The $TKO Long Bull Thesis

The Hidden Monopoly Wall Street Has Completely Mispriced

This is a guest post from Scott Barrett, a leading fantasy football expert and NFL analyst (115K+ followers on X at @ScottBarrettDFB), who is now expanding his analytical coverage into the UFC. You can also follow his UFC-focused account on X at @ScottBarrettUFC.

Since owning shares of Nvidia back in 2016, I never thought I’d encounter another true “Holy Grail” stock — the ex-ante obvious future multi-bagger with near-zero risk.

But I knew that if I did find one, it would have to live in the right industry. For instance, a sector such as financial data, which — as The Terminalist showed brilliantly here — has dramatically outperformed the S&P 500 for more than 30 years.

And it would need a world-class moat. Which led me to think, what moat is better than monopoly economics?

So for the past few months, I’ve been researching elite industries and businesses with monopoly-like structures — places where only a few operators control nearly all of the economics.

I thought I might find something “good,” maybe even impressive.

I did not expect to find anything this good. And certainly not this cheap, or so early into its lifecycle.

At first glance, the company looked like an obvious buy.

But as I dug deeper — into the filings, the partnerships, the regulatory setup, the margin structure, the catalysts lining up — it became clear I had stumbled onto something far rarer.

A company in a structurally advantaged position, run by world-class operators, armed with multiple transformational catalysts, and protected by a moat strong enough to make Buffett tap-dance… yet still completely misunderstood by the market.

A company growing lightning-fast, with elite margins, sitting on several imminent tailwinds — and somehow trading at a valuation that assumes none of this exists.

As I kept peeling back layers, I felt the same sensation I’ve had with the biggest winners of my career:

“Why isn’t anyone talking about this?”

This is the deepest and most asymmetric setup I’ve ever published. The full thesis — including the identity of the company — is below.

Disclaimer: This publication is for informational and educational purposes only and does not constitute investment advice. I am not a registered investment advisor. All opinions expressed are my own and may be incorrect. Readers should conduct their own research and consult a qualified financial professional before making any investment decisions.

Any last-minute guesses?

Are you sure?

Okay.

We’re talking about TKO 0.00%↑ — TKO Group Holdings, Inc.

TKO Group Holdings, Inc. (NYSE: TKO) is a premium sports and entertainment company formed in September 2023 through the merger of Endeavor Group Holdings’ subsidiary Zuffa (parent of UFC) and World Wrestling Entertainment (WWE). It operates as a publicly traded entity, majority-owned (51%) by Endeavor. Headquartered in New York, NY, TKO focuses on combat sports, wrestling, and experiential hospitality, reaching over 1 billion households in 210 countries and producing more than 500 live events annually.

Key Properties and Operations

UFC (Ultimate Fighting Championship): The world’s leading mixed martial arts (MMA) promotion. Led by CEO Dana White.

WWE (World Wrestling Entertainment): A global sports entertainment powerhouse, known for scripted wrestling and media content. Led by President Nick Khan and Creative Head Paul Levesque (Triple H).

Additional Assets: Includes IMG (global sports marketing agency), On Location (premium hospitality), and Professional Bull Riders (PBR). In 2025, TKO announced Zuffa Boxing and plans to acquire more Endeavor assets amid Endeavor’s sale to Silver Lake Partners.

Here’s the pitch:

Management: Elite

• Ari Emanuel — The inspiration for Entourage’s Ari Gold, brother of Rahm Emanuel, and the best deal-maker / most well-connected power broker in American entertainment.

• Mark Shapiro — One of the sharpest operators in media. Rumored internal favorite to replace Bob Iger as Disney CEO. Shapiro is great in his role, but not worried about key man risk because next man up is Nick Khan, who is equally elite.

• Dana White — Signed a new 5-year deal (through 2031). He seems less engaged than he used to be, but he’s still the best promoter combat sports has ever seen, and is a moat in his own right.

Moat: Elite

TKO has a monopoly on combat sports, much like the NBA (basketball), MLB (baseball), and NFL (football) have monopolies in their given domains.

For clarity, this is a pro forma monopoly in MMA and scripted wrestling, with a government-enforced monopoly in boxing coming very soon.

Competition: None

There is effectively zero real competition in the space.

What part of “monopoly status” aren’t you understanding?

5-Point Pitch

1. Sports leagues massively outperform the market

Historically, there are very few investments better than monopolistic sports leagues. It’s just typically been very rare for the public to be able to own a piece of that business.

Investing in TKO today feels almost like owning a stake in an NFL team in the 1960s or 1970s — before the rest of the world understood what those economics would become. To fully appreciate this analogy, and the rarity of the opportunity in front of us, I consider this podcast required listening:

If the NFL comparison feels too lofty, then think about the NBA just a mere decade ago. From 2014 to 2024, the NBA delivered a total return of 2,088% compared to 687% for the S&P 500.

As a function of the industry TKO operates in — and, of course, Ari Emanuel’s core thesis about ballooning media-rights valuations in the streaming wars era, where live sports are the ultra-high-scarcity uber-coveted crown jewel asset — I believe TKO will have a relatively easy time outpacing the S&P 500 for years to come.

2. Extremely high-margin business

There is even a pathway for TKO to outpace the other major sports leagues.

Player compensation consumes roughly half of league revenues in the MLB (48–50%), NFL (48%), NBA (49–51%), and NHL (~50%). By contrast, UFC and WWE talent compensation sits closer to 15% — with no union and no CBA — giving TKO dramatically higher operating leverage and structurally superior margins (an insane 93.1% Gross Profit Margin TTM).

