TKO Group Holdings posted better-than-anticipated revenue but saw a March antitrust settlement with UFC fighters squeeze its bottom line.
The company, formed through the merger of WWE and UFC last September, is run by Endeavor Group Holdings. Endeavor recently unveiled a plan to go private, making TKO the only public window onto the dealmaking activities of Ari Emanuel & Co.
Revenue of $629.7 million came in ahead of Wall Street analysts’ expectations, though the WWE and UFC components each recorded upticks in the single digits. Because of the timing of the merger, results in the quarterly report reflect the operations only of UFC.
One new piece of news included in the earnings release was WWE’s $25 million sale of rights to Monday Night Raw to NBCUniversal. Under the short-term extension, the franchise will continue to air on USA Network through the end of the year before a long-term, exclusive streaming deal with Netflix kicks in next January.
Net losses for TKO totaled $249.5 million in the quarter, while adjusted earnings before interest, taxes, depreciation and amortization [EBITDA] came in at $282.2 million. The company noted a $335 million settlement of antitrust claims filed by UFC fighters during the quarter. The settlement, announced in March, is payable in installments, per the earnings release.
TKO raised its full-year guidance for revenue, EBITDA and free cash flow conversion.
In the earnings release, Emanuel pointed to the UFC settlements and the raised guidance. “These positive developments, along with the strength in our underlying businesses, give us more conviction than ever in
the combination of UFC and WWE, and in TKO’s ability to deliver sustainable long-term value for shareholders,” he said.
