Tag: UFC Financials

TKO Q3 financial call notes: WWE revenue increases while UFC revenue dips, boxing future

Posted on by Josh Nason

The following is being updated as the 5 PM Eastern call progresses.

TKO — the parent company of WWE and the UFC — announced their 2024 Q3 quarterly earnings on Wednesday, announcing revenue of $681.2 million, net income of $57.7 million, and adjusted EBITDA of $310 million from July through September of this year.

For the full year, they revised their revenue target to $2.745 billion, up from the previously announced $2.67 billion.

WWE revenue finished at $326.3 million, up from $287.3 million year-over-year — the latter of which includes revenue before the merger with UFC was completed and just afterward. Per usual, the 14% increase ($39 million) was driven by media rights and content fees, live events and sponsor revenue.

WWE-specific numbers for the quarter are as follows:

  • $227.4 million in media rights and content
  • $51.1 million in live events
  • $21.7 million in sponsorship
  • $26.1 million in consumer products

In prepared remarks, company head Ari Emanuel said they set new records in 42 markets. They held 18 events outside the U.S., up from 11 the previous year, citing their return to Japan and run of successful PLEs which included Germany’s Bash in Berlin.

UFC

Quarterly revenue was down 11% year over year to $354.9 million, driven by a $50.4 million decrease in media rights and content revenue due to having one less “numbered” event and two fewer Fight Nights than the year prior. That was offset by a $10.2 million increase in sponsorship revenue and fees from renewals while ticket revenue was flat.

Specific numbers for the quarter are as follows:

  • $216.3 million in media rights and content
  • $51.4 million in live events
  • $74 million in sponsorship
  • $13.2 million in consumer products

In their prepared statements, they brought the recent UFC vs. Cung Le settlement and reiterated it will be tax deductible to the company as previously relayed.

Q&A

  • Asked about previous comments about splitting up UFC TV rights, Mark Shapiro re-iterated that they are looking to maximize value, and how they are driving subs for ESPN+ and are still a ratings winner for ESPN/ABC — bucking a trend with other leagues who are struggling early in their deals. He said WWE is a still a stalwart when it comes to TV ratings.
  • Asked about why PPV is still a strong model for UFC, Shapiro said they still sell them overseas while ESPN sells them domestically. When it comes to negotiations, Shapiro said it’s whatever the market will bear. He said PPV is still a strong model. “We will not have a shortage of suitors,” he said, re-iterating how much they love Disney.
  • Asked about Dana White’s comments about going into boxing, Shapiro said off the cuff comments by White does not translate into anything for Wall Street. He said if they were to get involved, they would be involved in an organic way, not a merger and acquisitions way. Ideally, they would partner with someone who would pay TKO to operate it. “Boxing is ripe for a fix,” he said.
  • Shapiro said he is pleased with the growth of UFC Fight Pass and are seeing upticks in subs internationally, and foresee keeping that separate from any media deal. Having more live events of all kinds of fighting is the key.
  • Shapiro again said the recent Noche show at the Sphere in Las Vegas was a one-and-done, but that doesn’t mean they couldn’t run one in the eventual one in Abu Dhabi.
  • Asked how Netflix could increase WWE sponsorship worldwide, Shapiro said they have been great out of the gate in selling combo packages with media inventory and around the event. They have a new deal with Minute Maid where they are a WWE sponsor and also Netflix inventory. Nick Khan made an appearance on the call, saying they expect the global reach to help them even more.
  • Shapiro said they haven’t had challenges with talent leaving because both WWE and UFC is the destination spot, something they don’t take for granted. They want to keep those costs under control and as long as they are aligning with right partners and storytelling, people will gravitate to both UFC and WWE.
  • TKO will not explore any other Endeavor assets past what they already brought on/acquired recently like PBR, etc.

TKO Q2 financial notes: WWE revenue, ticket prices, UFC piracy & PPV cost issues

Posted on by Josh Nason

The parent company of WWE & UFC had such a successful second quarter that they increased their targeted revenue for the year.

