TKO Group, the publicly traded entity that encompasses both the renowned mixed martial arts organization UFC and the iconic wrestling promotion WWE, reported a substantial revenue of $681.2 million during the third quarter of its fiscal year.
The combined entity, which recently made headlines for acquiring three prominent sports and entertainment properties from its parent company Endeavor, displayed a remarkable stability in revenue, posting figures slightly down from $684.8 million for the same period in 2023. This financial performance covering the three months that ended on September 30, 2024, was detailed in an announcement made yesterday, November 6.
During the same quarter, the UFC reported an income of $354.9 million, a notable decrease from $397.5 million earned in the previous year, primarily due to hosting three fewer events compared to Q3 2023. In contrast, WWE contributed $326.3 million during the same timeframe, reflecting significant growth from a mere $51.6 million in the third quarter of 2023, as this revenue calculation began only after the merger finalized on September 12 of that year. Overall, WWE’s full Q3 2023 revenue was much stronger at $287.3 million.
Consequently, while WWE demonstrated a significant year-on-year increase, the overall revenue levels for TKO remained largely consistent.
In terms of profitability, the company heralded an increase in EBITDA (earnings before interest, taxation, depreciation, and amortization) to $310 million, compared to $239.7 million in the same quarter last year, signifying positive operational performance.
Net income for the company rose impressively to $57.7 million, up from $22 million the previous year, which marks a $35.7 million increase year-on-year.
However, the UFC faced a marked decline in its media rights and content income, which dropped from $266.7 million to $216.3 million year-on-year. This decline was not fully mitigated by the rise in sponsorship revenue, which increased from $63.8 million to $74 million, highlighting challenges in monetizing its content and events.
This decrease in media rights revenue can primarily be attributed to the UFC hosting three fewer events in the months of July, August, and September compared to the same quarter last year—specifically one less numbered event and two fewer Fight Nights.
Meanwhile, WWE reported a remarkable 14% rise in its revenue compared to the previous year, supported by increases in media rights, live events, and sponsorship earnings.
In a statement, Ariel Emanuel, TKO’s executive chair and chief executive, expressed confidence in the strong third-quarter results, emphasizing, “TKO’s solid third quarter results reflect continued strength across UFC and WWE, particularly in live events and brand partnerships.” He further indicated that, based on this momentum, the company anticipates delivering results at the upper end of its full-year 2024 guidance for revenue and adjusted EBITDA.
Additionally, he highlighted the favorable conditions leading to the recent authorization of a robust capital return program and the acquisition of industry-leading sports assets. He stated, “Just over a year since UFC and WWE came together to form TKO, our conviction in this business is as strong as ever.”
TKO has also updated its full-year 2024 guidance, projecting revenue expectations to reach the upper end of a range between $2.67 billion and $2.74 billion and adjusted EBITDA of between $1.22 billion and $1.24 billion.
The group’s Q2 results, which were released in August, showcased total revenue of $851.2 million.
In a strategic move to expand its portfolio, TKO executed a $3.25 billion all-equity acquisition of three major assets from Endeavor, which include the notable sports and entertainment agency IMG, the events and hospitality firm On Location, and the renowned bull riding competition Professional Bull Riders (PBR).
Importantly, the leadership teams of PBR and On Location will remain intact following the acquisition, while IMG’s president of media, Adam Kelly, will be appointed as the president of the IMG business segment as a whole. This acquisition, which is expected to close in the first half of 2025, will expand TKO’s operational footprint beyond competition-focused activities and into broader segments of the sports business landscape, while also streamlining Endeavor’s operations in preparation for its intended privatization set for early 2025.
**Interview with Ariel Emanuel, TKO Group Executive Chair and Chief Executive**
**Interviewer:** Thank you for joining us today, Ariel. TKO recently announced its third-quarter earnings, reporting a revenue of $681.2 million. How do you feel about these numbers, especially in the context of the previous year?
**Ariel Emanuel:** Thank you for having me. We are pleased with our results for the third quarter of 2024. While we observed a slight decrease in total revenue compared to last year, the overall stability demonstrates our ability to adapt and thrive in a dynamic landscape, particularly with the integration of WWE and UFC.
**Interviewer:** That’s an interesting point. The UFC saw a decrease in revenue due to hosting fewer events. How do you plan to address this going forward?
**Ariel Emanuel:** Yes, the UFC’s revenue was affected by hosting three fewer events in Q3. We are constantly analyzing our event calendar and are committed to maximizing our engagement with fans and partners. We’re exploring more opportunities in marketing, sponsorship, and potentially expanding our event footprint to drive future revenues.
**Interviewer:** On the flip side, WWE saw a significant increase in revenue. What do you attribute this growth to?
**Ariel Emanuel:** WWE’s impressive growth—reflecting a 14% increase—can be attributed to a variety of factors: increased media rights, live events, and sponsorship revenue. The recent merger with UFC has also given us a broader platform to promote our events and engage with a larger audience.
**Interviewer:** You mentioned in your statement that TKO’s results reflect strength across both brands. Can you elaborate on how you plan to maintain this momentum?
**Ariel Emanuel:** Our strategy is rooted in leveraging the synergies between WWE and UFC. We are committed to enhancing fan experiences across both platforms and exploring cross-promotional opportunities. Furthermore, we will continue to invest in our digital content and distribution networks to ensure we reach as many fans as possible.
**Interviewer:** Lastly, there was a notable increase in TKO’s net income. What does this mean for the company’s future, especially in light of the challenges in media rights revenue?
**Ariel Emanuel:** The increase in net income demonstrates our effective cost management and operational performance. While the decline in media rights revenue is a challenge, our strong EBITDA indicates our core business is performing well. Our focus will remain on improving profitability and exploring new revenue streams that align with the evolving nature of sports and entertainment.
**Interviewer:** Thank you, Ariel. Your insights into TKO’s recent performance and forward-looking strategies are invaluable.
**Ariel Emanuel:** Thank you for having me. We’re excited about the future and the opportunities ahead for TKO Group, WWE, and UFC.
