as a result of any such waiver or whether this information statement/prospectus would be amended as a result of any waiver will be made by WWE at the time of such waiver based on the facts and circumstances as they exist at that time, and any such waiver could have an adverse effect on New PubCo and the current stockholders of WWE.

WWE, UFC and, subsequently, New PubCo, must continue to retain, motivate and recruit executives and other key employees and service providers, including athletes and performers, which may be difficult in light of uncertainty regarding the Transactions, including the merger, and failure to do so could negatively affect New PubCo.

Both WWE and UFC must continue to retain, motivate and recruit executives and other key employees and service providers, including athletes and performers, during the period prior to completion of the Transactions, including the merger. Moreover, New PubCo must be successful at retaining and motivating key employees and service providers, including athletes and performers, following the completion of the Transactions, including the merger. Experienced employees and talent in the industries in which WWE and UFC operate are in high demand and competition for such employees and talent can be intense. Employees and talent of both WWE and UFC may experience uncertainty about their future role with New PubCo until, or even after, strategies with regard to New PubCo as a combined company are announced or executed. The potential distractions of the Transactions, including the merger, may adversely affect the ability of WWE, UFC or, following completion of the Transactions, including the merger, New PubCo, to retain, motivate and recruit executives and other key employees and service providers, including athletes and performers, and keep them focused on applicable strategies and goals. A failure by WWE, UFC or, following the completion of the Transactions, including the merger, New PubCo, to attract, retain and motivate executives and other key employees, including athletes and performers, during the period prior to or after the completion of the Transactions, including the merger, could have a negative impact on the businesses of WWE, UFC or New PubCo. Furthermore, if key employees or talent of WWE or UFC depart or are at risk of departing due to issues including the uncertainty and difficulty of integration, financial security or a desire not to become employees or talent of New PubCo, WWE, UFC and/or New PubCo may incur significant costs to retain such individuals or to identify, hire and retain replacements for departing employees and talent and may lose significant expertise and talent relating to the business of WWE, UFC and/or New PubCo, and New PubCo’s ability to realize the anticipated benefits of the Transactions, including the merger, may be adversely affected.

 

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The Transactions, including the merger, may trigger change in control or other provisions in certain agreements, which may allow third parties to terminate or alter existing contracts or relationships with WWE.

WWE has contracts with customers, licensees, vendors, landlords, lenders and other business partners, which may require WWE to obtain consents from these other parties in connection with the Transactions, including the merger. If these consents cannot be obtained, the counterparties to these contracts and other third parties with which WWE currently has relationships may have the ability to terminate, reduce the scope of or otherwise materially adversely alter their relationships with WWE in anticipation of the Transactions, including the merger, or with New PubCo following the Transactions, including the merger. The pursuit of such rights may result in WWE or New PubCo suffering a loss of potential future revenue or incurring liabilities in connection with a breach of such agreements or losing rights that are material to its business.

Any such disruptions could adversely impact New PubCo’s ability to achieve the anticipated benefits of the Transactions, including the merger. The adverse effect of such disruptions could also be exacerbated by a delay in the completion of the Transactions, including the merger, or the termination of the transaction agreement.

The opinions of the WWE Board’s financial advisors will not be updated to reflect changes in circumstances between the signing of the transaction agreement in April 2023 and the completion of the Transactions, including the merger, on the closing date.

The WWE Board has not obtained updated opinions from its financial advisors as of the date of this information statement/prospectus, and the WWE Board does not anticipate asking its financial advisors to update their opinions, which were issued in connection with the signing of the transaction agreement on April 2, 2023. Changes in the operations and prospects of WWE or UFC, general market and economic conditions and other factors that may be beyond the control of WWE or UFC, and on which the WWE Board’s financial advisors’ opinions were based, may significantly alter the price of the shares of WWE common stock by completion of the Transactions, including the merger. The opinions of the Board’s financial advisors do not speak as of the time the Transactions, including the merger, will be completed or as of any date other than the date of such opinions. For a description of the opinions that the WWE Board received from its financial advisors, please read the section entitled “The Transactions—Opinions of WWE’s Financial Advisors” beginning on page 109 of this information statement/prospectus.

Risks Relating to WWE’s Business

You should read and consider the risk factors specific to WWE’s business. These risks are described in the sections entitled “Risk Factors” in WWE’s Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on February 2, 2023, which is incorporated by reference into this information statement/prospectus. For further information, please read the section entitled “Where You Can Find More Information” beginning on page 310 of this information statement/prospectus.

Risks Relating to UFC’s Business

UFC’s ability to generate revenue from discretionary and corporate spending on events, such as corporate sponsorships and advertising, is subject to many factors, including many that are beyond UFC’s control, such as general macroeconomic conditions.

UFC’s business depends on discretionary consumer and corporate spending. Many factors related to corporate spending and discretionary consumer spending, including economic conditions affecting disposable consumer income such as unemployment levels, fuel prices, interest rates, changes in tax rates, tax laws that impact companies or individuals, and inflation can significantly impact UFC’s operating results. While consumer and corporate spending may decline at any time for reasons beyond UFC’s control, the risks associated with UFC’s businesses become more acute in periods of a slowing economy or recession, which may be accompanied by reductions in corporate sponsorship and advertising, decreases in attendance at live events, and purchases of

 

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PPV, among other things. There can be no assurance that consumer and corporate spending will not be adversely impacted by current economic conditions, or by any future deterioration in economic conditions, thereby possibly impacting UFC’s operating results and growth. A prolonged period of reduced consumer or corporate spending, such as those that occurred during the COVID-19 pandemic, could have an adverse effect on UFC’s business, financial condition, and results of operations.

UFC depends on key relationships with television and cable networks, satellite providers, digital streaming partners and other distribution partners.

A key component of UFC’s success is its relationships with television and cable networks, satellite providers, digital streaming and other distribution partners, as well as corporate sponsors. UFC is dependent on maintaining these existing relationships and expanding upon them to ensure UFC has a robust network with whom it can work to arrange multimedia rights sales and sponsorship engagements, including distribution of its events. UFC’s television programming for its events is distributed by television and cable networks, satellite providers, PPV, digital streaming, and other media. UFC has an important relationship with ESPN as they are the exclusive domestic distributor of all UFC events. Because a portion of UFC’s revenues are generated, directly and indirectly, from the distribution of its events, any failure to maintain or renew arrangements with distributors and platforms, the failure of distributors or platforms to continue to provide services to UFC, or the failure to enter into new distribution opportunities on terms favorable to UFC could adversely affect UFC’s business. UFC regularly engages in negotiations relating to substantial agreements covering the distribution of its television programming by carriers located in the United States and abroad. UFC has agreements with multiple PPV providers globally and distributes a portion of UFC’s events through PPV, including certain events that are sold exclusively through PPV. While the value of sports media licensing rights has experienced continued growth in recent years, there is no guarantee that such growth can be maintained or that the current value of UFC’s sports media licensing rights will not diminish over time. Any adverse change in these relationships or agreements, including as a result of U.S., European Union and United Kingdom trade and economic sanctions and any counter-sanctions enacted by such sanctioned countries (e.g., Russia), or a deterioration in the perceived value of UFC’s sponsorships, or these distribution channels could have an adverse effect on UFC’s business, financial condition and results of operations.

UFC may not be able to adapt to or manage new content distribution platforms or changes in consumer behavior resulting from new technologies.

UFC must successfully adapt to and manage technological advances in its industry, including the emergence of alternative distribution platforms. If UFC is unable to adopt or is late in adopting technological changes and innovations, it may lead to a loss of consumers viewing UFC’s content, a reduction in revenues from attendance at UFC’s live events, a loss of ticket sales, or lower site fee revenue. UFC’s ability to effectively generate revenue from new content distribution platforms and viewing technologies will affect its ability to maintain and grow UFC’s business. Emerging forms of content distribution may provide different economic models and compete with current distribution methods (such as television, film, and pay-per-view (“PPV”)) in ways that are not entirely predictable, which could reduce consumer demand for UFC’s content offerings. UFC must also adapt to changing consumer behavior driven by advances that allow for time shifting and on-demand viewing, such as digital video recorders and video-on-demand, as well as internet-based and broadband content delivery and mobile devices. If UFC fails to adapt its distribution methods and content to emerging technologies and new distribution platforms, while also effectively preventing digital piracy, UFC’s ability to generate revenue from its targeted audiences may decline and could result in an adverse effect on UFC’s business, financial condition, and results of operations.

Because UFC’s success depends substantially on its ability to maintain a professional reputation, adverse publicity concerning UFC, or UFC’s key personnel could adversely affect UFC’s business.

UFC’s professional reputation is essential to its continued success and any decrease in the quality of its reputation could impair UFC’s ability to, among other things, recruit and retain qualified and experienced personnel, or enter into multimedia, licensing, and sponsorship engagements. UFC’s overall reputation may be

 

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negatively impacted by a number of factors, including negative publicity concerning Endeavor or UFC, members of UFC or Endeavor’s management or other key personnel or the athletes that participate in UFC events. Many athletes that participate in UFC events are public personalities with large social media followings whose actions generate significant publicity and public interest. Any adverse publicity relating to such individuals or individuals that UFC employs or has a contractual relationship with, or to UFC, including from reported or actual incidents or allegations of illegal or improper conduct, such as harassment, discrimination, or other misconduct, could result in significant media attention, even if not directly relating to or involving UFC, and could have a negative impact on UFC’s professional reputation. This could result in termination of media rights agreements, licensing, sponsorship or other contractual relationships, or UFC’s ability to attract new sponsorship or other business relationships, or the loss or termination of such employees’ services, all of which could adversely affect UFC’s business, financial condition, and results of operations.

The markets in which UFC operates are highly competitive, both within the United States and internationally.

UFC faces competition from a variety of other domestic and foreign companies. UFC also faces competition from alternative providers of the content and events that UFC offers, including Bellator, M-1 Global, Professional Fighters League, Combate Global, Invicta FC, Cage Warriors, AMC Fight Nights, ONE Championship, Rizin Fighting Federation, Absolute Championship Akhmat, Pancrase, Caged Steel, Eagle Fighting Championship, KSW and Extreme Fighting Championship and from other forms of media, entertainment and leisure activities in a rapidly changing and increasingly fragmented environment. Any increased competition, which may not be foreseeable, or UFC’s failure to adequately address any competitive factors, could result in reduced demand for UFC’s content, live events, or brand, which could have an adverse effect on UFC’s business, financial condition, and results of operations.

UFC depends on the continued services of executive management and other key employees, and of its parent company, Endeavor. The loss or diminished performance of these individuals, or any diminished performance by Endeavor, could adversely affect UFC’s business.

UFC’s performance is substantially dependent on the continued services of executive management and other key employees as well as its relationship with its parent company, Endeavor. In addition, UFC has entered into service agreements with Endeavor. UFC cannot be sure that any adverse effect on Endeavor’s business would not also have an adverse effect on UFC’s business, financial condition, and results of operations. Further, members of UFC’s or Endeavor’s executive management may not remain with Endeavor or UFC and may compete with UFC in the future. The loss of any member of UFC’s or Endeavor’s executive management teams could impair UFC’s ability to execute its business plan and growth strategy, have a negative impact on its business, financial condition, and results of operations, or cause employee morale problems and the loss of additional key employees.

Changes in public and consumer tastes and preferences and industry trends could reduce demand for UFC’s content offerings and adversely affect its business.

UFC’s ability to generate revenues is highly sensitive to rapidly changing consumer preferences and industry trends, as well as the popularity of UFC’s brand, events, and the athletes that participate in UFC events. UFC’s success depends on its ability to offer premium content through popular channels of distribution that meet the changing preferences of the broad consumer market and respond to competition from an expanding array of choices facilitated by technological developments in the delivery of content. UFC’s operations and revenues are affected by consumer tastes and entertainment trends, including the market demand for the distribution rights to live events, which are unpredictable and may be affected by factors such as changes in the social and political climate, global epidemics such as the COVID-19 pandemic or general macroeconomic factors. Changes in consumers’ tastes or a change in the perceptions of UFC’s brand and business partners, whether as a result of the social and political climate or otherwise, could adversely affect UFC’s operating results. UFC’s failure to avoid a

 

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negative perception among consumers or anticipate and respond to changes in consumer preferences, could result in reduced demand for UFC’s events and content offerings, which could have an adverse effect on its business, financial condition and results of operations.

Consumer tastes change frequently and it is a challenge to anticipate what offerings will be successful at any point in time. UFC may invest in its content and events before learning the extent to which it will achieve popularity with consumers. A lack of popularity of UFC’s content offerings, as well as labor disputes, unavailability of a star athlete, cost overruns, disputes with production teams, or severe weather conditions, could have an adverse effect on UFC’s business, financial condition and results of operations.

Owning and managing events for which UFC sells media and sponsorship rights, ticketing and hospitality exposes UFC to greater financial risk. If the live events that UFC owns and manages are not financially successful, UFC’s business could be adversely affected.

UFC acts as a principal by owning and managing live events for which it sells media and sponsorship rights, ticketing and hospitality. Organizing and operating a live event involves significant financial risk as UFC bears all or most event costs, including a significant amount of up-front costs. In addition, UFC typically books its live events many months in advance of holding the event and often incurs expenses prior to receiving any related revenue. Accordingly, if a planned event fails to occur or there is any disruption in UFC’s ability to live stream or otherwise distribute, whether as a result of technical difficulties or otherwise, UFC could lose a substantial amount of these costs, fail to generate the anticipated revenue, and could be forced to issue refunds for ticket sales and generate lower than expected media rights, sponsorship and licensing fees. If UFC is forced to postpone a planned event, it could incur substantial additional costs in order to stage the event on a new date, may have reduced attendance and revenue, and may have to refund fees. UFC could be compelled to cancel or postpone all or part of an event for many reasons, including severe weather conditions, issues with obtaining permits or government regulation, athletes failing to participate, as well as operational challenges caused by extraordinary incidents, such as terrorist or other security incidents, mass-casualty incidents, natural disasters, public health concerns including pandemics, or similar events. Such incidents have been shown to cause a nationwide and global disruption of commercial and leisure activities. UFC often has cancellation insurance policies in place to cover a portion of its losses if it is compelled to cancel an event, but its coverage may not be sufficient, no longer covers a pandemic and is subject to deductibles. If the live events that UFC owns and manages are not financially successful, UFC could suffer an adverse effect on its business, financial condition and results of operations.

Unfavorable outcomes in legal proceedings may adversely affect UFC’s business and operating results.

UFC’s results may be affected by the outcome of pending and future litigation. Unfavorable rulings in UFC’s legal proceedings could result in material liability to UFC or have a negative impact on its reputation or relations with its employees or third parties. The outcome of litigation, including class action lawsuits, is difficult to assess or quantify. Plaintiffs in class action lawsuits may seek recovery of very large or indeterminate amounts and the magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time. UFC is currently named in five related class-action lawsuits filed against it alleging that UFC violated Section 2 of the Sherman Act by monopolizing an alleged market for the promotion of elite professional MMA bouts and monopsonizing an alleged market for the services of elite professional MMA athletes. On August 9, 2023, the plaintiffs in the class-action lawsuits were certified as a class. If UFC is unable to resolve these or other matters favorably, UFC’s business, operating results, and UFC’s financial condition may be adversely affected.

In addition, UFC is currently, and from time to time in the future may be, subject to various other claims, investigations, legal and administrative cases and proceedings (whether civil or criminal), or lawsuits by governmental agencies or private parties. If the results of these investigations, proceedings, or suits are unfavorable to UFC or if UFC is unable to successfully defend against third-party lawsuits, it may be required to pay monetary damages or may be subject to fines, penalties, injunctions, or other censure that could have an adverse effect on its business, financial condition, and results of operations. Even if UFC adequately addresses

 

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the issues raised by an investigation or proceeding or successfully defends a third-party lawsuit or counterclaim, UFC may have to devote significant financial and management resources to address these issues, which could have an adverse effect on its business, results of operations, and financial condition.

The impact of global pandemics or other outbreaks, such as the COVID-19 pandemic, could adversely affect UFC’s business, financial condition and results of operations.

UFC’s operations and events could be impacted by restrictions resulting from global pandemics or similar outbreaks, such as the COVID-19 pandemic. COVID-19 is still impacting certain countries and communities. While activity has resumed in all of UFC’s businesses and restrictions in locations where it operates have been lessened or lifted in most cases, such restrictions could in the future be increased or reinstated. UFC will assess and respond to any such pandemics or outbreaks, including by abiding by any new government-imposed restrictions, market by market. UFC is unable to accurately predict the ultimate impact any global pandemics or similar outbreaks will have on its operations going forward due to the aforementioned uncertainties.

UFC’s key personnel and athletes may be adversely impacted by immigration restrictions and related factors.

UFC’s ability to retain its key personnel is impacted, at least in part, by the fact that a portion of its key personnel in the United States is comprised of foreign nationals who are not United States citizens. Similarly, some UFC athletes are foreign nationals who are not United States citizens. In order to be legally allowed to work or compete in the United States, these individuals generally hold non-immigrant visas (which may or may not be tied to UFC) or green cards, the latter of which makes them permanent residents in the United States.

The ability of these foreign nationals to remain and work or compete in the United States is impacted by a variety of laws and regulations, as well as the processing procedures of various government agencies. Changes in applicable laws, regulations, or procedures could adversely affect UFC’s ability to hire or retain these key personnel or sponsor athletes who are not United States Citizens and could affect its costs of doing business. In addition, if the laws, rules or procedures governing the ability of foreign nationals to work or compete in the United States were to change or if the number of visas available for foreign nationals permitted to work in the United States were to be reduced, UFC’s business could be adversely affected, if, for example, UFC is unable to retain an employee or sponsor an athlete who is a foreign national.

Corresponding issues apply with respect to UFC’s key personnel working and athletes competing in countries outside of the United States relating to citizenship and work authorizations. Similar changes in applicable laws, regulations or procedures in those countries could adversely affect UFC’s ability to hire or retain key personnel or sponsor athletes internationally.

UFC’s business is international in nature and may require employees, contractors and athletes that participate in UFC events to frequently travel or live abroad. The ability of UFC’s key personnel, contractors and the athletes that participate in UFC events to travel internationally for their work or to participate in UFC events is impacted by a variety of laws and regulations, policy considerations of foreign governments, the processing procedures of various government agencies and geopolitical actions, including war and terrorism (for example, the conflict involving Russia and Ukraine), or natural disasters including earthquakes, hurricanes, floods, fires, as well as pandemics. In addition, UFC’s productions of live events internationally subject it to the numerous risks involved in foreign travel and operations and also subject it to local norms and regulations, including regulations requiring UFC to obtain visas for its key personnel and, in some cases, contractors and athletes that participate in UFC events. Actions by athletes that are out of UFC’s control may also result in certain countries barring them from travelling internationally, which could adversely affect UFC’s business. If UFC’s key personnel, contractors and athletes that participate in UFC events were prevented from conducting their work internationally for any reason, it could have an adverse effect on UFC’s business, financial condition, and results of operations.

 

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UFC’s failure to retain or continue to discover key athletes could lead to a decline in the appeal of UFC’s events and the popularity of its brand of entertainment, which could adversely affect its operating results.

UFC’s success depends, in large part, upon its ability to identify, discover and retain athletes who have the physical ability and presence or charisma to succeed in UFC’s live events and programming content. UFC cannot guarantee that it will be able to continue to identify these athletes. Additionally, throughout UFC’s history, athletes from time to time have stopped participating in UFC events for any number of reasons, and UFC cannot guarantee that it will be able to retain its current athletes either during the terms of their contracts or when their contracts expire. UFC’s failure to attract and retain key athletes, an increase in the costs required to attract and retain such athletes, or a serious or untimely injury to, or the death of, or unexpected or premature loss or retirement for any reason of, any of UFC’s key athletes could lead to a decline in the popularity of UFC’s brand of entertainment and events. Any of the foregoing issues could adversely affect UFC’s operating results.

UFC relies on technology, such as its information systems, to conduct its business. Failure to protect its technology against breakdowns and security breaches could adversely affect its business.

UFC relies on technology, such as its information systems, content distribution systems, ticketing systems, and payment processing systems, to conduct its business. This technology is vulnerable to service interruptions and security breaches from inadvertent or intentional actions by UFC’s employees, partners, and vendors, or from attacks by malicious third parties. Such attacks are of ever-increasing levels of sophistication and are made by groups and individuals with a wide range of motives and expertise, including organized criminal groups, “hacktivists,” nation states, and others. The techniques used to breach security safeguards evolve rapidly, and they may be difficult to detect for an extended period of time, and the measures UFC takes to safeguard its technology may not adequately prevent such incidents.

There can be no assurance that UFC’s efforts to protect its confidential and personal information and that of its other business relationships and its investments in information technology will prevent service interruptions or security breaches in its systems or the unauthorized or inadvertent wrongful use or disclosure of such confidential or personal information. Such incidents could adversely affect UFC’s business operations, and reputation. Any such breach could require UFC to expend significant resources to mitigate the breach of security and to address matters related to any such breach, including the payment of fines, compensation and/or damages liabilities. Although UFC maintains an insurance policy that covers data security, privacy liability, and cyber-attacks, its insurance may not be adequate to cover losses arising from breaches or attacks on its systems. UFC would also be exposed to a risk of loss or litigation and potential liability under laws, regulations and contracts that protect the privacy and security of confidential or personal information. For example, the California Consumer Privacy Act of 2018 (the “CCPA”), imposes a private right of action for security breaches that could lead to some form of remedy including regulatory scrutiny, fines, private right of action settlements, and other consequences. As a further example, where a security incident involves a breach of security leading to the accidental or unlawful destruction, loss, alternation, unauthorized disclosure of, or access to, personal data in respect of which UFC is a controller or processor under the GDPR (as defined below), this could result in fines of up to €20.0 million or 4% of annual global turnover under the EU GDPR (as defined below) or £17.50 million and 4% of total annual revenue in the case of the UK GDPR (as defined below). UFC also may be required to notify regulators about any actual or perceived personal data breach as well as the individuals who are affected by the incident within strict time periods.

UFC relies on technology at live events, the failure or unavailability of which, for any significant period of time, could affect its business, reputation and the success of its live events. UFC also relies on technology to provide its digital offerings, live streaming, and virtual events, which may be vulnerable to hacking, denial of service attacks, human error and other unanticipated problems or events that could result in interruptions in UFC’s service and to unauthorized access to, or alteration of, the content and data contained on UFC’s systems and those of its third-party vendors. Any significant interruption or failure of the technology upon which UFC relies, or any significant breach of security, could result in decreased performance and increased operating costs

 

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(including refunds to impacted end users), adversely affecting UFC’s business, financial condition, reputation and results of operations.

In addition, UFC’s use of technology systems and applications presents the potential for further vulnerabilities. For instance, UFC may be subject to spam, spyware, ransomware, phishing and social engineering, viruses, worms, malware, DDOS attacks, password attacks, man-in-the-middle attacks, cybersquatting, impersonation of employees, officers, or athletes, abuse of comments and message boards, fake reviews, doxing, and swatting. UFC cannot assure you that its internal policies in place to protect against these vulnerabilities will be successful or that UFC will not be adversely affected should one of these events occur.

Unauthorized disclosure of sensitive or confidential customer information could harm UFC’s business and standing with its customers.

The protection of UFC’s customer, employee, and other company data is critical to UFC. UFC collects, stores, transmits, and uses personal information relating to, among others, UFC’s employees, consumers, and event participants, as well as a range of talent and production information and data that may be provided to UFC by its vendors. As a result of the COVID-19 pandemic, UFC also collects certain COVID-related health and wellness information about its employees and others. UFC relies on commercially available systems, software, tools, and monitoring to provide security for processing, transmission, and storage of such confidential information. UFC’s facilities and systems, and those of its third-party service providers, may be threatened by or become the target of security breaches, acts of vandalism, payment card terminal tampering, computer viruses, misplaced, lost or stolen data, programming or human errors, or other similar events. UFC has had and in the future may have breaches of its security systems and unauthorized access to sensitive and confidential information. Any security breach involving the misappropriation, loss or other unauthorized disclosure of employee, customer or other information, whether by UFC or its third-party service providers, could damage UFC’s reputation, result in the loss of customers, expose UFC to risk of litigation and liability or regulatory investigations or actions, disrupt UFC’s operations, and harm UFC’s business. In addition, media and public scrutiny of information security and privacy has become more intense in recent years. As a result, UFC may incur significant costs to change its business practices or modify its offerings in connection with the protection of personally identifiable information as well as implementing future information security standards.

UFC also seeks to protect trade secrets, confidential information, personal information and other proprietary information, in part, by entering into nondisclosure and confidentiality agreements with parties who have access to such information, such as UFC’s employees, collaborators, consultants, advisors and other third parties. However, UFC cannot guarantee that it has entered into such agreements with each party that may have or has had access to its trade secrets or proprietary technology, information and processes. Further, despite these efforts, no assurance can be given that these agreements will be effective in controlling access to and distribution of UFC’s products and proprietary information as any of these parties may breach the agreements and disclose UFC’s proprietary information, including its trade secrets, and it may not be able to obtain adequate remedies for such breaches.

Defending a claim that a party illegally disclosed or misappropriated a trade secret or confidential information is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts within and outside of the United States are less willing or unwilling to protect trade secrets. If any of UFC’s trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, UFC would have no right to prevent them from using that technology or information to compete with UFC. If any of UFC’s trade secrets were to be disclosed to or independently developed by a competitor or other third party, its competitive position would be materially and adversely harmed.

 

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Regulatory action for alleged privacy violations could result in significant fines, orders to cease data processing or other penalties.

Regulators may impose significant fines for privacy and data protection violations. UFC’s business operations involve the collection, transfer, use, disclosure, storage, and disposal of personal or sensitive information around the world, including the European Economic Area (“EEA”). As a result, UFC’s business is subject to complex and continually evolving (and at times conflicting) U.S. (federal and state) and international laws and regulations regarding privacy and data protection. Many of these laws and regulations are subject to change and uncertain interpretation and could result in claims, changes to UFC’s business practices, penalties, increased cost of operations, or otherwise harm UFC’s business.

For example, in Europe, UFC is subject to the General Data Protection Regulation 2016/679 and applicable national supplementing laws (“EU GDPR”) and in the United Kingdom, UFC is subject to the United Kingdom data protection regime consisting primarily of the U.K. General Data Protection Regulation and Data Protection Act of 2018 (“UK GDPR”, and together with the EU GDPR, the “GDPR”). The GDPR creates requirements for in-scope businesses regarding personal data, broadly defined as information relating to an identifiable person. Non-compliance carries potential significant monetary penalties of up to the higher of 4% of a company’s worldwide annual turnover or €20 million/£17.5 million under the EU GDPR and UK GDPR, respectively. UFC may also face orders to cease/ change its processing of personal data, as well as civil claims (including class actions), enforcement notices, assessment notices (for a compulsory audit) and reputational damage.

