TKO BORROWS a Billion Dollars Just to Buy Back Its Own Stock (FOMO On Steroids)

“Let’s borrow more money to buy more stock”
TKO Group: Sounds Legit. 

TKO Group, the $40B Frankenstein of UFC, WWE, and PBR, woke up and chose violence today with a $1 billion share repurchase… all while borrowing $1B to do it. In short, the company closed a term loan, wired $800M to Morgan Stanley for an accelerated buyback, and lined up another $174M under a 10b5-1 plan. They even tossed in a girthy $26M earlier this month for good measure. Total: $1B out the door, all under a $2B first lien term loan.

(Source: Giphy) 

Why? Because taking on leverage to shrink your float is a whole other level of confidence. In fact, President and COO Mark Shapiro said the quiet part out loud: Screw “capital allocation discipline”... this is about telling investors the stock is undervalued, periot. 

(Source: Investing.com) 

With that said, buybacks are only half the show. TKO just doubled its quarterly dividend to $0.76 a share (roughly $150M in distributions), while also inking a seven-year, $1.1B-per-year UFC media deal with Paramount that kicks in 2026. Meaning, CBS, Paramount+, and an entire global audience will be watching guys in a cage generate more cash than some mid-cap banks. Therefore, on paper, this is a neat little capital return trifecta: buybacks, dividends, and billion-dollar media rights. In practice, it’s the company telling investors: “Yes, we’re levering up, but our stock’s cheap, our brands print cash, and our events fill arenas in 210 countries with 500+ live events a year.”

Naturally, Wall Street is already licking the floor with this. Jefferies went to $250, Guggenheim to $205, UBS reiterated Buy at $164, and Baird initiated at Outperform. It’s the exact same song every time… a bunch of analysts glazing the company’s media contracts like it’s the second coming of Disney.

(Source: Giphy) 

To be fair though, TKO’s balance sheet wasn’t soft to begin with. Current ratio of 1.3, steady liquidity, and enough operational cash flow from UFC pay-per-views, WrestleMania rights, and bull-riding broadcasts to convince lenders this is free money. The company repurchased $170M in 2024 and $100M in 2023, so this $1B program is basically a roided-up sequel.

Which means… which means… the real story is that TKO has officially graduated from “sports entertainment” to financial engineering entertainment. Sure, dudes bleeding in a cage is cool… but the sexier part is using leverage, TV rights, and recurring dividends to keep shareholders locked in while the company scales its empire. And as of right now, it’s working as shares are mooning +3.80% on the day. So yeah, place your bets accordingly, friends. Until next time… 

At the time of publishing, Stocks.News holds positions in Disney as mentioned in the article.