Endeavor Group Holdings reported $1.597 billion in revenue for the quarter ending in March, just beating analyst estimates, and a net income of $36.3 million. The sports, media and entertainment giant’s stock (NYSE: EDR) rose as much as 4% in late trading following the release of its first-quarter numbers.
Endeavor also announced its first dividend payments of up to $25 million, which will benefit the company’s Class A shareholders starting in the third quarter. It is also planning a stock buyback of up to $300 million in shares and a hefty debt paydown after a number of big moves early in 2023.
“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,” Endeavor CEO Ari Emanuel said 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.”
Endeavor, which offers services from representation, event management and data collection to media-rights consulting and content production, announced its acquisition of WWE (NYSE: WWE) in early April. The company is already home to mixed martial arts promoter UFC. The WWE deal is expected to close in the second half of this year, and the two businesses will then be merged into a new, separate public company that will trade under the ticker TKO.
Endeavor will hold a 51% controlling stake in the new company while existing WWE shareholders will retain the other 49%. Emanuel will lead the new company while Mark Shapiro will similarly hold a dual role as president and COO of both businesses. Dana White will stay on as UFC president; Nick Khan will lead WWE.
Endeavor acquired a stake in UFC in 2016 for $4 billion in a group deal with KKR and Silver Lake and took full ownership of the popular MMA property in 2021 in advance of going public.
UFC falls under Endeavor’s Owned Sports Properties unit, which posted $353.3 million in revenue for the quarter, up $56.6 million (or 19.1%) year over year on the back of increased media rights fees, sponsorships and commercial pay-per-view revenues. Although it will soon be spun out of the segment upon completion of the WWE merger, UFC is one of Endeavor’s most profitable businesses. Endeavor said increased ticket sales for international professional bull riding organization PBR also contributed to the jump.
Just a few weeks after the WWE news broke, Endeavor agreed to sell IMG Academy for $1.25 billion to Asia-focused private equity fund BPEA EQT. The Bradenton, Fla., sports-focused boarding school is housed under Endeavor’s “Events, Experiences and Rights” segment, which reported $800.8 in revenue million for the quarter, up $19.9 million (2.5%) over the first quarter of 2022 on the back of record attendance and sponsorship sales at tennis’ Miami Open and growth at IMG Academy.
(Endeavor is the parent company of several other sports properties including the Madrid Open tennis tournament, hospitality provider On Location and Learfield, the dominant college athletics dealmaker.)
Q1 also marks the debut of Endeavor’s fourth business segment, Sports Data & Technology, as the new home for its IMG Arena data business and sports betting tech platform OpenBet—which it acquired last year. Revenue for the division rang in at $100.9 million, up 123.9% from 2022 thanks to the addition of OpenBet.
The conglomerate’s Representation segment, powered by WME, reported $350.2 million in revenue, down $7.1 million or 2%, compared to the first quarter of 2022.
(This story has corrected the year to 2023 in the second paragraph noting Endeavor's recent acquisitions and mergers.)