Under the GDPR, and other privacy regimes globally, UFC is subject to rules regarding cross-border transfers of personal data. Recent legal developments in Europe have created complexity and uncertainty regarding transfers of personal data from the EEA and United Kingdom to the U.S. and other jurisdictions. For example, on July 16, 2020, the Court of Justice of the European Union invalidated the EU-US Privacy Shield Framework, under which personal data could be transferred from the EEA to relevant self-certified U.S. entities, and further noted that reliance on the Standard Contractual Clauses alone (a standard, non-negotiable form of contract approved by the European Commission as an adequate personal data transfer mechanism, and a potential alternative to the Privacy Shield Framework) may not necessarily be sufficient in all circumstances. Subsequent European court and regulatory decisions have taken a restrictive approach to international data transfers.

UFC is currently implementing the Standard Contractual Clauses and relies on transfer impact assessments to transfer personal information outside the EEA and the UK, including to the United States. As supervisory authorities within the EEA issue further guidance on international data transfers under the GDPR, and as enforcement actions continue, UFC could suffer additional costs, complaints and/or regulatory investigations or fines, and/or it could affect UFC’s operations and the manner in which it provides its services (e.g. UFC may have to stop using certain tools and vendors and make other operations changes). There can be no assurances that UFC will be successful in its efforts to comply with the GDPR or other privacy and data protection laws and regulations, or that violations will not occur, particularly given the complexity of both these laws and UFC’s business, as well as the uncertainties that accompany new laws.

In addition, as discussed above, the CCPA imposes significant data privacy and potential statutory damages related to data protection for the data of California residents. The effects of this legislation potentially are far-reaching and may require UFC to modify its data processing practices and policies and to incur significant costs and expenses in an effort to comply. Further, on November 3, 2020, the California Privacy Rights Act (the “CPRA”) was voted into law by California residents. The CPRA, which went into effect on January 1, 2023 and becomes enforceable on July 1, 2023, significantly amends the CCPA and imposes additional data protection obligations on companies doing business in California, including additional consumer rights processes and opt outs for certain uses of personal and sensitive data. It also creates a new California data protection agency specifically tasked to enforce the law, which will likely result in increased regulatory scrutiny of California businesses in the areas of data protection and security. The CCPA has encouraged similar data privacy laws to be considered and enacted in other states across the United States. For example, in March 2021, the Governor of

 

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Virginia signed into law the Virginia Consumer Data Protection Act (the “VCDPA”), which took effect on January 1, 2023. The VCDPA creates consumer rights, similar to the CCPA, and imposes corresponding obligations on covered companies, relating to the access to, deletion of, and disclosures of personal data collected by covered businesses about Virginia residents. The VCDPA provides for civil penalties for violations that are enforceable by the Virginia Attorney General. Further, Colorado, Utah, Connecticut, Iowa and Indiana have enacted the Colorado Privacy Act, the Utah Consumer Privacy Act, the Connecticut Data Privacy Act, Iowa Consumer Data Protection Act, and the Indiana Consumer Data Protection Act, respectively, which will go into effect in 2023 (Colorado, Utah and Connecticut) 2025 (Iowa) and 2026 (Indiana), and will impose obligations similar to or more stringent than those UFC may face under other data protection laws. Montana and Tennessee also have laws that are awaiting signature by their respective state governors (with similar bills in other states in the legislative process) and, more generally, these laws mark the beginning of a trend toward more stringent data privacy legislation in the United States, which could also increase UFC’s potential liability and adversely affect its business. Further, broad federal data privacy legislation also has been proposed. Recent, new, and proposed state and federal legislation relating to data privacy may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional compliance programs, could impact strategies and availability of previously useful information, and could result in increased compliance costs and/or changes in business practices and policies.

UFC’s global reach means it is subject to other privacy regimes, and new laws are being enacted regularly, including laws which may have potentially conflicting requirements that would make compliance challenging. If the trend of increasing enforcement by regulators of such laws as reflected in recent guidance and decisions continues, this could lead to substantial costs, require significant systems changes, limit the effectiveness of UFC’s marketing activities, divert the attention of UFC’s technology personnel, adversely affect UFC’s margins, increase costs and subject UFC to additional liabilities.

Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, may lead to broader restrictions and impairments on UFC’s marketing and personalization activities and may negatively impact its efforts to better understand users. Recent U.S. and European court and regulator decisions are driving increased attention to cookies and tracking technologies and privacy activists are referring non-compliant companies to regulators. If the trend of increasing enforcement by regulators of the strict approach including opt-in consent for all but essential use cases, as seen in recent guidance and decisions continues, this could lead to substantial costs, require significant systems changes, limit the effectiveness of UFC’s marketing activities, divert the attention of UFC’s technology personnel, adversely affect UFC’s margins, and subject UFC to additional liabilities.

Any failure to comply with data protection laws and/or regulations that results in a data security breach could require notifications to data subjects and/or owners under federal, state and/or international data breach notification laws and regulations. The effects of any applicable U.S. state, U.S. federal and international laws and regulations that are currently in effect or that may go into effect in the future, are significant and may require UFC to modify its data processing practices and policies and to incur substantial costs and potential liability in an effort to comply with such laws and regulations. Responding to allegations of non-compliance, whether or not true, could be costly, time consuming, distracting to management, and cause reputational harm. In addition to government regulation, privacy advocates and industry groups may propose new and different self-regulatory standards. Because the interpretation and application of privacy and data protection laws are still uncertain, it is possible that these laws may be interpreted and applied in a manner that is inconsistent with one another or inconsistent with UFC’s existing data management practices or the features of UFC’s products and services. Any actual or perceived failure to comply with these and other data protection and privacy laws and regulations could result in regulatory scrutiny and increased exposure to the risks of litigation or the imposition of consent orders, resolution agreements, requirements to take particular actions with respect to training, policies or other activities, and civil and criminal penalties, including fines, which could harm UFC’s business. In addition, UFC, its third-party service providers or customers could be required to fundamentally change their business activities and practices or modify their products and services, which could harm UFC’s, UFC’s customers’ or UFC’s third-

 

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party service providers’ businesses. Any of the foregoing could result in additional cost and liability to UFC, damage UFC’s reputation, inhibit sales, and harm UFC’s business.

UFC may be unable to protect its trademarks and other intellectual property rights, and others may allege that UFC infringes upon their intellectual property rights.

UFC has invested significant resources in its brands associated with its business including, but not limited to, “UFC,” “OCTAGON,” “ULTIMATE FIGHTING CHAMPIONSHIP,” “AS REAL AS IT GETS” and “ULTIMATE FIGHTER,” as well as the UFC logo and the 2 dimensional octagon shape in an attempt to obtain and protect the UFC brand and its public recognition. The UFC brand is essential to its success and competitive position. UFC has also invested significant resources in the premium content that it produces.

UFC’s trademarks, copyrights, and other intellectual property rights are critical to its success and competitive position. During trademark registration proceedings, UFC may receive rejections of its applications by the United States Patent and Trademark Office or equivalent authorities in other foreign jurisdictions. Although UFC would be given an opportunity to respond to those rejections, it may be unable to overcome such rejections and, consequently, may be unable to obtain sufficient protection for certain trademarks. UFC’s intellectual property rights may be challenged, opposed, and/or invalidated by third parties and may not be strong enough to provide meaningful commercial competitive advantage. In addition, UFC may seek to oppose, cancel and/or invalidate a third party’s intellectual property rights if it deems such intellectual property violates its rights. If UFC fails to secure intellectual property rights or maintain its intellectual property, competitors might be able to use UFC’s brands or other intellectual property, which may harm UFC’s business. Further, policing unauthorized use and other violations of UFC’s intellectual property is difficult, particularly given its global scope, so UFC may be unable to prevent others (including third party licensees) from infringing, diluting or misappropriating its intellectual property rights. For example, UFC’s premium content may be subject to digital piracy by third parties. If UFC is unable to maintain and protect its intellectual property rights adequately, it may lose an important advantage in the markets in which it competes and its business may be harmed. In particular, the laws of certain foreign countries do not protect intellectual property rights in the same manner as do the laws of the United States and, accordingly, UFC’s intellectual property is at greater risk in those countries even where UFC takes steps to protect its intellectual property in such countries. In addition, UFC may be required to forgo protections or rights to technology, data and intellectual property in order to operate in or access markets in a foreign jurisdiction. Any such direct or indirect loss of rights in these assets could negatively impact UFC’s business. UFC cannot guarantee that the available legal steps it has taken, and takes in the ordinary course of business, to reasonably protect its intellectual property will be successful or predict whether these steps will be adequate to prevent infringement or misappropriation of these rights.

From time to time, in the ordinary course of UFC’s business, it becomes involved in opposition and cancellation proceedings or other litigation or disputes with third-parties related to intellectual property. Any opposition and cancellation proceedings or other litigation or dispute involving the scope or enforceability of UFC’s intellectual property rights or any allegation that UFC infringes, misappropriates or dilutes the intellectual property rights of others, regardless of the merit of these claims, could be costly and time-consuming. If any infringement or other intellectual property claim made against UFC by any third party is successful, if UFC is required to indemnify a third party with respect to a claim, or if UFC is required to, or decides to, cease use of a brand, rebrand or obtain non-infringing intellectual property (such as through a license), which may not be available on commercially reasonable terms, if at all, or may be nonexclusive, thereby giving UFC’s competitors and other third parties access to the same intellectual property rights licensed to UFC, it could result in harm to UFC’s competitive position and could adversely affect its business and financial condition. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments related to UFC’s intellectual property and if securities analysts or investors perceive these results to be negative, it could have an adverse effect on the valuation of UFC. Any adverse ruling or perception of an adverse ruling in defending UFC’s intellectual property rights could have an adverse impact on UFC’s cash position. Such litigation or proceedings could increase UFC’s operating losses and reduce the resources available for development

 

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activities and future sales, marketing and distribution activities. If UFC is found to infringe, misappropriate or otherwise violate a third party’s intellectual property rights, and it is unsuccessful in demonstrating that such rights are invalid or unenforceable, it may be required to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, or pay substantial royalties and other fees.

UFC may license its trademarks and trade names to third parties, such as distributors, consumer product licensees and sponsors. Although these license agreements may provide guidelines for how UFC’s trademarks and trade names may be used, a breach of these agreements or misuse of UFC’s trademarks and trade names by its licensees may jeopardize its rights in or diminish the goodwill associated with its trademarks and trade names. UFC’s efforts to enforce or protect its proprietary rights and intellectual property rights related to trademarks, trade names, and service marks may be ineffective and could result in substantial costs and diversion of resources and could adversely affect its financial condition or results of operations. UFC’s technology, data and intellectual property are subject to a heightened risk of theft, unauthorized use or compromise to the extent that UFC engages in operations outside the United States, particularly in those jurisdictions that do not have comparable levels of protection of proprietary information and assets, such as intellectual property, trademarks, copyrights, trade secrets, know-how and customer information and records. Piracy, in particular, threatens to damage UFC’s business. Furthermore, in light of the compelling consumer proposition, piracy services are subject to rapid global growth. The success of UFC’s streaming video solutions (e.g., UFC Fight Pass) is directly threatened by the availability and use of pirated alternatives, including the live streaming of UFC’s live events on social media and other platforms. The value that streaming services and their customers are willing to pay for content that UFC develops may be reduced if piracy prevents these services from realizing adequate revenues.

In the event of a bankruptcy, UFC’s intellectual property licenses could be affected in numerous ways. There is a concern that a bankruptcy can result in UFC losing intellectual property rights. Although some protections are granted via the United States Bankruptcy Code to licensees of intellectual property in instances when a licensor of intellectual property files for bankruptcy, the United States Bankruptcy Code definition of intellectual property only includes trade secrets, patents and patent applications, copyrights, and mask works and does not include trademarks by themselves. Further, because UFC relies heavily on the use and licensing of trademarks, it is at risk of losing royalties and other payments from its licensees in the event of a UFC bankruptcy event.

As a result of UFC’s operations in international markets, it is subject to risks associated with the legislative, judicial, accounting, regulatory, political and economic risks and conditions specific to such markets.

UFC operates in various jurisdictions abroad, including through joint ventures, and it expects to continue to expand its international presence. UFC faces, and expects to continue to face, additional risks in the case of its existing and future international operations, including:

 

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political instability, adverse changes in diplomatic relations and unfavorable economic conditions in the markets in which UFC has international operations or into which it may expand;

 

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more restrictive or otherwise unfavorable government regulation of the entertainment, sports and sports betting industries, which could result in increased compliance costs or otherwise restrict the manner in which UFC operates and the amount of related fees it is able to charge;

 

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limitations on the enforcement of intellectual property rights;

 

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enhanced difficulties of integrating any foreign acquisitions;

 

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limitations on the ability of foreign subsidiaries to repatriate profits or otherwise remit earnings;

 

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adverse tax consequences;

 

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less sophisticated legal systems in some foreign countries, which could impair UFC’s ability to enforce its contractual rights in those countries;

 

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limitations on technology infrastructure;

 

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variability in venue security standards and accepted practices; and

 

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difficulties in managing operations due to distance, language and cultural differences, including issues associated with (i) business practices and customs that are common in certain foreign countries but might be prohibited by U.S. law and UFC’s internal policies and procedures and (ii) management and operational systems and infrastructures, including internal financial control and reporting systems and functions, staffing and managing of foreign operations, which UFC might not be able to do effectively or on a cost efficient basis.

If UFC’s goodwill or intangible assets become impaired, it may be required to record a significant charge to earnings.

UFC reviews its goodwill for impairment annually as of October 1 and at any time upon the occurrence of certain events or substantive changes in circumstances that indicate the carrying amount of goodwill may not be recoverable. If such goodwill or intangible assets are deemed to be impaired, an impairment loss equal to the amount by which the carrying amount exceeds the fair value of the assets would be recognized. Adverse impacts to UFC’s business could result in impairments and significant charges to earnings.

Participants and spectators in connection with UFC’s live events are subject to potential injuries and accidents, which could subject UFC to personal injury or other claims and increase its expenses, as well as reduce attendance at its live events, causing a decrease in its revenue.

There are inherent risks to participants and spectators involved with producing, attending, or participating in live events. Injuries and accidents have occurred and may occur from time to time in the future, which could subject UFC to substantial claims and liabilities for injuries. Incidents in connection with UFC’s live events at any of its venues or venues that it rents could also result in claims, reducing operating income or reducing attendance at its events, causing a decrease in its revenues. There can be no assurance that the insurance UFC maintains will be adequate to cover any potential losses. The physical nature of many of UFC’s live events exposes the athletes that participate to the risk of serious injury or death. These injuries could include concussions, and many sports leagues and organizations have been sued by athletes over alleged long-term neurocognitive impairment arising from concussions. Although the participants in UFC’s events, as independent contractors, are responsible for maintaining their own health, disability and life insurance, UFC may provide coverage under its accident insurance and event insurance policies, if available, or its general liability insurance policies, for injuries that athletes incur while competing. To the extent such injuries are not covered by UFC’s policies, UFC may self-insure medical costs for athletes for such injuries. Liability to UFC resulting from any death or serious injury, including concussions, sustained by athletes while competing, to the extent not covered by UFC’s insurance, could adversely affect its business, financial condition, and operating results.

UFC is subject to extensive U.S. and foreign governmental regulations, and its failure to comply with these regulations could adversely affect its business.

UFC’s operations are subject to federal, state and local laws, statutes, rules, regulations, policies, and procedures in the United States and around the world, which are subject to change at any time, governing matters such as:

 

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licensing laws for athletes and the promotion and operation of MMA events;

 

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licensing laws for the supply of sports betting data and other related products to gambling operators;

 

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licensing, permitting and zoning requirements for operation of UFC’s offices, locations, venues, and other facilities;

 

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health, safety, and sanitation requirements;

 

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the service of food and alcoholic beverages;

 

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working conditions, labor, minimum wage and hour, citizenship, immigration, visas, harassment and discrimination, and other labor and employment related considerations;

 

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human rights and human trafficking, including compliance with the U.K. Modern Slavery Act and similar current and future legislation;

 

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employment of youth workers and compliance with child labor laws;

 

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compliance with the U.S. Americans with Disabilities Act of 1990 and the U.K.’s Disability Discrimination Act 1995;

 

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compliance with the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.K. Bribery Act 2010 (the “Bribery Act”) and similar regulations in other countries;

 

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compliance with applicable antitrust and fair competition laws;

 

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compliance with international trade controls, including applicable import/export regulations, and sanctions and international embargoes that may limit or prohibit UFC’s ability to do business with specific individuals or entities or in specific countries or territories;

 

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compliance with anti-money laundering and countering terrorist financing rules, currency control regulations, and statutes prohibiting tax evasion and the aiding or abetting of tax evasion;

 

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marketing activities, including the placement of gambling-related advertising at and around MMA events;

 

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environmental protection regulations;

 

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compliance with current and future privacy and data protection laws imposing requirements for the collecting, processing, storing and protection of personal or sensitive information, including the GDPR and the E.U. e-Privacy Regulation;

 

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compliance with cybersecurity laws imposing country-specific requirements relating to information systems and network design, security, operations, and use;

 

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tax laws; and

 

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imposition by foreign countries of trade restrictions, restrictions on the manner in which content is currently licensed and distributed, ownership restrictions, or currency exchange controls.

Noncompliance with these laws could subject UFC to whistleblower complaints, investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, reputational harm, adverse media coverage, and other collateral consequences. Multiple or repeated failures by UFC to comply with these laws and regulations could result in increased fines or proceedings against it, including suspension or revocation proceedings relating to licenses it is required to maintain to conduct its business. If any subpoenas or investigations are launched, or governmental or other sanctions are imposed, or if UFC does not prevail in any possible civil or criminal litigation, its business, results of operations, and financial condition could be materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees. Enforcement actions and sanctions could further harm UFC’s business, results of operations, and financial condition. There can be no assurance that a law or regulation will not be interpreted or enforced in a manner contrary to UFC’s current understanding. In addition, the promulgation of new laws, rules, and regulations could restrict or unfavorably impact UFC’s business, which could decrease demand for its events or content, reduce revenue, increase costs, or subject it to additional liabilities. For example, some legislatures have proposed laws in the past that would impose potential liability on UFC and other promoters and producers of live events for incidents that occur at their events, particularly relating to drugs and alcohol.

 

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In the United States and certain foreign jurisdictions, UFC may have direct and indirect interactions with government agencies and state-affiliated entities in the ordinary course of its business. In particular, athletic commissions and other applicable regulatory agencies require UFC to obtain licenses for promoters, medical clearances, licenses for athletes, or permits for events in order for it to promote and conduct its live events and productions. In the event that UFC fails to comply with the regulations of a particular jurisdiction, whether through its acts or omissions or those of third parties, UFC may be prohibited from promoting and conducting its live events and productions in that jurisdiction. The inability to present UFC’s live events and productions in jurisdictions could lead to a decline in various revenue streams in such jurisdictions, which could have an adverse effect on its business, financial condition, and results of operations.

UFC operates in a number of countries which are considered to be at a heightened risk for corruption. Additionally, UFC operates adjacent to industry segments, such as sports marketing, that have been the subject of past anti-corruption enforcement efforts. As a global company, a risk exists that UFC’s employees, contractors, agents, or managers could engage in business practices prohibited by applicable U.S. laws and regulations, such as the FCPA, as well as the laws and regulations of other countries prohibiting corrupt payments to government officials and others, such as the Bribery Act. There can be no guarantee that UFC’s compliance programs will prevent corrupt business practices by one or more of its employees, contractors, agents, managers, or vendors, or that regulators in the U.S. or in other markets will view its program as adequate should any such issue arise.

UFC is also required to comply with economic sanctions laws imposed by the United States or by other jurisdictions where it does business, which may restrict its transactions in certain markets, and with certain customers, business partners, and other persons and entities. As a result, UFC may be prohibited from, directly or indirectly (including through a third-party intermediary), procuring goods, services, or technology from, or engaging in transactions with, individuals and entities subject to sanctions, including sanctions arising from the conflict involving Russia and Ukraine. UFC cannot guarantee that its efforts to remain in compliance with sanctions requirements will be successful. Any violation of anti-corruption or sanctions laws could result in fines, civil and criminal sanctions against UFC or its employees, prohibitions on the conduct of its business (e.g., debarment from doing business with International Development Banks and similar organizations), and damage to its reputation, which could have an adverse effect on its business, financial condition, and results of operations.

UFC has a substantial amount of indebtedness, which could adversely affect its business, and we cannot be certain that additional financing will be available on reasonable terms when required, or at all.

As of June 30, 2023, UFC had an aggregate of $2.7 billion outstanding indebtedness under the UFC Credit Facilities, with the ability to borrow approximately $205 million more pursuant to the revolving credit facility under the UFC Credit Facilities.

If UFC cannot generate sufficient cash flow from operations to service this debt, it may need to refinance this debt, dispose of assets or issue equity to obtain necessary funds. Additionally, UFC’s credit rating has in the past and may in the future be downgraded. UFC does not know whether it will be able to take any of these actions on a timely basis, on terms satisfactory to UFC or at all.

This substantial amount of indebtedness could:

 

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require UFC to dedicate a substantial portion of its cash flow from operations to payments on its indebtedness, thereby reducing funds available for working capital, capital expenditures or other purposes;

 

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require UFC to refinance in order to accommodate the maturity of the term loans under the UFC Credit Facilities in 2026;

 

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increase UFC’s vulnerability to adverse economic and industry conditions, which could lead to a downgrade in its credit rating and may place it at a disadvantage compared to competitors who may have proportionally less indebtedness;

 

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increase UFC’s cost of borrowing and cause it to incur substantial fees from time to time in connection with debt amendments or refinancings; and

 

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limit UFC’s ability to obtain necessary additional financing for working capital, capital expenditures or other purposes in the future, plan for or react to changes in its business and the industries in which it operates, make future acquisitions or pursue other business opportunities, and react in an extended economic downturn.

Despite this substantial indebtedness, UFC may still have the ability to incur significantly more debt. The incurrence of additional debt could increase the risks associated with this substantial leverage, including UFC’s ability to service this indebtedness. In addition, because borrowings under the UFC Credit Facilities bear interest at a variable rate, UFC’s interest expense could increase, exacerbating these risks. The Federal Reserve has recently raised, and may in the future further raise, interest rates to combat the effects of recent high inflation. Increases in these rates may increase UFC’s interest expense. For example, for the year ended December 31, 2022, UFC’s interest expense experienced a net increase of $37.3 million, or 36.5%, compared to the year ended December 31, 2021, primarily driven by higher interest rates on UFC’s variable rate indebtedness that was partially offset by lower overall indebtedness. Although this increase did not materially impact UFC’s operations and business, further increases in interest rates and UFC’s interest expense may impact UFC’s ability to service its indebtedness, increase borrowing costs in the future and reduce UFC’s funds available for operations and other purposes. Based on the outstanding indebtedness under the UFC Credit Facilities as of December 31, 2022, a hypothetical 100 basis point increase in interest rates would have resulted in an approximately $28 million increase in annual interest expense. For further information, please read the section entitled “Management Discussion and Analysis of UFC—Results of Operations—Interest Expense, Net” beginning on page 201 of this information statement/prospectus.

From time to time, UFC may need additional financing, whether in connection with its capital improvements, acquisitions, or otherwise. UFC’s ability to obtain additional financing, if and when required, will depend on investor demand, its operating performance, the condition of the capital markets and other factors. For example, if borrowings available under UFC Holdings, LLC’s term loan and revolving credit facilities (the “UFC Credit Facilities”) are insufficient or unavailable at a reasonable cost, UFC may be required to adopt one or more alternatives to raise cash, such as incurring additional indebtedness, selling its assets, seeking to raise additional equity capital, or restructuring, which alternatives may not be available to UFC on favorable terms when required, or at all. Any of the foregoing could have a material adverse effect on UFC’s business.

Restrictive covenants applicable to the UFC Credit Facilities may restrict UFC’s ability to pursue its business strategies.

The credit agreements governing the terms of the UFC Credit Facilities restrict, among other things, asset dispositions, mergers and acquisitions, dividends, stock repurchases and redemptions, other restricted payments, indebtedness, loans and investments, liens, and affiliate transactions. The UFC Credit Facilities also contain customary events of default, including upon a change in control. These covenants, among other things, limit UFC’s ability to fund future working capital needs and capital expenditures, engage in future acquisitions or development activities, or otherwise realize the value of its assets and opportunities fully. Such covenants could limit the flexibility of UFC’s subsidiaries in planning for, or reacting to, changes in the sports industry. UFC’s ability to comply with these covenants is subject to certain events outside of its control. Additionally, UFC may in the future need to amend or obtain waivers to its existing covenants, and cannot guarantee that it will be able to obtain those amendments or waivers on commercially reasonable terms or at all. If UFC is unable to comply with these covenants, the lenders under the UFC Credit Facilities could terminate their commitments and accelerate repayment of UFC’s outstanding borrowings, which also may result in the acceleration of or default under any other debt UFC may incur in the future to which a cross-acceleration or cross-default provision applies. If such an acceleration were to occur, UFC may be unable to obtain adequate refinancing indebtedness for its outstanding borrowings on favorable terms, or at all. UFC has pledged a significant portion of its assets as collateral under its UFC Credit Facilities. If UFC is unable to repay its outstanding borrowings when due, the lenders under the UFC Credit Facilities will also have the right to proceed against the collateral granted to them to secure the indebtedness owed to them, which may have an adverse effect on its business, financial condition, and operating results.

 

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UFC will require a significant amount of cash to service its indebtedness. The ability to generate cash or refinance UFC’s indebtedness as it becomes due depends on many factors, some of which are beyond UFC’s control.

UFC’s ability to make payments on, or to refinance its obligations under, its indebtedness will depend on future operating performance and on economic, financial, competitive, legislative, regulatory, and other factors. Many of these factors are beyond UFC’s control. UFC’s consolidated cash balance also includes cash from other consolidated non-wholly owned entities. These entities may have restrictions in their ability to distribute cash to the rest of the company, including under the terms of applicable operating agreements or debt agreements, which may require the approval of certain third parties based on the timing and amount of distribution. It cannot be assured that UFC’s business will generate sufficient cash flow from operations or that future borrowings will be available to UFC in an amount sufficient to enable UFC to satisfy its obligations under its indebtedness or to fund its other needs. In order for UFC to satisfy its obligations under its indebtedness, UFC must continue to execute its business strategy. If UFC is unable to do so, it may need to refinance all or a portion of its indebtedness on or before maturity.

