Steve Carrier on February 27, 2024
TKO executives conducted a conference call discussing the company’s fourth-quarter and full-year earnings report, which became available on February 27, 2024, at TKOgrp.com. Below are the key points from the call. Remember to refresh the page for any new updates.
TKO’s Senior VP of Investor Relations, Seth Zaslow, covered the legal aspects before handing over the reins to the hosts.
The hosts of the call were CEO Ari Emanuel, President and COO Mark Shapiro, and CFO Andrew Schleimer.
Emanuel commenced with his opening remarks, highlighting the remarkable viewership and attendance achievements for both UFC and WWE. He underscored the significance of the sponsorship agreements with Anheuser-Busch and Slim Jim, along with the groundbreaking WWE media rights deal with Netflix. Emanuel emphasized that UFC has consistently broken sponsorship records over the past six years and expressed confidence in WWE’s similar potential.
Emanuel elaborated on UFC’s attendance milestones and the strong ratings garnered by UFC prelim fights on ESPN networks. He also touched upon the recent renewals of the company’s television rights.
In regard to WWE, Emanuel celebrated the impressive attendance figures at premium live events, citing the Royal Rumble’s record-breaking turnout of over 48,000 fans. He expressed great enthusiasm about the Netflix deal and highlighted significant network shifts, with Smackdown returning to the USA Network and NXT relocating to the CW Network.
Schleimer then discussed the synergies between UFC and WWE. He highlighted the upcoming Elimination Chamber event in Perth, Australia, emphasizing its potential to enhance fan engagement in the region. Additionally, he discussed the recently signed deal with the Honda Center, which will host both UFC and WWE events, further expanding the company’s reach.
Schleimer then addressed the financial aspects, mentioning the projected $50 million to $100 million in net savings resulting from increased synergy between the brands. Finally, he proceeded to review the earnings report presentation.
Schleimer discussed their ongoing efforts to secure a broadcasting platform for Raw during the interim period between the expiration of the current deal with USA Network in September and the commencement of the new Netflix deal in January. He emphasized that Raw will not be off the air during the fourth quarter of the year, reassuring stakeholders that this continuity shouldn’t come as a surprise.
During the Q&A session, the first caller directed a question to Emanuel regarding what excites him about bringing Raw to Netflix beyond financial gains. Emanuel expressed tremendous enthusiasm for the deal, highlighting their satisfaction with the financial aspects and characterizing it as transformative, akin to the UFC deal with ESPN+. He emphasized the global reach of Netflix as immensely significant and underscored its importance. He also mentioned that the PLE deal is the last remaining deal on the table.
Schleimer added that they anticipate Raw will continue airing in the fourth quarter of the year but cautioned viewers not to presume any specific financial outcomes.
Another caller inquired about their willingness to purchase stock if a major shareholder decided to sell a significant portion at once. They indicated a readiness to seize opportunities and emphasized their commitment to shareholder value. Emanuel returned to discussing the Netflix deal, while one of the hosts noted Vince McMahon’s substantial holdings of 20 million shares, stating that McMahon’s intentions remain unclear.
It was highlighted that Netflix holds the rights to all international deals as they become available, indicating a gradual transition of markets to Netflix. They expressed excitement about Raw’s visibility on the front page of Netflix.
When asked about the impact of the Netflix deal on international brand extensions like NXT Europe, Nick Khan emphasized the priority of global localized products, suggesting that Netflix aids in this aspect. He hinted at the possibility of introducing more local stars from various international markets. It was clarified that the Netflix deal does not prohibit them from creating new content, but Netflix has a first look option.
The caller inquired about revenue and cost synergies when running both UFC and WWE events in the same market. Once again, the speakers emphasized the potential for production savings through this approach.
Shapiro discussed the notion of a potential bubble bursting for sports media rights but expressed confidence that outlets will continue to pay for premium content. He cited examples from other live sports and stated that they are in a strong position. Emanuel echoed Shapiro’s sentiments, emphasizing that premium content commands a premium price.
In response to the final caller’s question regarding cost savings from having a single partner in Netflix, one of the hosts confirmed the expected cost savings. Shapiro also addressed sponsorship deals, noting that UFC currently secures approximately $35 million in sponsorship deals. He acknowledged WWE’s strong performance in local sponsorship sales but highlighted the need for improvement on a national level. Shapiro expressed confidence that WWE could achieve similar success to UFC, aiming for over $200 million in sponsorship deals. With this, the call concluded.
February 27, 2024 4:58 pm
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