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.
