The share price for WWE and UFC stocks took a steep decline on Thursday following the news that PFL MMA would be getting serious financial backing from the Saudi Arabia Public Investment Fund.
WWE and UFC are in the final stages of what will be a major moment in both company’s history. Earlier this year, the two sports and entertainment giants came to an agreement for a merger of the two globally recognized brands. Once the merger is completed, which should be in the next few weeks, the two companies will fall under the umbrella of the newly formed TKO Group Holdings.
Related: UFC tonight – Fight card, betting odds, and watch times for Saturday’s UFC event
The parent company will eventually be publically traded and offer interested investors the chance to own a piece of what should be the preeminent powerhouse in the worlds of professional wrestling and mixed martial arts. While both have long faced competition in their industries, each has always been the world leader in MMA and wrestling.
However, things have changed when it comes to the UFC, and they could soon be faced with the greatest rival the 30-year-old company has ever seen. Earlier this week it was announced that the Saudi PIF — through a newly formed company — purchased a minority stake in the Professional Fighters League. The new partnership will mean an influx of $100 million and could lead to much more in the future.
WWE stocks fell 12% after PFL MMA investment from the Saudi PIF
Having the backing of one of the wealthiest funds in the world instantly makes PFL MMA serious competition for the UFC in the MMA space, and that fact has apparently worried some investors for the two companies that are soon to be merged.
On Thursday, WWE stocks dropped $13.50 a share — down 12% — while shares for the UFC’s parent company Endeavor shares fell to $2.26 — or 9% lower than their previous value.
“While there is room for all to succeed in the growing MMA market, PIF backing augurs poorly for WWE and UFC’s medium/long term talent costs,” Wolfe Research analyst Peter Supino said in a Thursday research note (via Sportico).
The plunge in value is one of the best indicators yet of how huge it is for PFL MMA do have long-term financial support from the Saudi PIF.