The Muhammad Ali Revival Act seeks to bring the same business model over to boxing.

3. Valuation criticism is overstated

One of the dumbest takes you’ll see, you’ll see repeatedly when researching TKO. It goes something like this:

“TKO currently has an 81.4 P/E ratio, meaning it’s a bit overpriced, operating at a clear premium to Formula One Group Series (NASDAQ: FWONK) which trades at 29x.”

Lies, damned lies, and P/E ratios.

Didn’t I just tell you this was a company experiencing explosive growth?

Were you asleep in August when the UFC just signed a $1.1B/year deal with Paramount, effectively doubling their previous deal with ESPN?

A more meaningful (yet still conservative) valuation anchor comes from TD Cowen:

“In early December of 2025, TD Cowen raised its price target of TKO to $245.00 (up from $230.00), reflecting a multiple of 21x the firm’s FY26 EBITDA estimate.”

21x. That’s it!?

First of all, yes. Obviously, yes. TKO should trade at a very steep premium to F1, just like it should trade at a steep premium to Major League Pickleball and competitive Cornhole. But it doesn’t even? That’s not even true?

TKO currently trades at ~$195, and Cowen’s 21x multiple is based on a target price of $245, which is currently +25% above today’s price. So, it’s really more like a 16.7x multiple.

But if it really were trading at an 80X multiple, that would not be obscene to me. You know boxing is contributing roughly zero to that, right? You know that NFL and MLB franchises routinely transact at 65–85x EBITDA, despite far lower growth and far less efficient margin structures.

At a bare minimum, and to be as generous as possible, it seems WWE is the only head of the TKO Cerberus that is appropriately valued and understood by Wall Street (which is why I give it less attention). UFC and Zuffa Boxing remain dramatically undervalued, embedding enormous free upside as the market catches up. In fact, Zuffa Boxing may not be priced in at all.

4. The UFC’s move to Paramount+ is a generational unlock for the sport

The PPV model (or more accurately, the Crackstreams model) massively throttled the UFC’s growth and mainstream popularity. Now, Paramount+ will offer UFC content for $8/month — a 95% cheaper entry point than traditional PPVs.

CBS — The Tiffany Network — will also air at least six of the UFC’s 12 numbered events each year. (Whether those are full cards or prelims remains unconfirmed, but either way, the reach is enormous.)

The UFC’s upcoming “White House Card” on DJT’s birthday is shaping up to be the biggest single-event attention spike (outside the Super Bowl) since Ali vs. Spinks II (1978). The President is personally promising an all-time spectacle. In his wildest imaginings, you may actually see Putin and Zelensky sitting cageside while Conor McGregor turns Michael Chandler’s face into meatloaf. Dream scenarios aside, the event could or should generate a WrestleMania III–level explosion in visibility and mainstream resonance.

Meanwhile, the increasingly likely PSKY/WBD merger improves the Paramount+ product, boosts subscriptions, and expands UFC distribution. Shapiro has already hinted at UFC airing on HBO Max and TBS. And if the merger goes through, TKO receives incremental simulcast fees, rumored to be in the nine-figure range.

All of this is pretty straightforward:

Greater reach -> more fans -> more lucrative site fees, better sponsorships, higher ticket prices, etc.

Tangentially-Related Side Notes:
1) Boxing, UFC, and WWE have a much easier/cleaner pathway to global expansion than any other major league sport. Is the NFL really going to move the Jacksonville Jaguars to China, Africa, Mexico, or England? I don’t know, but Song Yadong (China), Dricus Du Plessis (South Africa), Diego Lopes (Mexico), and Paddy Pimblett (England) are only a few fights away from becoming champions and headlining an event in their home country.

2) The other major league sports are having a really hard time connecting with Millenials, Gen Z, and Gen Alpha., but combat sports is the only major sports category where the median fan is getting younger. The median UFC fan is 35 years old, much lower than for NFL (50), MLB (47), NBA (42), NHL (49), and MLS (49).

3) It’s a bit harder to quantify, but the UFC is really just a spectacular product and a wildly entertaining sport. Given equivalent exposure, it’s not hard to imagine the UFC (currently at 17% Fan Interest) overtaking the NBA (51%) and MLB (42%) in popularity over the next decade.

5. Zuffa Boxing: The sleeping giant

Thanks to Ari Emanuel’s extensive political connections, The Muhammad Ali Revival Act is 1-6 months away from passing with no real opposition. This will effectively give TKO a government-enforced monopoly on boxing, creating another $20B business out of thin air.

Zuffa boxing is already live with its first event airing on Paramount+ in January. They have the only television deal in boxing today. For the 3-5 super-events (such as Canelo v. Crawford) they’re doing per year, they’ll only get about $10M/event to start, until they hit some easy-to-reach benchmarks over the next few years to turn that into a 50% partnership stake alongside the Saudis, who are currently taking on all risk and eating all costs.

TLDR / Conclusion

TKO is effectively the UFC/WWE/Boxing equivalent of buying into the NFL in the 1960s — elite operators, monopoly economics, and multiple billion-dollar catalysts the market still hasn’t priced in. It offers both massive multi-bagger upside and a uniquely rare margin of safety.

This is a generational buy-and-hold. If I were on my deathbed tomorrow, my last words to my wife really might be:

“No matter how desperate things get… don’t sell TKO until at least 2035.”