UFC could be subject to union-organizing and labor disruption, which could adversely affect UFC’s business.

Though UFC’s businesses are not subject to collective bargaining agreements, UFC’s businesses may be interrupted as a result of labor disputes by outside unions, or internal efforts, attempting to unionize one or more groups of employees. There have also been efforts to organize the athletes that participate in UFC’s events. A work stoppage or other labor disruption at one or more of UFC’s operated venues or at its promoted events could have an adverse effect on its business, financial condition, and results of operations. UFC cannot predict the effect that a potential work stoppage or other labor disruption would have on its business.

UFC may face labor shortages that could slow its growth.

The successful operation of UFC’s business depends upon its ability to attract, motivate, and retain a sufficient number of qualified employees. Shortages of labor may make it increasingly difficult and expensive to attract, train, and retain the services of a satisfactory number of qualified employees and could adversely impact UFC’s events and productions. Competition for qualified employees could require UFC to pay higher wages, which could result in higher labor costs and could have an adverse effect on its business, financial condition, and results of operations.

UFC also relies on contingent workers in order to staff its live events and productions, and its failure to manage its use of such workers effectively could adversely affect its business, financial condition, and results of operations. UFC could potentially face various legal claims from contingent workers in the future, including claims based on new laws or stemming from allegations that contingent workers or employees are misclassified. UFC may be subject to shortages, oversupply, or fixed contractual terms relating to contingent workers. UFC’s ability to manage the size of, and costs associated with, the contingent workforce may be subject to additional constraints imposed by local laws.

Exchange rates may cause fluctuations in UFC’s results of operations.

Because UFC derives revenues from its international operations, it may incur currency translation losses or gains due to changes in the values of foreign currencies relative to the U.S. Dollar. UFC cannot, however, predict the effect of exchange rate fluctuations upon future operating results. Although UFC cannot predict the future relationship between the U.S. Dollar and the currencies used by its international businesses, principally the British Pound and the Brazilian Real, UFC experienced a foreign exchange rate net loss of $0.9 million for the six months ended June 30, 2023.

 

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Costs associated with, and UFC’s ability to, obtain insurance could adversely affect its business.

As a result of heightened concerns and challenges regarding property, casualty, liability, business interruption, cancellation, and other insurance coverage have resulted from terrorist and related security incidents along with varying weather-related conditions and incidents, UFC may experience increased difficulty obtaining high policy limits of coverage at a reasonable cost and with reasonable deductibles. UFC cannot assure you that future increases in insurance costs and difficulties obtaining high policy limits and reasonable deductibles will not adversely impact its profitability, thereby possibly impacting its operating results and growth. UFC has a significant investment in equipment when holding live events at venues across the world, which are generally located near major cities and which hold events typically attended by a large number of people.

UFC cannot assure you that its insurance policy coverage limits, including insurance coverage for property, casualty, liability and business interruption losses, and acts of terrorism, would be adequate should one or multiple adverse events occur, or that its insurers would have adequate financial resources to sufficiently or fully pay its related claims or damages. UFC cannot assure you that adequate coverage limits will be available, offered at a reasonable cost, or offered by insurers with sufficient financial soundness. The occurrence of such an incident or incidents affecting any one or more of UFC’s venues could have an adverse effect on its financial position and future results of operations if asset damage or company liability were to exceed insurance coverage limits, or if an insurer were unable to sufficiently or fully pay UFC’s related claims or damages.

Risks Related to New PubCo After the Completion of the Transactions

In addition to the other information included or incorporated by reference into this information statement/prospectus, including the matters addressed in “Cautionary Statement Regarding Forward-Looking Statements,” you should carefully consider the following risks related to the business of the combined company, New PubCo. In addition, you should read and consider the risks associated with each of the businesses of WWE and UFC, because these risks may also affect the combined company. For more information regarding the risks associated with the businesses of UFC and WWE, see “Risks Relating to UFC’s Business” and “Risks Relating to WWE’s Business.”

Risks Related to the New PubCo Business

Combining the businesses of WWE and UFC may be more difficult, time-consuming or costly than expected and the actual benefits of combining the businesses of WWE and UFC may be less than expected, either or both of which may adversely affect New PubCo’s future results.

The success of the Transactions, including the merger, will depend, in part, on New PubCo’s ability to realize the anticipated benefits from combining the businesses of WWE and UFC as further described in the section entitled “The Transactions—WWE’s Reasons for the Transactions; Recommendation of the WWE Board of Directors” beginning on page 98 of this information statement/prospectus.

Such anticipated benefits may not be achieved if the businesses of WWE and UFC are not successfully combined. WWE and UFC have been operated as independent businesses, and they will continue to be operated as such until the completion of the Transactions, including the merger. Upon completion of the Transactions, including the merger, the management of New PubCo may face significant challenges in integrating the technologies, organizations, systems, procedures, policies and operations, as well as addressing the different business cultures at WWE and UFC, managing the increased scale and scope of the combined businesses, identifying and eliminating duplicative programs, and retaining key personnel. If New PubCo as a combined company is not successfully integrated, the anticipated benefits of the Transactions, including the merger, may not be realized fully or at all or may take longer to realize than expected. Actual synergies, if achieved, may be less than expected and may take longer to achieve than anticipated.

The integration of the businesses of WWE and UFC may also be complex and time consuming and require substantial resources and effort. In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized as a result. The integration process and other

 

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disruptions resulting from the Transactions, including the merger, may also disrupt WWE’s or UFC’s ongoing businesses operations and/or adversely affect WWE’s or UFC’s relationships with employees, customers, clients, partners, regulators and others with whom WWE and UFC have business or other dealings. Such consequences of the integration process may adversely affect New PubCo’s business and results of its operations.

The financial assumptions, estimates, projections and synergies considered by the WWE Board and its financial advisors may not be realized, which may adversely affect the market price of New PubCo Class A common stock following the completion of the Transactions, including the merger.

In connection with the WWE Board’s evaluation of the Transactions, including the merger, WWE’s management prepared and provided to the WWE Board certain unaudited prospective financial information regarding WWE’s and UFC’s anticipated future operations as standalone companies without giving effect to the Transactions, including the merger, and as if the Transactions, including the merger, had not been contemplated, as well as estimated revenue and cost synergies of New PubCo as a combined company. Such unaudited prospective financial information was also provided to WWE’s financial advisors for their use and reliance in connection with their financial analyses and opinions. The unaudited prospective financial information with respect to WWE was also provided to Endeavor and its financial advisor to facilitate their respective evaluations of the Transactions, including the merger. For further information, please read the section entitled “The Transactions—Certain Unaudited Prospective Financial Information” beginning on page 105 of this information statement/prospectus.

The unaudited prospective financial information was prepared by, or directed by, the management of WWE. Such unaudited prospective financial information is inherently based on various estimates and assumptions that are subject to the judgment of those preparing them and is also subject to significant economic, competitive, industry and other uncertainties and contingencies, all of which are difficult or impossible to predict and many of which are beyond the control of WWE and New PubCo. There can be no assurance that the prospective results and synergies will be realized or that actual results and synergies will not be significantly higher or lower than estimated. Moreover, as such unaudited prospective financial information covers multiple years, such information by its nature becomes less predictive with each successive year. The failure of the prospective results or synergies to be realized or any deviation of actual results may adversely affect the financial position of New PubCo and, therefore, the market price of New PubCo Class A common stock following completion of the Transactions, including the merger.

New PubCo’s business may involve potential internal conflicts of interest due to the breadth and scale of its platform.

New PubCo expects to have to manage actual and potential internal conflicts of interest in its business due to the expected breadth and scale of its platform. Different parts of the New PubCo business may have actual or potential conflicts of interest with each other, including its media production, events production, owned sports properties, sponsorship, and content development businesses. Although New PubCo expects to attempt to manage these conflicts appropriately, any failure to adequately address or manage internal conflicts of interest could adversely affect its reputation, and the willingness of third parties to work with New PubCo may be affected if it fails, or appears to fail, to deal appropriately with actual or perceived internal conflicts of interest, which could have an adverse effect on New PubCo’s business, financial condition, and results of operations. For more information regarding potential conflicts of interest related to New PubCo’s status as a controlled company, see “—New PubCo will be controlled by Endeavor. The interests of Endeavor may differ from the interests of other stockholders of New PubCo.”

The unaudited pro forma combined condensed financial statements included herein are presented for informational purposes only and may not be an indication of New PubCo’s financial condition or results of operations in the future.

The unaudited pro forma combined condensed financial statements included herein are presented for informational purposes only and are not intended to, and are not necessarily indicative of, what New PubCo’s

 

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actual financial condition or results of operations would have been had the Transactions been completed on the date indicated. The assumptions used in preparing the pro forma financial information may not prove to be accurate and other factors may affect New PubCo’s financial condition or results of operations. Accordingly, New PubCo’s financial condition and results of operations in the future may not be evident from or consistent with such pro forma financial information.

New PubCo will depend on the continued service of members of its executive management and other key employees, as well as management of acquired businesses, the loss or diminished performance of whom could adversely affect New PubCo’s business.

New PubCo’s performance will be substantially dependent on the performance of members of its executive management and other key employees, as well as management of acquired businesses. New PubCo may seek to acquire businesses that have strong management teams and may rely on these individuals to conduct day-to-day operations and pursue growth. Although New PubCo expects to enter into employment and severance protection agreements with certain members of its senior management team and expects to sign employment agreements with the management of any acquired businesses, New PubCo cannot be sure that any member of its senior management or management of any acquired businesses will remain with New PubCo or that they will not compete with it in the future. The loss of any member of New PubCo’s senior management team could impair its ability to execute its business plan and growth strategy, have a negative impact on its revenues and the effective working relationships that its executive management have developed, and cause employee morale problems and the loss of additional key employees, agents, managers, and clients.

New PubCo will share control in joint venture projects, other investments, and strategic alliances, which will limit its ability to manage third-party risks associated with these projects.

New PubCo may participate in joint ventures, other non-controlling investments, and strategic alliances in the future. In these joint ventures, investments, and strategic alliances, New PubCo may have shared control over the operation of the assets and businesses. As a result, such investments and strategic alliances may involve risks such as the possibility that a partner in an investment might become bankrupt, be unable to meet its capital contribution obligations, have economic or business interests or goals that are inconsistent with New PubCo’s business interests or goals, or take actions that are contrary to New PubCo’s instructions or to applicable laws and regulations. In addition, New PubCo may be unable to take action without the approval of its partners, or its partners could take binding actions without its consent. Consequently, actions by a partner or other third party could expose New PubCo to claims for damages, financial penalties, additional capital contributions, and reputational harm, any of which could have an adverse effect on its business, financial condition, and results of operations.

Preparing New PubCo’s financial statements will require it to have access to information regarding the results of operations, financial position, and cash flows of its joint ventures and other investments. Any deficiencies in New PubCo’s internal controls over financial reporting may affect its ability to report its financial results accurately or prevent or detect fraud. Such deficiencies also could result in restatements of, or other adjustments to, New PubCo’s previously reported or announced operating results, which could diminish investor confidence and reduce the market price for its New PubCo Class A common stock. Additionally, if New PubCo’s joint ventures and other investments are unable to provide this information for any meaningful period or fail to meet expected deadlines, it may be unable to satisfy its financial reporting obligations or timely file its periodic reports.

Increasing scrutiny of, and evolving expectations for, sustainability and environmental, social, and governance initiatives could increase New PubCo’s costs, harm its reputation, or otherwise adversely impact its business.

New PubCo, as with other companies, may face increasing scrutiny related to its environmental, social and governance (“ESG”) practices and disclosures from certain investors, capital providers, shareholder advocacy groups, other market participants, customers, and other stakeholder groups. With this increased focus, public

 

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reporting regarding ESG practices is becoming more broadly expected. While New PubCo may at times engage in voluntary initiatives, such initiatives may be costly and may not have the desired effect. For example, New PubCo may not ultimately be able to achieve any initiatives or commitments it undertakes due to cost, technological constraints, or other factors outside of its control. Moreover, actions or statements that New PubCo may take based on expectations or assumptions that it believes to be reasonable at the time made may subsequently be determined to be erroneous or be subject to misinterpretation. If New PubCo’s ESG practices and reporting do not meet investor, consumer, employee, or other stakeholder expectations, which continue to evolve, its business, brand or reputation may be negatively impacted and subject to investor or regulator engagement regarding such matters. Furthermore, some market participants, including major institutional investors, may also use third-party benchmarks or scores to measure New PubCo’s ESG practices in making investment and voting decisions. In addition, new sustainability rules and regulations have been adopted and may continue to be introduced in various states and other jurisdictions. Operating in more than one jurisdiction may make New PubCo’s compliance with any applicable ESG and sustainability-related rules more complex and expensive, and potentially expose it to greater levels of legal risks associated with its compliance. New PubCo’s failure to comply with any applicable rules or regulations could lead to penalties and adversely impact its reputation, customer attraction and retention, access to capital and employee retention. Such ESG matters may also cause additional impacts on New PubCo’s business, financial condition, or results of operations.

The terms of HoldCo’s services agreement with Endeavor following the completion of the Transactions, including the merger, may be more favorable than HoldCo would be able to obtain from an unaffiliated third party. If HoldCo were to cease being a subsidiary of Endeavor, HoldCo may be unable to replace the services Endeavor provides in a timely manner or on comparable terms.

Endeavor and certain of its affiliates, on the one hand, and HoldCo, on the other hand, will enter into a services agreement pursuant to which Endeavor and HoldCo will agree to provide each other with certain specified services following the completion of the Transactions, including the merger, including services relating to content, events, gaming rights, marketing, sponsorship, accounting, employee benefits, information technology, legal support and communications. The services agreement will have a term of seven years, subject to successive automatic 12-month renewal terms, unless Endeavor provides written notice of its intent not to renew.

WWE negotiated these arrangements with Endeavor in anticipation of WWE becoming a subsidiary of HoldCo. Although Endeavor will be contractually obligated to provide HoldCo with services during the term of the services agreement, HoldCo cannot be assured that these services will be sustained at the same level after the expiration of such services agreement, or that HoldCo will be able to replace these services in a timely manner or on comparable terms. If services are no longer procured from Endeavor pursuant to those arrangements, or if certain arrangements are terminated, HoldCo’s costs of procuring those services from third parties may increase. The services agreement also contains terms and provisions that may be more favorable to HoldCo than terms and provisions HoldCo might have obtained in arm’s-length negotiations with unaffiliated third parties. For a description of the services agreement, see “Summary of Certain Agreements Related to the Transactions” beginning on page 180 of this information statement/prospectus.

Risks Related to New PubCo’s Organization and Structure

New PubCo will be a holding company and its principal asset will be equity interests in HoldCo and, accordingly, New PubCo will be dependent upon distributions from HoldCo to pay taxes and other expenses.

New PubCo will be a holding company and its principal asset will be its ownership interest of HoldCo. New PubCo will not have independent means of generating revenue. Because HoldCo is intended to be treated as a pass-through entity for U.S. federal income tax purposes, New PubCo and other members of HoldCo (or their indirect equity holders) generally will be subject to U.S. federal income taxes on their allocable share of HoldCo’s taxable income or gain. As the sole managing member of HoldCo, New PubCo generally intends to cause HoldCo to make quarterly distributions to the members of HoldCo (or otherwise provide them with

 

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liquidity) in amounts sufficient to cover the taxes on their allocable share of the taxable income of HoldCo after the consummation of the Transactions. However, there can be no assurance that HoldCo and its subsidiaries will generate sufficient cash flow to distribute funds to New PubCo to cover New PubCo’s taxes and other expenses or that applicable state law and contractual restrictions, including negative covenants in any applicable debt instruments, will permit such distributions. Subsidiaries of HoldCo are currently subject to debt instruments or other agreements that may restrict distributions from HoldCo’s subsidiaries and HoldCo’s ability to make distributions to New PubCo, which could adversely affect New PubCo’s cash flows, liquidity and financial condition.

As a result of (among other considerations) potential differences in the amount of net taxable income allocable to the members of HoldCo under applicable tax rules and the lower tax rate applicable to corporations (like New PubCo) as compared to individuals (certain individuals will own indirect interests in HoldCo and be subject to tax on income earned by HoldCo), it is anticipated that the tax distributions made by HoldCo to New PubCo may exceed the tax liabilities that New PubCo is required to pay on its allocable share of income of HoldCo. HoldCo’s payment of tax distributions to the members of HoldCo could result in the distribution of cash out of HoldCo that is in excess of what is required to permit the direct or indirect securityholders of HoldCo to pay their tax liabilities attributable to their direct or indirect ownership of HoldCo, which could have an adverse effect on HoldCo’s liquidity.

New PubCo will have discretion on how to utilize cash distributed to New PubCo (including tax distributions) that is in excess of cash actually required to pay New PubCo’s taxes or other costs and expenses as a public company, including retaining such cash, loaning such cash to HoldCo or distributing such cash. No adjustments to the exchange ratio for common units and corresponding shares of New PubCo Class B common stock will be made as a result of any loans made by New PubCo to HoldCo or as a result of any retention of cash by New PubCo. To the extent New PubCo does not distribute any cash it holds and instead, for example, holds such cash balances, or lends them to HoldCo or HoldCo’s subsidiaries, this may result in shares of New PubCo Class A common stock increasing in value relative to the value of HoldCo common units. The holders of common units may benefit from any value attributable to such cash balances if they acquire shares of New PubCo Class A common stock in exchange for their common units.

In addition to the foregoing, it is also possible that in certain situations New PubCo may not receive distributions from HoldCo sufficient to pay its tax liabilities attributable to New PubCo’s allocable share of income and gain of HoldCo. In such situations, HoldCo may loan cash to New PubCo to enable New PubCo to pay its tax liabilities, and HoldCo may charge New PubCo interest on any such loans in an amount up to 50 basis points in excess of HoldCo’s current cost of debt capital. These loans could affect New PubCo’s liquidity and adversely affect its financial results and condition.

New PubCo will be controlled by Endeavor. The interests of Endeavor may differ from the interests of other stockholders of New PubCo.

Upon the completion of the Transactions, including the merger, subsidiaries of Endeavor are expected to collectively own 51.0% of the voting power of New PubCo and 51.0% of the economic interests in HoldCo. Under the governance agreement, Endeavor may acquire additional shares of New PubCo common stock up to an aggregate of 75.0% of economic or voting interest in New PubCo or HoldCo without the approval of a majority of the independent directors of the New PubCo Board. Endeavor will also conduct various administrative functions of New PubCo pursuant to the services agreement. The provision of these services will provide Endeavor significant influence over of the daily operations and internal functions of New PubCo.

Subject to consent rights and the other agreements described herein, including the governance agreement and the services agreement, Endeavor will have the ability to substantially control New PubCo, including the ability to control any action requiring the general approval of its stockholders, including the election of a majority of the New PubCo Board members, the adoption of amendments to its certificate of incorporation and

 

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stockholder amendments to its bylaws, and the approval of any merger or sale of substantially all of its assets, subject to the terms of the governance agreement relating to Endeavor’s agreement to vote in favor of the director nominees not designated by Endeavor as described in more detail in “Summary of Certain Agreements Related to the Transactions—Governance Agreement” beginning on page 181 of this information statement/prospectus. This concentration of ownership and voting power may also delay, defer, or even prevent an acquisition by a third party or other change of control of New PubCo, and may make some transactions more difficult or impossible without the support of Endeavor, even if such events are in the best interests of minority stockholders. This concentration of voting power may have a negative impact on the price of New PubCo Class A common stock.

Endeavor’s interests may not be fully aligned with holders of New PubCo Class A common stock, which could lead to actions that are not in their best interest, because Endeavor will, immediately after the completion of the Transactions, hold its economic interest in the New PubCo business through HoldCo, rather than through New PubCo. For example, Endeavor and subsidiaries of Endeavor may have different tax positions from New PubCo, which could influence Endeavor’s decisions regarding whether and when New PubCo should dispose of assets or incur new or refinance existing indebtedness. In addition, the structuring of future transactions may take into consideration tax or other considerations relevant to Endeavor or its subsidiaries even where no similar considerations would apply to New PubCo. The significant ownership in New PubCo held by Endeavor’s subsidiaries, as well as the ability of Endeavor’s subsidiaries to control the operations of New PubCo pursuant to the services agreement and resulting ability to effectively control New PubCo may discourage someone from making a significant equity investment in New PubCo, or could discourage transactions involving a change in control, including transactions in which holders of shares of New PubCo Class A common stock might otherwise receive a premium for their shares over the then-current market price. Subject to the contractual limitations described in the section entitled “Summary of Certain Agreements Related to the Transactions—Governance Agreement” beginning on page 181 of this information statement/prospectus, Endeavor also operates a number of businesses through its subsidiaries that may compete with New PubCo or may otherwise conflict with the interests of New PubCo, or be party to agreements or engaged in activities that prevent New PubCo from performing certain business activities or owning certain assets.

Section 203 of the DGCL (“Section 203”) may affect the ability of an “interested stockholder” to engage in certain business combinations, including mergers, consolidations or acquisitions of additional shares, for a period of three years following the time that the stockholder becomes an “interested stockholder.” An “interested stockholder” is defined to include persons owning directly or indirectly 15% or more of the outstanding voting stock of a corporation. New PubCo will elect in its amended and restated certificate of incorporation not to be subject to Section 203. Endeavor, Mr. McMahon and their respective affiliates and direct and indirect transferees will not be deemed to be “interested stockholders,” regardless of the percentage of New PubCo voting stock owned by them, and accordingly will not be subject to such restrictions.

New PubCo’s amended certificate of incorporation will provide that, to the fullest extent permitted by law, Endeavor, Mr. McMahon and their respective affiliates renounce any interest or expectancy in a transaction or matter that may be a corporate opportunity for New PubCo, or any of New PubCo’s non-employee directors have no duty to present such corporate opportunity to New PubCo and they may invest in competing businesses or do business with New PubCo’s clients or customers. To the extent that New PubCo’s non-employee directors invest in other businesses, they may have differing interests than New PubCo’s other stockholders. In addition, New PubCo may in the future partner with or enter into transactions with existing investors or their affiliates, including with respect to future investments, acquisitions, and dispositions.

New PubCo cannot predict the impact its capital structure and the concentrated control by Endeavor may have on its stock price or its business.

New PubCo cannot predict whether its multiple share class capital structure, combined with the concentrated control by Endeavor, will result in a lower trading price or greater fluctuations in the trading price

 

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of its New PubCo Class A common stock, or will result in adverse publicity or other adverse consequences. In addition, some indices are considering whether to exclude companies with multiple share classes from their membership. For example, in July 2017, FTSE Russell, a provider of widely followed stock indices, stated that it plans to require new constituents of its indices to have at least five percent of their voting rights in the hands of public stockholders. In addition, in July 2017, S&P Dow Jones, another provider of widely followed stock indices, stated that companies with multiple share classes will not be eligible for certain of their indices. As a result, New PubCo Class A common stock will likely not be eligible for these stock indices. New PubCo will not be able to assure you that other stock indices will not take a similar approach to FTSE Russell or S&P Dow Jones in the future. Exclusion from indices could make New PubCo Class A common stock less attractive to investors and, as a result, the market price of its New PubCo Class A common stock could be adversely affected.

Both Endeavor and subsidiaries of Endeavor and WWE stockholders will have a reduced ownership and voting interest after the Transactions, including the merger, and will exercise less influence over the management and policies of New PubCo.

After the completion of the Transactions, including the merger, WWE stockholders and Endeavor and subsidiaries of Endeavor will own a smaller percentage of New PubCo than they currently own of WWE and HoldCo, respectively. It is expected that subsidiaries of Endeavor will hold 51.0% and WWE securityholders will hold 49.0% of the voting power of New PubCo, in each case on a fully diluted basis, immediately after the completion of the Transactions, including the merger. Consequently, WWE stockholders, as a group, and Endeavor and subsidiaries of Endeavor, as a group, will each have reduced ownership and voting power in New PubCo as a combined company compared to their ownership and voting power in WWE and HoldCo, respectively, prior to the combination. In particular, the WWE stockholders, as a group, will have less than a majority of the ownership and voting power of New PubCo and, therefore, will be able to exercise less collective influence over the management and policies of New PubCo than they currently exercise over the management and policies of WWE. Additionally, assuming that WWE’s capitalization at the Closing is the same as it was on August 4, 2023, immediately following the completion of the Transactions, including the merger, (1) Mr. McMahon is expected to have beneficial ownership of New PubCo equity securities representing approximately 33.5% of the economic interests in New PubCo, approximately 16.4% of the voting power of New PubCo, and, indirectly, approximately 16.4% of both the economic interests in, and voting power of, HoldCo, in each case on a fully diluted basis, (2) WWE directors and executive officers other than Mr. McMahon are expected to have beneficial ownership of New PubCo equity securities representing approximately 2.5% of the economic interests in New PubCo, approximately 1.2% of the voting power of New PubCo, and, indirectly, approximately 1.2% of both the economic interests in, and voting power of, HoldCo, in each case on a fully diluted basis. (3) Ms. McMahon is expected to have beneficial ownership of New PubCo equity securities representing approximately 0.7% of the economic interests in New PubCo, approximately 0.3% of the voting power of New PubCo, and, indirectly, approximately 0.3% of both the economic interests in, and voting power of, HoldCo, in each case on a fully diluted basis, (4) Ms. McMahon Levesque is expected to have beneficial ownership of New PubCo equity securities representing approximately 2.2% of the economic interests in New PubCo, approximately 1.1% of the voting power of New PubCo, and, indirectly, approximately 1.1% of both the economic interests in, and voting power of, HoldCo, in each case on a fully diluted basis.

New PubCo will have a significant amount of indebtedness and may need to incur more in the future, which could adversely affect its business.

New PubCo and its subsidiaries will have a significant amount of indebtedness following completion of the Transactions and may need to incur more in the future. In addition, in connection with executing its business strategies following the Transactions, New PubCo expects to evaluate the possibility of investing in additional target assets and making other strategic investments, and it may elect to finance these endeavors by incurring additional indebtedness.

This significant amount of indebtedness could:

 

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require New PubCo to dedicate a substantial portion of its cash flow from operations to payments on its indebtedness, thereby reducing funds available for working capital, capital expenditures or other purposes;

 

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increase New PubCo’s vulnerability to adverse economic and industry conditions, which could lead to a downgrade in its credit rating and may place it at a disadvantage compared to competitors who may have proportionally less indebtedness;

 

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increase New PubCo’s cost of borrowing and cause it to incur substantial fees from time to time in connection with debt amendments or refinancings; and

 

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limit New PubCo’s ability to obtain necessary additional financing for working capital, capital expenditures or other purposes in the future, plan for or react to changes in its business and the industries in which it operates, make future acquisitions or pursue other business opportunities, and react in an extended economic downturn.

