WrestleMania in Riyadh? Are We Sure About That?

The geo-political ground has shifted out from under TKO and that ain't all

At The MMA Draw, we’ve been way out in front, singing the praises of TKO and bossman Ari Emanuel for being the absolute best at navigating the turbulent waters of Donald Trump’s second term as US President.

Ari, Mark Shapiro, Nick Khan, and the TKO crew have built a multi-billion-dollar sports business empire on three pillars:

1. A principled commitment to squeezing sponsors, fans, and fighters for every possible cent

2. A political alliance with Donald Trump, and

3. Financing from the Gulf Kingdoms of the Arabian Peninsula

In light of current events, that last one brings to mind Jesus’ parable of The Wise and Foolish Builders from Matthew 7:24-27:

²⁴ “Therefore everyone who hears these words of mine and puts them into practice is like a wise man who built his house on the rock. ²⁵ The rain came down, the streams rose, and the winds blew and beat against that house; yet it did not fall, because it had its foundation on the rock. ²⁶ But everyone who hears these words of mine and does not put them into practice is like a foolish man who built his house on sand. ²⁷ The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash.”

Mark Shapiro’s UFC Business Model Is Obvious

We’ve been decrying Mark Shapiro’s value extraction Private Equity bro business practices since this newsletter launched, so I’ll let some quotes from the latest episode of The Ariel Helwani Show illustrate the state of the situation:

Ariel Helwani: They’ve got big fights in their back pocket, like they have big fights. I just got to be honest. Like there’s a part of me that’s unsure if this regime...

All I keep hearing about is the UFC has never been more disorganized.

This is what everyone’s telling me I’ve been checking in while I’m away. What’s going on with this?

Why are they announcing Miami so late? Like, what’s going on with that?

Historically, we would know what’s the main event for May by now, let alone April 11.

And there’s a part of me that wonders, look at the stuff that Ronda said.

Like why wouldn’t you take Ronda Rousey back? You’re telling me Ronda Rousey doesn’t add a few more (Paramount) subs? Against Gina or not, why wouldn’t you take her back?

And so there’s a part of me that is worried that this regime like, can they close the deal? Can they make the big fights happen? Will they close the deal with Jon (Jones) and Alex (Pereira)? Will they close the deal with with Conor McGregor? Will they close the deal on some of these big fights? Can they close these big fights? When’s the last mega fight that they closed for us? When’s the last mega fight?

Petesy Carroll: That they could be just trying to put on the the cheapest events as far as she’s concerned, like not wanting to spend money to maximize their profit. Like, do you believe that’s real in 2026? Having just signed this Paramount deal or does that seem a bit far fetched?

Eric Jackman: It does not and so that would tell me, though that this is by design, right? The big fights require big purses the big fights require X number of dollars to get Jon Jones to get Conor McGregor to get Ronda Rousey and I can make 80% of what I was going to make with those people. But my cost is one fourth, one tenth why why would I do it from a business perspective?

Ariel Helwani: They got to make the big fights, Man come on. They’re in the fight making business, like enough already.

Eric Jackman: What’s funny about it is on the boxing side, you hear the executives and Dana White and everybody being like, ‘boxing never made the big fights. They never have this guy fighting that guy. We’re gonna do it we’re gonna do it.’

I’m laughing because I’m looking over at the MMA side of it, and they never do it. And they continue to not do it. And we continue to see these fights that everybody’s clamoring for and not get made.

Mark Shapiro is on a conference call seemingly every day talking about their bottom line and nothing about the actual fights themselves.

Not that that’s his job, but when he talks about it, it’s very clear to me that they’re counting dollars and cents and worried about profit margins and ROI and not necessarily making the best fights.

And if it hasn’t been clear by how much Dana White’s Contender Series filler talent appears on every single card, they’ve been telling us that they don’t care about the big fights for years now.

And the lack of quality fights is beginning to impact the business:

Disappointing ticket sales for the most recent UFC Fight Night in Mexico are a concern for TKO. International sites like Perth (Australia), London, and especially cities in the Middle East have been great sources of site fees “Financial Incentive Packages.”

