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TKO Group, the new Endeavor-owned public company created by the merger of UFC and WWE, released its first quarterly financial results today led by the Ultimate Fighting Championship, showing numbers boosted by media rights, content fees, live events and sponsorships. Three months ended in September.
WWE had softer numbers in the 2023 quarter compared to last year, partly due to timing of events and payments from partners. Revenue fell 6 percent to $287 million. Ebitda (a type of operating profit) fell 17% to $102 million. After some drama on WWE’s part, Endeavor bought him from Vince McMahon this fall and folded him into a TKO with the UFC, creating a combat sport. Ari Emanuel is the CEO of Endeavor and TKO.
The numbers were hit this month as Endeavor marked another dramatic move – plans to go private thanks to major shareholder Silver Lake Partners.
WWE’s sales were squeezed by lower consumer product licensing revenue, lower media rights and content revenue, all of which more than offset contractual payments for WWE’s media rights. Raw And SmackDown, and premium live events, there is TKO. WWE is in the midst of reviving key franchises. He announced a new five-year contract in September Declinewhich will move from Fox to USA Network next year.
At UFC, sales jumped 17 percent to $397 million, driven by a $31 million increase in media rights and content fees, a $12.7 million increase in live events revenue and a $12.2 million increase in sponsorship revenue. The rights and fees were domestic and international and included two more Fight Night events. There was one more live stream, as well as new sponsors and major renovations. UFC ebitda rose 17 percent to $238 million on stronger sales, partially offset by $18 million in higher operating expenses.
Combined revenue for the UFC and WWE in the quarter rose from $645 million to $685 million, an increase of about 6%. Combined EBITDA of $340 million was up nearly 4 percent from $326 million.
Execs will host a call with Wall Streeters at 5 ET to discuss the numbers.
After launching TKO, “Our teams focused on WWE, UFC and Endeavor on integration and implementing our strategy,” said Emmanuel. “This includes identifying top-tier spending alliances where we lead, bringing events to new international markets including Saudi Arabia and Australia, delivering media rights to WWE and closing UFC’s largest partnership deal to date with AB InBev. We know about stocks’ ability to unlock long-term value.
The multi-year InBev deal was announced in October, making Anheuser-Busch and Bud Light the UFC’s sole official beer partner since January.
He TKOed his most profitable assets, hoping that the effort would boost EDR’s stock price. But the damage didn’t materialize and Emanuel said this month that Endeavor is exploring strategic options, though his stake in TKO remains unchanged. Endeavor’s main investor, Silver Lake, has revealed that it is working on a proposal to take the company private.
TKO actually reported consolidated quarterly net income of $22 million, down significantly from $129 million in revenue and up from $340 million to $449 million. But these numbers only include WWE’s financials from September 12 (the day the TKO deal closed) to September 30 (the end of the third quarter).
It said the profit reduction reflected a $136 million loss in selling, general and administrative expenses “related to professional fees and bonuses related to the TKO transaction and restructuring.”
Full quarter-year comparative pro forma results for WWE may be filed with the SEC.
On September 13, TKO made a special one-time cash distribution of $3.86 per share of Class A common stock paid on September 29.
The company stated that there are cash flows generated by corporate activities. It was $67 million, a decrease of $71.3 million from $138.3 million, primarily due to lower revenue.
Free cash flow was $63.6 million, a decrease of $72.5 million from $136.1 million, primarily due to a decrease in cash flow from operating activities.
Cash and cash It was 188.6 million dollars, and total debt $2.773 billion as of September 30.
TKO’s performance highlights for the quarter include:
-The UFC has held 13 events that consistently deliver strong viewership and viewership and hold multiple records for gross revenue per arena.
-WWE signed a five-year domestic media rights deal with NBCUniversal SmackDown From October 2024
–WrestleMania 40The April 2024 concert at Philadelphia’s Lincoln Financial Field broke the all-time gate record by selling more than 90,000 tickets in one day when it went on sale. WrestleMania 39
-The UFC has finalized a multi-year sponsorship agreement with AB InBev, including financial and marketing assets, to become the exclusive “UFC Official World Beer Partner” beginning January 1, 2024.
-UFC has expanded its partnership with the Department of Culture and Tourism to expand its presence in the Middle East North Africa (MENA) region – Abu Dhabi has agreed to a deal to host a number of events until 2028. Fight 3 nights annually, including the first event in Saudi Arabia in March 2024