On Thursday, TKO released their Q2 financial statements followed by an investors call that featured comments from the usual company leadership with some nods to what might be coming pricing-wise down the line for consumers.

The new revenue target for the year is $2.745 billion, up from the originally forecasted $2.67 billion.

Overall company revenue increased to $851.2 million thanks to big quarters from WWE ($456.8 million) and UFC ($394.4 million), up from $629.7 million in Q1.

The quarterly revenue increase of $46.5 million by WWE was driven by increases in live event revenue, media rights and content revenue. Ticket sales revenue helped the live events portion while the addition of one PLE in the quarter helped in all areas. They noted third-party original programming revenue was down due to “timing of delivery” and their consumer products revenue was flat due to an increase in video game license revenue being offset by their transition of live event merch sales to Fanatics.

The UFC revenue increase of $89.2 million was driven by increases in media rights & content ($38.9 million), live events ($36.7 million) and sponsorship ($15.5 million). They noted they held one more “numbered event” and that their media rights fees contractually escalated in addition to “higher site fee revenues.”

The UFC class action lawsuit was mentioned in their release and on the call, not straying too far from their original statements when the presiding judge would not accept the initial settlement. They believe the judge erred in making his ruling and while they are prepared to go to court on both cases, they are evaluating all their options including new settlement talks.

Call notes:

  • Asked about further optimizing ticket prices for WWE, TKO president Mark Shapiro said they haven’t seen any pushback and that site fees are a huge growth sector for them, sponsorship is great, and rights fees are great for both WWE and UFC.
  • He made a point to say “don’t underestimate the Netflix play” in growing WWE worldwide in that it’s all about discovery and new viewers due to WWE being featured on the home screen when viewers log on. He said that is “a whole new audience for us” and expects it to help drive both site fees and sponsorship increases.
  • While initially forecasting $100 million in cost savings when the merger happened, TKO chief financial officer Andrew Schleimer said they now expect to exceed that, citing efficiencies gained thus far by cutting “superfluous” production costs and making some shows “smaller.” That comment is believed to be related to using smaller sets for some PLEs which allows for more tickets to be sold and less setup/breakdown costs.
  • In an interesting comment, Shapiro said their UFC piracy numbers are “jacked up” due to ESPN becoming a bit too aggressive with their PPV pricing. He said he and Dana White talked to ESPN’s Jimmy Pitaro about that and that ESPN was receptive, and some changes with discounting for early buys has appeared. He also said they are sustaining their buys.
  • Shapiro said TKO head Ari Emanuel has a big focus on “festivalizing” their events and making them more multi-day cultural events, something municipalities and cities are saying they want more of. He mentioned wanting to pit cities against each other to bring them in, citing the Las Vegas vs. Minnesota fight for WrestleMania 41 that saw the former up their offer to secure it.
  • Schleimer said the UFC received a $20 million site fee for the company’s debut in Saudi Arabia in June and that there was a “meaningful fee” attached to UFC 302 from Newark, New Jersey.
  • Asked about consumer trends for both brands, they aren’t seeing any slowdown, crediting the creativity and matchmaking by Dana White and Paul Levesque. Shapiro said demos are strong, age group is strong, and the Hispanic market has picked up which they are trying to grow.
  • He said they are watching their ticket pricing but probably aren’t being as aggressive with WWE as they should be and mentions using some dynamic pricing with some venues.

Other notes:

  • Vince McMahon was in TKO’s 10-Q filing as well with two separate stock purchases agreements by TKO, one on April 4th that purchased 1,642,970 shares from McMahon for $146.2 million and another on April 7th for 1,853,724 shares at $165 million.
  • In the first half of the year, Dwayne Johnson earned $6.7 million and $15.7 million worth of restricted stock units (RSUs) in two transactions as part of his $30 million agreement with TKO. He also earned a combined $700,000 in royalties and incurred $3.1 million in “certain travel expenses associated with delivering services” in the first six months of which $400,000 was paid back to him.