Moreover, New PubCo may be required to raise substantial additional capital to execute its business strategy. New PubCo’s ability to arrange additional financing will depend on, among other factors, its financial position and performance, as well as prevailing market conditions and other factors beyond its control. If New PubCo is unable to obtain additional financing, its credit ratings could be further adversely affected, which could further raise its borrowing costs and further limit its future access to capital and its ability to satisfy its obligations under its indebtedness.

If Endeavor or its subsidiaries sell a controlling interest in New PubCo to a third party in a private transaction, WWE stockholders may not realize any change of control premium on shares of New PubCo Class A common stock and it may become subject to the control of a presently unknown third party.

Following the completion of the Transactions, including the merger, Endeavor’s subsidiaries will own a controlling equity interest in New PubCo. Endeavor will have the ability, should it choose to do so, to sell some or all of its subsidiaries’ shares of New PubCo’s capital stock (or shares of New PubCo capital stock that Endeavor’s subsidiaries may obtain) in a privately negotiated transaction, which, if sufficient in size, could result in a change of control of New PubCo. Further, the distribution or sale by Endeavor’s subsidiaries of a substantial number of shares after the Transactions, including the merger, even if not a controlling interest, or a perception that a distribution or such sales could occur, could significantly reduce the market price of New PubCo Class A common stock.

The ability of Endeavor’s subsidiaries to privately sell shares of New PubCo’s capital stock, with no requirement for a concurrent offer to be made to acquire all of the shares of New PubCo Class A common stock that will be publicly traded hereafter, could prevent you from realizing any change of control premium on your shares of New PubCo Class A common stock that may otherwise accrue to Endeavor’s subsidiaries on a private sale of New PubCo’s capital stock. Additionally, if Endeavor’s subsidiaries privately sell a controlling interest in New PubCo, New PubCo may become subject to the control of a presently unknown third party. Such third party may have conflicts of interest with those of other stockholders. In addition, if Endeavor’s subsidiaries sell a controlling interest in New PubCo to a third party, New PubCo future indebtedness may be subject to acceleration, Endeavor may terminate certain other arrangements, and New PubCo’s other commercial agreements and relationships could be impacted, all of which may adversely affect New PubCo ability to run its business as described herein and may have an adverse effect on its operating results and financial condition.

New PubCo will be exempt from certain corporate governance requirements since it will be a “controlled company” within the meaning of NYSE rules, and as a result its stockholders will not have the protections afforded by these corporate governance requirements.

Endeavor will control more than 50% of New PubCo’s combined voting power for the election of the New PubCo Board. As a result, New PubCo will be considered a “controlled company” for the purposes of NYSE rules and corporate governance standards, and therefore will be permitted to, and intends to, elect not to comply with certain corporate governance requirements of the NYSE, including, for example, the requirement to

 

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establish a nominating and corporate governance committee composed entirely of independent directors. For so long as New PubCo remains a controlled company, it may at any time and from time to time, utilize any or all of the applicable governance exemptions available under the NYSE rules. Accordingly, holders of New PubCo Class A common stock will not have the same protections afforded to stockholders of companies that are subject to all of the rules and corporate governance standards of NYSE, and the ability of New PubCo’s independent directors to influence its business policies and affairs may be reduced. New PubCo expects to remain a controlled company until Endeavor no longer controls more than 50% of its combined voting power.

Under the terms of the transaction agreement, the New PubCo Board will consist of 11 members who will be determined prior to the Closing, five of whom will be selected by WWE and six of whom will be selected by Endeavor. As such, while New PubCo will be a controlled company, a majority of New PubCo directors will be independent. For further information regarding the New PubCo Board and its committees following the Closing, please see “Summary of Certain Agreements Related to the Transactions—Governance Agreement” beginning on page 181 of this information statement/prospectus.

If New PubCo is unable to effectively implement or maintain a system of internal control over financial reporting, it may not be able to accurately or timely report its financial results and its stock price could be adversely affected.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), New PubCo will be required to furnish a report by its management on its internal control over financial reporting, including an attestation report on internal control over financial reporting issued by its independent registered public accounting firm, beginning with its second annual report as a public company. To achieve compliance with Section 404 of the Sarbanes-Oxley Act, New PubCo will be engaged in a process to document and evaluate its internal control over financial reporting, which is both costly and challenging. New PubCo will need to dedicate internal resources, potentially engage outside consultants, adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite New PubCo’s efforts, there is a risk that neither it nor its independent registered public accounting firm will be able to conclude within the prescribed timeframe that its internal control over financial reporting is effective as required by Section 404 of the Sarbanes-Oxley Act. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of New PubCo’s financial statements. New PubCo could also become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources.

Provisions in New PubCo’s organizational documents and certain rules imposed by regulatory authorities may delay or prevent its acquisition by a third party.

New PubCo’s amended and restated certificate of incorporation and bylaws will contain several provisions that may make it more difficult or expensive for a third party to acquire control of New PubCo without the approval of its Board. These provisions, which may delay, prevent, or deter a merger, acquisition, tender offer, proxy contest or other transaction that stockholders may consider favorable, will include the following:

 

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advance notice requirements for stockholder proposals and director nominations;

 

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provisions limiting stockholders’ ability to call special meetings of stockholders, to require special meetings of stockholders to be called and to take action by written consent; and

 

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the ability of the New PubCo Board to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by the New PubCo Board.

 

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These provisions of New PubCo’s certificate of incorporation and bylaws could discourage potential takeover attempts and reduce the price that investors might be willing to pay for shares of New PubCo Class A common stock in the future, which could reduce the market price of the New PubCo Class A common stock.

The provisions of New PubCo’s certificate of incorporation requiring exclusive venue in the Court of Chancery in the State of Delaware for certain types of lawsuits and the federal district courts of the United States for the resolution of any complaint asserting a cause of action under the Securities Act may have the effect of discouraging lawsuits against New PubCo’s Directors and officers.

New PubCo’s amended and restated certificate of incorporation will provide that, unless New PubCo consents in writing to the selection of an alternative forum, (A) the Court of Chancery of the State of Delaware be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of New PubCo, (ii) any action asserting a claim of breach of fiduciary duty owed by any director, officer, agent or other employee or stockholder of New PubCo to it or its stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, the amended and restated certificate of incorporation or New PubCo’s bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) any action asserting a claim governed by the internal affairs doctrine, in each case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein or, if such court does not have subject matter jurisdiction thereof, the federal district court located in the State of Delaware; and (B) the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Notwithstanding the foregoing, the exclusive forum provision shall not apply to claims seeking to enforce any liability or duty created by the Exchange Act. Although New PubCo believes this provision benefits it by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against its directors and officers. It is possible that, in connection with any applicable action brought against New PubCo, a court could find the choice of forum provisions contained in New PubCo’s amended and restated certificate of incorporation to be inapplicable or unenforceable in such action. If a court were to find the choice of forum provisions contained in New PubCo’s amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, New PubCo may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect its business, financial condition, or results of operations.

UFC has no history of operating as a publicly traded company separate from Endeavor and has no history of operating with WWE as a combined publicly traded company. New PubCo’s pro forma financial information, therefore, is not necessarily representative of the results that New PubCo would have achieved as a combined, publicly traded company and may not be a reliable indicator of its future results.

The historical information about UFC herein refers to its businesses as operated by and integrated with Endeavor. New PubCo’s pro forma financial information included herein is derived from the consolidated financial statements and accounting records of WWE and, with respect to UFC, Endeavor. Accordingly, the pro forma financial information included herein does not necessarily reflect the financial condition, results of operations or cash flows that New PubCo would have achieved as a publicly traded company during the periods presented or those that it will achieve in the future primarily as a result of the factors described below:

Prior to the Transactions, UFC’s businesses have been operated by Endeavor as part of Endeavor’s broader corporate organization, rather than as a separate, publicly traded company. Endeavor and its affiliates supported UFC in various corporate functions such as legal, treasury, accounting, auditing, human resources, corporate affairs and finance. New PubCo’s pro forma financial results reflect allocations of corporate expenses from Endeavor for such functions and are likely to be less than the expenses New PubCo would have incurred had it operated as a separate, publicly-traded company. Following the Transactions, including the merger, the cost related to such functions previously performed by Endeavor, or such functions that will be performed by Endeavor pursuant to the services agreement, may therefore increase. Currently, the UFC business is integrated with the other businesses of Endeavor. Historically, UFC and Endeavor have shared economies of scope and

 

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scale in costs, employees, vendor relationships and customer relationships. Although similar economies of scale and scope may exist as a combined company with WWE, and although New PubCo will enter into transition agreements with Endeavor, including the services agreement, these arrangements may not fully capture the benefits that UFC had enjoyed as a result of being integrated with Endeavor and may result in New PubCo paying higher charges than in the past for these services. This could have an adverse effect on New PubCo’s results of operations and financial condition following the completion of the Transactions, including the merger.

Following the completion of the Transactions, New PubCo may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements.

After the completion of the Transactions, the cost of capital for New PubCo’s businesses may be higher than Endeavor’s or WWE’s cost of capital prior to the Transactions, including the merger.

As a public company, New PubCo’s costs may be significant, and the regular operations of its business may be disrupted.

New PubCo expects to in the future incur significant additional legal, accounting, reporting, and other expenses as a result of having publicly traded common stock, including, but not limited to, increased costs related to auditor fees, legal fees, directors’ fees, directors and officers insurance, investor relations, and various other costs. New PubCo also expects to incur incremental costs associated with corporate governance requirements, including requirements under the Exchange Act, the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as well as rules implemented by the SEC and the Public Company Accounting Oversight Board. Compliance with these rules and regulations will make some activities more difficult, time-consuming, or costly, and increase demand, and, as a result, may place a strain on New PubCo’s systems and resources. Moreover, the additional demands associated with being a public company may disrupt regular operations of New PubCo’s business by diverting the attention of some of New PubCo’s senior management team away from revenue producing activities.

In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. New PubCo will invest and intends to continue to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If New PubCo’s efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against New PubCo, which could have an adverse effect on its business, financial condition, and results of operations.

The competitive opportunity provisions in the New PubCo charter could enable certain directors, principals, officers, employees, members and/or other representatives of Endeavor, Mr. McMahon or their respective affiliates to benefit from competitive opportunities that might otherwise be available to New PubCo.

New PubCo’s Charter will provide that, to the fullest extent permitted by law, New PubCo renounces any interest or expectancy in a transaction or matter that may be a competitive opportunity for certain directors, principals, officers, employees, members and/or other representatives of Endeavor, Mr. McMahon or their respective affiliates (the “Identified Persons”) (other than in their capacities as directors of New PubCo), and such Identified Persons have no duty to refrain from directly or indirectly (1) participating or otherwise engaging in any competitive opportunity, (2) otherwise competing with New PubCo or any of its controlled affiliates, (3) otherwise doing business or transacting with any potential or actual customer, supplier or other business

 

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relation of New PubCo or any of its controlled affiliates or (4) otherwise employing or engaging any officer, employee or other service provider of New PubCo or any of its controlled affiliates. In addition, the Identified Persons have no duty to present any such competitive opportunity to New PubCo. To the extent that the Identified Persons engage in any of the foregoing actions, they may have differing interests than New PubCo’s other stockholders. For a more complete description of the terms of the New PubCo charter, see the section titled “Description of New PubCo’s Capital Stock” beginning on page 257 of this information statement/prospectus.

After the Transactions, including the merger, certain of New PubCo’s executive officers and directors may have actual or potential conflicts of interest because of their equity interest in Endeavor. Also, certain of Endeavor’s current executive officers are expected to become New PubCo’s directors and officers, which may create conflicts of interest or the appearance of conflicts of interest.

Because of their current or former positions with Endeavor, Mr. Emanuel, Mr. Shapiro, Mr. Schleimer and Mr. Krauss own, and other New PubCo executive officers and directors who have not yet been identified may own, equity interests in Endeavor. Continuing ownership of shares of Endeavor capital stock and equity awards could create, or appear to create, potential conflicts of interest if New PubCo and Endeavor face decisions that could have implications for both Endeavor and New PubCo, after the Transactions, including the merger. In addition, Mr. Emanuel, Mr. Shapiro, Mr. Schleimer and Mr. Krauss, and other New PubCo executive officers and directors who have not yet been identified, are expected to become New PubCo’s executive officers and directors, and this could create, or appear to create, potential conflicts of interest when New PubCo and Endeavor encounter opportunities or face decisions that could have implications for both companies following the Transactions or in connection with the allocation of such officers’ or directors’ time between Endeavor and New PubCo.

Endeavor and subsidiaries of Endeavor may compete with New PubCo.

Endeavor and subsidiaries of Endeavor will not be restricted from competing with New PubCo, other than as contractually agreed upon. Endeavor has agreed that until the later of five years following the closing date of the transactions or six months following Endeavor’s ceasing to beneficially own more than 20% of the voting power of the then-outstanding shares of New PubCo common stock, Endeavor and its controlled affiliates (other than UFC and its subsidiaries) will not (1) other than de minimis passive investments, acquire or invest in any competitive wrestling league or professional mixed martial arts league that is competitive with UFC or (2) represent any competitive wrestling league, any athlete or wrestling talent in respect of their contractual relationship with UFC or its subsidiaries or any former wrestling talent of WWE in respect of their contractual relationship with any competitive wrestling league. See “Summary of Certain Agreements Related to the Transactions—Governance Agreement” beginning on page 181 of this information statement/prospectus.

If Endeavor in the future decides to engage in the type of business New PubCo conducts, it may have a competitive advantage over New PubCo, which may cause New PubCo’s business, financial condition and results of operations to be materially adversely affected. For further information, please read the section entitled “Summary of Certain Agreements Related to the Transactions.”

Risks Related to New PubCo Class A Common Stock

No trading market currently exists for New PubCo Class A common stock.

Prior to the completion of the Transactions, including the merger, there has been no market for New PubCo Class A common stock. Upon completion of the Transactions, including the merger, shares of New PubCo Class A common stock are expected to be listed for trading on the NYSE. However, there can be no assurance that an active market for New PubCo Class A common stock will develop after the Transactions, including the merger, are completed, or that if it develops, the market will be sustained.

The market price for shares of New PubCo Class A common stock may be affected by factors different from those affecting the market price for shares of WWE Class A common stock.

Upon completion of the Transactions, (i) holders of WWE Class A common stock and WWE Class B common stock will become holders of New PubCo Class A common stock, and (ii) Endeavor and subsidiaries of

 

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Endeavor will become holders of New PubCo Class B common stock. WWE’s business differs from that of UFC, and accordingly the results of operations of New PubCo will be affected by factors different from those currently affecting the results of operations of WWE and UFC when operated as independent businesses. For a discussion of the business of WWE and of certain material risk factors to consider in connection therewith, please read the documents incorporated by reference into this information statement/prospectus and referred to under the section entitled “Where You Can Find More Information” beginning on page 310 of this information statement/prospectus. For a discussion of the business of UFC and of certain material risk factors to consider in connection therewith, please read the risk factors included under the subsection entitled “Risks Relating to UFC’s Business; Risks Related to New PubCo After the Completion of the Transactions” above.

The shares of New PubCo Class A common stock to be received by the WWE stockholders as a result of the Transactions will have rights that are different from the rights of shares of WWE Class A common stock.

Following completion of the Transactions, including the merger, WWE stockholders will no longer be WWE stockholders but will instead be New PubCo stockholders whose rights as stockholders of New PubCo will be governed by Delaware law, the charter and the bylaws. There will be important differences between the current rights of a WWE stockholder and the rights of a New PubCo stockholder. For further information, please read the section entitled “Comparison of Stockholder Rights” beginning on page 261 of this information statement/prospectus.

Declaration, payment and amounts of dividends, if any, to holders of shares of New PubCo common stock will be uncertain.

Following the completion of the Transactions and the listing of the New PubCo Class A common stock on the NYSE, the WWE Designees will be permitted to declare, set a record date for and pay a one-time dividend on shares of New PubCo Class A common stock. In the event of any such dividend being declared, all holders of New PubCo Class A common stock as of the applicable record date would receive such a dividend; accordingly, assuming that there are no changes to WWE’s capitalization from August 4, 2023 until the Closing, and that there are no changes to New PubCo’s capitalization from August 4, 2023 until the record date applicable to such dividend (other than in connection with the Transactions), immediately following the Closing, (i) assuming a fully diluted basis (i.e., all Other WWE equity securities have been converted into New PubCo Class A common stock) as of such record date, (1) Mr. McMahon would receive approximately 33.5% of the aggregate amount of any such dividend, (2) WWE directors and executive officers other than Mr. McMahon would receive their pro rata portion of approximately 2.5% of the aggregate amount of any such dividend, (3) Ms. McMahon would receive approximately 0.7% of the aggregate amount of any such dividend, (4) Ms. McMahon Levesque would receive approximately 2.2% of the aggregate amount of any such dividend, (5) all other former WWE stockholders would receive their pro rata portion of approximately 59.9% of the aggregate amount of any such dividend and (6) former holders of Other WWE equity securities (other than Mr. McMahon and other former WWE directors and executive officers) would receive their pro rata portion of approximately 1.1% of the aggregate amount of any such dividend, and (ii) assuming that no Other WWE equity securities have been converted into New PubCo Class A common stock as of such record date, (1) Mr. McMahon would receive approximately 34.6% of the aggregate amount of any such dividend, (2) WWE directors and executive officers other than Mr. McMahon would receive their pro rata portion of approximately 0.2% of the aggregate amount of any such dividend, (3) Ms. McMahon would receive approximately 0.7% of the aggregate amount of any such dividend, (4) Ms. McMahon Levesque would receive approximately 2.3% of the aggregate amount of any such dividend, (5) all other former WWE stockholders would receive their pro rata portion of approximately 62.2% of the aggregate amount of any such dividend and (6) all Other WWE equity securities (including those held by Mr. McMahon, which represent less than 0.1% of economic interests in New PubCo on a fully-diluted basis) that have been converted into equity securities of New PubCo (but which have not been converted into New PubCo Class A common stock) would be treated as specified in the agreements applicable to such securities, as described in this information statement/prospectus and the public filings that WWE makes with the SEC that are incorporated by reference into this information statement/prospectus, as described in the section entitled “Where You Can Find More Information.” Percentages in the immediately preceding sentence may not sum to 100% due to rounding.

 

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However, the amount of dividends, if any, that are declared or paid to New PubCo stockholders cannot yet be determined and depends on a number of factors. The New PubCo Board will have sole discretion to determine whether any dividends will be declared, when dividends, if any, are declared, and the amount of such dividends.

Such determination would be based on a number of considerations, including, but not limited to, New PubCo’s results of operations and capital management plans, the market price of New PubCo Class A common stock, the availability of funds to New PubCo, industry practice and other factors deemed relevant by the New PubCo Board. In addition, New PubCo’s ability to pay dividends and the amount of any dividends ultimately paid in respect of the New PubCo common stock will, in each case, be subject to New PubCo receiving funds, directly or indirectly, from its operating subsidiaries, including, but not limited to, the operating subsidiaries of HoldCo.

Furthermore, the ability of the operating subsidiaries of HoldCo to make distributions to New PubCo will depend on the satisfaction of applicable state law, and subject to any covenants and restrictions in existing agreements and contracts, including debt facilities, with respect to such distributions, and the ability of HoldCo to receive distributions from its own subsidiaries will continue to depend on applicable state law with respect to such distributions. There can be no guarantee that New PubCo stockholders will receive or be entitled to dividends. For further information, please read the section entitled “Potential for New PubCo to Pay Dividends” beginning on page 85 of this information statement/prospectus.

The market price for shares of New PubCo Class A common stock may decline as a result of the Transactions and as a result of some New PubCo stockholders adjusting their portfolios.

Following the completion of the Transactions, the market price of New PubCo Class A common stock may decline if, among other things, the operating synergy estimates in connection with the integration of WWE’s and UFC’s businesses are not realized, if the transaction costs related to the Transactions are greater than expected, or if the services arrangements contemplated by the services agreement do not achieve the expected benefits, if the one-time post-closing dividend is lower than anticipated, or if HoldCo does not make quarterly distributions to the members of HoldCo. The market price also may decline if New PubCo does not achieve the perceived benefits of the Transactions as rapidly or to the extent anticipated by financial or industry analysts or if the effect of the Transactions on New PubCo’s financial position, results of operations or cash flows is not consistent with the expectations of financial or industry analysts.

In addition, sales of New PubCo common stock or warrants for New PubCo common stock by securityholders of New PubCo after the completion of the Transactions may cause the market price of New PubCo Class A common stock to decrease.

Based on the number of shares of WWE common stock outstanding as of August 4, 2023, and assuming that there are no changes to WWE’s capitalization between August 4, 2023 and the completion of the Transactions, approximately 83,161,653 shares of New PubCo Class A common stock are expected to be issued and outstanding following the completion of the Transactions. In addition, based on the number of shares of WWE common stock outstanding as of August 4, 2023, and assuming that there are no changes to WWE’s capitalization between August 4, 2023 and the completion of the Transactions, upon the completion of the Transactions, approximately 89,830,653 shares of New PubCo Class B common stock are expected to be issued and outstanding following the completion of the Transactions. Certain WWE stockholders and the EDR Subscribers may decide not to hold the shares of New PubCo common stock that they receive in the Transactions. However, the EDR Subscribers have agreed not to, directly or indirectly sell, assign, transfer, exchange, gift, bequest, pledge, hypothecate or otherwise dispose of or encumber any shares of New PubCo common stock received in the Transactions for a period of two years from the completion of the Transactions without the approval of a majority of WWE Designees. In addition, for a period of two years from the completion of the Transactions, EDR and its controlled affiliates agreed not to (1) acquire all of the outstanding equity interests in, or all or substantially all of the assets of, New PubCo or UFC, (2) increase their economic and/or voting interest in New PubCo or UFC above 75% of the then-current outstanding economic or voting interests of New PubCo or UFC or (3) effect a sale of New PubCo or UFC that would result in the receipt of a disproportionate “control premium” relative to other New PubCo stockholders. Other New PubCo stockholders,

 

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such as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell the shares of New PubCo Class A common stock that they receive in the merger. Such sales of New PubCo Class A common stock could have the effect of depressing the market price for New PubCo Class A common stock and may take place promptly following the completion of the Transactions.

Any of these events may make it more difficult for New PubCo to sell equity or equity-related securities, dilute WWE securityholders’ ownership interest in New PubCo and/or have an adverse impact on the market price of New PubCo Class A common stock.

The synergies attributable to the Transactions may vary from expectations, which may negatively affect the market price of shares of New PubCo Class A common stock.

WWE currently expects that the Transactions will result in a number of benefits and synergies, including, but not limited to, operating synergies and stronger fundamental demand for New PubCo’s products and services, and that the Transactions will be accretive to New PubCo’s earnings. These expectations are based on current estimates that may materially change. Actual operating, technological, strategic and revenue opportunities, if achieved at all, may be less significant than expected or may take longer to achieve than anticipated. In addition, future events and conditions, including, but not limited to, adverse changes in market conditions, regulatory framework, additional transaction and integration-related costs and other factors such as the failure to realize some or all of the anticipated benefits of the Transactions could decrease or delay the accretion that is currently anticipated or could result in dilution. Any dilution of, decrease in, or delay of any accretion to the New PubCo’s earnings per share could cause the price of shares of New PubCo Class A common stock to decline or grow at a reduced rate.

Future sales of New PubCo Class A common stock, or the perception in the public markets that these sales may occur, may depress the price of New PubCo Class A common stock.

Additional sales of a substantial number of shares of New PubCo Class A common stock in the public market after the completion of the Transactions, including the merger, or the perception that such sales may occur, could have an adverse effect on New PubCo’s stock price and could impair its ability to raise capital through the sale of additional stock. Furthermore, redemptions or exchanges of common units (and the corresponding shares of New PubCo Class B common stock) into New PubCo Class A common stock will have a dilutive effect on the number of outstanding shares of New PubCo Class A common stock, even if the indirect or direct economic ownership of HoldCo by holders of New PubCo Class A common stock remain unchanged. The New PubCo Class A common stock registered herein will be freely tradable without restriction under the Securities Act, except for any New PubCo Class A common stock that may be held or acquired by its directors, executive officers, and other affiliates (as that term is defined in the Securities Act), which will be restricted securities under the Securities Act. The shares of New PubCo Class A common stock not being registered hereby or issuable as described above will be restricted securities. Restricted securities may not be sold in the public market unless they are registered under the Securities Act or an exemption from registration is available. As described below, shares of New PubCo Class A common stock may be sold in the public market either in a registered offering or pursuant to an exemption from registration, such as Rule 144 promulgated under the Securities Act (“Rule 144”).

Based on the number of shares of WWE common stock outstanding as of August 4, 2023, and assuming that there are no changes to WWE’s capitalization between August 4, 2023 and the completion of the Transactions, upon the completion of the Transactions, including the merger, New PubCo will have 83,161,653 shares of New PubCo Class A common stock issued and outstanding. In addition, 89,830,653 shares of New PubCo Class A common stock are eligible to be issued upon the exercise of the redemption rights of Endeavor described elsewhere herein. Of these shares:

 

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54,210,274 shares are not subject to the resale restrictions under Rule 144; and

 

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83,161,653 shares are issuable upon the exercise of redemption rights held by affiliates (as defined under Rule 144) and are, therefore, subject to the volume, manner of sale and other restrictions of Rule 144 to the extent these shares are sold pursuant to Rule 144.

 

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In addition, based on the number of shares of WWE common stock outstanding as of August 4, 2023, and assuming that there are no changes to WWE’s capitalization between August 4, 2023 and the completion of the Transactions, upon the completion of the Transactions, including the merger, New PubCo will have 805,114 restricted stock units outstanding and 1,805,818 performance stock units outstanding. Shares issuable in respect of such equity awards will be registered on Form S-8 under the Securities Act. These shares will be able to be freely sold in the public market upon issuance, subject to applicable vesting requirements, compliance by affiliates with Rule 144, and other restrictions provided under the terms of the applicable plan and/or the award agreements entered into with participants. Further, New PubCo expects to adopt a 2023 Incentive Award Plan, under which additional shares of New PubCo Class A common stock will be reserved for future issuance. In the future, New PubCo may also issue additional securities in connection with investments, acquisitions or capital-raising activities, which could constitute a material portion of its then-outstanding shares of New PubCo Class A common stock. Any shares of New PubCo Class A common stock that it issues will have a dilutive effect on the number of outstanding shares of New PubCo Class A common stock.

