Endeavor Group Holdings, the owner of WME, UFC, IMG and other ventures, reported revenue of $1.26 billion in its fourth-quarter earnings, reflecting growth at its three operating units: owned sports, events and experiences, and representation.
The company once again reported a loss in the quarter, of $226 million, though Endeavor notes that it also made $500 million in discretionary debt payments, bringing its leverage from $5.43 billion to $5.17 billion.
Notably, the company also released 2023 guidance, projecting revenue growth in the low double digits, or between $5.825 billion and $5.975 billion, as well as adjusted EBITDA of $1.250 billion to $1.305 billion.
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On the company’s earnings call, CEO Ari Emanuel weighed in on two of the biggest question marks in the entertainment industry today: a possible writers strike, and the future of the WWE. Endeavor has been seen as a potential bidder for the wrestling business.
“We support our clients as they work through the issues with the studios,” Emanuel said. “Hopefully they’ll solve and resolve their issues.”
However, he added that he believes Endeavor is “differently positioned” compared to its competitors as it grapples with a possible strike, noting the company’s sports, books, theatrical and speaking business lines.
“I’ve been through many strikes before,” Emanuel said. “Compared to last time, this one is very different and our company is very different. So I think we’re pretty well-positioned as it relates to the strike.”
As for the WWE, Emanuel said the company has an “unbelievable product” and that Vince McMahon “created a great business,” but he also said, “We’re not going to do anything that would increase our leverage at this point in time.”
“His business is really valuable,” Emanuel added, before repeating that the company was not willing to increase its leverage at the moment.
Endeavor CFO Jason Lublin said, “We certainly feel we have the ability to keep keep executing on M&A, we’re an acquisitive company,” and raised the possibility of “using our cash and our public equity as an alternative currency in order to execute on our strategies.”
Among Endeavor’s business lines, the events, experiences and rights segment led the way with $557.7 million of revenue in the quarter, up 8 percent from the same quarter last year. The growth was due to continued consumer demand in live events, as well as the addition of the Madrid Open and OpenBet (which will move to a new segment next quarter).
The representation unit, which includes WME, had $408.5 million in revenue for the quarter, down 43 percent from the same quarter a year ago. However, the comparison is not apples to apples, as last year’s figure includes revenue from Endeavor Content, which the company has since sold. The company says that its adjusted EBITDA was up 5 percent year-over-year, with continued interest in content by TV networks and streaming services, as well as live events, driving growth.
And at owned sports, revenue was $301.4 million, up 9 percent from a year ago, led by higher rights fees at the UFC, as well as better sponsorship, licensing and pay-per-view revenue.
