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Endeavor Posts $1.2B in Revenue, Overall Loss in Q3

todayNovember 11, 2022

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Endeavor Group Holdings, the parent company of UFC, WME and IMG, posted revenue of $1.2 billion in its third quarter, as foreign exchange rate headwinds pushed it to a net loss of $12.5 million.

Despite the difficult macroeconomic environment being felt across the tech and media sectors, Endeavor remains bullish on its prospects, touting its exposure to sports and live music, which are still posting strong results.

“Our business performed well in the quarter despite a turbulent macroeconomic environment,” said Endeavor CEO Ari Emanuel, in a statement. “Given our unique positioning relative to a set of highly resilient secular industry trends across premium sports and entertainment content and live events, we remain confident in our ability to continue delivering on our long-term growth strategy while also being good stewards of capital.”

Emanuel elaborated on those comments on the earnings call, saying that the company simply isn’t seeing demand for live events and experiences slow down.

“Spending habits have shifted, but our company has a presence at every point on the purchase chain,” he said. “During COVID people were buying stuff, and post-COVID, they are more focused on experiences, and we are the benefit of that side of the equation.”

Endeavor also adjusted its full-year 2022 guidance, raising its guidance for adjusted EBITDA to between $1.145 billion to $1.175, and indicating that revenue will be between $5.235 billion and $5.325 billion, on the low end of its prior guidance.

During the earnings conference call, Emanuel reitrated the company’s position as a middleman, able to carve out pieces of the content and live sports business, and in its owned and operated segments, to take the entire slice.

“These leading tech companies go head to head with major streaming and media players, including Disney, Netflix, NBCUniversal, Warner Bros. Discovery and Paramount for the best video, podcasts gaming, and social content,” Emanuel said.

On the sports side, Emanuel said that “we’ve positioned ourselves on the supply side of this industry, working directly with rightsholders, and sportsbooks to deliver everything from official data, streaming feeds to betting and mobile apps.”

“In sports, the demand for premium talent-led content and shows no sign of slowing. In fact, opportunities for talent are expanding into new formats,” he added.

The company is also undergoing significant change in its structure, as it completed the acquisition of OpenBet (and prepares to launch a new sports betting division) and with the sale of 80 percent of Endeavor Content, which impacted revenues at the company’s representation unit.

In representation, revenue was $388.3 million, down 42 percent from the same quarter a year ago. That drop was almost entirely due to the loss of Endeavor Content, which was sold to CJ ENM. When excluding revenue tied to Endeavor Content, the company’s representation business was up 17 percent compared to last year, suggesting continued strength in the sector.

In sports, which is led by UFC and Professional Bull Riders, revenue was $402.3 million, up 39 percent, thanks to increased rights fees, an extra live pay-per-view event, and more live attendance at events.

And in Endeavor’s events, experiences and rights segment, revenues were $440.6 million, down 1 percent compared to last year, due to the timing of some events.

Endeavor says it also paid off some $250 million in debt in Q3, and plans to pay down the same amout in Q4.

This article was originally published by The Hollywood Reporter.

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