The price of New PubCo Class A common stock may be volatile, and holders of New PubCo Class A common stock may be unable to resell their Class A Common Stock at or above their purchase price or at all.

The market price for New PubCo Class A common stock may fluctuate significantly in response to a number of factors, most of which New PubCo cannot control, including, among others:

 

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trends and changes in consumer preferences in the industries in which New PubCo operates;

 

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changes in general economic or market conditions or trends in New PubCo’s industry or the economy as a whole and, in particular, in the consumer and advertising marketplaces;

 

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changes in key personnel;

 

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New PubCo’s entry into new markets;

 

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changes in New PubCo’s operating performance;

 

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investors’ perceptions of New PubCo’s prospects and the prospects of the businesses in which it participates;

 

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fluctuations in quarterly revenue and operating results, as well as differences between New PubCo’s actual financial and operating results and those expected by investors;

 

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the public’s response to press releases or other public announcements by New PubCo or third parties, including New PubCo’s filings with the SEC;

 

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announcements relating to litigation;

 

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guidance, if any, that New PubCo provides to the public, any changes in such guidance or New PubCo’s failure to meet such guidance;

 

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changes in financial estimates or ratings by any securities analysts who follow New PubCo Class A common stock, New PubCo’s failure to meet such estimates or failure of those analysts to initiate or maintain coverage of the New PubCo Class A common stock;

 

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downgrades in New PubCo’s credit ratings or the credit ratings of its competitors;

 

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the development and sustainability of an active trading market for New PubCo Class A common stock;

 

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investor perceptions of the investment opportunity associated with New PubCo Class A common stock relative to other investment alternatives;

 

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the inclusion, exclusion, or deletion of New PubCo Class A common stock from any trading indices;

 

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future sales of New PubCo Class A common stock by its officers, directors, and significant stockholders;

 

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other events or factors, including those resulting from system failures and disruptions, hurricanes, pandemics, wars, acts of terrorism, other natural disasters, or responses to such events;

 

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changes in financial markets or general economic conditions, including, for example, due to the effects of recession or slow economic growth in the U.S. and abroad, interest rates, fuel prices, international currency fluctuations, corruption, political instability, acts of war, including the conflict involving Russia and Ukraine, acts of terrorism, and pandemics or other public health crises;

 

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price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; and

 

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changes in accounting principles.

These and other factors may lower the market price of New PubCo Class A common stock, regardless of its actual operating performance. As a result, New PubCo Class A common stock may trade at prices significantly below the price at which shares were purchased.

In addition, the stock markets, including the NYSE, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If New PubCo were to become involved in securities litigation, it could incur substantial costs and its resources and the attention of management could be diverted from its business.

Risks Related to New PubCo Tax Matters

Tax matters may cause significant variability in New PubCo’s financial results.

New PubCo’s businesses, conducted through HoldCo and its subsidiaries, will be subject to income taxation in the United States, as well as in many tax jurisdictions throughout the world. Tax rates in these jurisdictions may be subject to significant change. If New PubCo’s effective tax rate increases, its operating results and cash flow could be adversely affected. New PubCo’s effective income tax rate may vary significantly between periods due to a number of complex factors including, but not limited to, projected levels of taxable income, pre-tax income being lower than anticipated in countries with lower statutory rates or higher than anticipated in countries with higher statutory rates, increases or decreases to valuation allowances that need to be recorded against deferred tax assets, tax audits conducted and settled by various tax authorities, adjustments to income taxes upon finalization of income tax returns, the ability to claim foreign tax credits, and changes in tax laws and their interpretations in countries in which New PubCo will be subject to taxation.

HoldCo may be required to pay additional taxes as a result of the partnership audit rules.

The Bipartisan Budget Act of 2015 changed the rules applicable to U.S. federal income tax audits of partnerships, including entities such as HoldCo that are taxed as partnerships. Under these rules (which generally are effective for taxable years beginning after December 31, 2017), subject to certain exceptions, audit adjustments to items of income, gain, loss, deduction, or credit of an entity (and any holder’s share thereof) are determined, and taxes, interest, and penalties attributable thereto, are assessed and collected, at the entity level. Although there are uncertainties in how these rules will continue to be implemented, they could result in HoldCo (or any of its applicable subsidiaries that are or have been treated as partnerships for U.S. federal income tax purposes) being required to pay additional taxes, interest and penalties as a result of an audit adjustment, and New PubCo, as an indirect member of HoldCo (or such other entities), could be required to indirectly bear the economic burden of those taxes, interest, and penalties even though New PubCo may not otherwise have been required to pay additional corporate-level taxes as a result of the related audit adjustment (and even though New PubCo may not have even been an equity holder of HoldCo during the taxable period for which the relevant audit adjustment is imposed).

Under certain circumstances, HoldCo may be eligible to make an election (a “Push Out Election”) to cause holders of equity interests in HoldCo to take into account the amount of any taxes attributable to any tax audit adjustment, including any interest and penalties, in accordance with such holders’ interest in HoldCo in the year under audit.

With respect to taxable periods beginning after the completion of the Transactions, New PubCo will decide whether to cause HoldCo to make a Push Out Election in New PubCo’s discretion. If HoldCo does not make this election, the then-current holders of common units (including the EDR subscribers, as applicable) would

 

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economically bear the burden of the understatement even if such holders had a different percentage interest in HoldCo during the year under audit, unless, and only to the extent, HoldCo recovers such amounts from current or former impacted holders of HoldCo. Similar rules will also apply with respect to any of HoldCo’s subsidiaries that are or have been treated as partnerships for U.S. federal income tax purposes.

With respect to taxable periods (or portions thereof) of HoldCo or its subsidiaries ending on or prior to the completion of the Transactions EDR OpCo will have the ability to prevent HoldCo or such subsidiaries from making (or causing to be made) any Push Out Election, as further described below. The failure to make such election could result in New PubCo bearing liabilities with respect to such audit adjustment even though New PubCo may not have owned any interest in HoldCo during the audited period and could adversely affect New PubCo’s liquidity and financial condition.

HoldCo has agreed to indemnify EDR OpCo (and its affiliates and direct and indirect owners) and New PubCo for certain tax liabilities attributable to taxable periods (or portions thereof) ending on or prior to the completion of the Transactions, and this indemnification could adversely affect the liquidity and financial condition of HoldCo and New PubCo.

Under the terms of the transaction agreement, HoldCo has generally agreed to indemnify EDR OpCo and its affiliates and direct and indirect equity holders for tax liabilities attributable to the business conducted by HoldCo and its subsidiaries for taxable periods ending on or prior to the completion of the Transactions, subject to certain exceptions. HoldCo has also generally agreed to indemnify New PubCo and its affiliates for tax liabilities attributable to WWE and its subsidiaries for taxable periods ending on or prior to the completion of the Transactions, subject to certain exceptions. These indemnification obligations will subject the equity holders of New PubCo to risks and potential exposures attributable to the business conducted by HoldCo for periods prior to the time that New PubCo acquired an interest in HoldCo, and to exposure for income taxes otherwise payable by HoldCo’s former equity owners. In addition, EDR OpCo will have the ability to prevent HoldCo from making a Push Out Election in connection with pre-closing tax audits of HoldCo and its subsidiaries attributable to periods (or portions thereof) ending on or prior to the completion of the Transactions. EDR OpCo’s interests in connection with such election will differ from those of New PubCo, as a failure to make such election could result in New PubCo bearing tax liabilities that would, if such election were made, be borne by HoldCo’s former equity owners. Any tax liabilities that are subject to indemnification by HoldCo could adversely affect the liquidity and financial position of HoldCo and New PubCo.

A new 1% U.S. federal excise tax could be imposed on New PubCo in connection with redemptions.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into federal law. The IRA provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded U.S. corporations and certain other persons (a “covered corporation”). Because New PubCo will be a Delaware corporation and its securities will trade on the NYSE, it will be a “covered corporation” for this purpose. The excise tax is imposed on the repurchasing corporation itself, not its stockholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of Treasury has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. If New PubCo were to conduct repurchases of its stock or other transactions covered by the excise tax described above, it could potentially be subject to this excise tax, which could increase its costs and adversely affect its operating results.

Future changes to U.S. and foreign tax laws could adversely affect New PubCo.

The G20, the OECD, the U.S. Congress and Treasury Department and other government agencies in jurisdictions where New PubCo and its affiliates will do business have had an extended focus on issues related to

 

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the taxation of multinational corporations, including, but not limited to, transfer pricing, country-by-country reporting and base erosion. As a result, the tax laws in the United States and other countries in which New PubCo and its affiliates will do business could change on a prospective or retroactive basis, and any such changes could have an adverse effect on its worldwide tax liabilities, business, financial condition, and results of operations.

General Risk Factors Related to New PubCo

New PubCo may face labor shortages that could slow its growth.

The successful operation of New PubCo’s business depends upon its ability to attract, motivate, and retain a sufficient number of qualified employees. Shortages of labor may make it increasingly difficult and expensive to attract, train, and retain the services of a satisfactory number of qualified employees and could adversely impact New PubCo’s events and productions. Competition for qualified employees could require New PubCo to pay higher wages, which could result in higher labor costs and could have an adverse effect on its business, financial condition, and results of operations.

New PubCo also will rely on contingent workers and volunteers in order to staff its events and productions, and its failure to manage its use of such workers effectively could adversely affect its business, financial condition, and results of operations. New PubCo could potentially face various legal claims from contingent workers and volunteers in the future, including claims based on new laws or stemming from allegations that contingent workers, volunteers or employees are misclassified. New PubCo may be subject to shortages, oversupply, or fixed contractual terms relating to contingent workers. New PubCo’s ability to manage the size of, and costs associated with, the contingent workforce may be subject to additional constraints imposed by local laws.

Costs associated with, and New PubCo’s ability to, obtain insurance could adversely affect its business.

Heightened concerns and challenges regarding property, casualty, liability, business interruption, cancellation, and other insurance coverage have resulted from terrorist and related security incidents along with varying weather-related conditions and incidents. New PubCo may experience increased difficulty obtaining high policy limits of coverage at a reasonable cost and with reasonable deductibles. New PubCo will not be able to assure you that future increases in insurance costs and difficulties obtaining high policy limits and reasonable deductibles will not adversely impact its profitability, thereby possibly impacting its operating results and growth. New PubCo will have a significant investment in property and equipment at each of its venues, which will be generally located near major cities and which hold events typically attended by a large number of people.

New PubCo will not be able to assure you that its insurance policy coverage limits, including insurance coverage for property, casualty, liability and business interruption losses, and acts of terrorism, would be adequate should one or multiple adverse events occur, or that its insurers would have adequate financial resources to sufficiently or fully pay its related claims or damages. New PubCo will not be able to assure you that adequate coverage limits will be available, offered at a reasonable cost, or offered by insurers with sufficient financial soundness. The occurrence of such an incident or incidents affecting any one or more of New PubCo’s venues could have an adverse effect on its financial position and future results of operations if asset damage or company liability were to exceed insurance coverage limits, or if an insurer were unable to sufficiently or fully pay New PubCo’s related claims or damages.

If securities or industry analysis publish inaccurate or unfavorable research about New PubCo or its business, the price of its Class A Common Stock and trading volume could decline.

The trading market for New PubCo Class A common stock will depend in part on the research and reports that securities or industry analysts publish about New PubCo or its business. If one or more of the analysts who cover New PubCo downgrades New PubCo Class A common stock or publishes inaccurate or unfavorable

 

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research about New PubCo or its business, New PubCo’s share price would likely decline. If one or more of these analysts cease coverage of New PubCo or fail to publish reports on New PubCo regularly, demand for New PubCo Class A common stock could decrease, which could cause New PubCo’s stock price and trading volume to decline. In addition, if New PubCo’s operating results fail to meet the expectations of securities analysts, its stock price would likely decline.

Risks Relating to the Convertible Notes

The Convertible Notes will be effectively subordinated to the Co-Obligors’ secured debt and any liabilities of their subsidiaries.

Following the consummation of the Transactions, the Convertible Notes will rank senior in right of payment to any indebtedness of New PubCo and WWE, which are collectively referred to as the Co-Obligors, that is expressly subordinated in right of payment to the Convertible Notes; equal in right of payment to any unsecured indebtedness of WWE and New PubCo, respectively, that is not so subordinated; effectively junior in right of payment to any secured indebtedness of WWE and New PubCo, respectively, to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of subsidiaries of WWE and New PubCo, respectively. In the event of the bankruptcy, liquidation, reorganization or other winding up, assets of the Co-Obligors that secure debt ranking senior in right of payment to the Convertible Notes will be available to pay obligations on the Convertible Notes only after the secured debt has been repaid in full from these assets. There may not be sufficient assets remaining to pay amounts due on any or all of the Convertible Notes then outstanding. The Indenture does not prohibit the Co-Obligors from incurring additional senior debt or secured debt, nor does it prohibit any of their subsidiaries from incurring additional liabilities.

As of June 30, 2023, on a pro forma basis after giving effect to the Transactions, New PubCo’s total consolidated indebtedness would have been approximately $3,161 million, approximately $33 million of which was secured indebtedness of certain of its subsidiaries. As of June 30, 2023, on a pro forma basis after giving effect to the Transactions the subsidiaries of the Co-Obligors would have had approximately $3,161 million of indebtedness and other liabilities, excluding intercompany obligations, to which the Convertible Notes would have been structurally subordinated. In addition, certain of the domestic subsidiaries of the Co-Obligors may be guarantors under a term loan and revolving credit facilities following the consummation of the Transactions.

The Convertible Notes will be the obligations of the Co-Obligors only and certain of the Co-Obligors’ operations will be conducted through, and certain of the Co-Obligors’ consolidated assets will be held by, their subsidiaries.

The Convertible Notes are the obligations of the Co-Obligors exclusively and are not guaranteed by any of their subsidiaries. A portion of the Co-Obligors’ consolidated assets is held by their subsidiaries. Accordingly, the ability of the Co-Obligors to service their debt, including the Convertible Notes, depends in part on the results of operations of the Co-Obligors’ subsidiaries and upon the ability of such subsidiaries to provide the Co-Obligors with cash, whether in the form of dividends, loans or otherwise, to pay amounts due on the Co-Obligors’ obligations, including the Convertible Notes. The subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to make payments on the Convertible Notes or to make any funds available for that purpose. In addition, dividends, loans or other distributions to the Co-Obligors from such subsidiaries may be subject to contractual and other restrictions and are subject to other business considerations.

Servicing the Co-Obligors’ debt requires a significant amount of cash, and the Co-Obligors may not have sufficient cash flow from their business to pay the substantial debt.

The ability of the Co-Obligors to make scheduled payments of the principal of or to pay interest on the Convertible Notes depends on their future performance, which is subject to economic, financial, competitive and

 

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other factors beyond their control. The business of the Co-Obligors may not continue to generate cash flow from operations in the future sufficient to service their debt and make necessary capital expenditures. If the Co-Obligors are unable to generate such cash flow, they may be required to attempt to adopt one or more alternatives which, if available, may be onerous or highly dilutive. Such alternatives may include, for example, selling assets or obtaining additional equity capital on terms that may be onerous or highly dilutive. The ability of the Co-Obligors to repay their debt will depend on the capital markets and their financial condition at such time. The Co-Obligors may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on their debt obligations.

Recent and future regulatory actions and other events may adversely affect the trading price and liquidity of the Convertible Notes.

We expect that many investors in, and potential purchasers of, the Convertible Notes will employ, or seek to employ, a convertible arbitrage strategy with respect to the Convertible Notes. Investors would typically implement such a strategy by selling short the New PubCo Class A common stock underlying the Convertible Notes and dynamically adjusting their short position while continuing to hold the Convertible Notes. Investors may also implement this type of strategy by entering into swaps on the New PubCo Class A common stock in lieu of or in addition to short selling the New PubCo Class A common stock.

The SEC and other regulatory and self-regulatory authorities have implemented various rules and taken certain actions, and may in the future adopt additional rules and take other actions, that may impact those engaging in short selling activity involving equity securities (including the New PubCo Class A common stock). Such rules and actions include Rule 201 of SEC Regulation SHO, the adoption by the Financial Industry Regulatory Authority, Inc. and the national securities exchanges of a “Limit Up-Limit Down” program, the imposition of market-wide circuit breakers that halt trading of securities for certain periods following specific market declines, and the implementation of certain regulatory reforms required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Any governmental or regulatory action that restricts the ability of investors in, or potential purchasers of, the Convertible Notes to effect short sales of New PubCo Class A common stock, borrow such common stock or enter into swaps on such common stock could adversely affect the trading price and the liquidity of the Convertible Notes.

Volatility in the market price and trading volume of New PubCo Class A common stock could adversely impact the trading price of the Convertible Notes.

The stock market in recent years has experienced significant price and volume fluctuations that have often been unrelated to the operating performance of companies. In addition, there will have been no historical market price of the New PubCo Class A common stock. The market price of the New PubCo Class A common stock could fluctuate significantly for many reasons, including in response to the risks described in this section, elsewhere in this information statement/prospectus or the documents incorporated by reference in this information statement/prospectus or for reasons unrelated to the operations of New PubCo, such as reports by industry analysts, investor perceptions or negative announcements by customers, competitors or suppliers of New PubCo regarding their own performance, as well as industry conditions and general financial, economic and political instability. A decrease in the market price of New PubCo Class A common stock would likely adversely impact the trading price of the Convertible Notes. The market price of New PubCo Class A common stock could also be affected by possible sales of such common stock by investors who view the Convertible Notes as a more attractive means of equity participation in New PubCo and by hedging or arbitrage trading activity that New PubCo expects to develop involving New PubCo Class A common stock. This trading activity could, in turn, affect the trading price of the Convertible Notes. See “—Risks Relating to New PubCo after Completion of the Transactions.” This volatility in the market price of the New PubCo Class A common stock may affect the price at which you could sell the shares of New PubCo Class A common stock you receive upon conversion of your Convertible Notes, if any, and the sale of substantial amounts of New PubCo Class A common stock could adversely affect the price of New PubCo Class A common stock and the value of your Convertible Notes.

 

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Despite the expected debt levels, we may still incur substantially more debt or take other actions which would intensify the risks discussed above.

Despite the expected consolidated debt levels upon consummation of the Transactions, we and our subsidiaries may be able to incur substantial additional debt in the future, subject to the restrictions contained in its debt instruments, some of which may be secured debt. The Co-Obligors will not be restricted under the terms of the Indenture from incurring additional debt, securing existing or future debt, recapitalizing their debt or taking a number of other actions that are not limited by the terms of the Indenture that could have the effect of diminishing the ability of the Co-Obligors to make payments on the Convertible Notes when due. The term loan and revolving credit facilities will restrict the ability of the Co-Obligors to incur certain additional indebtedness, including secured indebtedness, but if the term loan and revolving credit facilities mature or are repaid, the Co-Obligors may not be subject to such restrictions under the terms of any subsequent indebtedness.

The Co-Obligors may not have the ability to raise the funds necessary to repay the Convertible Notes at maturity or to repurchase the Convertible Notes upon a fundamental change, and New PubCo’s future debt may contain limitations on their ability to pay cash upon repurchase of the Convertible Notes.

Holders of the Convertible Notes will have the right to require the Co-Obligors to repurchase their Convertible Notes upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100.0% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, as described under “Description of Convertible Notes—Fundamental Change Permits Holders to Require Us to Repurchase Convertible Notes.” However, the Co-Obligors may not have enough available cash or be able to obtain financing at the time they are required to make repurchases of Convertible Notes surrendered therefor. In addition, the ability of the Co-Obligors to repurchase the Convertible Notes may be limited by law, by regulatory authority or by agreements governing future indebtedness. The failure by the Co-Obligors to repurchase Convertible Notes at a time when the repurchase is required by the indenture would constitute a default under the indenture. A default under the indenture or the fundamental change itself could also lead to a default under agreements governing existing or future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, the Co-Obligors may not have sufficient funds to repay the indebtedness and repurchase the Convertible Notes.

Future sales of New PubCo Class A common stock in the public market could lower the market price for New PubCo Class A common stock and adversely impact the trading price of the Convertible Notes.

In the future, New PubCo may sell additional shares of New PubCo Class A common stock to raise capital. In addition, a substantial number of shares of New PubCo Class A common stock will be reserved for issuance upon the exercise or vesting of equity awards and upon conversion of the Convertible Notes. New PubCo cannot predict the size of future issuances or the effect, if any, that they may have on the market price for New PubCo Class A common stock. The issuance and sale of substantial amounts of New PubCo Class A common stock, or the perception that such issuances and sales may occur, could adversely affect the trading price of the Convertible Notes and the market price of New PubCo Class A common stock and impair New PubCo’s ability to raise capital through the sale of additional equity securities.

Additionally, all of the issued and outstanding shares of New PubCo Class B common stock will be held by EDR OpCo and certain other subsidiaries of EDR OpCo. Sales of substantial amounts of these shares, or the perception that such sales could occur, may lower the prevailing market price of New PubCo Class A common stock.

Holders of Convertible Notes will not be entitled to any rights with respect to New PubCo Class A common stock, but they will be subject to all changes made with respect to New PubCo Class A common stock to the extent the conversion obligation includes shares of New PubCo Class A common stock.

Holders of Convertible Notes will not be entitled to any rights with respect to New PubCo Class A common stock (including, without limitation, voting rights and rights to receive any dividends or other distributions on

 

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such common stock) prior to the conversion date relating to such Convertible Notes (if the Co-Obligors have elected to settle the relevant conversion by delivering solely shares of New PubCo Class A common stock (other than paying cash in lieu of delivering any fractional share)) or the last trading day of the relevant observation period (if the Co-Obligors elect to pay and deliver, as the case may be, a combination of cash and shares of New PubCo Class A common stock in respect of the relevant conversion), but holders of Convertible Notes will be subject to all changes affecting New PubCo Class A common stock. For example, if an amendment is proposed to New PubCo’s certificate of incorporation or bylaws requiring stockholder approval and the record date for determining the stockholders of record entitled to vote on the amendment occurs prior to the conversion date related to a holder’s conversion of its Convertible Notes (if the Co-Obligors have elected to settle the relevant conversion by delivering solely shares of New PubCo Class A common stock (other than paying cash in lieu of delivering any fractional share)) or the last trading day of the relevant observation period (if the Co-Obligors elect to pay and deliver, as the case may be, a combination of cash and shares of New PubCo Class A common stock in respect of the relevant conversion), such holder will not be entitled to vote on the amendment, although such holder will nevertheless be subject to any changes affecting New PubCo Class A common stock.

Upon conversion of the Convertible Notes, you may receive less valuable consideration than expected because the value of New PubCo Class A common stock may decline after you exercise your conversion right but before the Co-Obligors settle their conversion obligation.

Under the Convertible Notes, a converting holder will be exposed to fluctuations in the value of New PubCo Class A common stock during the period from the date such holder surrenders Convertible Notes for conversion until the date of settlement of the conversion obligation.

If the Co-Obligors elect to satisfy the conversion obligation solely in shares of New PubCo Class A common stock upon conversion of the Convertible Notes, the Co-Obligors will be required to deliver the shares of New PubCo Class A common stock, together with cash for any fractional share, on the third business day following the relevant conversion date. Accordingly, if the price of New PubCo Class A common stock decreases during this period, the value of the shares that you receive will be adversely affected and would be less than the conversion value of the Convertible Notes on the conversion date.

The Convertible Notes are not protected by restrictive covenants.

The Indenture does not contain any financial or operating covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Co-Obligors or any of their subsidiaries. The indenture contains no covenants or other provisions to afford protection to holders of the Convertible Notes in the event of a fundamental change or other corporate transaction involving the Co-Obligors except to the extent described under “Description of Convertible Notes—Fundamental Change Permits Holders to Require Us to Repurchase Convertible Notes,” “Description of Convertible Notes—Conversion Rights—Increase in Conversion Rate Upon Conversion Upon a Make-Whole Fundamental Change” and “Description of Convertible Notes—Consolidation, Merger and Sale of Assets.”

The increase in the conversion rate for Convertible Notes converted in connection with a make-whole fundamental change may not adequately compensate you for any lost value of your Convertible Notes as a result of such transaction.

If a make-whole fundamental change occurs prior to the maturity date, under certain circumstances, the Co-Obligors will increase the conversion rate by a number of additional shares of New PubCo Class A common stock for Convertible Notes converted in connection with such make-whole fundamental change. The increase in the conversion rate will be determined based on the date on which the specified corporate transaction becomes effective and the price paid (or deemed to be paid) per share of New PubCo Class A common stock in such transaction, as described below under “Description of Convertible Notes—Conversion Rights—Increase in Conversion Rate Upon Conversion Upon a Make-Whole Fundamental Change.” The increase in the conversion rate for Convertible Notes converted in connection with a make-whole fundamental change may not adequately compensate you for any lost value of your Convertible Notes as a result of such transaction. In addition, if the

 

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price of New PubCo Class A common stock in the transaction is greater than $50.00 per share or less than $19.93 per share (in each case, subject to adjustment), no additional shares will be added to the conversion rate. Moreover, in no event will the conversion rate per $1,000 principal amount of Convertible Notes as a result of this adjustment exceed 50.1756 shares of New PubCo Class A common stock, subject to adjustment in the same manner as the conversion rate as set forth under “Description of Convertible Notes—Conversion Rights—Conversion Rate Adjustments.”

The Co-Obligors’ obligation to increase the conversion rate for Convertible Notes converted in connection with a make-whole fundamental change could be considered a penalty, in which case the enforceability thereof would be subject to general principles of reasonableness and equitable remedies.

The conversion rate of the Convertible Notes may not be adjusted for all dilutive events.

The conversion rate of the Convertible Notes is subject to adjustment for certain events, including, but not limited to, the issuance of certain stock dividends on New PubCo Class A common stock, the issuance of certain rights or warrants, subdivisions, combinations, distributions of capital stock, indebtedness, or assets, cash dividends and certain issuer tender or exchange offers as described under “Description of Convertible Notes—Conversion Rights—Conversion Rate Adjustments.” However, the conversion rate will not be adjusted for other events, such as a third-party tender or exchange offer or an issuance of New PubCo Class A common stock for cash, that may adversely affect the trading price of the Convertible Notes or New PubCo Class A common stock. An event that adversely affects the value of the Convertible Notes may occur, and that event may not result in an adjustment to the conversion rate.

Some significant restructuring transactions may not constitute a fundamental change, in which case the Co-Obligors would not be obligated to offer to repurchase the Convertible Notes.

