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Wednesday, March 22, 2023

Endeavor’s 3rd Quarter 2022 Earnings Boosted by UFC and Live Music Business – The Hollywood Reporter

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

Despite the difficult macroeconomic environment being felt in the technology and media sectors, Endeavor remains upbeat about its prospects, promoting its exposure to sports and live music, which are still performing well.

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

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

“Spending habits have changed, but our company has a presence at every point in the purchasing chain,” he said. “During COVID, people were buying things, and after 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 and $1,175 and indicating that revenue will be between $5.235 billion and $5.325 billion, at the lower end of its range. previous guide.

During the earnings conference call, Emanuel reiterated the company’s position as a middleman, capable of taking parts of the live sports and content business, and in the segments it owns and operates, to take the entire slice.

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

As for sports, Emanuel said that “we have positioned ourselves on the supply side of this industry, working directly with rights holders and sports bookmakers to offer everything from official data, streaming broadcasts to betting and mobile apps”.

“In esports, the demand for premium talent-driven content shows no signs of slowing down. In fact, the opportunities for talent are expanding into new formats,” he added.

The company is also undergoing a significant change in its structure, having completed the acquisition of OpenBet (and preparing to launch a new sports betting division) and with the sale of 80 percent of Endeavor Content, impacting revenue in the representative unit of the company.

In representation, revenues were $388.3 million, 42 percent less than in the same quarter of the previous year. That drop was almost entirely due to the loss of Endeavor Content, which was sold to CJ ENM. Excluding revenue linked to Endeavor Content, the company’s management business increased 17 percent compared to last year, suggesting continued strength in the sector.

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

And in Endeavour’s events, experiences and rights segment, revenue was $440.6 million, down 1 percent from last year, due to scheduling of some events.

Endeavor says it also paid down about $250 million in debt in the third quarter and plans to pay the same amount in the fourth quarter.

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