Saudi Arabia may team up with UFC owner TKO to create a boxing league

In the days since Donald J. Trump was re-elected president, one of his most notable stops was at an Ultimate Fighting Championship event at Madison Square Garden.

Mr. Trump’s appearance in the front row was notable, as was the presence of some of his closest associates, like Elon Musk, who sat next to him. But few of those present at the battles would admit it The other guy Sitting next to the president-elect.

Yasser Al-Rumayyan, governor of the Public Investment Fund, Saudi Arabia’s massive sovereign wealth vehicle, watched the action from ringside, getting closer to being part of the action. A fund-owned company is close to establishing a boxing league with TKO, the owner of the Ultimate Fighting Championship. A deal for a new competition, featuring up-and-coming boxers associated exclusively with the league, could be announced within weeks, according to three people familiar with the matter.

TKO said in a statement on Wednesday that it had “nothing to announce,” but that it would “evaluate any unique and compelling opportunity that could fit well within our business portfolio and create additional value for our shareholders.”

The wealth fund did not comment.

Potential investment in TKO Follow a A Saudi-Saudi effort In June to create a multibillion-dollar boxing league aimed at uniting the world’s best boxers, who for decades have been divided between rival promoters and vying for titles controlled by an alphabetical array of sanctioning bodies. Although this effort has not been completely abandoned, it has proven complex and expensive, even for a country like Saudi Arabia, which has spent billions over the past half-decade to become a player in some of the world’s biggest sports.

The new league will be invested by Selah Company, a subsidiary of the Public Investment Fund. TKO – controlled by the entertainment and sports group Endeavor and embodied by UFC manager Dana White, An old friend of Mr. Trump‘s- He’ll be a managing partner. In exchange, TKO was offered an equity stake and a share of revenue, according to the people familiar with the matter, who spoke on the condition of anonymity ahead of the formal announcement.

Saudi Arabia has backed some of the biggest and richest boxing bouts in history in recent years. It has hosted major title fights, most recently the showdown between Oleksandr Usyk and Tyson Fury, which ended with Mr. Usyk as the first undisputed heavyweight champion in more than a generation. Such fights, which for many years proved impossible to negotiate, occurred thanks to millions of dollars put on the table by Turki Al-Sheikh, a government official with close ties to the kingdom’s Crown Prince Mohammed bin Salman.

Mr Al Sheikh, a former security guard, has become perhaps the toughest man in boxing, appearing at ringside and even inside the ring in the biggest matches. He also frequently receives letters of thanks from some of boxing’s most famous fighters and promoters, who refer him Such as “Your ExcellencyHe pushed for a partnership with Mr. White, who over the past two decades has transformed the UFC from a $2 million company to one worth more than $10 billion. Talks have been taking place for more than a year in the United States, Europe and Saudi Arabia.

It was Mr. Al-Sheikh Suggested in interviews He was planning a new boxing project. He made no secret of his frustration with the way the sport is run, where the best fighters rarely meet in their prime. In November, he bought Ring Magazine — the century-old bible of the sport — and vowed to reestablish its prominence.

Mr Al Sheikh has also teamed up with the World Boxing Council, a sanctioning organisation, to create the International Boxing Federation Boxing Grand PrixA tournament for young boxers.

For TKO, which owns both the UFC and World Wrestling Entertainment, the venture poses little risk, given that the Saudis are footing the bill. “If we’re going to engage in boxing, we expect to do it organically, not in an M&A way,” Mark Shapiro, TKO’s president, said on an earnings call in November, referring to mergers and acquisitions.

“So, that is, we don’t write a check,” he added.

If the deal is completed, TKO will receive a management fee of approximately $30 million annually. Saudi Arabia is expected to pay far more in hosting fees for the league than any other country, according to details of the plan reviewed by The New York Times. The two fights there will bring in more than $40 million in fees. Other matches are scheduled to be held in the United States and Europe, where hosting fees will be much lower.

TKO is also talking to other parties, including other Arab countries, about a boxing league, according to a person familiar with the matter.

Endeavor, TKO’s parent company, has had a sometimes tense relationship with Saudi Arabia, and this potential partnership indicates that it has largely been repaired. In 2019, after the murder of Saudi journalist Jamal Khashoggi, Endeavour It returned $400 million The Saudi sovereign wealth fund invested in the company.

For the Saudis, having a partner like Mr. White will come at the right time. he Join Meta’s Board of Directors This week, he spoke at the last three Republican national conventions. Mr. Trump regularly hosted UFC events at his properties in the organization’s early years, and has attended many of the fights. Mr. Trump and Al-Rumayyan are also close, with the Saudi-owned LIV Golf Championship holding many of its events at Mr. Trump’s courses, including one scheduled for April in Florida.

Saudi officials described sports and entertainment as key pillars of a strategy known as Vision 2030, to move their economy away from dependence on oil exports, and as part of efforts to liberalize society. Critics have described these efforts differently, calling them a way to use sports to deflect focus from Saudi Arabia’s human rights record, a tool known as “sportswashing.”

What TKO will have is a partnership with the largest sports investor in the world. Saudi Arabia has invested in teams, talent and events across a wide range of sports, most recently securing the rights to host the 2034 FIFA Men’s World Cup, the most watched event on the planet.

The UFC’s US media rights deal with ESPN expires this year, as does the network’s deal with Top Rank, a major boxing promoter. TKO could try to bundle the rights to the new boxing league with those of the UFC to help support the emerging boxing league.

But applying the UFC’s rules of the game to boxing would be very difficult. Boxing is a more regulated sport than mixed martial arts, with the Muhammad Ali Federal Code stipulating the separation in boxing of the role of manager and promoter, and the general roster of purse figures.

Unlike the UFC, the league will not feature top boxers. They may not think there is an upside to joining. While the fractured nature of boxing means that its earning potential is not maximized for promoters and managers, top boxers earn much more than top MMA fighters.

In October, the UFC Antitrust lawsuit settlement A lawsuit was filed by former fighters — who claimed the company illegally withheld fighters’ salaries — for $375 million. Documents submitted as evidence in that lawsuit showed that the UFC paid less than 20 percent of its revenue to its fighters.

In boxing, these numbers are reversed, with fighters combining to earn upwards of 50 percent of the revenue from any given fight.