TKO Q3 earnings call recap: WWE NXT deal, Saudi Arabia, Raw rights, Vince McMahon

Posted on by Josh Nason

The first quarterly investors call for TKO Holdings took place Tuesday afternoon as the world got a further glimpse into the financials for the mega combat sports entity that houses both WWE and UFC.

In their first official quarter as a company, they announced total revenues of $449.1 million. However, the numbers are a bit skewed as it covers July 1st, 2023 through September 30th, 2023 for UFC and September 12th through September 30th for WWE.

WWE’s revenue for that period was $51.6 million with their combined revenue for the entire quarter at $287.3 million. That number was down 6% year-over-year prior due to both lower consumer product licensing and media/content fees — the latter blamed on timing.

Conversely, UFC revenue was up to $397.5 million, up from $340.7 million year-over-year, fueled by increases in media rights ($31.2 million), live event revenue ($12.7 million), and sponsorship ($12.2 million).

CEO Ari Emanuel, president Mark Shapiro, CFO Andrew Schleimer and investor contact Seth Zaslow were on the call which did not feature Vince McMahon, Dana White or Nick Khan. In a difference from past WWE-specific calls, there was less in terms of interesting news and more a rehash of previous press releases with some level of insight.

McMahon wasn’t a major focus of the call, nor was the team asked about this blurb from a separate TKO SEC supplement filing Tuesday that was not in prior reports as relates to risk factors for TKO:

“Mr. McMahon’s membership on our Board could have adverse financial and operational impacts on our business. 

“Mr. McMahon’s membership on our Board could expose us to negative publicity and/or have other adverse financial and operational impacts on our business. His membership also may result in additional scrutiny or otherwise exacerbate the other risks described herein. Any of these outcomes could directly or indirectly have adverse financial and operational impacts on our business.”

McMahon’s name comes up in that document frequently under “WWE Legal Proceedings.” TKO assumed $3.5 million of McMahon’s future payments “to certain counterparties” and that he has agreed to pay future settlements personally.

A few highlights from the call:

  • In 2023, Emanuel said they have already garnered mid-eight figures in site fees (assumed to be for both companies) and expect that to grow in the years ahead. He said this February’s Elimination Chamber event in Australia will bring WWE its largest site fee ever, but didn’t say what the number was.
  • Saudi Arabia was a major focus of conversation and optimism for the future for both WWE and UFC.
  • Emanuel said the WWE NXT deal with The CW represents a 70% AAV (average annual value) increase. He said he is very pleased with that deal and with CW’s reach.
  • He is also very pleased on the SmackDown agreement with NBCUniversal and the 40% AAV increase.
  • With WWE Raw rights, he said they have until October of next year to find the right partner as they do all production in-house. They are very optimistic about those as well and that like with the UFC/ESPN deal, they will take their time, calling interest “robust.” He said there’s a lot of momentum and productive conversations with both linear players and streamers. They have flexibility on both day & time, and there’s no specific timeline on a deal. 
  • Schleimer said they will continue to look for more cost efficiencies between the two groups across a variety of departments.
  • Emanuel said in some cases, partnerships and sponsorships are being sold and proposed with both UFC and WWE packaged together. Hospitality packages were also discussed as “bullish” with the early success of WrestleMania 40 noted as a big win. 

WWE announced highlights 

  • The announcement of WrestleMania 40 at Lincoln Financial Field in Philadelphia and subsequent ticket sales of 90,000+ for the two-day event, breaking the WrestleMania 39 record already
  • WWE’s five-year deal with NBCUniversal for SmackDown starting in October 2024.

UFC announced highlights

  • UFC held 13 events and continued to set arena records for attendance in doing so including six sellouts. International sellouts were noted, something the company remains bullish on.
  • UFC completed their biggest ever sponsorship deal with AB InBev’s Bud Light that begins in January 2024.
  • UFC will expand its presence in the MENA region (Middle East North Africa) that will see Abu Dhabi host “numbered” shows through 2028 and includes three annual Fight Night shows in Saudi Arabia that start in March 2024.