(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of ~~“large~~"large accelerated filer,~~” “accelerated~~" "accelerated filer,~~” “smaller~~" "smaller reporting company,”" and ~~“emerging~~"emerging growth ~~company”~~company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November ~~5, 2021,~~8, 2022, there were ~~264,109,869~~289,423,865 shares of the registrant’s Class A common stock outstanding, ~~187,258,129~~183,110,405 shares of the registrant’s Class X common stock outstanding and ~~238,154,296~~229,875,648 shares of the registrant’s Class Y common stock outstanding.

This Quarterly Report on Form 10-Q (the ~~“Quarterly Report”~~"Quarterly Report") contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the ~~“Securities Act”~~"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the ~~“Exchange Act”~~"Exchange Act"). All statements other than statements of present and historical facts contained in this Quarterly Report, including without limitation, statements regarding our expectations, beliefs, plans, strategies, objectives, prospects, assumptions, future events or expected performance, are forward-looking statements.

Without limiting the foregoing, you can generally identify forward-looking statements by the use of forward-looking terminology, including the terms "aim," "anticipate," "believe," "could," "mission," “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” “target,” “predict,” “potential,” “contemplate,”"may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "target," "predict," "potential," "contemplate," or, in each case, their negative, or other ~~,variations~~variations or comparable terminology and expressions. The forward-looking statements in this Quarterly Report are only predictions and are based on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of known and unknown risks, uncertainties and assumptions, including, but not limited to:

These risks could cause actual results to differ materially from those implied by forward-looking statements in this Quarterly Report. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Even if our results of operations, financial condition and liquidity and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods.

You should read this Quarterly Report and the documents that we reference herein completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we have no obligation to update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

As used in this Quarterly Report, unless we state otherwise or the context otherwise requires:

CONSOLIDATED STATEMENTS OF REDEEMABLE INTERESTS AND SHAREHOLDERS’~~/ MEMBERS’~~ EQUITY

CONSOLIDATED STATEMENTS OF REDEEMABLE INTERESTS AND ~~SHAREHOLDERS’/ MEMBERS’~~MEMBERS' EQUITY

~~CONSOLIDATED STATEMENTS OF REDEEMABLE INTERESTS AND SHAREHOLDERS’/ MEMBERS’ EQUITY~~

DESCRIPTION OF BUSINESS AND ORGANIZATION

Endeavor Group Holdings, Inc. (the ~~“Company”~~"Company" or ~~“EGH”~~"EGH") was incorporated as a Delaware corporation in January 2019. The Company was formed as a holding company for the purpose of completing an initial public offering ~~(“IPO”~~("IPO") and other related transactions in order to carry on the business of Endeavor Operating Company, LLC (d.b.a. Endeavor) and its subsidiaries (collectively, ~~“Endeavor”~~"Endeavor" or ~~“EOC”~~"EOC"). As the sole managing member of Endeavor Manager, LLC (“("Endeavor ~~Manager”~~Manager"), which in turn is the sole managing member of EOC, the Company operates and controls all the business and affairs of Endeavor, and through Endeavor and its subsidiaries, conducts the Company’s business. The Company is a global ~~entertainment,~~ sports and ~~content~~entertainment company.

Prior to the IPO, Endeavor was owned by WME Holdco, LLC (which is referred to as ~~“Holdco”~~"Holdco" herein and iswas principally owned by executive employees of the Company), affiliates of Silver Lake (which are collectively referred to as ~~“Silver Lake”~~"Silver Lake" herein), and other investors and executive employees of the Company.

Initial Public Offering

On May 3, 2021, the Company closed an IPO of 24,495,000 shares of Class A common stock at a public offering price of $24.00 per share, which included 3,195,000 shares of Class A common stock issued pursuant to the underwriters’ option to purchase additional shares of Class A common stock. This option to purchase additional shares of Class A common stock closed on May 12, 2021.

Reorganization Transactions

Prior to the closing of the IPO, a series of reorganization transactions ~~(the “Reorganization Transactions”)~~ was ~~completed:~~

• ~~EGH’s certificate of incorporation was amended and restated to, among other things, provide for the following common stock:~~

Class of Common Stock
Par Value

Votes

Economic Rights
Class A common stock
$
0.00001

1

Yes
Class B common stock
$
0.00001

None

Yes
Class C common stock
$
0.00001

None

Yes
Class X common stock
$
0.00001

1

None
Class Y common stock
$
0.00001

20

None

~~Voting shares of EGH’s common stock will generally vote together as a single class on all matters submitted to a vote of our stockholders;~~

~~• Endeavor Manager became the sole managing member of EOC and EGH became the sole managing member of Endeavor Manager;~~

• Endeavor Manager issued to equityholders of certain management holding companies common interest units in Endeavor Manager along with paired shares of its Class X common stock as consideration for the acquisition of Endeavor Operating Company Units held by such management holding companies;

• For certain pre-IPO investors, EGH issued shares of its Class A common stock, Class Y common stock and rights to receive payments under tax receivable agreements and for certain other pre-IPO investors, EGH issued shares of its Class A common stock as consideration for the acquisition of Endeavor Operating Company Units held by such pre-IPO investors;

• For holders of Endeavor Operating Company Units which remained outstanding following the IPO, EGH issued paired shares of its Class X common stock and, in certain instances, Class Y common stock, in each case equal to the number of Endeavor Operating Company Units held and in exchange for the payment of the aggregate par value of the Class X common stock and Class Y common stock received; and

• Certain Endeavor Profits Units, Endeavor Full Catch-Up Profits Units and Endeavor Partial Catch-Up Profits Units remained outstanding following the closing of the IPO. Subsequent to the IPO, the Endeavor Full Catch-up Profits Units were recapitalized and converted into Endeavor Operating Company Units and the Endeavor Partial Catch-Up Profits Units were recapitalized and converted into Endeavor Profits Units.

completed. Subsequent to the closing of the IPO, several new and current investors purchased in the aggregate 75,584,747 shares of Class A common stock at a price per share of $24.00 ~~(the “Private Placement”)~~. ~~Of these shares,~~ ~~57,378,497~~ ~~were purchased from EGH and~~ ~~18,206,250~~ were purchased from an existing investor. EGH registered these shares of Class A common stock on a Form S-1 registration statement. Net proceeds from the IPO and the Private Placement, after deducting underwriting discounts and commissions and offering expenses, was $~~1,886.6~~ ~~million.~~

~~Subsequent to the closing of the IPO and the Private Placement,~~Then, through a series of transactions, EOC acquired the equity interests of the minority unitholders of Zuffa, which owns and operates the Ultimate Fighting ~~Championship (the “UFC Buyout”).~~Championship. This resulted in EOC directly or indirectly owning 100% of the equity interests of Zuffa. In consideration for the minority unitholders’ equity interests of Zuffa, (a) EGH and its subsidiaries issued to certain of such unitholders shares of Class A common stock, Endeavor Operating Company Units,

~~Table of Contents~~

~~Endeavor Manager Units, shares of Class X common stock and/or shares of Class Y common stock, and (b) EGH used $835.7~~ million of the net proceeds from this offering and the concurrent private placements to purchase Endeavor Operating Company Units (or equity interests of Zuffa) from certain of such holders. In addition, some of those minority unitholders sold their equity interests of EGH to the private placement investors in the concurrent private placement.

Proceeds, after the UFC Buyout and payment of underwriting discounts and commissions and certain offering expenses, were contributed to Endeavor Manager in exchange for Endeavor Manager Units. Endeavor Manager then in turn contributed such net proceeds to Endeavor Operating Company in exchange for Endeavor Operating Company Units.

~~See Note 16 for the 2021 Incentive Award Plan, which became effective upon the IPO as well as for the equity-based compensation charges recorded from the impact of the IPO.~~

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the accompanying disclosures.

Significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, allowance for doubtful accounts, ~~content cost amortization and impairment,~~ the fair value of acquired assets and liabilities associated with acquisitions, the fair value of the Company’s reporting units and the assessment of goodwill, other intangible assets and long-lived assets for impairment, consolidation, investments, redeemable non-controlling interests, the fair value of equity-based compensation, tax receivable agreements liability, income taxes and contingencies.

Management evaluates these estimates using historical experience and other factors, including the general economic environment and actions it may take in the future. The Company adjusts such estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time and as such, these estimates may ultimately differ from actual results. Changes in estimates resulting from weakness in the economic environment or other factors beyond the Company’s control could be material and would be reflected in the Company’s consolidated financial statements in future periods.

RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In ~~January~~August 2020, the Financial Accounting Standards Board ~~(“FASB”~~("FASB") issued Accounting Standards Update ~~(“ASU”~~("ASU") ~~2020-01,~~ Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323 and Topic 815 (“ASU 2020-01”). ASU 2020-01 clarifies that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the fair value measurement alternative. This ASU is effective for annual and interim reporting periods beginning after December 15, 2020. The Company adopted this new guidance on January 1, 2021 with no material impact on its consolidated financial statements.

~~In December 2019, the FASB issued ASU 2019-12,~~ ~~Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes~~ (“ASU 2019-12”). The update removes certain exceptions to the general principles in Topic 740 and simplifies accounting for income taxes in certain areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective for annual and interim reporting periods beginning after December 15, 2020. The Company adopted this new guidance on January 1, 2021 with no material impact on its consolidated financial statements.

~~Recently Issued Accounting Pronouncements~~

~~In August 2020, the FASB issued ASU~~ 2020-06,, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU addresses issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. The amendments in this update ~~are~~were effective for public entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. ~~Early~~The adoption ~~is permitted. The Company is currently evaluating~~did not have a material effect on the ~~effect~~Company’s financial position or results of ~~this update on its consolidated financial statements.~~operations.

Recently Issued Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial ~~Reporting~~.Reporting. This ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. Adoption of the expedients and exceptions is permitted upon issuance of this update through December 31, 2022. The Company is ~~currently evaluating~~in the ~~effect~~process of assessing the impact of this ~~update~~ASU on its consolidated financial statements.

In ~~October 2021,~~March 2022, the FASB issued ASU ~~2021-08,~~ ~~Business Combinations~~2022-01, Derivatives and Hedging (Topic ~~805)~~815): ~~Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.~~Fair Value Hedging—Portfolio Layer Method. This ASU ~~provides~~clarifies the guidance in ASC 815 on fair value hedge accounting of interest rate risk for portfolios of financial assets, expanding the scope of this guidance to ~~help improve~~allow entities to apply the ~~accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice~~portfolio layer method to portfolios of all financial assets, including both prepayable and ~~inconsistency related to recognition of an acquired contract liability and the effect on subsequent revenue recognized by the acquirer.~~nonprepayable financial assets. The amendments in this update are effective for public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. ~~Early~~The adoption ~~is permitted. The Company is currently evaluating the effect of this update on its consolidated financial statements but is expecting to early adopt in the fourth quarter 2021.~~

The estimated fair value of assets acquired and liabilities assumed are preliminary and subject to change as we finalize purchase price allocations, which is expected within one year of the respective acquisitions.

