- Endeavor reports net income of US$36.3m for Q1
- Acquisition of WWE not yet a factor on balance sheet
Agency giant Endeavor recorded a revenue total of US$1.6 billion for the fiscal first quarter of 2023, with its owned sports properties division a strong performer.
The sports segment, which includes revenue from the Ultimate Fighting Championship (UFC) and Professional Bull Riders (PBR), was at US$353.3 million for the quarter, a rise of US$56.6 million year-over-year (YoY) – a 19.1 per cent increase over the same period in 2022. Growth was mainly fueled by an increase in media rights fees, sponsorships, commercial pay-per-view (PPV) and event-related revenue at the UFC, which stemmed from both the staging of an extra PPV event in the quarter, as well as more events with live audiences.
PBR also saw an increase in ticket sales and revenue from its new team series, which also contributed to the division’s strong performance. Its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) was calculated at US$185.7 million, which was a 24.8 per cent jump YoY.
Endeavor’s owned sports properties segment is set to be bolstered by the addition of World Wrestling Entertainment (WWE), whose acquisition was announced last month. It plans to merge WWE with UFC to form a new publicly listed company, with the agency also announcing recently that it planned to sell IMG Academy for US$1.25 billion. In connection with the sale, it plans to launch a US$300 million share repurchase, as well as plans to pay down US$50 million extra in debt.
Meanwhile, its events, experiences and rights division reported US$800.8 million in quarterly revenue, which was up US$19.9 million on last year’s first quarter. The increase was primarily attributed to record attendance and sponsorship sales at the Miami Open, as well as growth at IMG Academy. The representation segment’s revenue suffered a two per cent decline for the quarter, posting a total of US$350.2 million.
The agency’s sports data and technology segment increased its revenue by US$55.8 million to US$100.9 million from the previous year. The acquisition of OpenBet, as well as growth at IMG Arena were considered the main factors causing growth.
Endeavor’s net income for the quarter was at US$36.3 million, with its adjusted EBITDA reported to be US$306.4 million. In terms of its full year outlook, it projects revenue between US$5.67 billion and US$5.82 billion, with adjusted EBITDA predicted to be between US$1.22 billion and US$1.28 billion.
The company also plans to make quarterly cash dividends of up to US$25 million to its shareholders, with the first to be declared in the fiscal third quarter.
“This quarter, we continued to deliver solid results and set a number of financial and attendance records across our owned sports properties and marquee events,” said Ari Emanuel, Endeavor chief executive.
“Our agreement to sell IMG Academy, together with the planned share repurchase and quarterly dividend announced today, are strong examples of our commitment to maximising return for our shareholders. We are excited about the unique opportunity the proposed combination of UFC and WWE presents, and remain focused on durable growth as we continue to execute our successful strategy in content and experiences.”