But the UFC Fight Night coming up later this month in London looks weak, and fans are already complaining of being priced out by high ticket prices. There’s a pattern of ticket sales diminishing by ~20-25% on return visits to an international city.

That’s not a promotion experiencing explosive, generational growth. That’s a sign of value extractors running out the string.

That’s why Middle Eastern shows in Al Rayyan, Qatar, and Abu Dhabi, UAE, were so critical to TKO’s bottom line in 2025 — no one pays higher site fees than the Gulf States, or they did.

If the Iran War ends the dream of Arabian cities as major tourist destinations, how is TKO going to meet its 2030 goal of earning $360 million/year from “Financial Incentive Packages?”

TKO needs Middle Eastern money and shows. Andrew Schleimer (CFO) always talks about the importance of these events. How big is the site fee the Saudis are set to pay for WrestleMania 43? $100 million? More?

And will Riyadh be under any condition to host it come 2027?

We don’t even know how much Las Vegas paid in “FIP” to steal WrestleMania 42 out from under New Orleans, but we can assume it was much less than Riyadh, with reports of poor ticket sales and a dying Las Vegas, I wouldn’t expect them to increase the FIP they get out of Vegas going forward.

And Then There’s the WWE

Our own Blake “Axe” Avignon tweeted about the getting-to-know-you pains between ESPN and WWE:

Sources: Inside ESPN, there’s chatter that WWE’s transition into the network’s ecosystem hasn’t been seamless. One person described it as a “DNA mismatch”, adding that WWE leadership has yet to make a unified push to correct the shortcomings.

That unease, according to another source, extends beyond distribution. Early #WrestleMania42 ticket movement hasn’t inspired confidence, they said, viewing it as a sign the current strategy may not be landing as intended. ESPN and WWE also announced that the first hour of WrestleMania 42 will air live on ESPN’s linear channels before shifting to #ESPNUnlimited, a move designed to broaden exposure but one that also underscores the evolving nature of the new distribution model.

Separately, TKOGrp’s reported restriction on nearby venue watch-party broadcasts was characterized by one source as a self-inflicted deterrent. The source argued the policy undercuts the very FOMO effect live events thrive on. If price-sensitive fans opted to watch Night 1 locally and the show delivered, the thinking goes, organic buzz and fear of missing out could have driven incremental ticket sales for Night 2. Instead, limiting nearby broadcasts may suppress that spillover demand. The same person also pointed to the rising cost of WWE fandom and what they described as Mark Shapiro’s growing disconnect from the everyday WWE consumer.

Let’s not forget that it wasn’t Mark Shapiro who landed the WWE deal with ESPN. It was his rival on the TKO board, Nick Khan.

Maybe that’s why Shapiro took so many shots at the deal on last week’s earnings call.

It almost feels personal, like a Hollywood agent pissing contest.

TKO’s Pals at Paramount Won WBD, But They’re Drowning in Debt

We posted our quick thoughts on the Paramount-WBD merger last week, but the Entertainment Strategy Guy has posted on it now, and I gotta share a bit of his analysis:

Hollywood is divided. Some folks wanted Netflix because of political reasons. Netflix is still viewed as a Democratic-Party-aligned company, while countless people, especially pundits, hate CBS News new politics and dread the Ellisons taking control of CNN.
…
I expect much more pushback now, though I could be wrong. Many Democrats, both in Hollywood and nationally, will oppose the Ellisons taking over CNN, creating a political coalition to stop this deal. Regardless of what generated the pushback, it will still push back.

Longer term, politicized deal-making is bad for deal-making. (Or bad for the economy if it doesn’t get stopped.) We’ll see how that situation evolves going forward.
…
(Paramount-WBD) Weaknesses: Big Tech cash flows: if you have them (Google, Apple, Amazon) life is just easier. (The one counter is they potentially have Oracle cash flow backing them up, but that also has risks if some of the AI bubble talk is to be believed.)
…
Paramount is paying a lot more, already has a lot of debt, and will need to raise a lot more.