~~In January 2020, the Company acquired On Location Events, LLC, dba On Location Experiences (“OLE”) for total consideration of $441.1~~ ~~million consisting of cash consideration of $366.4~~ ~~million; rollover equity, representing~~ ~~13.5% of the equity interest of OLE, valued at $65.2~~ ~~million and a contingent premium payment, as discussed below, valued at $9.5~~ million. The rollover equity is held by 32 Equity, LLC (“32 Equity”), the strategic investment firm affiliated with the National Football League (“NFL”). OLE is party to a Commercial License Agreement (“CLA”) with NFL Properties, LLC, an affiliate of the NFL, which provides OLE with the right to operate as the official hospitality partner of the NFL.

As part of the acquisition, the Company entered into an Amended and Restated Limited Liability Company Agreement of OLE’s parent entity, Endeavor OLE Parent, LLC (“OLE Parent”), with 32 Equity. The terms of the agreement provide 32 Equity with certain call rights to acquire additional common units in OLE Parent and liquidity rights. At any time on or prior to April 1, 2022, 32 Equity has the right to purchase that amount of additional common units of OLE Parent from the Company that would result in 32 Equity having an aggregate ownership percentage interest in OLE Parent of 32%, at a price per unit equal to the original acquisition price of its rollover equity. Between April 1, 2022 and April 1, 2024, 32 Equity has an additional right to purchase that amount of additional common units of OLE Parent from the Company that would result in 32 Equity having an aggregate percentage interest in OLE Parent equal to ~~44.9~~% at a price per unit equal to the greater of the original acquisition price of its rollover equity and an amount based on a 15x EBITDA multiple of OLE Parent. The agreement also provides 32 Equity with certain rights to put its common units in OLE Parent to the Company upon a termination of the CLA or its option on or after January 2, 2025 (the “Lockup Period”). The Company also has certain call rights to require 32 Equity to sell its common units in OLE Parent to the Company upon a termination of the CLA in the event aforementioned put rights are not exercised. The put/call price is an amount equal to fair market value and the exercise of these put/call rights may give rise to an obligation of the Company to make a premium payment to 32 Equity in certain circumstances. At any time following the Lockup Period, 32 Equity will be entitled to a $~~41.0~~ million premium payment from the Company if both (i) 32 Equity or the Company exercise the put/call rights described above or there is a sale or IPO of OLE Parent and (ii) certain performance metrics based on average OLE gross profit or NFL related business gross profit are achieved. The $41.0 million premium payment will also be payable if, prior to January 2, 2026, a sale or IPO of OLE Parent occurs or if 32 Equity exercises its put rights following a termination of the CLA due to an OLE event of default (in which case the $41.0 million premium payment may be subject to proration).

On Location Experiences is a premium experiential hospitality business that serves iconic rights holders with extensive experience in ticketing, curated hospitality, live event production and travel management in the worlds of sports and entertainment. Operations include Anthony Travel, CID Entertainment, Future Beat, Kreate Inc., PrimeSport and Steve Furgal’s International Tennis Tours. OLE is included in the Events, Experiences & Rights segment.

~~The Company incurred $13.7~~ million of transaction related costs in connection with the acquisition. These costs were expensed as incurred and included in selling, general and administrative expenses in the consolidated statement of operations.

The goodwill for the OLE acquisition was assigned to the Events, Experiences & Rights segment. Goodwill was primarily attributable to the go-to-market synergies expected to arise as a result of the acquisition and other intangible assets that do not qualify for separate recognition. The goodwill is partially deductible for tax purposes. The weighted average life of finite-lived intangible assets acquired is ~~10.7~~ ~~years.~~

~~The acquisition was accounted for as a business combination and the fair values of the assets acquired and the liabilities assumed in the business combination are as follows (in thousands):~~

OLE

Cash and cash equivalents

$
45,230

Restricted cash

86

Accounts receivable

10,316

Deferred costs

99,184

Other current assets

53,893

Property and equipment

4,361

Operating lease right-of-use assets

3,509

Other assets

74,193

Intangible assets:

Trade names

75,400

Customer and client relationships

198,819

Goodwill

387,542

Accounts payable and accrued expenses

(55,927
)
Other current liabilities

(28,224
)
Deferred revenue

(175,790
)
Debt

(217,969
)
Operating lease liabilities

(3,509
)
Other long-term liabilities

(24,377
)
Non-redeemable non-controlling interest

(5,635
)
Net assets acquired

$
441,102

~~On March 20, 2020, the Company acquired the remaining~~ 50~~% of the membership interests of PIMGSA LLP for a total transaction price of $37.0~~ ~~million, which is to be paid on various dates and amounts. Prior to the acquisition, the Company owned a~~ 50% membership interest of PIMGSA LLP and was accounted for under the equity method. PIMGSA LLP trades under the name FC Diez Media and provides a complete and global sports media service, sponsorship and digital agency, formed exclusively to serve the South American Football Confederation. The Company recorded $~~8.6~~ ~~million and $46.4~~ ~~million of goodwill and a finite-lived contract based intangible asset, respectively. The finite-lived intangible asset has a useful life of~~ ~~2 years. The Company also recognized a gain of $27.1~~ ~~million for the difference between the carrying value and fair value of the previously held membership interest. The gain was included in other income, net in the consolidated statement of operations.~~

In 2011, the Company and Asian Tour Limited (“AT”) formed a venture, Asian Tour Media Pte Ltd. LTD (“ATM”), for the commercial exploitation of certain Asian Tour events. As of December 31, 2019, ATM was a consolidated subsidiary of the Company as the Company had control over ATM’s operating decisions. The shareholders’ agreement included a provision whereby, if certain financial conditions were met as of December 31, 2019, a change in the corporate governance structure would be implemented as of January 1, 2020. Such financial conditions were met as of December 31, 2019, resulting in a change in the corporate governance such that the Company no longer maintains control over the operating decisions of ATM. The Company determined that the 50~~% ownership interest would be accounted for under the equity method as of January 1, 2020. On January 1, 2020, the Company derecognized all the assets and liabilities of ATM and recognized an $8.1~~ million gain for the difference between the carrying value of the assets and liabilities and fair value of the Company’s 50% ownership interest. The gain was included in other income, net in the consolidated statement of operations.

The Company’s supplemental cash flow information is as follows (in thousands):


	Nine Months Ended September 30,					Nine Months Ended September 30,
	2021		2020			2022		2021
Supplemental information:
Cash paid for interest	$	145,966	$	183,694		$	160,217	$	145,966
Cash payments for income taxes		27,185		31,457			33,309		27,185

Non-cash investing and financing activities:
Capital expenditures included in accounts payable and accrued liabilities	$	15,931	$	2,745		$	8,037	$	15,931
Contingent consideration provided in connection with acquisitions		4,472		9,947			1,500		4,472
Establishment and acquisition of non-controlling interests							414,985		3,087,301
Tax receivable agreements liability adjustments							819		32,081
Accretion of redeemable non-controlling interests		34,417		(10,281	)		83,849		34,417
Accrued redemption of units included in accrued liabilities and other current liabilities		—		17,396
Issuance of Class A Common Units		—		26,476
Issuance of promissory note		—		15,885
Establishment and acquisition of non-controlling interests		3,087,301		—
Establishment of tax receivable agreements liability		32,081		—
Investment in affiliates retained from a business divestiture							202,220		—
Deferred consideration in connection with acquisitions							31,770		—
Issuance of Class A common stock in connection with acquisitions							70,254		—

8. 6. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The changes in the carrying value of goodwill are as follows (in thousands):


	Owned Sports Properties		Events, Experiences & Rights			Representation			Total			Owned Sports Properties			Events, Experiences & Rights			Representation			Total
Balance — December 31, 2020	$	2,674,038	$	1,011,217		$	495,924		$	4,181,179
Balance — December 31, 2021												$	2,741,048		$	1,266,144		$	499,362		$	4,506,554
Acquisitions		0		238,385			15,134			253,519			25,585			826,221			—			851,806
Divestiture													(91,960	)		—			—			(91,960	)
Impairment		0		(1,979	)		(2,545	)		(4,524	)		—			(689	)		—			(689	)
Foreign currency translation and other													(635	)		(13,830	)		(1,278	)		(15,743	)
Assets held for sale		0		0			(10,808	)		(10,808	)		—			(11,997	)		—			(11,997	)
Foreign currency translation and other		0		(1,351	)		(2,124	)		(3,475	)
Balance — September 30, 2021	$	2,674,038	$	1,246,272		$	495,581		$	4,415,891
Balance — September 30, 2022												$	2,674,038		$	2,065,849		$	498,084		$	5,237,971

Intangible Assets

The following table summarizes information relating to the Company’s identifiable intangible assets as of September 30, ~~2021~~2022 (in thousands):


	Weighted Average Estimated Useful Life (in years)		Gross Amount		Accumulated Amortization			Carrying Value		Weighted Average Estimated Useful Life (in years)		Gross Amount		Accumulated Amortization			Carrying Value
Amortized:
Trade names		17.3	$	990,937	$	(276,005	)	$	714,932		17.1	$	1,045,525	$	(329,005	)	$	716,520
Customer and client relationships		6.7		1,336,213		(985,996	)		350,217		6.9		1,448,375		(1,045,532	)		402,843
Internally developed technology		3.9		118,828		(58,271	)		60,557		6.0		279,176		(83,400	)		195,776
Other		4.3		45,355		(45,109	)		246		4.3		45,188		(44,180	)		1,008
				2,491,333		(1,365,381	)		1,125,952			$	2,818,264	$	(1,502,117	)	$	1,316,147
Indefinite-lived:
Trade names				339,460		—			339,460			$	438,369	$	—		$	438,369
Owned events				88,696		—			88,696				431,154		—			431,154
Other													14,000		—			14,000
Total intangible assets			$	2,919,489	$	(1,365,381	)	$	1,554,108			$	3,701,787	$	(1,502,117	)	$	2,199,670

1817

~~Table of Contents~~

The following table summarizes information relating to the Company’s identifiable intangible assets as of December 31, ~~2020~~2021 (in thousands):