Upon the occurrence of a fundamental change, the holders of the Convertible Notes will have the right to require the Co-Obligors to repurchase their Convertible Notes. However, the fundamental change provisions will not afford protection to holders of Convertible Notes in the event of other transactions that could adversely affect the Convertible Notes. For example, transactions such as leveraged recapitalizations, refinancings, restructurings, or acquisitions initiated by New PubCo may not constitute a fundamental change requiring the Co-Obligors to offer to repurchase the Convertible Notes. In the event of any such transaction, the holders would not have the right to require the Co-Obligors to repurchase the Convertible Notes, even though each of these transactions could increase the amount of the Co-Obligors’ indebtedness, or otherwise adversely affect the Co-Obligors’ capital structure or any credit ratings, thereby adversely affecting the holders of Convertible Notes.

New PubCo cannot assure you that an active trading market will develop for the Convertible Notes.

New Pubco does not intend to apply to list the Convertible Notes on any securities exchange or to arrange for quotation on any automated dealer quotation system. In addition, the liquidity of the trading market in the Convertible Notes, and the market price quoted for the Convertible Notes, may be adversely affected by changes in the overall market for this type of security and by changes in New PubCo’s financial performance or prospects or in the prospects for companies in its industry generally. As a result, New PubCo cannot assure you that an active trading market will develop or be maintained for the Convertible Notes. If an active trading market does not develop or is not maintained, the market price and liquidity of the Convertible Notes may be adversely affected. In that case you may not be able to sell your Convertible Notes at a particular time or you may not be able to sell your Convertible Notes at a favorable price.

Any adverse rating of the Convertible Notes may cause their trading price to fall.

New PubCo does not intend to seek a rating on the Convertible Notes. However, if a rating service were to rate the Convertible Notes and if such rating service were to lower its rating on the Convertible Notes below the rating initially assigned to the Convertible Notes or otherwise announces its intention to put the Convertible Notes on credit watch, the trading price of the Convertible Notes could decline.

 

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INFORMATION ABOUT WWE, NEW PUBCO AND MERGER SUB

World Wrestling Entertainment, Inc.

WWE is an integrated media and entertainment company. It has been involved in the sports entertainment business for four decades, and has developed into one of the most popular brands in global entertainment today. WWE is principally engaged in the production and distribution of unique and creative content through various channels, including content rights agreements for its flagship programs, Raw and SmackDown, and its premium over-the-top network, premium live event programming, monetization across social media outlets, live events, licensing of various WWE themed products, and the sale of merchandise at its live events.

WWE’s principal executive offices are located at 1241 East Main Street, Stamford, Connecticut 06902, and its telephone number is (203) 352-8600. WWE’s internet address is http://www.corporate.wwe.com. Please note that WWE’s internet address is included in this information statement/prospectus as an inactive textual reference only. The information contained on WWE’s website is not incorporated by reference into this information statement/prospectus or any future documents that may be filed with the SEC and should not be considered part of this information statement/prospectus. WWE makes available on this website, free of charge, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after it electronically files or furnishes such materials with or to the SEC. Investors may access these filings in the “Investors” section of WWE’s website.

For a more detailed description of the business of WWE, please see WWE’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 2, 2023.

New Whale Inc.

New PubCo is a Delaware corporation and a direct, wholly owned subsidiary of WWE. New PubCo was incorporated on March 29, 2023 solely for the purpose of effecting the Transactions and, immediately after the Transactions, including the merger, New PubCo will be renamed “TKO Group Holdings, Inc.”

Pursuant to the transaction agreement, Merger Sub will merge with and into WWE, with WWE surviving the merger as a direct, wholly owned subsidiary of New PubCo. New PubCo will become a publicly traded corporation and former WWE stockholders will own stock in New PubCo.

New PubCo has been formed by WWE solely to effect the Transactions, it has no material assets and has not conducted any business operations other than such operations that are incidental to its formation and in connection with the Transactions, including the merger. Accordingly, no financial statements of New PubCo have been included in this information statement/prospectus. Upon completion of the Transactions, New PubCo’s principal executive offices will be located at 200 Fifth Avenue, 7th Floor, New York, New York 10010 and its telephone number will be (646) 558-8333.

Merger Sub Inc.

Merger Sub is a Delaware corporation and a direct, wholly owned subsidiary of New PubCo. Merger Sub was incorporated on March 29, 2023 solely for the purpose of effecting the Transactions, including the merger. As a result of the merger, Merger Sub will merge with and into WWE, with WWE surviving and becoming a wholly owned subsidiary of New PubCo.

Merger Sub has not conducted any business operations other than such operations that are incidental to its formation and in connection with the Transactions, including the merger. Merger Sub’s principal executive offices are located at 1241 East Main Street, Stamford, Connecticut 06902.

 

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INFORMATION ABOUT HOLDCO

Zuffa Parent LLC

HoldCo operates solely as the parent company of UFC. UFC is a premium global sports brand, a live events and media content company, and the largest Pay-Per-View (PPV) event provider in the world. Over its 29-year history, UFC has developed, grown, and revolutionized the sport of mixed martial arts (“MMA”), hosting hundreds of marquee events around the world and reaching hundreds of millions of fans. UFC is committed to gender equality as one of the few professional sports organizations in the world where male and female athletes compete on equal grounds in all aspects.

UFC is among the most popular sports organizations in the world, with more than 700 million fans who skew young and diverse, as well as 228 million social media followers, as of December 31, 2022. The organization produces more than 40 live events annually in some of the most prestigious arenas around the world and, as of December 31, 2022, broadcasts its content to over 900 million TV households across more than 170 countries. UFC’s athlete roster features some of the world’s best MMA athletes representing more than 70 countries.

HoldCo is a Delaware limited liability company and a wholly owned subsidiary of Endeavor Operating Company, LLC. HoldCo’s principal executive offices are located at 6650 S. Torrey Pines Drive, Las Vegas, NV 89118.

 

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THE TRANSACTIONS

This section describes the Transactions. The descriptions of the transaction agreement, the stockholders agreement, the governance agreement, the services agreement, the registration rights agreement and the HoldCo operating agreement (collectively, the “transaction documents”) in this section and elsewhere in this information statement/prospectus are qualified in their entirety by reference to the complete text of the transaction documents, copies of the forms of which are attached hereto as Annex A, D, E, F, G and H, respectively, and all of which are incorporated by reference into this information statement/prospectus. This summary is not intended to be complete and may not contain all of the information about the Transactions that is important to you. You are encouraged to carefully read the transaction documents in their entirety. This section is not intended to provide you with any factual information about New PubCo, Endeavor or WWE. Such information can be found elsewhere in this information statement/prospectus and in the public filings that WWE and Endeavor make with the SEC that are incorporated by reference into this information statement/prospectus, as described in the section entitled “Where You Can Find More Information” beginning on page 310 of this information statement/prospectus.

General

In connection with its entry into the transaction agreement, WWE formed two wholly owned subsidiaries, New PubCo and Merger Sub. Subject to the terms and conditions of the transaction agreement, (i) WWE will undertake the Pre-Closing Reorganization, (ii) following the Pre-Closing Reorganization, Merger Sub will merge with and into WWE, with WWE surviving the merger as a direct, wholly owned subsidiary of New PubCo, (iii) following the merger, the surviving corporation will be converted to WWE LLC, a Delaware limited liability company, which will be wholly owned by New PubCo immediately prior to the WWE transfer, and (iv) following the conversion, New PubCo will (a) contribute all of the equity interests in WWE LLC to HoldCo in exchange for 49.0% of the membership interests in HoldCo on a fully diluted basis after giving effect to any issuance of membership interests in HoldCo in connection with such exchange and (b) issue to EDR OpCo and certain of its subsidiaries equity a number of shares of New PubCo Class B common stock, par value $0.00001 per share, representing, in the aggregate, 51.0% of the voting power of New PubCo on a fully diluted basis and no economic rights in New PubCo, in exchange for a payment equal to the par value of such New PubCo Class B common stock. As a result of the Transactions, including the merger, subsidiaries of Endeavor are expected to collectively own 51.0% of the voting power of New PubCo and 51.0% of the economic interests in HoldCo, with former securityholders of WWE common stock indirectly owning 49.0% of the economic interests in HoldCo, 49.0% of the voting power of New PubCo and 100.0% of the economic interests in New PubCo, in each case, on a fully diluted basis. Assuming that there are no changes to WWE’s capitalization from August 4, 2023 until the Closing, immediately following the Closing, (i) assuming a fully diluted basis (i.e., all Other WWE equity securities have been converted into New PubCo Class A common stock) as of such record date, (1) Mr. McMahon is expected to indirectly own approximately 16.4% of economic interests in HoldCo, approximately 16.4% of the voting power of New PubCo and approximately 33.5% of the economic interests in New PubCo, (2) WWE directors and executive officers other than Mr. McMahon are expected to indirectly own approximately 1.2% of economic interests in HoldCo, approximately 1.2% of the voting power of New PubCo and approximately 2.5% of the economic interests in New PubCo, (3) Ms. McMahon is expected to indirectly own approximately 0.3% of economic interests in HoldCo, approximately 0.3% of the voting power of New PubCo and approximately 0.7% of the economic interests in New PubCo, (4) Ms. McMahon Levesque is expected to indirectly own approximately 1.1% of economic interests in HoldCo, approximately 1.1% of the voting power of New PubCo and approximately 2.2% of the economic interests in New PubCo, (5) all other WWE stockholders are expected to indirectly own approximately 29.4% of economic interests in HoldCo, approximately 29.4% of the voting power of New PubCo and approximately 59.9% of the economic interests in New PubCo and (6) former holders of Other WWE equity securities (other than Mr. McMahon and other former WWE directors and executive officers) are expected to indirectly own approximately 0.5% of economic interests in HoldCo, approximately 0.5% of the voting power of New PubCo and approximately 1.1% of the economic interests in New PubCo and (ii) assuming that no Other WWE equity securities have been converted intoNew PubCo Class A common stock as of such record date,

 

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(1) Mr. McMahon is expected to indirectly own approximately 16.6% of the economic interests in HoldCo, approximately 16.6% of the voting power of New PubCo and approximately 34.6% of the economic interests in New PubCo, (2) WWE directors and executive officers other than Mr. McMahon are expected to indirectly own approximately 0.1% of the economic interests in HoldCo, approximately 0.1% of the voting power of New PubCo and approximately 0.2% of the economic interests in New PubCo, (3) Ms. McMahon is expected to indirectly own approximately 0.3% of economic interests in HoldCo, approximately 0.3% of the voting power of New PubCo and approximately 0.7% of the economic interests in New PubCo, (4) Ms. McMahon Levesque is expected to indirectly own approximately 1.1% of economic interests in HoldCo, approximately 1.1% of the voting power of New PubCo and approximately 2.3% of the economic interests in New PubCo and (5) all other former WWE stockholders are expected to indirectly own approximately 29.9% of economic interests in HoldCo, approximately 29.9% of the voting power of New PubCo and approximately 62.2% of the economic interests in New PubCo. Percentages in the immediately preceding sentence may not sum to 100% due to rounding.

In addition, New PubCo will be the sole managing Member of HoldCo and New PubCo will be renamed “TKO Group Holdings, Inc.” immediately following the completion of the Transactions, including the merger.

At the effective time, each issued and outstanding share of WWE Class A common stock and WWE Class B common stock (other than cancelled WWE shares) will be converted automatically into one validly issued, fully paid and non-assessable share of New PubCo Class A common stock. The New PubCo Class A common stock is expected to be listed for trading on the NYSE. If the Transactions are completed, WWE Class A common stock will be delisted from the NYSE, deregistered under the Exchange Act and cease to be publicly traded.

The adoption of the transaction agreement and, therefore, the approval of the Transactions, including the merger, required the affirmative vote of holders of a majority of the voting power of the shares of WWE common stock entitled to vote on such matters. On April 2, 2023, Mr. McMahon, who, as of the date thereof, was the record holder of 69,157 shares of WWE Class A common stock and 28,682,948 shares of WWE Class B common stock, representing approximately 81.0% of the aggregate voting power of the issued and outstanding shares of WWE common stock on such date, delivered a written consent adopting and, therefore, approving the transaction agreement and the Transactions, including the merger. Accordingly, the delivery of the Written Consent was sufficient to adopt the transaction agreement and, therefore, approve the Transactions, including the merger, on behalf of WWE stockholders. WWE has not solicited and is not soliciting your adoption of the transaction agreement or approval of the Transactions, including the merger.

No further action by any Endeavor stockholder or WWE stockholder is required under applicable law, and neither Endeavor nor WWE will solicit the votes of their respective stockholders for the adoption or approval of the transaction agreement or the Transactions, including the merger. Neither Endeavor nor WWE will call a special meeting of their respective stockholders for purposes of voting on adoption or approval of the transaction agreement or the Transactions, including the merger. For this reason, this information statement/prospectus is being provided to you for informational purposes only. You are not being asked for a proxy, and you are requested not to send a proxy.

Consideration to WWE Securityholders

WWE stockholders will receive one share of New PubCo Class A common stock for each share of WWE common stock that they hold. As of the Closing, subsidiaries of Endeavor are expected to collectively own 51.0% of the voting power of New PubCo and 51.0% of the economic interests in HoldCo, with former securityholders of WWE common stock indirectly owning 49.0% of the economic interests in HoldCo, 49% of the voting power of New PubCo and 100.0% of the economic interests in New PubCo, in each case, on a fully diluted basis. The value of the transaction consideration the WWE stockholders will receive in the Transactions, including the merger, will therefore depend on the combined value of HoldCo and WWE at the effective time.

At the effective time, (i) each award of WWE RSUs, including any dividend equivalent rights granted with respect thereof, that is outstanding immediately prior to the effective time will be converted into an equivalent

 

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award of restricted stock units of New PubCo, on the same terms and conditions as were applicable under the award of WWE RSUs immediately prior to the effective time (including any provisions for acceleration), with respect to a number of shares of New PubCo Class A common stock equal to the number of shares of WWE common stock subject to such WWE RSU immediately prior to the effective time, and (ii) each award of WWE PSUs, including any dividend equivalent rights granted with respect thereof, that is outstanding immediately prior to the effective time will be converted into an equivalent award of performance stock units of New PubCo, on the same terms and conditions as were applicable under the award of WWE RSUs immediately prior to the effective time (including any provisions for acceleration), with respect to a number of shares of New PubCo Class A common stock equal to the number of shares of WWE common stock subject to such WWE PSU immediately prior to the effective time; provided, that, the applicable performance-vesting conditions will be equitably adjusted, prior to the effective time by the WWE Compensation Committee of the WWE Board in good faith, following consultation and reasonable consideration of comments from Endeavor, and following the effective time by the New PubCo Compensation Committee of the New PubCo Board, as necessary, and in a manner consistent with past practice, to take into account the effects, if any, of the Transactions, including the merger.

Prior to the effective time, the WWE Board (or an appropriate committee thereof) will take necessary actions such that (i) any offering period under the WWE ESPP during which the effective time would otherwise have occurred will be deemed to have ended on the fifth business day prior to the closing date and (ii) each outstanding purchase right under the WWE ESPP with respect to such offering period will automatically be exercised on the fifth business day prior to the closing date with respect to such offering period.

Based on capitalization information as of August 4, 2023, there are 805,114 shares of WWE Class A common stock underlying the outstanding WWE RSUs, and, assuming that there are no changes to WWE’s capitalization between August 4, 2023 and the completion of the Transactions, immediately following the completion of the Transactions, including the merger, approximately 805,114 shares of New PubCo Class A common stock are expected to be underlying the New PubCo RSUs issued in respect thereof. Additionally, based on capitalization information as of August 4, 2023, there are 1,805,818 shares of WWE Class A common stock underlying the outstanding WWE PSUs, and, assuming that there are no changes to WWE’s capitalization between August 4, 2023 and the completion of the Transactions, immediately following the completion of the Transactions, including the merger, approximately 1,805,818 shares of New PubCo Class A common stock are expected to be underlying the New PubCo PSUs issued in respect thereof.

Potential for New PubCo to Pay Dividends

Following the completion of the Transactions, including the merger, and the listing of the New PubCo Class A common stock on the NYSE, the WWE Designees will be permitted to declare, set a record date for and pay a one-time dividend on shares of New PubCo Class A common stock, funded by a cash distribution by WWE LLC to New PubCo prior to the completion of the Transactions. In the event of any such dividend being declared, all holders of New PubCo Class A common stock as of the applicable record date would receive such a dividend; accordingly, assuming that there are no changes to WWE’s capitalization from August 4, 2023 until the Closing, and that there are no changes to New PubCo’s capitalization from August 4, 2023 until the record date applicable to such dividend (other than in connection with the Transactions), immediately following the Closing, (i) assuming a fully diluted basis (i.e., all Other WWE equity securities have been converted into New PubCo Class A common stock) as of such record date, (1) Mr. McMahon would receive approximately 33.5% of the aggregate amount of any such dividend, (2) WWE directors and executive officers other than Mr. McMahon would receive their pro rata portion of approximately 2.5% of the aggregate amount of any such dividend, (3) Ms. McMahon would receive approximately 0.7% of the aggregate amount of any such dividend, (4) Ms. McMahon Levesque would receive approximately 2.2% of the aggregate amount of any such dividend, (5) all other former WWE stockholders would receive their pro rata portion of approximately 59.9% of the aggregate amount of any such dividend and (6) former holders of Other WWE equity securities (other than Mr. McMahon and other former WWE directors and executive officers) would receive their pro rata portion of approximately 1.1% of the aggregate amount of any such dividend, and (ii) assuming that no Other WWE equity securities have been converted into New PubCo Class A common stock as of such record date, (1) Mr. McMahon

 

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would receive approximately 34.6% of the aggregate amount of any such dividend, (2) WWE directors and executive officers other than Mr. McMahon would receive their pro rata portion of approximately 0.2% of the aggregate amount of any such dividend, (3) Ms. McMahon would receive approximately 0.7% of the aggregate amount of any such dividend, (4) Ms. McMahon Levesque would receive approximately 2.3% of the aggregate amount of any such dividend, (5) all other former WWE stockholders would receive their pro rata portion of approximately 62.2% of the aggregate amount of any such dividend, and (6) all Other WWE equity securities (including those held by Mr. McMahon, which represent less than 0.1% of economic interests in New PubCo on a fully-diluted basis) that have been converted into equity securities of New PubCo (but which have not been converted into New PubCo Class A common stock) would be treated as specified in the agreements applicable to such securities, as described in this information statement/prospectus and the public filings that WWE makes with the SEC that are incorporated by reference into this information statement/prospectus, as described in the section entitled “Where You Can Find More Information.” Percentages in the immediately preceding sentence may not sum to 100% due to rounding.

However, whether such dividend, or any other dividend, will be paid, and the amount of any such dividend, has not yet been determined. To the maximum extent permitted by law, New PubCo is expected to make quarterly distributions of cash received from HoldCo in excess of cash required for New PubCo’s taxes or other costs or expenses, unless a majority of the New PubCo Board determines that HoldCo has a bona fide need for such cash (e.g., potential acquisitions) and determines to loan such excess cash to HoldCo at market rates.

It is expected that such determination would be based on a number of considerations, including, but not limited to, New PubCo’s results of operations and capital management plans, the market price of New PubCo Class A common stock, the availability of funds to New PubCo, industry practice and other factors deemed relevant by the New PubCo Board. In addition, New PubCo’s ability to pay distributions and the amount of any distributions ultimately paid in respect of the New PubCo common stock will, in each case, be subject to New PubCo receiving funds, directly or indirectly, from its operating subsidiaries, including the operating subsidiaries of HoldCo.

Furthermore, the ability of the operating subsidiaries of HoldCo to make distributions to New PubCo will depend on the satisfaction of applicable state law and subject to any covenants and restrictions in existing agreements with respect to such distributions, and the ability of HoldCo to receive distributions from its own subsidiaries will continue to depend on applicable state law with respect to such distributions. There can be no guarantee that New PubCo stockholders will receive or be entitled to dividends.

Ownership of New PubCo after the Transactions

WWE stockholders will receive one share of New PubCo Class A common stock for each share of WWE common stock that they hold. As of the Closing, subsidiaries of Endeavor are expected to collectively own 51.0% of the voting power of New PubCo and 51.0% of the economic interests in HoldCo, with former securityholders of WWE common stock indirectly owning 49.0% of the economic interests in HoldCo, 49.0% of the voting power of New PubCo and 100.0% of the economic interests in New PubCo, in each case, on a fully diluted basis. Assuming that there are no changes to WWE’s capitalization from August 4, 2023 until the Closing, immediately following the Closing, (i) assuming a fully diluted basis (i.e., all Other WWE equity securities have been converted into New PubCo Class A common stock) as of such record date, (1) Mr. McMahon is expected to indirectly own approximately 16.4% of economic interests in HoldCo, approximately 16.4% of the voting power of New PubCo and approximately 33.5% of the economic interests in New PubCo, (2) WWE directors and executive officers other than Mr. McMahon are expected to indirectly own approximately 1.2% of economic interests in HoldCo, approximately 1.2% of the voting power of New PubCo and approximately 2.5% of the economic interests in New PubCo, (3) Ms. McMahon is expected to indirectly own approximately 0.3% of economic interests in HoldCo, approximately 0.3% of the voting power of New PubCo and approximately 0.7% of the economic interests in New PubCo, (4) Ms. McMahon Levesque is expected to indirectly own approximately 1.1% of economic interests in HoldCo, approximately 1.1% of the voting power of New PubCo and approximately 2.2% of the economic interests in New PubCo, (5) all other former WWE stockholders are expected to indirectly own approximately 29.4% of economic interests in HoldCo,

 

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approximately 29.4% of the voting power of New PubCo and approximately 59.9% of the economic interests in New PubCo and (6) former holders of Other WWE equity securities (other than Mr. McMahon and other former WWE directors and executive officers) are expected to indirectly own approximately 0.5% of economic interests in HoldCo, approximately 0.5% of the voting power of New PubCo and approximately 1.1% of the economic interests in New PubCo and (ii) assuming that no Other WWE equity securities have been converted into New PubCo Class A common stock as of such record date, (1) Mr. McMahon is expected to indirectly own approximately 16.6% of the economic interests in HoldCo, approximately 16.6% of the voting power of New PubCo and approximately 34.6% of the economic interests in New PubCo, (2) WWE directors and executive officers other than Mr. McMahon are expected to indirectly own approximately 0.1% of the economic interests in HoldCo, approximately 0.1% of the voting power of New PubCo and approximately 0.2% of the economic interests in New PubCo, (3) Ms. McMahon is expected to indirectly own approximately 0.3% of economic interests in HoldCo, approximately 0.3% of the voting power of New PubCo and approximately 0.7% of the economic interests in New PubCo, (4) Ms. McMahon Levesque is expected to indirectly own approximately 1.1% of economic interests in HoldCo, approximately 1.1% of the voting power of New PubCo and approximately 2.3% of the economic interests in New PubCo and (5) all other former WWE stockholders are expected to indirectly own approximately 29.9% of economic interests in HoldCo, approximately 29.9% of the voting power of New PubCo and approximately 62.2% of the economic interests in New PubCo. Percentages in the immediately preceding sentence may not sum to 100% due to rounding.

Background of the Transactions

The WWE Board, together with members of WWE’s senior management team, regularly reviews WWE’s performance, future growth prospects and overall strategic direction and evaluates various strategies and opportunities to improve WWE’s strategic position and enhance stockholder value. These reviews have included consideration of whether the continued execution of WWE’s strategy and possible strategic opportunities, including opportunities for acquisitions, dispositions, commercial partnerships or combinations with third parties, offered the best avenue to maximize stockholder value. WWE and its representatives also regularly meet with various potential commercial partners to learn about these companies’ businesses and evaluate potential opportunities.

On January 6, 2023, WWE publicly announced its intention to undertake a review of its strategic alternatives with the goal of maximizing value for all WWE stockholders.

The announcement followed the execution and delivery on January 5, 2023 of a stockholder written consent by Mr. McMahon, in his capacity as controlling stockholder of WWE, effecting the immediate removal of JoEllen Lyons Dillon, Jeffrey R. Speed and Alan M. Wexler from the WWE Board without cause, and the concurrent election of each of Mr. McMahon, Michelle D. Wilson and George A. Barrios to the WWE Board and implementing certain amendments to WWE’s Bylaws (the “January 5^th Amendments”).

Also on January 5, 2023, Mr. McMahon issued a press release announcing that he had taken the above described actions to position WWE to capitalize on a unique opportunity to maximize long-term value for all WWE stockholders. Such actions followed letters sent by Mr. McMahon to the WWE Board, dated December 20, 2022 and December 31, 2022, both of which were subsequently made public, wherein, among other things, Mr. McMahon stated his belief that WWE had a narrow window of opportunity to create significant value for all stockholders by undertaking a comprehensive review of strategic alternatives. These letters further stated Mr. McMahon’s belief that his return as Executive Chairman would allow him to provide necessary support to WWE’s senior management during the upcoming negotiations of WWE’s media rights agreements and that any review of strategic alternatives by WWE should occur in tandem with such media rights negotiations in order to maximize value creation for the benefit of all WWE stockholders. Mr. McMahon’s December letters further articulated his belief that both of these initiatives would be optimized to create stockholder value with his direct participation, leadership and support as WWE’s controlling stockholder.

 

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Later on January 5, 2023, following the issuance by Mr. McMahon of the press release, Mr. Emanuel contacted Mr. McMahon noting that he had seen the press release. There was no discussion on this call regarding any potential transaction between Endeavor and WWE.

In connection with the WWE Board’s consideration of Mr. McMahon’s December letters, WWE retained J.P. Morgan on December 30, 2022 to act as financial advisor to WWE in connection with its evaluation of strategic alternatives. J.P. Morgan provided a relationship disclosure letter to WWE’s management on December 26, 2022. The WWE Board selected J.P. Morgan on the basis of, among other factors, J.P. Morgan’s qualifications, extensive experience in advising sport and entertainment companies in connection with potential strategic transactions, and its knowledge and understanding of WWE’s business and industry informed by its longstanding relationship with WWE.

On January 9, 2023, at a special meeting of the WWE Board, the WWE Board elected Mr. McMahon as Executive Chairman of the WWE Board. Also on January 9, 2023, Raine delivered an initial draft of a relationship disclosure letter to WWE.

The WWE Board held a special meeting on January 12, 2023 where the WWE Board discussed WWE’s exploration of strategic alternatives and the process and timeline related thereto, including potential third-party outreach. On January 13, 2023, WWE formally entered into an engagement letter with Raine to act as financial advisor to WWE and Raine delivered an executed version of the previously delivered relationship disclosure letter to WWE’s management. WWE selected Raine on the basis of, among other factors, Raine’s qualifications, extensive experience in advising sport and entertainment companies in connection with potential strategic transactions, and its knowledge and understanding of WWE’s business and industry.