In other words, the price means more debt, and that onerous burden will likely swamp this deal. And that’s what killed every other deal for Warner Bros. over the years, which feels fitting. I don’t have a full financial revenue model for you today, but I doubt I could make one that would justify this price tag.

Warner Bros. has been cursed since the 1990s, and it has played a role in sinking the business empire aspirations of TIME Magazine, America Online, the Bronfmans, AT&T, Discover, and many others.

The fall of an earlier incarnation of Warner Bros. sunk WCW, ending the Monday Night Wars and the golden age of sports entertainment, and now Tony Khan and AEW are facing an oncoming train.

The 2018 AT&T Time Warner deal was a catastrophe. Time will tell how the Paramount-WBD deal is seen in retrospect.

Getting In Good With Trump Doesn’t Seem as Domestically Smart as It Did in 2025

Check this shit out. This picture says a thousand words.

Mark Shapiro made some interesting remarks at Morgan Stanley’s technology, media, and telecom conference about June’s UFC White House event:

“Whatever we lose -- [a projected] $30M at this point -- on the event, are we really losing? Other properties would kill to have the opportunity we’re going to have,” Shapiro said. “This is going to be enormous in terms of attention, in terms of earned media, in terms of our fans being happy. ... We are going to fully capitalize on the stage that is the White House, but we’re not going to capitalize on America; we will not profit from this event no matter what.”

Luke Thomas called bullshit, saying instead that TKO is trying to delicately distance itself from what is turning out to be the least popular American presidential administration of the century:

Luke Thomas: In reality, (UFC White House) has nothing to do with July 4th. This has nothing to do with the independence of the country. This has nothing to do with the celebration of the independence of the country. It has everything to do with one entity scratching another’s back and vice versa so that a rising tide between these two entities can lift all boats. That is the only reason it exists.
…
You have absolutely to a certain segment of fans who used to be die hard, not the biggest portion of fans, but a real one. You have turned your brand radioactive. I cannot possibly tell you every time you guys trotted (President Trump) out with Kid Rock’s shitty music. I mean, I’d rather eat a bullet than walk into any room being serenaded by Kid Rock. But that as an aside, every time you did that and every time the fight fighters fawned over him and every time you guys let them get up there and just say the most outlandish things other than complaining about their pay, because that’s when the real problem started, as we all know, you created and cultivated a climate that was absolutely radioactive to people of the left persuasion.

And they all left. They all left. My DMs and e-mail every time you would do that would be filled to the brim with fans being like, ‘You know what? I was kind of already on thin ice with them. I’m done. I can’t do it anymore.’

They’re gone. They’re gone. They’re absolutely gone. You can go back and trace how much the different fan how different the fan base has become from the BMF, the first BMF fight between Diaz and Masvidal at Madison Square Garden all the way around to when Jon Jones had his last fight in Madison Square Garden when the country was in this sort of Trump fervor, but the UFC fan base has just been kind of shuffled out.

…

(TKO) turned the sport into a vector for right-wing politics…

No. No is the answer. To say nothing of the fact that this morning I have to get up and check news that Israel has now invaded southern Lebanon. Americans, over a million Americans from countries like the UAE and and Saudi Arabia and uh Qatar and Lebanon and Bahrain and all, there’s a million Americans and they have basically no way of getting home because the (US) government didn’t assist them. And why didn’t the government assist them? Because they didn’t plan for this Iranian conflict to take the shape that it took so fast, so badly.

That brings us to the subject of our headline.

Donald Trump’s decision to attack Iran over the weekend might be bringing this current era of Middle Eastern politics to a sudden end.

This is a drag for TKO and Paramount alike because they have both become very accustomed to relying on money from Saudi Arabia, Qatar, and the United Arab Emirates.

Qatar is a relatively minor player in TKO’s operations, hosting UFC Qatar last November, and presumably paying a handsome site fee.

