Endeavor plans to launch a quarterly dividend, a sign of confidence in its business as it continued to embark on a number of dealmaking moves.
The company, which owns UFC and WME, reported first quarter revenues of $1.6 billion and net income of $36.3 million. The owned sports division (including UFC and PBR) delivered particularly strong results, with revenue of $353.3 million, up 19.1 percent from a year earlier.
Endeavor cut a pair of major transactions in recent weeks, including a deal to merge UFC and the WWE into a new Endeavor-controlled public company, and a deal to sell IMG Academy to a private equity firm for $1.25 billion.
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Endeavor says that in connection with the IMG Academy sale, it will launch a $300 million share repurchase and pay down $50 million extra in debt.
The company says it expects to declare its first dividend in Q3, with the Endeavor Operating Company paying up to $25 million to its shareholders, including Endeavor Group Holdings, which in turn will pass it to common shareholders.
The dividend signals that the company believes it will have solid cash flow and profits moving forward, with many investors seeking out companies that provide income to shareholders.
Endeavor’s representation segment was the only division to decline on a year-to-year basis to $350.2 million, though that was due to the company owning Endeavor Content a year ago. The company says its WME business grew compared to last year.
On the company’s earnings call, CEO Ari Emanuel said that the writers strike may have an impact on the company’s bottom line, but that would depend on how long the strike lasts.
“We completely support our clients in this situation, there are real issues that have to be addressed,” Emanuel said, noting that the use of AI, the size of writers rooms and royalties are all worthy discussions. “The duration is something I can’t tell you.”
He added that he expects studios to do more nonscripted programming while the strike is on, and will also bring in shows from other countries.
It also debuted a new segment: Sports Data & Technology, which includes OpenBet and IMG Arena. That division had revenue of $100.9 million.
The company also updated its guidance for revenue and EBITDA for the year to between $5.665 billion and $5.815 billion and $1.220 billion to $1.275 billion respectively, though that is primarily due to the sale of IMG Academy.
“This quarter, we continued to deliver solid results and set a number of financial and attendance records across our owned sports properties and marquee events,” said Ari Emanuel, Endeavor’s CEO, in a statement. “Our agreement to sell IMG Academy, together with the planned share repurchase and quarterly dividend announced today, are strong examples of our commitment to maximizing return for our shareholders. We are excited about the unique opportunity the proposed combination of UFC and WWE presents, and remain focused on durable growth as we continue to execute our successful strategy in content and experiences.”
