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Ari Emanuel: Here's what I would also say to you, we paid a fair price and I'll tell you why. We paid a little bit for control premium with our cost cuts, their new deal is coming up, which is right now. Our cost savings that we think we can extract from the business right now and grow the business with all of our levers, whether it be international sales, domestic, sponsorship, gambling, all the things that we do. I think it's right.
I would also say to you is, when I bought IMG, everybody said I overpaid. It was actually one of the cheapest deals in sports for sure. When I bought the UFC, everybody at 4.2 billion, they were like, "Crazy." We've tripled the EBITDA in that period of time. Now with this, this is going to be UFC 2.0 as it relates to all the things in the flywheel that we can bring to them. We have unbelievably attractive economics. The balance sheet's incredible. Our debt ratio is less than three times. Our free cash flow conversion is unbelievable. So I think when people look at this business on a combined basis and also look at the remaining assets for both shareholder, it's incredible.
Scott Wapner: Are you still as committed to de-leveraging as you've told Wall Street that you are? You said at a conference about a month ago, "We've taken the company from eight times levered to four times. I'd sleep a lot more if we got it lower." Are you still committed to that?
Ari Emanuel: Well right now in the new company we'll be at below three, at Endeavor we'll be below three also. So, I think we're doing our job there.
Scott Wapner: Why didn't Wall Street see this coming? I read analyst notes which said, "Deutsche Bank, 'We believe a WWE acquisition is off the table at this point.'" They thought maybe you were going to go in a different direction. What did Wall Street miss?
Ari Emanuel: Everything. Listen, I don't think people realize that Vince saw what we built with the UFC. He knows what he wants to do with the WWE and take it to the next level. We had long conversations about it. We think this is right for both groups. I think they just missed the value proposition and the flywheel effect on both of the companies.
Scott Wapner: What happens if you guys disagree? Executive chairman, McMahon says, "I think we should be doing this." CEO, Emanuel says, "No, I think we should be doing this, and this is my show." What happens?
Vince McMahon: Well, what happens there is we have a little contest in the ring.
Scott Wapner: Some people are going to say, "He's not joking."
Vince McMahon: I outweigh Ari by a hundred pounds, so I think that's the answer.
Scott Wapner: But seriously, what happens if you guys disagree?
Ari Emanuel: Here's what we said and I said it to him, "If we disagree on something that we want to do, we're not doing it." It's the relationship I have with Silver Lake and it's the relationship I have with Dana. Dana's got the say as it relates to the UFC, Vince as it relates to the WWE. He's going to have the say. We have nothing to do with the creative process. That's Vince's and that's Dana's situation. All the back stuff, we're going to try and do what we do. I think that's what he wants. But if there's a disagreement, that's called a relationship, we will work it out and that's how we have it.
Vince McMahon: Let me make it clear, I thought you worked for me.
Scott Wapner: On the creative side, Vince, do you plan to be as involved as you have in the past on the creative side?
Vince McMahon: Yes and no. On a higher level, yes. And the weeds, which I always loved to get in the weeds in the past, no, can't do that.
Scott Wapner: What happens if Vince, Mr. McMahon character, decides he wants to get back into the ring, do you let him?
Ari Emanuel: His choice.
Scott Wapner: Purely his choice?
Ari Emanuel: Purely.
Vince McMahon: That's not going to happen.
Scott Wapner: Famous last words.
Vince McMahon: I'm 77.
Scott Wapner: I know we're coming towards the end of our time, but the TV rights, where are we in the stage of renegotiating that, given where the economy is, given some of the concerns about the escalation in rights fees, how optimistic are you in renegotiating those fees?
Ari Emanuel: Well, the rights fees are now coming up. Here's what I would say to you-
Scott Wapner: Have you started the talks yet?
Ari Emanuel: No, they have not started the talks yet. Here's what I would say to you is, the number one show in cable is Raw, 1.8 million viewers, up nine percent from the same period of time, 2022 to 2023. Even though everybody says, "Cable's dying," Raw is up. SmackDown, I think it's 2.3 million viewers, up seven percent, same period. And the unbelievable thing is the 18 to 49 demographic is the best in the business. The rate card is way below market by a significant amount. So when you think about those things, and in my opinion, Vince and I talk about this, content's king. There's linear players, there's cable players, there's the SVOD players, everybody wants the young demographic, the social. I mean we're across the board, male, female, young, old, both assets. I think they're going to get a proper price.
Vince McMahon: The idea here is, there's nothing like the two combined, it's live. That's really a key because our events are live. People want to watch live. One of the reasons why we are a success and continue to be a success and can fit in every medium, can fit everywhere. In terms of social media and everything else, we fit everywhere.
Scott Wapner: Before I let you go, I want to ask you specifically about how you think about your legacy given where you took this company, what's happened in the last year, the regrets you may have as a result of all that, and how you think your legacy and your story will be told?
Vince McMahon: Well, let me just say that I've made mistakes, obviously, both personally and professionally through my 50-year career. I've owned up to every single one of them and then moved on. I'm not sure, the legacy stuff, I'm not going to write it, so I don't know. I want to say it's someone who had an extraordinary amount of fun, great passion for what they did, and wound up doing the biggest deal he's ever done in his life.
Scott Wapner: You say you're not going to write your legacy, but you did make that deal that you get a multimillion dollar payout if the company gets sold and you control your IP. So in a sense, you are going to write your legacy.
Vince McMahon: How about that? I just did, you wrote it for me.
Scott Wapner: What about that deal? People thought that was rather peculiar.
Vince McMahon: Which deal?
Scott Wapner: About getting the payout if the company gets sold, and then also owning the rights to your intellectual property so that you can tell your story if you want to.
Vince McMahon: It is what it is.
Ari Emanuel: Let me just tell you my opinion because we talked about this. I think that's fair. It is his legacy. He's the one, we're coming together. He's the one that should control his legacy. It shouldn't be controlled by somebody else and that's actually fair. A legacy, he's built 50 years. It shouldn't be held by anybody else. It should be held by him. That's the right thing to do.
Scott Wapner: When do we get a name for the new company?
Ari Emanuel: We're working on it now.
Vince McMahon: Very soon.
Ari Emanuel: Very soon.
Scott Wapner: And when do you expect it to go public, as you say, on the New York Stock Exchange?
Ari Emanuel: Hopefully in the next four to six months, so depending on the government.
Scott Wapner: Gentlemen, thank you.
Ari Emanuel: Thank you, Scott.
Scott Wapner: I appreciate it very much.
Vince McMahon: Thanks Scott.
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