Weighted Average
Estimated Useful Life
(in years)

Gross
Amount

Accumulated
Amortization

Carrying
Value

Amortized:

Trade names

17.5

$
970,595

$
(232,158
)

$
738,437

Customer and client relationships

6.7

1,317,083

(907,889
)

409,194

Internally developed technology

4.4

61,539

(46,126
)

15,413

Other

4.3

45,317

(44,251
)

1,066

2,394,534

(1,230,424
)

1,164,110

Indefinite-lived:

Trade names

341,272

—

341,272

Owned events

90,086

—

90,086

Total intangible assets

$
2,825,892

$
(1,230,424
)

$
1,595,468


	Weighted Average Estimated Useful Life (in years)		Gross Amount		Accumulated Amortization			Carrying Value
Amortized:
Trade names		17.3	$	991,021	$	(291,326	)	$	699,695
Customer and client relationships		6.7		1,344,783		(1,012,509	)		332,274
Internally developed technology		3.9		120,175		(66,939	)		53,236
Other		14.3		142,657		(44,608	)		98,049
			$	2,598,636	$	(1,415,382	)	$	1,183,254
Indefinite-lived:
Trade names			$	340,029	$	—		$	340,029
Owned events				88,401		—			88,401
Total intangible assets			$	3,027,066	$	(1,415,382	)	$	1,611,684

Intangible asset amortization expense was $~~48.6~~39.1 million and $~~55.3~~48.6 million for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and $~~141.0~~123.4 million and $~~178.8~~141.0 million for the nine months ended September 30, ~~2021and 2020, respectively.~~

During the six months ended June 30, 2020, the Company performed an interim impairment review due to the impact of the COVID-19 pandemic on the Company’s business. As a result of the interim impairment test, the Company recorded total non-cash impairment charges of $2022 and 2021, respectively~~137.3~~ ~~million for goodwill and $38.0~~ ~~million for intangible assets driven by lower projections. Of these charges, all of the goodwill and $31.8~~ ~~million of the intangible assets were recorded within the Company’s Events, Experiences & Rights segment and $6.2~~ million of the intangible assets was recorded to the Company’s Representation segment. The Company determines the fair value of each reporting unit based on discounted cash flows using an applicable discount rate for each reporting unit. Intangible assets were valued based on a relief from royalty method or an excess earnings method..

7. INVESTMENTS

The following is a summary of the Company’s investments (in thousands):


	September 30,		December 31,		September 30,		December 31,
	2021		2020		2022		2021
Equity method investments	$	193,255	$	177,663	$	281,385	$	196,423
Equity investments without readily determinable fair values		91,808		66,378		125,744		101,124
Equity investments with readily determinable fair values		779		7,037		306		665
Total investments	$	285,842	$	251,078	$	407,435	$	298,212

Equity Method Investments

As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company held various investments in non-marketable equity instruments of private companies. As of September 30, ~~2021,~~2022, the Company’s equity method investments are primarily comprised of ~~Learfield IMG College~~the restricted Endeavor Content business (now called Fifth Season) and Sports News Television Limited. The Company’s ownership of its equity method investments ~~ranges~~ranged from 56% to 50% as of September 30, ~~2021.~~2022.

In January 2022, in connection with the Company's sale of 80% of the restricted Endeavor Content business, the Company retained 20% ownership in the restricted Endeavor Content business. The investment is accounted for as an equity method investment. The Company’s share of the net loss of Fifth Season for the three and nine months ended September 30, 2022 was $4.4 million and $9.5 million, respectively, and is recognized within equity losses of affiliates in the consolidated statements of operations.

As of September 30, ~~2021,~~2022, the Company’s ownership in Learfield IMG College was approximately 42%. The Company’s share of the net loss of Learfield IMG College for the three and nine months ended September 30, 2022 and 2021 was $78.7 million, $137.5 million, $14.8 million and $76.3 million, respectively, and is recognized within equity losses of affiliates in the consolidated statements of operations.

~~For~~ The Company's share of the results of Learfield IMG College for the three and nine months ended September 30, ~~2020, the Company’s share of the net loss of Learfield IMG College was~~2022 included a $~~31.4~~56.1 million ~~and $238.9~~ ~~million, respectively, and is recognized within equity losses of affiliates in the consolidated statements of operations. The results of Learfield IMG College include a~~ charge as a result of its annual goodwill and indefinite lived intangibles ~~assets~~asset impairment test, primarily due to continued losses and the impact of COVID-19 on Learfield’s IMG College’s business. In addition, during the nine months ended September 30, 2020, the Company recorded total other-than-temporary impairment charges of $~~5.9~~ ~~million for one of its other equity method investments, which has been recorded in equity losses of affiliates in the consolidated statement of operations.~~losses.

Equity Investments without Readily Determinable Fair Values

As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company held various investments in non-marketable equity instruments of private companies.

The Company performed its assessment on its investments without readily determinable fair values and recorded an increase in fair value of $0.5 million and $0.9 million for the three months ended September 30, 2022 and 2021, respectively, and $14.5 million and $0.9 million for the nine months ended September 30, 2022 and 2021, respectively, in other income (expense), net in the consolidated statements of operations. The net increases were due to observable price changes partially offset by impairments. For ~~each of~~ the three and nine months ended September 30, ~~2021, the Company recorded an increase in fair value of $0.9~~ ~~million for its equity investments without readily determinable fair values. For the three months ended September 30, 2021, the Company sold~~ 0 ~~investments. For~~2022 and the nine months ended September 30, 2021, the Company sold investments for net proceeds of $~~4.8~~3.0 million, $3.3 million and ~~recorded~~$4.8 million, respectively, and a related ~~gains~~gain of $3.0 million, $3.3 million and $2.6 ~~million.~~

~~Table of Contents~~

million, respectively. For the three ~~and nine~~ months ended September 30, ~~2020,~~2021, the Company ~~recorded a net increase (decrease) of $~~sold ~~1.3~~no ~~million and $(~~investments.

~~2.4~~18

) million, respectively, for its equity investments without readily determinable fair values in other income (expense), net in the consolidated statements of operations. The net increase (decrease) recorded was due to observable price changes and impairment charges due to uncertainty in the investments’ ability to continue as a going concern.

Equity Investments with Readily Determinable Fair Values

As of September 30, ~~2021,~~2022, the Company had ~~two~~three investments in publicly traded companies. During the three and nine months ended September 30, ~~2021,~~2022, the Company ~~sold no~~did not sell any investments in publicly traded companies. ~~During the nine months ended September 30, 2021 , the Company sold two investments in publicly traded companies for total net proceeds of $11.5~~ ~~million.~~ As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company’s equity investments with readily determinable fair values were valued at $~~0.8~~0.3 million and $~~7.0~~0.7 million, respectively. For the three and nine months ended September 30, ~~2021 and 2020,~~2022, the Company recorded ~~(losses) gains~~$(0.3) million and $(0.9) million, respectively, due to the change in fair value in other income (expense), net in the consolidated statements of operations. For the three and nine months ended September 30, 2021, the company recorded $(0.1) million $~~5.1~~ ~~million, $0.3~~ ~~million~~ and $~~1.1~~5.1 million, respectively, due to the change in fair value in other income (expense), net in the consolidated statements of operations. See Note 119 for additional information regarding fair value measurements for these equity investments.

~~10.~~ 8. FINANCIAL INSTRUMENTS

The Company enters into forward foreign exchange contracts to hedge its foreign currency exposures on future production expenses denominated in various foreign currencies (i.e., cash flow hedges). The Company also enters into forward foreign exchange contracts that economically hedge certain of its foreign currency risks, ~~even though~~although hedge accounting does not apply or the Company elects not to apply hedge accounting. In addition, the Company enters into interest rate swaps to hedge certain of its interest rate risks on its debt. The Company monitors its positions with, and the credit quality of, the financial institutions that are party to its financial transactions. Prior to the sale of the restricted Endeavor Content business, the Company also entered into forward foreign exchange contracts to hedge its foreign currency exposures on future production expenses denominated in various foreign currencies (i.e., cash flow hedges).

As of September 30, ~~2021,~~2022, the Company had the following outstanding forward foreign exchange contracts (all outstanding contracts have maturities of less than 12 months from September 30, ~~2021)~~2022, with the exception of four contracts which mature within 18 months from such date) (in thousands except for exchange rates):

Foreign Currency

Foreign
Currency
Amount

US Dollar
Amount

Weighted Average
Exchange Rate Per
$1 USD
British Pound Sterling

£ 24,500

in exchange for

$
33,781

£ 0.73
Canadian Dollar (*)

C$ 35,717

in exchange for

$
27,410

C$ 1.30
Swedish Krona

kr 4,500

in exchange for

$
526

kr 8.56
Australian Dollar (*)

AUD$ 14,300

in exchange for

$
10,639

AUD$ 1.34
Singapore Dollar

S$ 1,300

in exchange for

$
960

S$ 1.35
(*) C$ 35,717 and AUD$ 14,300 of the outstanding forward foreign exchange contracts are related to assets held for sale
as of September 30, 2021 (See Note 6).

Foreign Currency
Foreign
Currency
Amount
US Dollar
Amount
Weighted Average
Exchange Rate Per
$1 USD
British Pound Sterling
£ 61,992
in exchange for
$77,648
£ 0.80
Euro
€9,907
in exchange for
$10,100
€0.98
Singapore Dollar
S$2,400
in exchange for
$1,754
S$ 1.37

For forward foreign exchange contracts designated as cash flow hedges, the Company recognized net gains (losses) in accumulated other comprehensive income (loss) of none and $(0.6) ~~million and $0.2~~ million for the three months ended September 30, 2022 and 2021, respectively, and ~~2020, respectively,~~$0.3 million and $(0.4~~) million and $(2.0~~) million for the nine months ended September 30, ~~2021and 2020,~~2022 and 2021, respectively. The Company reclassified $0.8 million gain into net income for the nine months ended September 30, 2022 in connection with the sale of the restricted Endeavor Content business and is included in the gain as described in Note 4. The Company did not reclassify any gains or losses into net income (loss) for the three months ended September 30, 2022. The Company reclassified a $1.5 million gain into net income (loss) for the three and nine months ended September 30, 2021. ~~The Company did~~ 0~~t reclassify any gains or losses into net loss for three and nine months ended September 30, 2020.~~

For forward foreign exchange contracts not designated as cash flow hedges, the Company recorded a net loss of $4.3 million and net gain ~~(loss)~~ of $0.6 ~~million and $(0.6~~) million for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and a net loss of $~~1.4~~7.4 million and net gain of $~~0.6~~1.4 million for the nine months ended September 30, ~~2021and 2020,~~2022 and 2021, respectively, in other income (expense), net in the consolidated statements of operations.

