In the days after Donald J. Trump was re-elected president, one of his most high-profile stops was an Ultimate Fighting Championship event at Madison Square Garden.
Trump's appearance in the front row was notable, as was the presence of some of his closest confidantes, such as Elon Musk, sitting next to him. But few who were present at the clashes would have recognized the other man sitting next to the president-elect.
Yasir al-Rumayyan, the governor of Saudi Arabia's massive sovereign wealth fund, watched the action from the ringside and is inching closer to joining the action. A company owned by the fund is about to form a boxing league with TKO, the owner of Ultimate Fighting Championship. A deal for what would be a new league, with up-and-coming boxers affiliated exclusively with the league, could be announced within weeks, according to three people familiar with the matter.
TKO said in a statement Wednesday that it had “nothing to announce” but that it would “evaluate any unique and compelling opportunity that would fit well within our portfolio of companies and create incremental value for our shareholders.”
The wealth fund did not comment.
The potential investment in TKO follows an attempt by Saudi Arabia in June to create a multi-billion dollar boxing league that aims to unite the world's best boxers, who have been divided for decades by rival promoters and fight for titles controlled by an alphabet soup of sanctioning bodies. That effort, while not completely abandoned, had proven complicated and expensive, even for a country like Saudi Arabia, which has spent billions over the past five years to become a player in some of the world's biggest sports.
The investment in the new competition will be made by Sela, a subsidiary of the Public Investment Fund. TKO — which is largely controlled by the Hollywood talent agency Endeavor and embodied by Dana White, the UFC empresario, a longtime friend of Mr. Trump — would be a managing partner. In return, TKO has received an equity stake and a share of the revenue, according to people familiar with the matter, who spoke on condition of anonymity ahead of the official announcement.
Saudi Arabia has backed some of the biggest and richest boxing fights in history in recent years. It has played host to major title fights, most recently a showdown between Oleksandr Usyk and Tyson Fury that ended with Mr. Usyk as the first undisputed heavyweight champion in more than a generation. Such battles, which for years proved virtually impossible, have occurred thanks to the millions of dollars put on the table by Turki al-Sheikh, a government official with close ties to the kingdom's crown prince, Mohammed bin Salman.
Mr al-Sheikh, a former security guard, has become perhaps the most powerful man in boxing, seen ringside and even inside the ring during the biggest fights. He is also a frequent recipient of letters of appreciation from some of boxing's best-known fighters and promoters, who refer to him as 'His Excellency'. He pushed for a partnership with Mr. White, who over the past two decades has turned the UFC from a $2 million company into one worth more than $10 billion. Talks have been taking place in the United States, Europe and Saudi Arabia for more than a year.
Mr al-Sheikh had suggested in interviews that he was planning a new boxing venture. And he has made no secret of his frustration with the way the sport is practiced, with the best fighters rarely meeting in their prime. In November he bought Ring Magazine – the sport's age-old bible – and vowed to restore its prominence.
Mr al-Sheikh has also worked with the World Boxing Council, a sanctions body, to create the Boxing Grand Prix, a tournament for young boxers.
For TKO, which owns both the UFC and World Wrestling Entertainment, the venture poses little risk since the Saudis are footing the bill. “If we were to get involved in boxing, we would expect to do so in an organic manner, and not in an M&A manner,” TKO President Mark Shapiro said during an earnings call in November, referring to mergers and acquisitions.
He added, “So, that is, we're not writing a check.”
Should the deal close, TKO will earn management fees of nearly $30 million per year. Saudi Arabia is expected to pay significantly more hosting fees to the league than any other country, according to details of the plan reviewed by The New York Times. Two fights there will net more than $40 million in fees. Other competitions are planned for the United States and Europe, where hosting costs will be much lower.
TKO has also discussed the boxing competition with other parties, including other Arab countries, one of the people familiar with the matter said.
Endeavor, TKO's parent company, has had a tense relationship with Saudi Arabia at times, and this potential partnership suggests it has largely been repaired. In 2019, following the murder of Saudi journalist Jamal Khashoggi, Endeavor returned $400 million that the Saudi sovereign wealth fund had invested in the company.
For the Saudis, getting a partner like Mr. White would come at an opportune time. He joined Meta's board this week and has spoken at the last three Republican National Conventions. Mr. Trump regularly hosted UFC events at his properties in the organization's early years, and he has attended many fights. Mr. Trump and Mr. al-Rumayyan are also close, as the Saudi-owned LIV Golf Championship is hosting several events at Mr. Trump's courses, including one scheduled for April in Florida.
Saudi officials have described sports and entertainment as key pillars of a strategy, known as Vision 2030, to shift their economy away from its dependence on oil exports and as part of efforts to liberalize society. Critics have reframed these efforts and positioned them as a way to use sports to distract from Saudi Arabia's human rights record, a tool known as sportswashing.
What TKO would get is a partnership with the largest sports investor in the world. Saudi Arabia has invested in teams, talent and events across a wide range of sports, most recently securing the rights to host the 2034 Men's World Cup, the most watched event in the world.
The UFC's U.S. media rights deal with ESPN expires this year, as does the network's deal with Top Rank, a leading boxing promoter. TKO could look to bundle the rights to its new boxing league with the UFC rights to support the fledgling boxing league.
But applying the UFC playbook to boxing will be extremely difficult. Boxing is a much more heavily regulated sport than mixed martial arts, with the federal Muhammad Ali Act mandating a separation in boxing between the roles of manager and promoter, and the public listing of stock figures.
Unlike UFC, the competition would not include the most prominent boxers. And they may not think there are any benefits to it. Although the fractured nature of boxing means that earning potential is not maximized for promoters and managers, top boxers earn much more than top MMA fighters.
In October, the UFC settled an antitrust lawsuit brought by former fighters — who alleged the company illegally suppressed fighter wages — for $375 million. Documents submitted as evidence in that lawsuit showed that the UFC paid less than 20 percent of its revenues to its fighters.
In boxing, these figures are reversed, with fighters collectively earning over 50 percent of the revenue from each fight.
