Smith Brain Trust / September 18, 2023

Why the UFC-WWE Merger is a One-Two Marketing Punch

Why the UFC-WWE Merger is a One-Two Marketing Punch

With two of the most prominent combat sports properties—WWE and UFC—now united under one belt, eyes are on parent company TKO Group Holdings for its plans to continue growing the brands moving forward.

While the challenge of maximizing the adjacent brands’ marketing potential is seemingly difficult from the outside looking in, the University of Maryland’s Robert H. Smith School of Business’ Mary Beth Furst doesn’t expect TKO to struggle in grappling with the task.

She says there are plenty of examples for TKO to draw inspiration from. Procter & Gamble’s Tide and Gain have successfully co-existed for years. The same goes for Unilever with its Magnum, Wells and Ben & Jerry’s ice cream lineup.

“The goal is to have brand positions that attract complementary target markets,” says Furst, a clinical professor and associate area chair of marketing at the Smith School. “Each brand has to be clear on the value and points of difference it offers customers.”

In Unilever’s case, each brand has a distinct identity that attracts different consumer demographics within the same product space. Ben & Jerry’s playful and environmentally-focused approach appeals to customers who factor sustainability into their purchasing decisions. On the other hand, Furst says that Magnum’s position as a super-premium brand “with a decadent and indulgent identity” lends itself well to customers looking to buy a special treat.

Those examples should give TKO reason enough to believe that both WWE and UFC can complement each other to grow the overall market of viewers in the combat sports and entertainment space.

The partnership may prove to be a boon for each side in securing media rights deals in the near future. UFC’s exclusive seven-year, $300 million contract with ESPN expires in 2025. WWE’s deals with FOX and NBC for its two notable programs—SmackDown and Raw—are up even sooner in 2024.

Disney, Amazon and FOX are reportedly entering the ring—or octagon—to strike a broadcast deal. One primary motivator for locking down the broadcast rights is because it would secure an audience of fans who “are enthusiastic, dedicated supporters who will purchase streaming on multiple platforms,” says Furst.

Other future growth opportunities for the brands under TKO might include enhancing live events—both are known for live shows that travel to major cities worldwide—developing new forms of content and increasing sponsorship and licensing opportunities.

Perhaps the most compelling aspect of the merger lies in the cross-promotion potential for athletes and personalities. It creates a “win-win” situation because athletes can increase their profiles by switching from one sport to another, while TKO will reap the viewership benefits of those decisions.

That trend has already informally occurred, with numerous UFC fighters transitioning to the WWE as they become less dominant. Now, Furst says that TKO can officially lean on that strategy to market fighters in the entertainment space of WWE if they sense it’s a good fit, and the same can be true for the inverse.

“Having a relationship with the athletes that extends their careers across multiple combat sports will strengthen the relevance of TKO,” says Furst.

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