In certain circumstances, the Company enters into contracts that are settled in currencies other than the functional or local currencies of the contracting parties. Accordingly, these contracts consist of the underlying operational contract and an embedded foreign currency derivative element. Hedge accounting is not applied to the embedded foreign currency derivative element. The Company recorded a net ~~gain (loss)~~loss of $($7.7 million and $1.2~~) million and $(2.2~~) million for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and $($~~10.4~~8.8) million and $~~11.0~~10.4 million for the nine months ended September 30, ~~2021and 2020,~~2022 and 2021, respectively, in other income (expense), net in the consolidated statements of operations.

In addition, the Company has entered into interest rate swaps for ~~portions~~$1.5 billion of its 2014 Credit Facilities and other variable interest bearing debt and has designated them cash flow hedges. The LIBOR portion of the facility from these interest rate swaps has been fixed at a coupon of 2.12% commencing from June 2019 until June 2024. In August 2022, the Company entered into additional interest rate hedges to swap additional $750 million of its 2014 Credit Facilities from floating interest expense to fixed. The LIBOR portion of the facility from these interest rate swaps has been fixed at a coupon of 3.162% until August 2024. Hedge accounting is applied to these additional interest rate swaps, similar to the pre-existing interest rate swaps. For the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, the Company recorded ~~losses~~gains (losses) of $($~~0.1~~45.1) million and $(~~0.7~~0.1) million in accumulated other comprehensive income (loss) and reclassified losses of $(none and $7.7~~) million and $(8.1~~) million into net income (loss), respectively. For the nine months ended September 30, ~~2021and 2020,~~2022 and 2021, the Company recorded gains ~~(losses)~~ of $107.3 million and $13.2 ~~million and $(93.2~~) million in accumulated other comprehensive income (loss) and reclassified ~~gains (losses)~~losses of $($~~22.6~~12.4) million and $~~15.0~~22.6 million into net income (loss)~~, respectively.~~.

~~11.~~ 9. FAIR VALUE MEASUREMENTS

The fair value hierarchy is composed of the following three categories:

Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

~~Table of Contents~~

Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurements.

The following tables present, for each of the fair value hierarchy levels, the Company’s assets and liabilities that are measured at fair value on a recurring basis (in thousands):


	Fair Value Measurements as of
	September 30, 2022
	Level I		Level II		Level III		Total
Assets:
Investments in equity securities with readily determinable fair values	$	306	$	—	$	—	$	306
Interest rate swaps		—		71,497		—		71,497
Forward foreign exchange contracts		—		2,412		—	$	2,412
Total	$	306	$	73,909	$	—	$	74,215
Liabilities:
Contingent consideration	$	—	$	—	$	4,377	$	4,377
Forward foreign exchange contracts		—		20,803		—		20,803
Total	$	—	$	20,803	$	4,377	$	25,180

Fair Value Measurements as of

September 30, 2021

Level I

Level II

Level III

Total

Assets:

Investments in equity securities with readily determinable fair values

$
779

$
—

$
—

$
779

Forward foreign exchange contracts

—

460

—

460

Total

$
779

$
460

$
—

$
1,239

Liabilities:

Contingent consideration

$
—

$
—

$
25,421

$
25,421

Interest rate swaps

—

71,834

—

71,834

Forward foreign exchange contracts

—

10,187

—

10,187

Total

$
—

$
82,021

$
25,421

$
107,442

Fair Value Measurements as of

December 31, 2020

Level I

Level II

Level III

Total

Assets:

Investments in equity securities with readily determinable fair values

$
7,037

$
—

$
—

$
7,037

Forward foreign exchange contracts

—

1,794

—

1,794

Total

$
7,037

$
1,794

$
—

$
8,831

Liabilities:

Contingent consideration

$
—

$
—

$
9,026

$
9,026

Interest rate swaps

—

107,909

—

107,909

Forward foreign exchange contracts

—

5,023

—

5,023

Total

$
—

$
112,932

$
9,026

$
121,958


	Fair Value Measurements as of
	December 31, 2021
	Level I		Level II		Level III		Total
Assets:
Investments in equity securities with readily determinable fair values	$	665	$	—	$	—	$	665
Forward foreign exchange contracts		—		2,529		—		2,529
Total	$	665	$	2,529	$	—	$	3,194
Liabilities:
Contingent consideration	$	—	$	—	$	26,900	$	26,900
Interest rate swaps		—		48,427		—		48,427
Forward foreign exchange contracts		—		13,363		—		13,363
Total	$	—	$	61,790	$	26,900	$	88,690

There have been 0no transfers of assets or liabilities between the fair value measurement classifications during the three and nine months ended September 30, ~~2021.~~2022.

Investments in Equity Securities with Readily Determinable Fair Values

The estimated fair value of the Company’s equity securities with readily determinable fair values is based on observable inputs in an active market, which is a Level 1 measurement within the fair value hierarchy.

Contingent Consideration

The Company has recorded contingent consideration liabilities in connection with its acquisitions. Contingent consideration is included in current liabilities and other long-term liabilities in the consolidated balance sheets. Changes in fair value are recognized in selling, general and administrative expenses. The estimated fair value of the contingent consideration is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.

The changes in the fair value of contingent consideration were as follows (in thousands):


	Nine Months Ended September 30,			Nine Months Ended September 30, 2022
	2021
Balance at December 31, 2020	$	9,026
Balance at December 31, 2021				$	26,900
Acquisitions		4,472			1,500
Payments		(2,491	)		(26,183	)
Change in fair value		14,414			2,243
Balance at September 30, 2021	$	25,421
Foreign currency translation					(83	)
Balance at September 30, 2022				$	4,377

Payments made during the nine months ended September 30, 2022 primarily related to the settlement of the premium contingent consideration with 32 Equity LLC ("32 Equity"). See Note 11.

Foreign Currency Derivatives

The Company classifies its foreign currency derivatives within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments (Note ~~10)~~8). As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had $~~0.5~~2.1 million and $~~1.8~~2.3

~~Table of Contents~~

million in other current assets, none and $0.2 million ~~and~~ ~~NaN~~ in assets held for sale, $~~3.2~~0.3 million and none in other assets, $11.6 million and $~~4.3~~4.5 million in other current liabilities, none and $~~1.2~~0.4 million ~~and~~ ~~NaN~~ in liabilities held for sale, and $~~6.9~~9.2 million and $~~0.7~~8.5 million in other long-term liabilities, respectively, recorded in the consolidated balance sheets related to the Company’s foreign currency derivatives.

Interest Rate Swaps

The Company classifies its interest rate swaps within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments (Note ~~10)~~8). ~~The fair value~~As of September 30, 2022 and December 31, 2021, the ~~swaps was~~Company had $~~71.8~~71.5 million and none in other assets and none and $~~107.9~~48.4 million ~~as of September 30, 2021 and December 31, 2020, respectively, and was included~~ in other long-term liabilities, respectively, recorded in the consolidated balance ~~sheets.~~sheets related to the Company’s interest rate swaps.

~~12.~~ 10. DEBT

The following is a summary of outstanding debt (in thousands):


	September 30,			December 31,			September 30,			December 31,
	2021			2020			2022			2021
2014 Credit Facilities:
First Lien Term Loan (due May 2025)	$	2,793,581		$	3,074,230		$	2,513,449		$	2,786,048
Revolving Credit Facility (due May 2024)		0			163,057
Zuffa Credit Facilities:
Zuffa First Lien Term Loan (due April 2026)		2,248,517			2,447,064			2,817,517			2,840,767
Other debt (2.46%-14.50% Notes due at various dates through 2031)		132,119			339,519
Other debt (3.25%-14.50% Notes due at various dates through 2031)								152,417			159,010
Total principal		5,174,217			6,023,870		$	5,483,383		$	5,785,825
Unamortized discount		(22,364	)		(40,982	)		(19,645	)		(26,077	)
Unamortized issuance costs		(43,452	)		(57,083	)		(36,335	)		(46,012	)
Total debt		5,108,401			5,925,805		$	5,427,403		$	5,713,736
Less: current portion		(75,858	)		(212,971	)		(89,039	)		(82,022	)
Total long-term debt	$	5,032,543		$	5,712,834		$	5,338,364		$	5,631,714

2014 Credit Facilities

As of September 30, 2022 and December 31, 2021, the Company had $2.5 billion and $2.8 billion, respectively, outstanding under a credit agreement that was entered into in connection with the 2014 IMG acquisition (the "2014 Credit Facilities"). The 2014 Credit Facilities consist of a first lien secured term loan (the “First Lien Term Loan”) and a $200.0 million secured revolving credit facility (the "Revolving Credit Facility"). In September 2022, we repaid $250.0 million of term loans under the 2014 Credit Facilities.

The financial debt ~~covenants~~covenant of the 2014 Credit Facilities did not apply as of September 30, 2022 and December 31, ~~2020,~~2021 as the Company amended the 2014 Credit Facilities receiving a waiver from the financial covenant for the test periods ended June 30, 2020, September 30, 2020 and December 31, 2020. In April 2021, the Company received a waiver from the financial covenant for the test periods ending June 30, 2021, September 30, 2021 and December 31, 2021. Also, in April 2021,had no borrowings outstanding under the Revolving Credit ~~Facility maturity date was extended from~~ ~~May 2023~~ to ~~May 2024~~.