Mr. McMahon subsequently informed WWE that, in light of his view that there was substantial alignment among the WWE Board and management to conduct a review of strategic alternatives amid WWE’s upcoming domestic media rights negotiation cycle, he intended, in his capacity as controlling stockholder of WWE, to substantially repeal the January 5th Amendments. On January 16, 2023, Mr. McMahon, in his capacity as controlling stockholder of WWE, executed and delivered a stockholder written consent effectuating such substantial repeal.

Beginning on January 17, 2023 and continuing until April 2, 2023, when WWE executed the transaction agreement, WWE’s financial advisors, acting on its behalf, contacted and were contacted by over 60 potential counterparties, including strategic companies, financial sponsors, family offices and sovereign wealth funds. As part of this initial outreach, representatives of WWE’s financial advisors contacted Endeavor on January 18, 2023 and described the next steps in the process, which representatives of WWE’s financial advisors indicated would include the distribution of a confidentiality agreement to Endeavor if Endeavor was interested in participating in the WWE process. Beginning on February 2, 2023, representatives of WWE’s financial advisors, acting on its behalf, began to distribute the form confidentiality agreement to such potential counterparties, which included a distribution of the form confidentiality agreement to Endeavor on February 2, 2023.

Between February 6 and March 21, 2023, WWE entered into confidentiality agreements with 20 potential counterparties. All but one of the confidentiality agreements entered into by WWE in connection with this process included a standstill provision for the benefit of WWE with a customary exclusion permitting parties to make proposals to WWE privately and confidentially, and each of the standstill provisions had a duration of at least 12 months. All confidentiality agreements entered into with standstill provisions included the customary exclusion for private proposals and a “fallaway” provision that would allow the counterparty to make a proposal to acquire WWE in the event WWE entered into a definitive sale agreement. Each potential counterparty that had indicated interest in exploring a strategic transaction with WWE was provided an opportunity to enter into a confidentiality agreement with WWE.

In early February 2023, WWE retained Paul, Weiss as legal counsel to WWE in connection with WWE’s exploration of strategic alternatives. WWE chose Paul, Weiss based on Paul, Weiss’ extensive experience in

 

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similar transactions, qualifications and reputation and WWE’s determination that Paul, Weiss would be independent for purposes of representing WWE.

In connection with Mr. McMahon’s election as Executive Chairman, during January and February 2023, WWE’s Compensation Committee (which, for the avoidance of doubt, does not include Mr. McMahon or any member of WWE’s management, and neither Mr. McMahon nor any member of WWE’s management was present for such discussions) discussed and reviewed the terms of Mr. McMahon’s compensation and employment.

On February 7, 2023, WWE and Endeavor signed a mutual confidentiality agreement in order to allow the parties to conduct reciprocal due diligence on each other relating to a possible business combination, and Silver Lake Partners—a significant stockholder of Endeavor—executed a joinder to the Endeavor confidentiality agreement on the same day. The confidentiality agreement with Endeavor contained a 12-month standstill provision binding Endeavor with a customary exclusion permitting Endeavor to make proposals to WWE privately and confidentially and a “fallaway” provision that would allow Endeavor to make a proposal to acquire WWE in the event WWE entered into a definitive sale agreement. The Silver Lake Partners joinder provided that the standstill provision did not apply to Silver Lake Partners except to the extent it was acting on behalf of Endeavor.

Also on February 7, 2023, Endeavor submitted a written non-binding indication of interest (the “February 7 Endeavor Proposal”) to combine WWE with its subsidiary, HoldCo (a holding company for Endeavor’s UFC business), in a cash and stock transaction in which WWE securityholders, at the closing of the transaction, would receive consideration that Endeavor indicated should be valued at $88.43 per share of WWE common stock (excluding the impact of any potential synergies), treating the WWE Class A common stock and WWE Class B common stock the same for these purposes. The February 7 Endeavor Proposal indicated this proposed transaction represented a premium of 23% to WWE’s unaffected share price of $72.04 on January 5, 2023, which was the day immediately prior to WWE’s announcement of WWE’s exploration of strategic alternatives. The February 7 Endeavor Proposal included an option for WWE securityholders to roll over or to be cashed out in the transaction, subject to the right of WWE stockholders to elect to receive cash payments in an aggregate maximum amount of $2 billion. The transaction described in the February 7 Endeavor Proposal would have resulted in the combined business continuing as a publicly traded subsidiary of Endeavor, in which Endeavor would own 57% of the combined business and WWE’s securityholders would own 43% of the combined business, in each case measured on a fully diluted basis and assuming that the Convertible Notes were settled entirely in cash and that no elections to receive cash payments were made by WWE stockholders.

Between February 7, 2023 and continuing into early March 2023, WWE and representatives from Paul, Weiss, acting as legal counsel to WWE, Kirkland & Ellis LLP (“K&E”), acting as counsel to Mr. McMahon, and WWE’s financial advisors had various preliminary discussions with Endeavor, Latham & Watkins, LLP (“Latham”), acting as

legal counsel to Endeavor, and Endeavor’s advisors to clarify the terms set forth in the Endeavor February 7 Proposal, including with respect to the tax aspects of the proposed structure and the valuation implications for WWE’s stockholders.

On February 13, 2023, Raine submitted a preliminary list of written due diligence questions to Endeavor in order to provide a basis for WWE and its advisors to further understand (including from a financial and valuation perspective) the implications of the February 7 Endeavor Proposal.

On February 15, 2023, Endeavor submitted an initial due diligence request list to Raine requesting additional information relating to tax structuring and related costs. On February 23, 2023, Raine provided responses to such requests to Endeavor.

Beginning on February 24, 2023, representatives of WWE’s financial advisors, on behalf of WWE, began distributing a process letter, ultimately to eight potential strategic counterparties (including Endeavor) and 12 potential financial sponsor counterparties, all of which potential strategic and financial counterparties had previously executed a confidentiality agreement with WWE except one of the potential strategic counterparties. The process letter requested that the recipients provide a written non-binding indication of interest with respect to a potential acquisition of, investment in, or any other transaction with, WWE no later than Monday, March 13, 2023 at 5 p.m. EST.

 

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On February 28, 2023, Endeavor provided written responses to the initial diligence questions that Raine had provided on February 13, 2023.

On March 1, 2023, WWE formally entered into an engagement letter with Moelis to act as financial advisor to WWE, along with Raine and J.P. Morgan, in connection with WWE’s evaluation of potential strategic alternatives. Moelis had delivered a relationship disclosure letter to WWE’s management on February 27, 2023. WWE selected Moelis on the basis of, among other factors, Moelis’ qualifications, extensive experience in advising sport and entertainment companies in connection with potential strategic transactions, and its knowledge and understanding of WWE’s business and industry.

On March 1, 2023, Mr. Emanuel, Mr. Shapiro and other representatives of Endeavor, met with Mr. McMahon, Mr. Khan and other representatives of WWE, including representatives of WWE’s financial advisors, to discuss the terms of the February 7 Endeavor Proposal. At this meeting, the Endeavor representatives gave a presentation (the “March 1 Presentation”) to the representatives of WWE describing the potential synergies that Endeavor stated it expected could be obtained in a combination.

On March 2, 2023, the WWE Board held a regularly scheduled meeting with representatives of Raine, J.P. Morgan and Moelis in attendance. During the course of this meeting, WWE’s senior management and financial advisors discussed with the WWE Board the ongoing strategic review and process to date, including recent developments regarding Endeavor. The WWE Board was informed that 20 potential counterparties had executed confidentiality agreements. At the meeting, the WWE Board determined that management should continue to actively pursue WWE’s strategic alternatives with all participants while also engaging with Endeavor regarding its outstanding proposal to determine if a viable and compelling transaction could be negotiated.

On March 13, 2023, WWE received preliminary written indications of interest from eight potential counterparties, three of whom (two strategic parties and one financial sponsor) had delivered indications of interest to acquire the whole company and five of whom (all financial sponsors) had submitted indications of interest to provide debt or equity financing to an acquiror in a potential acquisition of WWE, but had not submitted a bid to acquire the whole company. Endeavor did not submit a revised indication of interest at that time. Of the three potential counterparties that had delivered indications of interest to acquire the whole company on March 13, 2023, Strategic Party 1 submitted a cash offer at $95-$100 per share and indicated it would require third party equity and third party debt financing in order to complete a transaction with WWE; Financial Sponsor 1 submitted a cash offer for $90-$97.50 per share and contemplated that it may seek additional equity co-invest partners and that it would obtain debt financing; and Strategic Party 2 submitted a cash offer at an implied share price of $76.83 and indicated that it would need equity and debt financing partners in order to complete a transaction with WWE.

During the period following March 13, 2023, at the direction of WWE management, WWE’s financial advisors facilitated discussions between certain participants in WWE’s strategic alternatives process that had indicated an interest in pursuing a debt or equity financing partnership in connection with a potential transaction in order to attempt to elicit more concrete proposals from such parties at higher valuations.

Beginning on March 19, 2023, at the direction of WWE management, WWE’s financial advisors facilitated discussions between (1) Strategic Party 1 and Financial Sponsor 1 and (2) two other potential counterparties, with the goal of determining with respect to each foregoing pair whether a potential partnership regarding a potential transaction with WWE would be viable and compelling. Strategic Party 1 and Financial Sponsor 1 subsequently engaged in further discussions from March 19, 2023 until April 1, 2023 regarding a potential joint bid, but ultimately did not provide WWE with a joint proposal. The two other potential counterparties also engaged in subsequent discussions and on March 30, 2023 informed WWE’s financial advisors that neither wished to be the lead investor in connection with a potential acquisition of WWE and therefore they did not expect to partner with each other and submit a joint bid.

 

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On March 20, 2023, Raine delivered a written update to its relationship disclosure letter to the WWE Board describing its relationships with Endeavor and its affiliates and two counterparties that had submitted bids to WWE, including Strategic Party 1 and Financial Sponsor 1.

On March 21, 2023, the WWE Board held a special meeting with members of senior management and representatives from Raine, J.P. Morgan, Moelis, Paul, Weiss and K&E in attendance. Representatives of the financial advisors reviewed the key terms provided by each of the three parties other than Endeavor that had delivered indications of interest to acquire WWE in response to WWE’s solicitation of “round 1” indications of interest. The representatives of the financial advisors also described the terms provided by five additional parties that had submitted indications of interest to provide debt or equity financing to an acquiror in a potential acquisition of WWE, but had not submitted a bid to acquire WWE. The representatives of the financial advisors noted that the potential counterparties that had delivered indications of interest with the highest per share valuation (other than Endeavor) were Strategic Party 1 and Financial Sponsor 1. The representatives of the financial advisors also noted that none of the other potential acquirors that had submitted indications of interest to acquire WWE had indicated the financial capability to acquire WWE on a standalone basis without external financing, and as a result each such potential counterparty (including Strategic Party 1 and Financial Sponsor 1) would require third party equity and/or debt financing partners to be able to complete any proposed transaction with WWE. As such, financing partners had not yet been identified or secured, the representatives of the financial advisors noted that such counterparties that would require a partner in order to complete a transaction would likely need additional time to be in a position to sign a definitive agreement with WWE. WWE’s financial advisors also described the potential risks related to the availability of financing (both debt and equity) for the parties other than Endeavor and that if those parties failed to secure such financing, such parties could no longer be part of and remove competitive tension from the strategic review process. The representatives of the financial advisors also noted that Endeavor had indicated that it would not require a partner or other third party financing in order to complete its proposed transaction and had communicated a desire to move forward expeditiously to sign definitive agreements with respect to a transaction. The WWE Board discussed with its financial advisors potential combinations of bidders and debt and equity financing sources, noting the view that introducing Strategic Party 1 and Financial Sponsor 1 to each other to permit them to enter into discussions regarding partnering with each other could result in a bid that was competitive with Endeavor. Following discussion, the WWE Board determined to permit Strategic Party 1 and Financial Sponsor 1 to engage in discussions regarding partnering.

Representatives of the financial advisors then reviewed with the directors a preliminary financial analysis of the February 7 Endeavor Proposal, which they noted was subject to completion of their financial due diligence, as well as the fact that the February 7 Endeavor Proposal would result in the combined company continuing as a consolidated, publicly traded subsidiary of Endeavor in which Endeavor would own 57% of the combined company and WWE’s securityholders would own 43% of the combined company, in each case on a fully diluted basis. Throughout and following the financial advisors’ presentation, representatives of Raine, J.P. Morgan and Moelis responded to questions and other considerations raised by the directors.

The WWE Board also discussed with senior management and its legal and financial advisors a term sheet that had been prepared in connection with the ongoing Endeavor negotiations (the “WWE Term Sheet”), which had been provided to the WWE Board prior to the meeting. Representatives of Paul, Weiss explained that the WWE Term Sheet contemplated improved economic terms for a potential transaction and included illustrative governance rights that could be implemented in connection with any potential transaction with Endeavor.

Representatives of Paul, Weiss then summarized for the WWE Board certain key provisions of the WWE Term Sheet, explaining that the WWE Term Sheet proposed an equity ownership of 51.0% to Endeavor and 49.0% to WWE’s securityholders, in each case on a fully diluted basis. The proposed ownership levels implied an illustrative value of WWE using Endeavor’s valuation framework of $95.66 per share without synergies and $105.04 per share with $90 million of annual synergies (reflecting the mid-point of a $60-$120 million range for total estimated revenue and cost synergies, as set forth (without further allocation or detail) in the March 1 Presentation), with the potential for substantially higher synergies to be evaluated during further diligence,

 

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compared with valuations of $95.00- $100.00 per share and $90.00-$97.50 per share in the proposals received from Strategic Party 1 and Financial Sponsor 1, being the highest other proposals received; an all-stock transaction (involving only a single class of combined company common stock) with no cash election by WWE stockholders; an 11-person board, with six directors selected by Endeavor and five directors selected by WWE (and, with respect to WWE, going forward, by those five directors then on the board of the combined company) (the “WWE Directors”); Mr. Emanuel as the Chief Executive Officer of the combined company, with the Executive Chair of the combined company to be selected by the WWE Directors; certain minority approval rights exercisable by a committee comprised of the WWE Directors; a proposal to establish a post-closing dividend policy for the combined company; and the designation of a WWE representative on the Endeavor board (to be selected by a committee comprised of the WWE Directors).

Representatives of Paul, Weiss then reviewed with the WWE Board certain legal considerations applicable to the directors in this context, including the fiduciary duties applicable to their decision-making under Delaware law.

Following this discussion, the WWE Board determined to invite Strategic Party 1 and Financial Sponsor 1 to participate in the next round of WWE’s strategic review process and to engage in discussions regarding partnering, which could include providing all three parties with access to non-public information regarding WWE through WWE’s “round 2” electronic data room and otherwise progressing diligence with those counterparties. The WWE Board also determined that WWE management should continue discussions regarding a potential transaction with Endeavor on the basis of the WWE Term Sheet, which would include providing the WWE Term Sheet and a draft transaction agreement reflecting the terms discussed with the WWE Board to Endeavor when determined appropriate by WWE management.

On March 22, 2023, Messrs. McMahon and Khan, representing WWE, and Messrs. Emanuel and Shapiro, representing Endeavor, met in Stamford, Connecticut to discuss a potential transaction as contemplated by the WWE Term Sheet that had been authorized by the WWE Board but which was not shared with Endeavor prior to the meeting. During the course of this meeting, the parties aligned on continuing discussions on the basis of an equity ownership of 51.0% to Endeavor and 49.0% to WWE’s securityholders (i.e., as had been proposed by WWE), measured on a fully diluted basis, with the consideration to be received by WWE securityholders to be paid 100.0% in the form of equity of a newly formed publicly traded company.

Following this meeting, later on March 22, 2023, with the approval of WWE management, Paul, Weiss provided Latham with a copy of the WWE Term Sheet.

On March 23, 2023, Latham provided a revised term sheet to Paul, Weiss and K&E (the “March 23 Endeavor Term Sheet”). The March 23 Endeavor Term Sheet proposed that Mr. McMahon: serve as the Executive Chair of the combined company until his death, resignation or incapacity; have the right to select five of the 11 directors of the combined company and have veto rights over the taking of certain actions by the combined company, including certain related party transactions and sale transactions in which Endeavor would receive a disproportionate control premium relative to other WWE stockholders, in each case for so long as Mr. McMahon continued to own more than a to-be-agreed percentage of the equity in the combined company held by Mr. McMahon at signing or until Mr. McMahon no longer served as the Executive Chair of the combined company; that Mr. McMahon would approve the Transactions through a stockholder written consent and that the Transactions would not be subject to approval from any other WWE stockholders. During conversations on March 23 and March 24, 2023 involving representatives of K&E, Latham and Paul, Weiss, representatives of Latham emphasized to representatives of K&E and Paul, Weiss that the governance proposals in the March 23 Endeavor Term Sheet were fundamental to Endeavor’s thesis for pursuing a transaction with WWE in light of, among other things, Endeavor’s belief that Mr. McMahon’s continued leadership as contemplated by the March 23 Endeavor Term Sheet would be critical to the value creation driving Endeavor’s desire to engage in the transaction, and that agreeing to increase WWE’s securityholders’ pro forma equity ownership in the combined company to the 51/49 split that had been proposed by WWE was conditioned upon both changes required by Endeavor to the governance arrangements set forth in the March 23 Endeavor Term Sheet. Representatives of

 

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Latham also reiterated Endeavor’s position that Mr. McMahon provide his written consent to approve the potential transaction with Endeavor promptly following the signing of definitive transaction agreements and that the potential transaction not be subject to approval by any other WWE stockholders (which would mean that the potential transaction would not be subject to any “majority of the minority” stockholder approval condition).

Also on March 23, 2023, with the approval of WWE management, Paul, Weiss provided a draft transaction agreement to Latham. That same day, WWE provided Endeavor and its legal and financial advisors, Strategic Party 1 and Financial Sponsor 1 with access to a “round 2” electronic data room containing non-public information regarding WWE.

On March 24, 2023, WWE provided “round 2” data room access to Strategic Party 1’s outside financial advisors.

On March 24, 2023, representatives of Latham, Paul, Weiss and K&E engaged in discussions regarding the March 23 Endeavor Term Sheet, the draft transaction agreement and related matters.

Later on March 24, 2023, Endeavor provided WWE and its legal and financial advisors with access to an electronic data room containing non-public information regarding Endeavor and UFC.

On March 25, 2023, WWE provided “round 2” data room access to Strategic Party 1’s outside legal advisors.

On March 26, 2023, Latham provided a revised draft of the transaction agreement to Paul, Weiss and K&E. Also on March 26, 2023, representatives of Strategic Party 1 attended a WWE event held in Denver to which WWE had provided them tickets.

During this time and continuing until April 2, 2023, WWE and Endeavor engaged in reciprocal due diligence with respect to accounting, business, financial, legal, tax and other matters. During the course of this diligence work, Endeavor made it known that the ongoing financial audit of UFC would not be completed for several weeks and Endeavor proposed providing the audited financials following execution of definitive transaction agreements.

Concurrent with the parties’ respective diligence efforts, and continuing until April 2, 2023, representatives of Latham, Paul, Weiss and K&E, along with senior management of both Endeavor and WWE and their respective financial advisors, had a number of conversations and negotiations regarding the definitive transaction agreement and related matters and exchanged drafts of the term sheet and definitive agreements.

On March 27, 2023, the WWE Board held a special meeting with members of senior management and representatives of Raine, J.P. Morgan, Moelis, Paul, Weiss and K&E in attendance. During the meeting, representatives of the financial advisors provided a status update regarding the March 22, 2023 meeting between representatives of WWE and Endeavor and subsequent discussions between the two parties’ advisors regarding the potential transaction and described the March 23 Endeavor Term Sheet, including that Endeavor had agreed to an increase in the pro forma ownership of WWE’s securityholders in the combined company from 46% (the previous proposal in the February 7 Endeavor Proposal) to 49.0% (in each case, on a fully diluted basis and assuming that the Convertible Notes were entirely stock settled) (the “March 23 Endeavor Proposal”). The representatives of the financial advisors also discussed Endeavor’s proposal that UFC and WWE each hold a minimum amount of operating cash at the closing of the proposed transaction, which the WWE Board was informed by members of senior management and representatives of the financial advisors was currently expected to result in a distribution of approximately $300 million (based on the WWE management forecasts) to a newly-formed, publicly-listed holding company of which the economic interests would initially be held by the legacy WWE securityholders post-closing. In addition, the directors discussed certain criteria in connection with the potential transaction with Endeavor: (1) whether the potential transaction was likely to provide greater value to WWE stockholders than WWE’s standalone plan; (2) whether the potential transaction was likely to provide

 

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greater value to WWE stockholders than the other indications of interest received by WWE; (3) the potential speed of the Endeavor process and whether it was a positive or negative from a maximization of shareholder value standpoint; and (4) the go-forward governance structure.

With respect to the first two of the foregoing criteria discussed by the directors, and noting that additional valuation work needed to be completed, WWE’s financial advisors discussed with the WWE Board their preliminary financial analysis of: (a) WWE’s standalone plan, (b) the economic terms of the potential transaction with Endeavor, and (c) the terms of the all-cash indications of interest received from each of Strategic Party 1 and Financial Sponsor 1. WWE’s financial advisors discussed with the WWE Board that while the all-cash bids received from Strategic Party 1 and Financial Sponsor 1 could provide WWE stockholders with an immediate cash exit and low execution risk if a definitive agreement could be reached, none of the indications of interest had included secured financing and each of the other potential counterparties that had provided initial indications of interest, including Strategic Partner 1 and Financial Sponsor 1, would require debt and/or equity financing partners to more fully develop its potential proposal. WWE’s financial advisors also provided their views on the potential risks of obtaining such financing in the current macroeconomic climate and in light of the valuation ranges included in the indications of interest received by financing sources that had been reviewed at the previous WWE Board meeting. WWE’s financial advisors also discussed the potential loss of competitive tension in the strategic review process if Strategic Partner 1 and Financial Sponsor 1 were unsuccessful in securing financing, such that they were no longer part of the strategic review process. In addition, the financial advisors noted that the all-stock proposal from Endeavor would provide WWE stockholders the opportunity to participate in the potential benefits that may be realized from the near-term rights renewal of WWE and UFC, other revenue synergy opportunities and potential cost savings. The WWE Board discussed with its financial advisors the view that WWE would be best-positioned to obtain the highest valuation for all stockholders by continuing to engage with Endeavor and that the improved economic terms that were negotiated by WWE in the March 23 Endeavor Proposal were, subject to confirmatory diligence and further analysis, reasonably likely to provide greater value to WWE stockholders than WWE’s standalone plan or a transaction with any of the other parties that had provided indications of interest, including by allowing WWE stockholders to participate in the material expected synergies through continuing ownership. Further, while the other potential counterparties were proceeding with diligence, they were behind Endeavor in terms of timing. For these reasons, there could be no guarantee that the preliminary indications of interest provided by such counterparties would develop into bona fide offers, much less a definitive transaction.

Referring to the third criterion referred to above, the WWE Board discussed with its financial advisors factors relevant to whether moving expeditiously with Endeavor would be reasonably likely to result in a transaction that was in the best interests of WWE’s stockholders. In connection with this discussion, the financial advisors discussed with the WWE Board, among other things, that the then-current macro-economic uncertainty in both the mergers and acquisitions and financial markets generally, the fact that the March 23 Endeavor Proposal did not require debt financing or an equity partner, the fact that Endeavor had demonstrated a strong interest in moving quickly and the fact that Endeavor’s interest in doing so was motivated by its desire to quickly realize synergies that could benefit WWE’s stockholders and customers of the combined company. The WWE Board further discussed with the financial advisors that the other participants in WWE’s strategic review process, including Strategic Partner 1 and Financial Sponsor 1, had not to date demonstrated a level of interest and immediate actionability comparable to that demonstrated by Endeavor and, as such, it was possible such other participants would be unlikely to move with the pace required to reach actionable and compelling transaction terms in a timely manner. The representatives of the financial advisors noted that Endeavor and its representatives had already meaningfully engaged on diligence and provided detailed transaction terms, including go-forward governance arrangements, to WWE, as compared with Strategic Party 1, Financial Sponsor 1 and the other participants in the strategic review process.

With respect to the fourth criterion discussed with the WWE Board, the WWE legal and financial advisors discussed with the WWE Board that Endeavor had conditioned the proposed increase in valuation upon Mr. McMahon serving as Executive Chair of the newly formed public company until his death, resignation or

 

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incapacity, having the right to nominate the five WWE representatives to serve among the 11 total directors on the newly formed public company board of directors and having a veto right over certain transactions, in each case until he sold down a to-be-agreed percentage of his equity or he no longer served as Executive Chair. The WWE advisors discussed with the WWE Board that Endeavor had stated that these governance changes were fundamental to Endeavor’s thesis for pursuing the potential transaction in light of, among other things, Endeavor’s belief that Mr. McMahon’s continued leadership as contemplated by the March 23 Endeavor Proposal would be critical to the value creation driving Endeavor’s desire to engage in the Potential Transaction.

In addition, representatives of the financial advisors and members of senior management led a discussion with the WWE Board regarding the diligence conducted to date by WWE on the UFC business, including the financial due diligence.

During the course of this meeting, representatives of each of Raine, J.P. Morgan and Moelis reviewed with the WWE Board their respective relationships with WWE and Endeavor and their respective affiliates, which disclosures were reflected in written materials that had been previously delivered to the WWE Board.

At this meeting, the WWE Board met in executive session with only non-management directors and representatives of each of Raine, J.P. Morgan, Moelis and Paul, Weiss in attendance to allow the non-management directors to further discuss these matters. During the executive session, representatives of Paul, Weiss again reviewed certain legal considerations applicable to the directors in this context, including the fiduciary duties applicable to them under Delaware law. During the course of these discussions the non-management directors further discussed the key terms of Endeavor’s governance proposal, noting that Endeavor’s governance proposal was a pre-condition to its agreement to increase the valuation of its proposal and that Endeavor had stated such rights were critically important to Endeavor because of Endeavor’s interest in ensuring Mr. McMahon’s involvement in the potential transaction. Specifically, the non-management directors noted that in the WWE Term Sheet, Mr. McMahon had not been granted any personal rights and that the March 23 Endeavor Term Sheet had been conditioned upon the provision of such rights. The non-management directors further considered the extent of the specific governance rights proposed to be granted to Mr. McMahon alongside the fact that Mr. McMahon had not, and was not, requesting or proposing such rights and that Mr. McMahon would not be receiving any differential financial consideration under the March 23 Endeavor Term Sheet. Instead, Mr. McMahon was in fact sharing the “control premium” that was potentially obtainable by him for transferring his controlling position in WWE to Endeavor with the other stockholders of WWE.