But now, Qatar has troubles of its own, per geopolitical analyst Shanaka Anslem Perera:

Qatar, the world’s second-largest LNG exporter and a pillar of European and Asian gas supply, has no pipeline alternative to Hormuz whatsoever. Every cubic meter of Qatari gas reaches the open ocean through the Strait. When Iranian missiles struck the Ras Laffan complex, QatarEnergy halted production at the world’s largest Liquefied Natural Gas facility. The gas that Europe desperately needs for next winter’s storage refill is now sitting in reservoirs with no path to market.

And then there’s the UAE, home of Dubai, a city that has positioned itself as a playground for the wealthy, with its safety guaranteed by the U.S. military.

That’s not going so well this week:

People are running to get out of Dubai, per Semafor:

Cities including Abu Dhabi and Dubai have become playgrounds for the wealthy over the past few years, attracted by the year-round sunshine, tax-free lifestyle, and perception of safety. That was shattered over the weekend as Iranian missiles and drones rained down on the two cities, along with Qatar and Bahrain, causing those that could to attempt to flee.

The Saudi capital’s airport is one of the few still operating in the region, forcing executives and their families stranded in other parts of the Gulf to take the long drive in order to catch private jets or commercial planes.

Private security companies have been booking fleets of SUVs to ferry people on the 10-hour drive to Riyadh from Dubai and then charter private planes to take them out of the region, according to people familiar with the matter. They have been evacuating a mix of people, including senior executives at global finance firms and high-net worth individuals in the region for business or holidays, the people said. The rush in demand is sending prices for private jets and SUVs soaring, these people said.

Shanaka Anslem Perera draws out the implications and says this is more than a hiccup:

This is not a travel disruption story. This is the most expensive real-time stress test ever conducted on the Dubai economic model, and the results are coming in ugly.

Dubai’s economy is 88% expatriate. Its GDP is built on the implicit promise that this is the safest, most connected, most accessible hub in the region. That promise held for two decades. It shattered in 72 hours. Stock trading halted. Hotel no-eviction orders issued. Real estate transactions frozen, with 60 to 80% of deals on hold. Tourism revenues across the GCC totaling $120 billion per year now face structural repricing.

Here is the mechanism the market has not absorbed. The people boarding those $350,000 charters are not tourists. They are the capital. They are the family office principals, the fund managers, the UHNW residents whose presence underwrites Dubai’s entire financial ecosystem. When they leave, they do not just take their luggage. They take their deposits, their deal flow, their counterparty confidence, and their insurance on every asset denominated in the assumption that Dubai is permanent.

The question is no longer whether they left.

It is whether they come back.

And then there’s Saudi Arabia.

Not only is 60% of Zuffa Boxing owned by Saudi Arabia’s SELA, but the Saudis are planning to host Wrestlemania 43 in 2027.

And how are things going for them currently under Uncle Sam’s big safety umbrella?

This isn’t the place for a big debate about how Trump’s Iranian war is going. I’m just trying to point out that if the CIA headquarters in Riyadh isn’t safe, things aren’t looking as rosy for the future of tourism in the Kingdom.

Ari Emanuel has pulled off many business miracles on the way to becoming a billionaire, but let’s not forget he nearly lost everything in the 2020 COVID panic, and 2026 might turn out to be an equally historic bad year.

Social media posts (the ones that get past the censors) show Dubai looking like a ghost city, as if COVID resurfaced.

Ironically, it was Khaldoon Al Mubarak’s willingness to host UFC events at “Fight Island” in 2020 that saved Endeavor and Ari Emanuel’s empire. I wonder if Ari will be able to return the favor in Dubai’s hour of need?

Maybe he can call in Trump’s Board of Peace member Marty Edelman to help. After all, Edelman is the man who initially connected the UFC’s former owners, Lorenzo and Frank Fertitta, Jr., with the UAE and sold the Emirates a 10% share of UFC via Flash Entertainment.

The Gulf Arab states have become key centers of the petroleum, financial, and, more recently, tourist industries under the umbrella of Pax Americana. I’m afraid we’re going to find out very soon if that umbrella still holds.

And if it doesn’t, TKO is going to have to work hard to adapt to a very different world than the one that saw Donald Trump rise to power.

Nate Wilcox founded Bloody Elbow in 2007 and sold it in 2024.