~~On June 29, 2021, the Company repaid $256.7~~ ~~million related to the First Lien Term Loan. The Company paid a $28.6~~ million redemption premium related to the First Lien Term loan that was recorded in the consolidated statement of operations as loss on extinguishment of debt in the nine months ended September 30, 2021. In addition, on June 29, 2021, the Company repaid $~~163.1~~ ~~million related to the Revolving Credit~~ Facility.~~NaN~~ ~~borrowings related to the Revolving Credit Facility were outstanding as of September 30, 2021.~~

The Company had outstanding letters of credit under the 2014 Credit Facilities totaling $~~26.0~~19.3 million and $~~24.8~~23.8 million as of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

Zuffa Credit Facilities

~~In January~~As of September 30, 2022 and December 31, 2021, the Company ~~completed~~has $2.8 billion outstanding under a ~~refinancing of the Zuffa First Lien Term Loan and the Term Loan Add-on~~credit agreement that was entered into ~~a single term loan (the “New First Lien Term Loan”), which reduced the annual~~ ~~interest rate margin by 25 basis points to 3.00% for LIBOR~~ ~~loans and~~ ~~reduced the LIBOR floor by 25 basis points to 0.75%. The annual interest rate margin applicable to the New First Lien Term Loan is subject to a~~ ~~25 basis point step-down to 2.75% for LIBOR loans~~ ~~if the First Lien Leverage Ratio is below~~ ~~3.5-to-1. With the exception of the interest rate margin and the LIBOR floor, the New First Lien Term Loan has similar terms and conditions as the Zuffa First Lien Term Loan and Term Loan Add-on.~~

~~On June 29, 2021, the Company repaid $180.2~~ ~~million related to the Zuffa Credit Facilities.~~ ~~NaN~~ ~~redemption premium fees were incurred~~ in connection with the ~~payment.~~2016 Zuffa acquisition (the "Zuffa Credit Facilities"). The Zuffa Credit Facilities consist of a first lien secured term loan (the "Zuffa First Lien Term Loan") and a secured revolving credit facility in an aggregate principal amount of $205.0 million, letters of credit in an aggregate face amount not in excess of $40.0 million and swingline loans in an aggregate principal amount not in excess of $15.0 million (collectively, the "Zuffa Revolving Credit Facility"). The Zuffa Credit Facilities are secured by liens on substantially all of the assets of Zuffa.

The financial debt covenants of the Zuffa Credit Facilities did not apply as of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021 as Zuffa ~~did not utilize greater than~~had ~~thirty-five percent~~no ofborrowings outstanding under the ~~borrowing capacity.~~Zuffa Revolving Credit Facility.

Under the Zuffa Credit Facilities, Zuffa had $10.0 million and no outstanding letters of credit ~~under the Zuffa Credit Facilities totaling $10.0~~ ~~million~~ as of September 30, ~~2021~~2022 and December 31, ~~2020.~~2021, respectively.

Other Debt

~~OLE~~On Location Revolver

The ~~OLE~~On Location ("OL") revolving credit agreement contains a financial covenant that requires ~~OLE~~OL to maintain a First Lien Leverage Ratio of Consolidated First Lien Debt to Consolidated EBITDA, as defined in the credit agreement, of no more than 3-to-1. The Company is only

~~Table of Contents~~

required to meet the First Lien Leverage Ratio if the sum of outstanding borrowings on the Revolving Credit Facility plus outstanding letters of credit exceeding $2.0 million that are not cash collateralized exceeds 40forty percent of the total Revolving Commitments as measured on a quarterly basis, as defined in the credit agreement. As of September 30, 2022 and December 31, 2021, the Company was in compliance with the financial debt covenants.

~~In August 2021, OLE increased its borrowing capacity under its revolving credit agreement from $20.0~~ ~~million to $42.9~~ ~~million and the maturity date was extended from~~ ~~February 2025~~ ~~to the earlier of~~ ~~August 2026~~ ~~or the date that is~~ 91 ~~days prior to the maturity date of the term loans under the 2014 Credit Facilities.~~

~~OLE~~OL had 0no letters of credit outstanding under the revolving credit agreement as of September 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

Receivables Purchase Agreement

As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the debt outstanding under these arrangements was $~~50.5~~28.2 million and $~~83.7~~50.5 million, respectively.

~~Endeavor Content Capital Facility~~

~~In February 2021, the Company increased its capacity under its Endeavor Content Capital Facility from $~~21~~200.0~~ ~~million to $325.0~~ ~~million and in July 2021, the Company further increased the total capacity to $430.0~~ ~~million. As of September 30, 2021 and December 31, 2020, the Endeavor Content Capital Facility had $204.6~~ ~~million and $153.9~~ ~~million of borrowings outstanding, respectively, and~~ 0 ~~outstanding letters of credit. The borrowing amount outstanding as of September 30, 2021 was classified as liabilities held for sale.~~

Zuffa Secured Commercial Loans

As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, Zuffa was in compliance with its financial debt covenant under the Zuffa Secured Commercial Loans.

2014 Credit Facilities and Zuffa Credit Facilities

The 2014 Credit Facilities and the Zuffa Credit Facilities restrict the ability of certain subsidiaries of the Company to make distributions and other payments to the Company. These restrictions do include exceptions for, among other things, (1) amounts necessary to make tax payments, (2) a limited annual amount for employee equity repurchases, (3) distributions required to fund certain parent entities, (4) other specific allowable situations and (5) a general restricted payment basket. As of September 30, ~~2021,~~2022, EGH held cash of $~~76.4~~40.7 million, long-term deferred tax benefits of $132.9 million in other assets and a tax receivable agreements liability of $~~32.1~~200.0 ~~million.~~million, of which $41.2 million is in other current liabilities and $158.8 million is in other long-term liabilities. As of December 31, ~~2020, EOC~~2021, EGH held ~~cash~~long-term deferred tax benefits of $~~63.3~~61.5 ~~million; liabilities for redemption of units~~million in other assets and ~~future incentive awards~~a tax receivable agreements liability of $~~53.9~~133.8 million, of which $41.2 million is in other current liabilities and $~~11.9~~92.6 million ~~respectively; and liabilities and redeemable equity for unit put rights of $28.4~~ ~~million.~~is in other long-term liabilities. Otherwise, EGH ~~and EOC have~~has no material separate cash flows, assets or liabilities other than the investments in its subsidiaries. All its business operations are conducted through its operating subsidiaries; it has no material independent operations. EGH ~~and EOC have~~has no other material commitments or guarantees. As a result of the restrictions described above, substantially all of the subsidiaries’ net assets are effectively restricted in their ability to be transferred to EGH ~~or EOC~~ as of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company’s First Lien Term Loan under the 2014 Credit Facilities and Zuffa’s First Lien Term Loan under its Credit Facilities had an estimated fair value of $~~5.0~~5.1 billion and $~~5.3~~5.6 billion, respectively. The estimated fair values of the Company’s First Lien Term Loan under the 2014 Credit Facilities and Zuffa’s First Lien Term Loan under its Credit Facilities are based on quoted market values for the debt. Since the First Lien Term Loan under the 2014 Credit Facilities and Zuffa’s First Lien Term Loan under its Credit Facilities do not trade on a daily basis in an active market, fair value estimates are based on market observable inputs based on quoted market prices and borrowing rates currently available for debt with similar terms and average maturities, which are classified as Level 2 under the fair value hierarchy.

~~13.~~ ~~MEMBERS’ EQUITY~~

~~Common Units~~

~~The Company had~~ ~~2,149,218,614~~ ~~Class A Common Units issued and outstanding as of December 31, 2020. The Class A Common Units are held by Holdco, Silver Lake, and other investors. The Class A Common Units have~~ 0 ~~par value assigned to them.~~

~~In January 2020, the Company issued~~ ~~8,766,738~~ ~~Class A Common Units to Silver Lake as part of the Zuffa distribution discussed below.~~

~~Profits Units~~

~~The Company had~~ ~~314,123,415~~ Profits Units issued and outstanding as of December 31, 2020. Other than certain Profits Units held by key executives, Profits Units are not entitled to participate in operating distributions unless otherwise elected by the Board. Certain Profits Units are designated as Catch-Up Profits Units and are entitled to certain “catch up” distributions once the distribution threshold applicable to such Catch-Up Profits Units has been met. All Profits Units have no par value assigned to them.

~~Table of Contents~~

~~Non-controlling Interests~~

~~In January 2020, the Board of Zuffa approved the payment of a distribution in the amount of $300.0~~ ~~million to Zuffa common unit and profits unit holders. During the nine months ended September 30, 2020, Zuffa authorized and paid $201.9~~ ~~million. In lieu of cash, the Company issued~~ ~~8,766,738~~ ~~Class A Common Units at fair value to Silver Lake for $26.5~~ ~~million and issued a convertible promissory note to Silver Lake for $15.9~~ ~~million. This resulted in the Company retaining $135.0~~ ~~million of the $201.9~~ ~~million distribution paid during the nine months ended September 30, 2020. The remaining portion of the distribution was authorized and paid during the fourth quarter of 2020.~~

~~14.~~ 11. REDEEMABLE NON-CONTROLLING INTERESTS

~~OLE~~On Location

In connection with the acquisition of ~~OLE (Note 5),~~OL in 2020, the Company entered into an Amended and Restated Limited Liability Company Agreement ("OL LLC Agreement") of Endeavor OLE Parent, LLC ("OLE Parent") with 32 Equity. The terms of the agreement ~~provide~~provided 32 Equity with certain rights to put its common units in OLE Parent to the Company upon a termination of the ~~CLA~~Commercial License Agreement ("CLA") or at its option at any time following the Lockup ~~Period.~~Period as defined. The Company also ~~has~~had certain call rights to require 32 Equity to sell its common units in OLE Parent to the Company upon a termination of the CLA in the event the aforementioned put rights ~~are~~were not exercised. The put/call price iswas an amount equal to fair market value and the exercise of these put/call rights ~~may give~~would have given rise to an obligation of the Company to make a premium payment to 32 Equity in certain circumstances. ~~At any time following the Lockup Period, 32 Equity will be entitled to a $41.0~~ million premium payment from the Company if both (i) 32 Equity or the Company exercise the put/call rights described above or there is a sale or IPO of OLE Parent and (ii) certain performance metrics based on average OLE gross profit or NFL related business gross profit are achieved. The $~~41.0~~ million premium payment will also be payable if, prior to January 2, 2026, a sale or IPO of OLE Parent occurs or if 32 Equity exercises its put rights following a termination of the CLA due to an OLE event of default (in which case the $41.0 million premium payment may be subject to proration). The $~~41.0~~ ~~million~~ premium payment was recognized as a separate unit of account from the non-controlling interest. ~~The non-controlling interest was recognized at acquisition based on fair value of $65.2~~ million. During the nine months ended September 30, 2021, the redeemable non-controlling interest was adjusted for certain net assets that were contributed during the period. On June 25, 2021 Endeavor and 32 ~~Equity agreed to fund a combined $40.0~~ ~~million to OLE. This amount was funded via a pro-rata capital contribution from Endeavor and 32 Equity of $34.6~~ ~~million and $5.4~~ ~~million, respectively. No further capital contributions are contracted for future periods.~~ As of ~~September 30,~~December 31, 2021, the estimated redemption value of the non-controlling interest was $~~58.6~~57.9 million.

