Everyone hates monopolies until it comes time to tweak the old 401k and then everyone wants all of those monopolies in their portfolio.
I’m no exception.
I’ve spent decades decrying the business practices of TKO and their predecessors, but when I think about where to put my money, I can’t help but put on a different cap.
But I did promise that I would make a Bear’s case, and that time has come; well, it’s almost here.
First, I want to write a prelude that will seemingly serve to make the bull’s case even stronger.
Let’s just say I’m steelmanning Scott’s case; that’s an argumentative approach that’s the opposite of strawmanning.
Instead of building a weak version of the bull argument, I’m going to make an even stronger version, and then I’ll attack that.
Because TKO is truly an amazing company, and I’ve spent so much time analyzing their every move that I’ve got quite a bit to add to the Bull case…before I tear it all down in the sequel.
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.
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What is TKO?
In the interest of completeness and for new readers, I’ll include the description of TKO that Scott included in his Bull’s case:
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.
It’s important to note that in 2025, UFC revenue is expected to come in at around $1.5 billion, with an estimated EBITDA Margin of 51% (reported figures from TKO’s quarterly reports).
WWE revenue is expected to come in around $1.5 billon, with an estimated EBITDA margin of 52%.
IMG is harder to project as they only became part of TKO in 2025 (acquired from parent company WME Group (formerly Endeavor), but TKO reported IMG’s 3Q revenue at a respectable $336.7 million in revenue with an EBITDA margin of ~18% (which was down $492 million year-over-year(!) because of the lack Summer Olympics last year.)
Point being that IMG brings in gross revenue comparable to UFC and WWE but at a much lower margin.
Professional Bull Riders, for comparison, was tucked into the “Corporate and Other” section of TKO’s 3Q 2025 report, and that division reported $63.3 million in revenue. No idea what kind of EBITDA % we’re talking about for PBR, but it’s a small part of the company despite the company’s optimistic projections for growth.
IMG’s revenue will be up in 2026 based on OnLocation’s work with the 2026 Winter Olympics and FIFA World Cup, but either way, those divisions are secondary to this analysis.
Best parts of the TKO bull case
Scott Barrett made some excellent points in his piece, most importantly:
The TKO multi-monopoly model is incredible Scott began his quest for a great investment by looking for a company that enjoyed “a world-class moat” — i.e., something that protects their business from being gobbled up by competitors — well, he certainly found that in TKO, which enjoys monopsony control over Mixed Martial Arts (MMA) via the UFC and an extremely dominant position in sports entertainment via the WWE.