On March 27, 2023, following the WWE Board meeting, Paul, Weiss provided a further revised term sheet to Latham which reflected guidance received from the non-management directors in the executive session and which had been subsequently discussed with Mr. McMahon, K&E and members of senior management. Also on March 27, 2023, Latham provided Paul, Weiss and K&E with an initial draft of the stockholders agreement.

Between March 27, 2023, and April 2, 2023, representatives of Paul, Weiss had a number of separate discussions with the non-management directors regarding various matters, including various legal considerations applicable to such directors in the context of a proposed transaction with Endeavor.

On March 28, 2023, WWE’s Compensation Committee (which, for the avoidance of doubt, does not include Mr. McMahon or any members of WWE’s management, and neither Mr. McMahon nor any member of WWE’s management was present for such discussion) met for the purpose of reviewing and considering proposed employment agreements and compensation arrangements, including finalizing an employment agreement for Mr. McMahon. The Compensation Committee also reviewed and approved the grant of equity awards in respect of certain specified officers and one other member of WWE management as well as a proposed sale bonus agreement and sale bonuses for five specified officers and one other member of WWE management, in each case in connection with a potential change in control transaction (with the goal of driving the successful operation of WWE during the period between signing of a definitive transaction document and closing of any potential change in control transaction contemplated thereby and to promote the retention and continued focus of certain

 

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key employees). Pearl Meyer & Partners, LLC, the Compensation’s Committee’s compensation consultant, advised the Compensation Committee with respect to market practices and sale bonuses implemented by comparable companies. The Compensation Committee considered the proposed recipients and amounts of the sale bonuses, the extraordinary efforts of each of the proposed recipients, conditions on payment of the sale bonuses (including the types of transactions under which payment would be made), sale bonuses implemented by comparable companies, market data and the amount and size of the sale bonuses relative to the size of the proposed transaction. For the avoidance of doubt, Mr. McMahon was not granted a sale bonus.

Also on March 28, 2023, Latham provided Paul, Weiss and K&E with a further revised draft of the term sheet. Later that day, Paul, Weiss provided a further revised term sheet to Latham.

On March 29, 2023, Latham provided Paul, Weiss and K&E with a revised draft of the term sheet. Also on March 29, 2023, Paul, Weiss provided revised drafts of the transaction agreement and term sheet to Latham, and K&E provided a revised draft of the stockholders agreement to Paul, Weiss and Latham.

On March 31, 2023, multiple drafts of the transaction documents, including the transaction agreement and the stockholders agreement, were exchanged by Latham, Paul, Weiss and K&E. The key matters addressed in the drafts shared over these four days included, among other things: the amount of the pre-closing cash distributions to be made by HoldCo and WWE to New PubCo; the scope of the post-closing indemnity provided by HoldCo in favor of New PubCo; provisions related to the delivery of audited HoldCo financials; continuing employee benefits and mechanics of WWE PSU vesting; the scope of the interim operating covenants; and certain restrictions on Mr. McMahon’s ability to transfer shares of New PubCo common stock.

Later on March 31, 2023, J.P. Morgan delivered a written update to its relationship disclosure letter to the WWE Board describing its relationships with WWE, Endeavor and its affiliates and several counterparties that had submitted bids to WWE, including Strategic Party 1 and Financial Sponsor 1.

Early on April 1, 2023, Raine delivered a written update to its relationship disclosure letter to the WWE Board describing its relationships with Endeavor and its affiliates and with Strategic Party 1 and Financial Sponsor 1.

Also early on April 1, 2023, Paul, Weiss provided a revised draft of the transaction agreement to Latham. On the same day, K&E provided a revised draft of the stockholders agreement to Paul, Weiss and Latham.

On April 1, 2023, the WWE Board held a special meeting with members of senior management and representatives of Raine, J.P. Morgan, Moelis, Paul, Weiss and K&E in attendance. Mr. Levesque was not in attendance at the meeting due to his competing commitments at WrestleMania (which was occurring concurrently with the meeting), but he had informed members of senior management, who discussed with the WWE Board at the meeting, of his full support for the Transactions on the terms that had been agreed (subject to approval by the WWE Board) based on prior meetings and discussions he had with the WWE Board and WWE’s legal and financial advisors. During the course of the meeting, representatives of Paul, Weiss also advised the WWE Board of conversations with the non-management directors that had taken place during the prior week regarding such directors’ consideration of the potential transaction with Endeavor.

Representatives of the financial advisors began the meeting by reviewing WWE’s extensive outreach to potentially interested third parties and noting that there had been extensive speculation and reporting on WWE’s strategic review process in the financial and business media. Representatives of the financial advisors noted that, notwithstanding that outreach, the preliminary written indications of interest received on March 13, 2023 and WWE inviting the parties that had submitted the most compelling indications of interest to a second round data room, that there had not yet emerged any alternatives to the potential transaction with Endeavor that were executable in the near-term.

 

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Representatives of the financial advisors then reviewed the economic terms of the potential transaction with Endeavor, including the contemplated equity ownership of 51.0% to Endeavor and 49.0% to WWE’s securityholders, measured on a fully diluted basis, and the potential for the combined company to receive cash as part of the transaction which could be used by New PubCo to pay a dividend to the holders of its Class A common stock (which WWE stockholders would receive in the Transactions) following the closing of the Transactions, which the representatives of the financial advisors discussed with the WWE Board would be expected to result in New PubCo having sufficient cash to pay a dividend based on the WWE management forecasts following the closing of the Transactions. Representatives of Paul, Weiss then reviewed certain legal considerations applicable to the directors in the current context, including the fiduciary duties applicable to the directors in considering approval of the potential transaction with Endeavor. Representatives of Paul, Weiss also reviewed with the WWE Board the transaction structure and the key terms of the transaction agreement and the stockholders agreement, including the proposed governance arrangements, the expectation that Mr. McMahon would, as controlling stockholder, provide a written consent shortly after execution of a definite agreement and that no further WWE stockholder approval would be sought (which would mean that the Transactions would not be subject to any “majority of the minority” stockholder approval condition), which would mean that no other action by the WWE stockholders would be required to complete the Transactions and therefore the right of WWE to terminate the transaction agreement in response to a superior proposal would be eliminated, the anticipated timing of closing, the indemnity proposed by Endeavor in favor of New PubCo and WWE’s termination right tied to the timely delivery and substance of the audited financial statements of UFC.

Representatives of Raine, J.P. Morgan and Moelis then reviewed with the directors their respective financial analyses of the consideration proposed in the Transactions using various methodologies, including, in each case, a discounted cash flow analysis, and discussed the various assumptions underlying those analyses, including the financial projections for each of WWE and UFC and the projected synergies from the Transactions as provided by WWE management. The projected synergies discussed with the WWE Board at this time were prepared by WWE management as of such date and included both cost synergies that could potentially be achieved through utilization of Endeavor’s back office and infrastructure and revenue synergies that could potentially be achieved by growth across revenue areas, including, but not limited to, sponsorships, site fees and media rights. Please see the section of this information statement/prospectus entitled “Certain Unaudited Prospective Financial Information—Certain Synergies Estimated by WWE Management” for more information regarding these projected synergies which were prepared by WWE management and provided to the WWE Board in connection with its evaluation of WWE’s strategic alternatives and to Raine, J.P. Morgan and Moelis for their use and reliance in connection with their respective financial analyses and opinions. Throughout the meeting, the WWE Board asked questions of its advisors and management and engaged in discussions regarding the Transactions.

Raine then delivered its oral opinion to the WWE Board, subsequently confirmed by delivery of a written opinion dated April 2, 2023 to the WWE Board to the effect that, taking into account the consummation of the Transactions contemplated by the transaction agreement, as of April 1, 2023, the aggregate transaction consideration to be paid to the holders of WWE common stock (other than cancelled WWE shares) pursuant to the transaction agreement was fair, from a financial point of view, to such holders. For the full text of the written opinion of Raine, dated April 2, 2023, see “The Transactions—Opinions of WWE’s Financial Advisors” beginning on page 109 of this information statement/prospectus.

J.P. Morgan then delivered its oral opinion to the WWE Board, subsequently confirmed by delivery of a written opinion dated April 2, 2023 to the WWE Board to the effect that, as of April 1, 2023, the 49.0% of the membership interests in HoldCo on a fully-diluted basis to be received by New PubCo in exchange for all of the issued and outstanding membership interests of WWE LLC was fair, from a financial point of view, to New PubCo. For the full text of the written opinion of J.P. Morgan, dated April 2, 2023, see “The Transactions—Opinions of WWE’s Financial Advisors” beginning on page 109 of this information statement/prospectus.

Moelis then delivered its oral opinion to the WWE Board, subsequently confirmed by delivery of a written opinion dated April 2, 2023 to the WWE Board to the effect that, as of April 1, 2023, the exchange ratio implied

 

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by the ownership by New PubCo of 49.0% on a fully-diluted basis, and the ownership by Endeavor of 51.0% on a fully-diluted basis, of HoldCo was fair, from a financial point of view, to New PubCo. For the full text of the written opinion of Moelis, dated April 2, 2023, see “The Transactions—Opinions of WWE’s Financial Advisors” beginning on page 109 of this information statement/prospectus.

Following further discussion with senior management and WWE’s legal and financial advisors, and taking into account the factors described below in greater detail in the section entitled “The Transactions—WWE’s Reasons for the Transactions; Recommendation of the WWE Board of Directors” beginning on page 98 of this information statement/prospectus, the members of the WWE Board present unanimously adopted resolutions which, among other things, (i) determined that it was advisable and in the best interests of WWE and the WWE stockholders to enter into the transaction agreement and to consummate the Transactions, (ii) approved the execution, delivery and performance of the transaction agreement and the consummation of the Transactions and (iii) resolved to recommend that WWE stockholders adopt the transaction agreement.

That evening and during the course of April 2, 2023, WWE, Endeavor and their respective legal and financial advisors finalized the definitive transaction agreements.

On April 2, 2023, the parties executed and delivered the definitive transaction agreements. Shortly after the execution of the transaction agreement, Mr. McMahon delivered the Written Consent approving the Transactions.

On the morning of April 3, 2023, prior to the opening of trading on NYSE, the parties issued a joint press release announcing the execution of definitive transaction agreements.

WWE’s Reasons for the Transactions; Recommendation of the WWE Board of Directors

Following WWE’s review of its strategic alternatives to maximize value for all WWE stockholders, and as discussed by the WWE Board from time to time between January and April, 2023, on April 1, 2023, the WWE Board unanimously adopted resolutions (i) determining that it was advisable and in the best interests of WWE and the WWE stockholders to enter into the transaction agreement and to consummate the Transactions, (ii) approving the execution, delivery and performance of the transaction agreement and the consummation of the Transactions and (iii) resolving to recommend that WWE stockholders adopt the transaction agreement.

In the course of reaching its determination and recommendation, the WWE Board consulted and received advice from its outside financial, accounting and legal advisors and from WWE’s senior management and considered a number of factors including, but not limited to, the following material factors:

Potential Positive Factors. In recommending that WWE stockholders adopt the transaction agreement, the WWE Board considered a number of factors that it believes support its decision, including, among other factors, the following (not necessarily in order of relative importance):

 

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Attractive Value. The WWE Board’s belief that the per share transaction consideration provides WWE’s securityholders with an attractive value for their shares of WWE common stock in light of a number of factors, including:

 

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Sharing of Control Premium. The fact that all WWE stockholders, including Mr. McMahon, will receive the same transaction consideration per share of WWE common stock and, as such, Mr. McMahon is not receiving differential financial consideration despite the fact that he is relinquishing his controlling position in WWE, and that, as a result, all WWE stockholders would share in the control premium being paid by Endeavor;

 

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Post-Closing Dividend. That WWE is permitted to distribute excess cash to New PubCo as part of the Transactions which could be used by New PubCo to pay a dividend to the holders of New PubCo Class A common stock (which WWE stockholders would receive in the Transactions)

 

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following the completion of the Transactions, and the WWE Board’s understanding that it would be expected to result in New PubCo having sufficient cash to pay a dividend (based on the WWE management forecasts);

 

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Participation in the Combined Company. The all-stock nature of the Transactions, which will allow existing WWE stockholders to participate in the expected increased value of New PubCo through a 49.0% interest in HoldCo (on a fully diluted basis). Specifically, among other things, the WWE Board considered:

 

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The ability for WWE’s securityholders to meaningfully share in the continued successes of WWE;

 

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The ability for WWE’s securityholders to participate in the UFC business, including its global fan base, domestic media rights profile, sponsorship revenue, event operations, hospitality and technological capabilities;

 

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The cost synergies that are expected to be achieved by utilizing Endeavor’s back office and robust infrastructure and the synergies that are expected to be achieved by growth across revenue areas, including domestic media rights, sponsorships and site fees, which are more fully described in the section entitled “Certain Unaudited Prospective Financial Information—Certain Synergies Estimated by WWE Management” beginning on page 109 of this information statement/prospectus; and

 

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The potential for the combined company to develop new forms of content and pursue other strategic opportunities to further bolster both companies’ strong stable of brands.

 

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The potential benefits, including operational benefits, to the combined company from being a part of the Endeavor corporate ecosystem.

 

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Management and Governance of the Combined Company. The WWE Board’s belief that the governance arrangements contained in the transaction documents are favorable to WWE’s securityholders based on, among other factors:

 

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That WWE and UFC will continue to be led by their respective experienced management teams and that the New PubCo directors that will be nominated by WWE and Endeavor will have experience and expertise in WWE’s and UFC’s respective businesses and the WWE Board’s belief that such familiarity would be important to achieve the anticipated synergies;

 

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That a majority (six of 11) of the directors on the New PubCo Board will be required to be independent; and

 

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That the transaction documents include governance protections to ensure that the interests of legacy WWE stockholders are represented on the New PubCo Board, as further described in the section entitled “Summary of Certain Agreements Related to the Transactions—Governance Agreement” beginning on page 181 of this information statement/prospectus.

 

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Fairness Analyses. The financial analyses separately presented to the Board by representatives of each of Raine, J.P. Morgan and Moelis. The WWE Board also considered:

 

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The oral opinion of Raine rendered to the WWE Board, subsequently confirmed in Raine’s written opinion dated April 2, 2023, to the effect that, as of April 1, 2023 and taking into account the consummation of the Transactions contemplated by the transaction agreement, the aggregate transaction consideration to be paid to the holders of WWE common stock (other than cancelled WWE shares) pursuant to the transaction agreement was fair, from a financial point of view, to such holders, as more fully described below in the section entitled “The Transactions—Opinions of WWE’s Financial Advisors—Opinion of Raine” beginning on page 109 of this information statement/prospectus;

 

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The oral opinion of J.P. Morgan rendered on April 1, 2023, which was confirmed by delivery of a written opinion of J.P. Morgan to the WWE Board, dated April 2, 2023, which stated that, as of such date and based upon and subject to the factors and assumptions set forth in its written opinion, the WWE Transfer Consideration to be received by New PubCo in the proposed WWE transfer was fair, from a financial point of view, to New PubCo, as more fully described in the section entitled “The Transactions—Opinions of WWE’s Financial Advisors—Opinion of J.P. Morgan” beginning on page 121 of this information statement/prospectus; and

 

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The oral opinion of Moelis rendered on April 1, 2023, which was subsequently confirmed by delivery of a written opinion of Moelis, dated April 2, 2023, to the WWE Board to the effect that, as of such date, and based upon and subject to the assumptions made, procedures followed, matters considered and other limitations set forth in the opinion, the exchange ratio was fair, from a financial point of view, to New PubCo. (See the section entitled “The Transactions—Opinions of WWE’s Financial Advisors—Opinion of Moelis” beginning on page 133 of this information statement/prospectus).

 

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Diligence. The results of the due diligence investigation of UFC conducted by WWE’s management and outside advisors.

 

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Value Relative to Standalone Prospects: The WWE Board’s belief, after discussion with WWE management and its financial and legal advisors, that the per share transaction consideration compares favorably to the potential long-term value of a share of WWE’s common stock if WWE were to remain as a standalone entity after taking into account the risks and uncertainties associated with this alternative, including WWE’s business, competitive position and current market and financial conditions. Specifically, among other things, the WWE Board considered:

 

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Its knowledge and understanding of WWE’s business, operations, assets and liabilities, financial condition, earnings, strategy and future prospects;

 

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WWE’s historical and projected financial performance, including certain forecasts for WWE prepared by or at the direction of senior management of WWE, which reflected various assumptions of WWE’s senior management, including with respect to potential synergies that would be shared with WWE’s securityholders, as further described in the section entitled “—Certain Unaudited Prospective Financial Information” beginning on page 105 of this information statement/prospectus; and

 

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The risks that WWE would face if it continued to operate on a standalone public company basis, including the risk factors set forth in WWE’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and the possibility that the trading price of shares of WWE Class A common stock would not reach and sustain the level of the transaction consideration, or that doing so could take a considerable period of time.

 

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Value Relative to Other Indications of Interest. The WWE Board’s belief, after discussion with WWE management and its financial and legal advisors, that a potential transaction with Endeavor was reasonably likely to provide greater value to WWE stockholders than a transaction with any of the other parties that had provided indications of interest as part of WWE’s strategic review, as further described above in the section above entitled “—Background of the Transactions”, and that, were WWE to have delayed executing the agreement with Endeavor to continue to seek to negotiate with other potential bidders, this would have created a risk that the transaction with Endeavor might no longer be available for WWE on the negotiated terms, in which event securityholders of WWE would lose the opportunity to obtain the proposed transaction consideration. The WWE Board also considered that:

 

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WWE received written indications of interest from nine potential counterparties (including Endeavor) and provided three such potential counterparties (including Endeavor) with access to an electronic data room containing non-public information about WWE;

 

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Each of the eight counterparties (other than Endeavor) who provided indications of interest to WWE submitted offers at a lower implied valuation than the transaction consideration (1) were proceeding with diligence but were behind Endeavor in terms of timing and had not to date demonstrated a level of interest comparable to that demonstrated by Endeavor and, as such, it was possible such other participants would be unlikely to move with the pace required to reach actionable and compelling transaction terms in a timely manner, (2) would require debt and/or equity financing partners to more fully develop their potential proposals and (3) there could be no guarantee that the preliminary indications of interest provided by such counterparties would develop into bona fide offers, much less a definitive transaction; and

 

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The improvement in the transaction consideration offered by Endeavor after negotiation with WWE and its advisors from an ownership percentage of WWE securityholders of 46.0% to 49.0%, on a fully diluted basis and assuming that the Convertible Notes were settled entirely in stock, and the belief of the WWE Board that this transaction consideration and other terms to which Endeavor could agree were the most favorable, from an economic perspective, to the holders of WWE common stock, as more fully described in the section entitled “The Transactions—Background of the Transactions” beginning on page 87 of this information statement/prospectus.

 

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Other Strategic Alternatives. The WWE Board’s belief that there had not emerged any alternatives to the potential transaction with Endeavor that were executable in the near-term or that were likely to result in a more attractive proposition for WWE’s securityholders in light of, among other factors, the potential risks, rewards and uncertainties associated with those alternatives. In making that assessment, the WWE Board considered that:

 

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WWE had publicly announced its strategic review process on January 6, 2023 and then conducted an extensive process to explore those alternatives, which had provided any interested potential counterparties extensive opportunities to express their interest;

 

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In total, WWE and its financial advisors, acting on behalf of WWE, contacted and were contacted by over 60 potential counterparties and WWE entered into confidentiality agreements with 20 potential counterparties; and

 

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The WWE Board’s financial advisors, at the direction of the WWE Board, had informal discussions with four potential counterparties (other than Endeavor) that the WWE Board considered to be among the parties most likely to be interested in an acquisition of WWE with the goal of determining whether such potential counterparties partnered together to undertake a potential transaction with WWE would be viable and compelling, and such counterparties ultimately did not provide WWE with any joint proposal and would have required debt and/or equity financing that had not been secured.

 

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Likelihood and Speed of Consummation. The WWE Board’s belief that the Transactions would likely be consummated in an expeditious manner (which was important due to, among other things, the then-current macro-economic uncertainty in both the mergers and acquisitions and financial markets generally) based on, among other factors:

 

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The collective view of WWE’s advisors that Endeavor wanted to consummate a transaction expeditiously to realize synergies across WWE’s business and that any value created by such synergies would be shared with WWE’s securityholders;

 

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The support of Mr. McMahon, who, as of April 2, 2023, was the record holder of 69,157 shares of WWE Class A common stock and 28,682,948 shares of WWE Class B common stock, representing approximately 81.0% of the aggregate voting power of the issued and outstanding shares of WWE common stock on such date, sufficient to provide the stockholder approval required to approve the Transactions, including the merger; and

 

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The collective view of WWE’s advisors that Endeavor and its representatives had already meaningfully engaged on diligence and provided detailed transaction terms, including go-forward governance arrangements, to WWE, as compared to the other participants in the strategic review process.

 

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Certainty of the Completion of the Transactions. The WWE Board’s belief that the terms of the transaction agreement, taken as a whole, increased the degree of certainty that the Transactions will be completed, including:

 

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The closing conditions and the circumstances in which Endeavor may terminate the agreement being specific and limited;

 

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The fact that no third-party equity or debt financing is required in connection with the Transaction, resulting in the absence of a financing condition or other similar contingency in the transaction agreement;

 

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The fact that the outside date may be extended to July 2, 2024 in certain circumstances if the Transactions will not have been completed by January 2, 2024, which is anticipated to allow for sufficient time to obtain required regulatory approvals while minimizing the length of time during which WWE would be required to operate subject to the restrictions on interim operations set forth in the transaction agreement;

 

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The fact that the Transactions are not subject to the conditionality and execution risk of any required approval by Endeavor’s stockholders; and

 

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WWE’s ability to specifically enforce Endeavor’s obligations under the transaction agreement, including Endeavor’s obligations to complete the Transactions.

 

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Other Terms of the Transaction Documents. The WWE Board’s belief that the terms of the transaction agreement, including the nature of the representations, warranties and covenants provided by UFC in the transaction agreement, the restrictions on WWE’s operations during the period prior to the completion of the Transactions and the conditions to each party’s obligations, are favorable to WWE, including:

 

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The scope of the post-closing indemnity provided by HoldCo in favor of New PubCo, as further described in the section entitled “Summary of the Transaction Agreement—Indemnification” beginning on page 176 of this information statement/prospectus;

 

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The limitations imposed on Endeavor’s ability to compete with, or acquire additional interests in, New PubCo, as further described in the section entitled “Summary of Certain Agreements Related to the Transactions—Governance Agreement” beginning on page 181 of this information statement/prospectus;

 

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That the transaction agreement allows WWE to continue to declare and pay regular quarterly cash dividends on the WWE common stock, which have historically been $0.12 per share, in the period prior to Closing;

 

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That Endeavor was required to deliver to WWE the HoldCo Audited Financial Statements no later than July 1, 2023, and if the operating income reflected in such audited financial statements for the fiscal year ended December 31, 2022 (excluding the impact of stock-based compensation expense) had been less than 92.5% of the operating income reflected in the previously provided unaudited financial statements of HoldCo for the fiscal year ending December 31, 2022 (excluding the impact of stock-based compensation expense), WWE could have terminated the transaction agreement and, in the event of such termination, Endeavor would have been required to reimburse WWE for certain expenses; and

 

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The expectation that WWE stockholders will not recognize gain or loss for U.S. federal income tax purposes as a result of the merger and the Conversion.

 

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Potential Negative Factors. In recommending that WWE stockholders adopt the transaction agreement, the WWE Board also considered a variety of risks and potentially negative factors, including, among other risks and factors, the following (not necessarily in order of relative importance):

 

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The possibility that, although the transaction consideration provided the WWE stockholders the possibility to participate in the combined company, the price of the WWE common stock might have increased in the future to a price greater than the price of the New PubCo Class A common stock;

 

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The fact that the WWE stockholders cannot be certain of the value of the New PubCo Class A common stock to be paid to them as consideration for the Transactions given the all-stock nature of the Transactions and the absence of an adjustment for changes in value;

 

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The possibility that another party might have been willing to pay a higher purchase price for WWE than the transaction consideration;

 

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The risk of not realizing all of the anticipated strategic and other benefits between WWE and UFC, including, without limitation: the risk of not capturing all or a part of the anticipated cost and revenue synergies; the possibility that, without assuming the achievement of such synergies, New PubCo could have lower revenue and growth rates than each of WWE and UFC experienced historically; and the risk that the integration of WWE and UFC will subject WWE to liabilities that may arise at UFC, including liabilities arising out of the Transactions and the UFC Credit Facilities;

 

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The risks and costs associated with the potential diversion of management and employee attention and focus during the pendency of the Transactions;

 

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The potential effect of the public announcement of the transaction agreement, including effects on UFC and WWE’s revenues, customers, employees, operating results and share price and the risk of losing key WWE or UFC management, employees or talent during the pendency of the Transactions and thereafter;

 

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The risks related to the possibility that the Transactions might not be completed in a timely manner or at all, including that failure to complete the Transactions could cause WWE to incur significant expenses and/or lead to negative perceptions among investors;

 

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The fees and expenses associated with negotiating and completing the Transactions, including the merger;

 

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The fact that audited HoldCo financial statements were not available at the time of signing the transaction agreement;

 

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The risks and costs associated with the increased leverage of HoldCo as compared with WWE;

 

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The possibility that WWE will not have sufficient cash at the completion of the Transactions to distribute cash to New PubCo such that New PubCo will not have cash to pay a post-closing dividend to the holders of New PubCo Class A common stock, or that the amount of cash available for a post-closing dividend will be less than currently expected;

 

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The fact that, as a condition to entering into the transaction agreement, Endeavor required that the transaction agreement include a provision requiring that the Written Consent be delivered on the same day that the transaction agreement was executed, and that, if the Written Consent was not so delivered, WWE would be subject to a $90 million termination fee, as well as a provision that allowed Endeavor to terminate the transaction agreement if Mr. McMahon failed to execute and deliver the Written Consent within 12 hours after signing the transaction agreement The WWE Board also considered the fact that:

 

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Following delivery of the Written Consent, the transaction agreement prohibits the WWE Board from making an adverse recommendation change or terminating the transaction agreement with respect to an acquisition proposal; and

 

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Endeavor had stated that it required (i) approval of the transaction agreement and the Transactions by Mr. McMahon shortly after the transaction agreement was signed and (ii) that no further WWE

 

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