In April 2022, a series of transactions was completed between the Company and 32 Equity. Per the terms of the OL LLC Agreement, 32 Equity had the right to purchase additional common units in OLE Parent from the Company that would result in 32 Equity having an aggregate ownership percentage interest in OLE Parent of 32% at a price per unit equal to the original acquisition price of its rollover equity. 32 Equity exercised such right and paid the Company cash of $87.9 million. AsFollowing this exercise, EOC issued 8,037,483 EOC common units (and 32 Equity obtained an equal number of ~~December 31, 2020,~~paired shares of the ~~estimated redemption value was below the carrying~~Company's Class X common stock) in exchange for 32 Equity's non-controlling interests of OLE Parent. The aggregate value of the shares was $~~45.0~~223.7 ~~million.~~million based on the volume-weighted average trading price of the Class A common stock for thirty days ending on the day before the close. The Company and 32 Equity also agreed to settle the premium contingent consideration resulting in the Company paying 32 Equity $24.0 million in cash (Note 9). In addition, the Company issued 495,783 shares of Class A common stock to several employees of the Company in exchange for the employees' direct or indirect interests in OLE Parent based on the same valuation. As a result of these transactions, OLE Parent became an indirect wholly-owned subsidiary of EOC.

China

In June 2016, the Company received a contribution of $75.0 million from third parties in a newly formed subsidiary of the Company that was formed to expand the Company’s existing business in ~~China. Costs incurred for this contribution were $6.9~~ ~~million and were recognized as a reduction of the proceeds.~~China ("Endeavor China"). This contribution gave the non-controlling interests holders approximately 34% ownership of the subsidiary. The holders of the non-controlling interests ~~have~~had the right to put their investment to the Company at any time after June 1, 2023 for fair market value. As of ~~September 30,~~December 31, 2021, the estimated redemption value was $107.5 million.

In April 2022, the Company issued 5,693,774 shares of Class A common stock in exchange for the non-controlling partnership interests of Endeavor China. The aggregate value of the shares was $158.5 million based on the volume-weighted average trading price of the Class A common stock for thirty days ending on the day before the close. In addition, EOC issued 659,896 common units in EOC to several employees of the Company, including members of management (and such employees obtained an equal number of paired shares of the Company's Class X common stock), in exchange for the employees' direct or indirect interests in Endeavor China based on the same valuation. As a result of ~~December 31, 2020,~~these transactions, Endeavor China became an indirect wholly-owned subsidiary of EOC.

Barrett-Jackson

In connection with the ~~estimated redemption value~~acquisition of Barrett-Jackson in August 2022 (Note 4), the terms of the agreement provide the sellers a put option to sell their remaining ownership to IMG Auction Company, LLC, a subsidiary of the Company. The first election is between April and July 2029 for 29.9% of the total issued and outstanding units of Barrett-Jackson at that time and the second election is between April and July 2031 for any remaining ownership at that time. The purchase price of the put right is equal to Barrett-Jackson's EBITDA, as defined, multiplied by 13. This redeemable non-controlling interest was ~~below~~recognized at the ~~carrying~~acquisition date at fair value of $~~91.4~~210.1 million.

~~In March 2018, the Company entered into an agreement for an additional contribution in its existing subsidiary in China. The total additional contribution was $125.0~~ ~~million, of which $12.5~~ ~~million was the Company’s funding obligation and $112.5~~ ~~million was the existing non-controlling interests’ funding obligation. In January 2021, this agreement and the underlying funding obligation were terminated.~~

Zuffa

In July 2018, the Company received a contribution of $9.7 million from third parties (the ~~“Russia Co-Investors”~~"Russia Co-Investors") in a newly formed subsidiary of the Company (the ~~“Russia Subsidiary”~~"Russia Subsidiary") that was formed to expand the Company’s existing business in Russia and certain other countries in the Commonwealth of Independent States. The terms of this contribution provide the Russia Co-Investors with a put option to sell their ownership in the Russia Subsidiary five years and nine months after the consummation of the contribution. The purchase price of the put option is the greater of the total investment amount, defined as the Russia Co-Investors’ cash contributions less cash distributions, or fair value. As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the estimated redemption value was $9.7 million.

Frieze

In connection with the acquisition of Frieze in 2016, the terms of the agreement provide the sellers with a put option to sell their remaining ~~30%~~30% interest after fiscal year 2020. The Company also has a call option to buy the remaining ~~30%~~30% interest after fiscal year 2020 or upon termination of employment of the sellers who continued to be employees of Frieze after the acquisition. The price of the put and call option is equal to Frieze’s prior year’s EBITDA multiplied by 7.5. As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the estimated redemption value was below the carrying value of $~~22.0~~23.5 million and $~~22.2~~23.8 million, respectively.

~~15.~~ 12. EARNINGS PER SHARE

~~Basic earnings~~Earnings per share is calculated utilizing net income available to common stockholders of the Company ~~since May 1, 2021~~ divided by the weighted average number of shares of Class A Common Stock outstanding during the ~~same~~ period. ~~The Company’s~~Diluted EPS is calculated by dividing the net income available for common stockholders by the diluted weighted average shares outstanding ~~equity-based compensation awards under its equity-based compensation arrangements (Note 16) were anti-dilutive during the~~for that period.

~~Table of Contents~~

The computation of basic and diluted earnings per share and weighted average shares of the Company’s common stock outstanding for the periods presented below:


	Three Months Ended September 30, 2022			Three Months Ended September 30, 2021		Nine Months Ended September 30, 2022		May 1, 2021 - September 30, 2021

Basic (loss) earnings per share
Numerator
Consolidated net (loss) income	$	(12,538	)	$	63,613	$	547,348	$	(457,841	)
Net (loss) income attributable to NCI (Endeavor Operating Company)		(1,879	)		17,177		183,353		(154,395	)
Net (loss) income attributable to NCI (Endeavor Manager Units)		(620	)		3,951		28,682		(26,334	)
Net (loss) income attributable to the Company		(10,039	)		42,485		335,313		(277,112	)
Adjustment to net (loss) income attributable to the Company		—			—		4,348		(1,399	)
Net (loss) income attributable to EGH common shareholders	$	(10,039	)	$	42,485	$	339,661	$	(278,511	)
Denominator
Weighted average Class A Common Shares outstanding - Basic		285,870,317			262,891,070		278,724,574		261,048,116
Basic (loss) earnings per share	$	(0.04	)	$	0.16	$	1.22	$	(1.07	)

Three Months Ended
September 30, 2021

May 1, 2021 -
September 30, 2021

Basic net income (loss) per share

Numerator

Consolidated net income (loss)

$
63,613

$
(457,841
)
Net income (loss) attributable to NCI (Endeavor Operating Company)

17,177

(154,395
)
Net income (loss) attributable to NCI (Endeavor Manager Units)

3,951

(26,334
)
Net income (loss) attributable to the Company

42,485

(277,112
)
Adjustment to net loss attributable to the Company

-

(1,399
)
Net income (loss) attributable to EGH common shareholders

$
42,485

$
(278,511
)
Denominator

Weighted average Class A Common Shares outstanding - Basic

262,891,070

261,048,116

Basic net income (loss) per share

$
0.16

$
(1.07
)

Three Months Ended
September 30, 2021

Diluted net income per share

Numerator

Consolidated net income

$
63,613

Net loss attributable to NCI (Endeavor Operating Company)

(5,507
)
Net income attributable to NCI (Endeavor Manager Units)

-

Net income attributable to EGH common shareholders

$
69,120

Denominator

Weighted average Class A Common Shares outstanding - Basic

262,891,070

Additional shares assuming exchange of all Endeavor Profits Units

3,569,639

Additional shares from stock options and RSUs, as calculated using the treasury stock method

202,490

Additional shares assuming exchange of all Endeavor Operating Units and Endeavor Manager Units

169,259,312

Weighted average number of shares used in computing diluted income per share

435,922,511

Diluted net income per share

$
0.16


	Three Months Ended September 30, 2022			Three Months Ended September 30, 2021			Nine Months Ended September 30, 2022			May 1, 2021 - September 30, 2021

Diluted (loss) earnings per share
Numerator
Consolidated net (loss) income	$	(12,538	)	$	63,613		$	547,348		$	(457,841	)
Net (loss) income attributable to NCI (Endeavor Operating Company)		(1,879	)		(5,507	)		8,645			(154,395	)
Net loss attributable to NCI (Endeavor Manager Units)		(620	)		—			—			(26,334	)
Net (loss) income attributable to the Company		(10,039	)		69,120			538,703			(277,112	)
Adjustment to net (loss) income attributable to the Company		(1,422	)		—			(1,803	)		(1,399	)
Net (loss) income attributable to EGH common shareholders	$	(11,461	)	$	69,120		$	536,900		$	(278,511	)

Denominator
Weighted average Class A Common Shares outstanding - Basic		285,870,317			262,891,070			278,724,574			261,048,116
Additional shares assuming exchange of all Endeavor Profits Units		—			3,569,639			1,884,386			—
Additional shares from RSUs, Stock Options and Phantom Units, as calculated using the treasury stock method		—			202,490			1,875,609			—
Additional shares assuming exchange of all Endeavor Operating Units and Endeavor Manager Units		—			169,259,312			167,046,923			—
Additional shares assuming redemption of redeemable non-controlling interests		3,936,316			—			1,226,569			—
Weighted average number of shares used in computing diluted (loss) earnings per share		289,806,633			435,922,511			450,758,061			261,048,116

Diluted (loss) earnings per share	$	(0.04	)	$	0.16		$	1.19		$	(1.07	)


	Three Months Ended September 30, 2022		Three Months Ended September 30, 2021		Nine Months Ended September 30, 2022		May 1, 2021 - September 30, 2021
Securities that are anti-dilutive for the period
Stock Options		4,131,574		2,654,007		2,512,767		3,217,374
Unvested RSUs		6,925,143		7,125,939		1,261,040		7,576,141
Manager LLC Units		24,524,798		—		—		25,340,263
EOC Common Units		143,438,952		—		—		143,087,739
EOC Profits Interest & Phantom Units		15,777,736		—		—		16,238,545

~~16. EQUITY BASED COMPENSATION~~

~~Conversion of Pre-IPO Profit Interests and Phantom Units~~

In connection with the closing of the IPO, the Company consummated certain Reorganization Transactions, as described in further detail in Note 1. As part of such transactions, modifications of certain pre-IPO equity-based awards were made primarily to remove certain forfeiture and discretionary call terms, which resulted in the Company recording additional equity-based compensation expense of $~~251.9~~ ~~million during the nine months ended September 30, 2021.~~

In addition, certain put right arrangements which were outstanding prior to the IPO were terminated upon the consummation of such IPO, based on the original terms of those agreements, which resulted in the Company recording a reversal of related equity-based compensation expense of $~~4.0~~ ~~million during the nine months ended September 30, 2021. The fair value of the outstanding put rights as of September 30, 2021 totaled $5.7~~ ~~million, which is recorded in redeemable non-controlling interests.~~

~~2021 Incentive Award Plan~~

In connection with the IPO, the Company’s board of directors adopted the 2021 Incentive Award Plan (the “2021 Plan”). The 2021 Plan became effective on April 28, 2021. The Company initially reserved a total of ~~21,700,000~~ ~~shares of Class A common stock for issuance pursuant to the 2021 Plan. All current awards granted under the 2021 Plan are intended to be treated as stock options or restricted stock units (RSUs).~~ The terms of each award, including vesting and forfeiture, are fixed by the administrator of the 2021 Plan. Key grant terms include one or more of the following: (a) time-based vesting over a two to five year period or full vesting at grant; (b) market-based vesting conditions at graduated levels upon the Company’s attainment of certain market price per share thresholds; and (c) expiration dates (if applicable). Granted awards may include time-based vesting conditions only, market-based vesting conditions only, or both.

~~Table of Contents~~

~~The following table summarizes the RSU award activity for the nine months ended September 30, 2021.~~

Time Vested
RSUs

Market/ Market and Time
Vested RSUs

Units

Value *

Units

Value *

Outstanding at January 1, 2021

0

$
0

0

$
0

Granted

7,367,065

$
29.96

3,139,363

$
28.09

Released

(781,143
)

$
30.81

(830,857
)

$
29.04

Forfeited

(9,191
)

$
30.81

(39,199
)

$
27.57

Outstanding at September 30, 2021

6,576,731

$
29.86

2,269,307

$
27.74

Vested and releasable at September 30, 2021

1,268,130

$
30.53

4,130

$
28.21

* Weighted average grant date fair value

~~The following table summarizes the stock options award activity for the nine months ended September 30, 2021.~~

Stock Options

Options

Weighted average
exercise price

Outstanding at January 1, 2021

0

$
0

Granted

3,234,561

$
24.03

Forfeited or expired

(17,187
)

$
24.00

Outstanding at September 30, 2021

3,217,374

$
24.03

Vested and exercisable at September 30, 2021

563,367

$
24.00

~~The weighted average grant-date fair value of stock options granted under the Company’s 2021 Plan during the nine months ended September 30, 2021 was $9.56~~.

The Company estimates the fair value of each stock option on the date of grant using a Black-Scholes option pricing model. Management is required to make certain assumptions with respect to selected model inputs. Expected volatility is based on comparable publicly traded companies’ stock movements. The expected life represents the period of time that the respective awards are expected to be outstanding. The risk- free interest rate is based on the U.S treasury yield curve in effect at the time of grant. All stock options exercised will be settled in Class A common stock. ~~The key assumptions used for stock options granted during the nine months ended September 30, 2021 are as follows:~~


	Stock Options
~~Risk-free Interest Rate~~		~~1.02~~	%
~~Expected Volatility~~		~~41.35~~	%
~~Expected Life (in years)~~		~~5.73~~
~~Expected Dividend Yield~~		~~0.00~~	%

~~For the three and nine months ended September 30, 2021, the Company recorded share-based compensation expense of $31.2~~ ~~million and $142.6~~ million, respectively, related to RSUs and stock options granted under the 2021 Plan, which is included within selling, general and administrative expenses in the consolidated statements of operations.

~~The total grant-date fair value of RSUs and stock options which vested during the nine months ended September 30, 2021 was $71.3~~ ~~million. As of September 30, 2021, the aggregate intrinsic value of vested RSUs and stock options and aggregate intrinsic value of total outstanding RSUs and stock options was $39.1~~ ~~million and $268.5~~ ~~million, respectively.~~

~~As of September 30, 2021, the total unrecognized equity-based compensation related to stock options and restricted stock units was $166.8~~ ~~million, which is expected to be recognized over a weighted-average period of approximately~~ ~~1.93~~ ~~years.~~

~~CEO and Executive Chairman Market-Based Incentive Awards~~

In March 2019, the Company issued equity-based compensation awards in Endeavor and in Zuffa to the Company’s CEO (each a “Future Incentive Award”). The Future Incentive Awards were each based on achievement of various equity value thresholds of Endeavor and of Zuffa. In May 2021, the Company’s CEO received a RSU award covering ~~520,834~~ ~~shares of the Company’s Class A common stock following the achievement of one agreed upon increase in equity value of Zuffa under his Zuffa Incentive Future Award.~~ ~~One-third~~ of such RSUs were vested upon grant and the remaining will vest in two equal installments on each of the first and second anniversaries of the date of grant. The Endeavor and Zuffa Future Incentive Awards were cancelled in connection with the IPO and were replaced with an award of performance-vesting RSUs.

Each of the Company’s CEO and Executive Chairman received an award of performance-vesting RSUs pursuant to which they are eligible to receive a number of shares of the Company’s Class A common stock with a specified target value each time the price per share of the Company’s Class A common stock (calculated based on volume weighted average price thereof) exceeds an applicable threshold price

~~Table of Contents~~

~~above the public offering price of $24.00~~. ~~One-third~~ of any shares of the Company’s Class A common stock received upon achievement of any applicable threshold price will be vested upon grant and the remainder of such shares will vest in two equal installments on each of the first and second anniversaries of the date of grant. The first price threshold was achieved for the Company’s CEO on June 10, 2021. These performance-vesting RSUs will expire on the tenth anniversary of the date of grant.

The performance-vesting RSUs awarded to the CEO and Executive Chairman of the Company (each a “Market-Based Incentive Award”) are accounted for under ASC 718 as equity-classified awards due to the fixed number of shares of the Company’s Class A common stock each of the CEO and the Executive Chairman will be eligible for upon the achievement of each respective threshold. Compensation cost for performance- based awards with a market condition is recognized regardless of the number of units that vest based on the market condition and is recognized on a straight-line basis over the estimated service period. Compensation expense is not reversed even if the market condition is not satisfied. The Company used a Monte Carlo simulation model to determine the fair value and the derived service periods of these Market-Based Incentive Awards.

~~For the three and nine months ended September 30, 2021, total equity-based compensation expense for these Market-Based Incentive Awards was $24.1~~ ~~million and $47.6~~ million, respectively, and the Company reclassified the $27.0 million of long term liabilities from the Future Incentive Awards to additional paid in capital. As of September 30, 2021, total unrecognized equity-based compensation related to these CEO and Executive Chairman Market-Based Incentive Awards was $~~261.6~~ ~~million, which is expected to be recognized over a weighted-average period of approximately~~ ~~2.54~~ ~~years.~~

~~17.~~ 13. INCOME TAXES

EGH was incorporated as a Delaware corporation in January 2019. It was formed as a holding company for the purpose of completing an IPO and other related transactions. As the sole managing member of Endeavor Manager, which is the sole managing member of EOC, EGH operates and controls all the business and affairs of EOC, and through EOC and its subsidiaries, conducts the Company’s business. EGH is subject to corporate income tax on its share of taxable income or loss of EOC derived through Endeavor Manager. EOC is treated as a partnership for U.S. federal income tax purposes and is therefore not subject to U.S. corporate income tax. However, certain of EOC’s subsidiaries are subject to U.S. or foreign corporate income tax.

In accordance with ASC Topic 740, each interim period is considered integral to the annual period and tax expense is generally determined using an estimate of the annual effective income tax rate ~~(“AETR”~~("AETR"). The Company would record income tax expense each quarter using the estimated AETR to provide for income taxes on a current year-to-date basis, adjusted for discrete items, if any, that are noted in the relevant period. In accordance with the authoritative guidance for accounting for income taxes in interim periods, the Company computed its income tax provision for the three and nine months ended September 30, 2022 and 2021 based upon the AETR. Utilizing the AETR in 2020 would not have provided a reliable estimate of the tax provision based on the forecasted impact of COVID-19 on the Company’s operations and overall economy. Therefore, in accordance with the authoritative guidance for accounting for income taxes in interim periods, EOC computed its income tax

The provision for ~~the three and nine months ended September 30, 2020 based upon the actual effective tax rate for that period.~~

~~The benefit from~~(benefit from) income taxes for the three months ended September 30, ~~2021~~2022 and ~~2020~~2021 is $~~7.7~~8.5 million and $$(~~0.9~~7.7) million, respectively, based on pretax income of $~~73.8~~80.5 million and $~~11.7~~73.8 million, respectively. The effective tax rate is (~~10.5~~10.6)% and (~~8.0~~10.5%)% for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively. The (benefit from) provision for income taxes for the nine months ended September 30, ~~2021and 2020~~2022 and 2021 is $$(~~58.3~~6.0) million and $~~43.6~~58.3 million, respectively, based on pretax ~~losses~~income (loss) of $~~315.3~~686.4 million and $$(~~281.0~~315.3) million, respectively. The effective tax rate is (~~18.5~~0.9%)% and (~~15.5~~18.5%)% for the nine months ended September 30, ~~2021and 2020,~~2022 and 2021, respectively. The tax expense for the three months ended September 30, ~~2021~~2022 differs from the same ~~periods~~period in ~~2020~~2021 primarily due to ~~the impact of~~ additional estimated annual pre-tax income ~~for~~in 2022, which affects the ~~three months ended September 30, 2021.~~AETR, partially offset by the release of a $12.2 million valuation allowance on deferred tax assets in 2022. The tax expense for the nine months ended September 30, ~~2021~~2022 differs from the same ~~periods~~period in ~~2020~~2021 primarily due to the ~~impact~~release of ~~additional stock compensation expense~~a $65.9 million valuation allowance on deferred tax assets in 2022. The release of the ~~AETR,~~valuation allowance was due to the expected realization of certain tax benefits in connection with a tax receivable agreement ("TRA") liability. In addition, during the nine months ended September 30, 2021, $7.4 million of deferred tax liabilities associated with indefinite lived intangibles were recorded as a result of the IPO and tax expense of $10.2 million was recorded related to a change in ~~the~~ tax rate in the United Kingdom. Any tax balances reflected on the September 30, ~~2021~~2022 balance sheet would be adjusted accordingly to reflect the actual financial results for the year ending December 31, ~~2021.~~2022.

The Company’s effective tax rate differs from the U.S. federal statutory rate primarily due to partnership income not subject to income ~~tax,~~tax; state and local income ~~taxes,~~taxes; withholding taxes in foreign jurisdictions that are not based on net ~~income~~income; and income subject to tax in foreign jurisdictions which differ from the U.S. federal statutory income tax rate ~~and~~as well as the relative amount of income earned in those jurisdictions.

As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had unrecognized tax benefits of $~~44.1~~41.5 million and $~~34.4~~40.0 million, respectively, for which we are unable to make a reasonable and reliable estimate of the period in which these liabilities will be settled with the respective tax authorities.

The Company records valuation allowances against its net deferred tax assets when it is more likely than not that all, or a portion, of a deferred tax asset will not be realized. The Company evaluates the realizability of its deferred tax assets by assessing the likelihood that its deferred tax assets will be recovered based on all available positive and negative evidence, including historical results, reversals of deferred tax liabilities, estimates of future taxable income, tax planning strategies and results of operations. ~~Based on this analysis,~~During the nine months ended September 30, 2022, the Company released a $65.9 million valuation allowance on deferred tax assets due to the expected realization of certain tax benefits based on estimates of future taxable income. The Company has ~~concluded that its~~determined the remaining net deferred tax assets at EGH, exclusive of deferred tax liabilities associated with indefinite lived intangibles, will not be realized and as a result, has recorded a ~~full~~ valuation allowance as of September 30, ~~2021.~~2022.

Inflation Reduction Act of 2022

On August 16, 2022, the United States enacted the Inflation Reduction Act of 2022 ("IRA"). The IRA, among other things, creates a 15% corporate alternative minimum tax ("CAMT") on adjusted financial statement income for applicable corporations. The CAMT is effective for tax years beginning after December 31, 2022. Additionally, the IRA establishes a 1% excise tax on stock repurchases made by publicly traded US corporations and is effective for stock repurchases after December 31, 2022. While we continue to evaluate the potential tax effects of the IRA, we are currently not expecting the IRA to have a material impact on our consolidated financial statements.

Tax Receivable Agreements

In connection with the IPO and related transactions, the Company entered into ~~tax receivable agreements (“TRAs”)~~TRAs with certain persons that held direct or indirect interests in EOC and Zuffa prior to the IPO, (“including management of the Company ("TRA ~~Holders”~~Holders"). The TRAs generally provide for the

~~Table of Contents~~

payment by EGH of 85% of the amount of any tax benefits that EGH actually realizes, or in some cases is deemed to realize, as a result of (i) increases in EGH’s share of the tax basis in the net assets of EOC resulting from any redemptions or exchanges of LLC Units, (ii) increases in tax basis attributable to payments made under the TRAs, (iii) deductions attributable to imputed interest pursuant to the TRAs and (iv) other tax attributes allocated to EGH post-IPO and related transactions that were allocable to the TRA Holders prior to the IPO and related transactions.

~~The Company has recorded a full valuation allowance~~In connection with ~~respect to~~the expected realization of certain tax benefits including deferred tax assets, ~~subject to the TRA. Certain other tax attributes subject to the TRA do not result in deferred tax assets. During the nine months ended September 30, 2021,~~ the Company has ~~recognized~~ a $200.0 million TRA liability ~~on a portion~~as of ~~such attributes of approximately $~~September 30, 2022.

32 ~~million, after concluding that such TRA payments would be probable based on estimates of future taxable income over~~If the ~~terms of the TRAs. The amounts payable under the TRAs will vary depending upon a number of factors, including the amount, character, and timing of the taxable income of EGH in the future. If the~~existing valuation allowance recorded against ~~the~~ deferred tax assets ~~applicable to the tax attributes referenced above~~ is released in a future period as a result of having sufficient taxable income, among other criteria, or other tax attributes subject to the ~~TRA~~TRAs are determined to be payable, additional TRA liabilities may be ~~considered probable at that time~~recorded. If the relevant criteria are met in 2022, the Company would release a valuation allowance and ~~recorded within our statement~~record the associated TRA liability, each of ~~operations.~~which we would expect to be material.

~~18.~~ 25

14. REVENUE~~REVENUE~~

The following table presents the Company’s revenue disaggregated by primary revenue sources for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 (in thousands):


	Three Months Ended September 30, 2022
	Owned Sports Properties		Events, Experiences & Rights		Representation		Total
Media rights	$	200,310	$	133,600	$	—	$	333,910
Media production, distribution and content		1,026		84,160		61,387		146,573
Events and academy		200,936		222,845		—		423,781
Talent representation and licensing		—		—		244,370		244,370
Marketing		—		—		82,578		82,578
Eliminations		—		—		—		(9,796	)
Total	$	402,272	$	440,605	$	388,335	$	1,221,416


	Three Months Ended September 30, 2021									Nine Months Ended September 30, 2022
	Owned Sports Properties		Events, Experiences & Rights		Representation		Total			Owned Sports Properties		Events, Experiences & Rights		Representation		Total
Media rights	$	156,973	$	162,365	$	0	$	319,338		$	529,343	$	470,797	$	—	$	1,000,140
Media production, distribution and content		1,510		81,818		399,473		482,801			5,150		248,159		199,140		452,449
Events and performance		130,038		202,150		0		332,188
Events and academy											496,398		1,175,334		—		1,671,732
Talent representation and licensing		0		0		201,106		201,106			—		—		665,929		665,929
Marketing		0		0		64,144		64,144			—		—		238,542		238,542
Eliminations		0		0		0		(8,274	)		—		—		—		(21,098	)
Total	$	288,521	$	446,333	$	664,723	$	1,391,303		$	1,030,891	$	1,894,290	$	1,103,611	$	4,007,694


	Nine Months Ended September 30, 2021									Three Months Ended September 30, 2021
	Owned Sports Properties		Events, Experiences & Rights		Representation		Total			Owned Sports Properties		Events, Experiences & Rights		Representation		Total
Media rights	$	497,564	$	796,348	$	—	$	1,293,912		$	156,973	$	162,365	$	—	$	319,338
Media production, distribution and content		4,937		259,229		591,671		855,837			1,510		81,818		399,473		482,801
Events and performance		328,366		459,038		0		787,404
Events and academy											130,038		202,150		—		332,188
Talent representation and licensing		0		0		493,780		493,780			—		��		201,106		201,106
Marketing		0		0		156,413		156,413			—		—		64,144		64,144
Eliminations		0		0		0		(15,189	)		—		—		—		(8,274	)
Total	$	830,867	$	1,514,615	$	1,241,864	$	3,572,157		$	288,521	$	446,333	$	664,723	$	1,391,303

Three Months Ended September 30, 2020

Owned Sports Properties

Events, Experiences & Rights

Representation

Total

Media rights

$
169,817

$
261,978

$
0

$
431,795

Media production, distribution and content

1,701

59,347

42,296

103,344

Events and performance

127,612

62,932

0

190,544

Talent representation and licensing

0

0

102,799

102,799

Marketing

0

0

38,488

38,488

Eliminations

0

0

0

(2,478
)
Total

$
299,130

$
384,257

$
183,583

$
864,492

~~Table of Contents~~

Nine Months Ended September 30, 2020

Owned Sports Properties

Events, Experiences & Rights

Representation

Total

Media rights

$
395,857

$
524,914

$
0

$
920,771

Media production, distribution and content

4,901

173,109

193,295

371,305

Events and performance

282,778

474,844

0

757,622

Talent representation and licensing

0

0

330,686

330,686

Marketing

0

0

145,176

145,176

Eliminations

0

0

0

(7,757
)
Total

$
683,536

$
1,172,867

$
669,157

$
2,517,803


	Nine Months Ended September 30, 2021
	Owned Sports Properties		Events, Experiences & Rights		Representation		Total
Media rights	$	497,564	$	796,348	$	—	$	1,293,912
Media production, distribution and content		4,937		259,229		591,671		855,837
Events and academy		328,366		459,038		—		787,404
Talent representation and licensing		—		—		493,780		493,780
Marketing		—		—		156,413		156,413
Eliminations		—		—		—		(15,189	)
Total	$	830,867	$	1,514,615	$	1,241,864	$	3,572,157

In the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, there was revenue recognized of $~~14.6~~12.8 million and $~~8.2~~14.6 million, respectively, from performance obligations satisfied in prior periods. In the nine months ended September 30, ~~2021and 2020,~~2022 and 2021, there was revenue recognized of $~~36.8~~42.4 millionand $~~10.5~~36.8 million, respectively, from performance obligations satisfied in prior periods.

Remaining Performance Obligations

The following table presents the aggregate amount of transaction price allocated to remaining performance obligations for contracts greater than one year with unsatisfied or partially satisfied performance obligations as of September 30, ~~2021~~2022 (in thousands). The transaction price related to these future obligations does not include any variable consideration.


	Years Ending December 31,		Years Ending December 31,
Remainder of 2021	$	413,888
2022		1,519,817
Remainder of 2022			$	391,316
2023		1,304,702		1,659,804
2024		1,011,721		1,253,988
2025		950,756		1,092,802
2026				198,750
Thereafter		621,767		576,626
	$	5,822,651	$	5,173,286

Contract Liabilities

The Company records deferred revenue when cash payments are received or due in advance of its performance. The Company’s deferred revenue balance primarily relates to advance payments received related to advertising and sponsorship agreements, event advanced ticket sales and performance tuition. Deferred revenue is included in the current liabilities section and in other long-term liabilities in the consolidated balance sheets.

The following table presents the Company’s contract liabilities as of September 30, ~~2021~~2022 and December 31, ~~2020~~2021 (in thousands):


Description	December 31, 2021		Additions		Deductions (1)			Acquisitions		Held for Sale			Foreign Exchange			September 30, 2022
Deferred revenue - current	$	651,760	$	1,901,792	$	(1,960,241	)	$	26,974	$	(2,903	)	$	(7,667	)	$	609,715
Deferred revenue - noncurrent	$	62,155	$	12,447	$	(3,980	)	$	2,082	$	—		$	(289	)	$	72,415

(1) As of September 30, 2022, the balance in deductions also included $3.6 million and $0.8 million in deferred revenue - current and deferred revenue - noncurrent, respectively, primarily due to the divestiture of DBH (Note 4).

December 31,

Foreign

September 30,

Description

2020

Additions

Deductions

Acquisitions

Held for Sale

Exchange

2021

Deferred revenue - current

$
606,530

$
1,690,495

$
(1,462,394
)

$
39,449

$
(239,623
)

$
2,074

$
636,531

Deferred revenue - noncurrent

$
19,437

$
7,595

$
(17,536
)

$
18,564

$
(3,652
)

$
0

$
24,408

~~19.~~ 15. SEGMENT INFORMATION

As of September 30, ~~2021,~~2022, the Company has 3three reportable segments: Owned Sports Properties, Events, Experiences & Rights, and Representation. The Company also reports the results for the ~~“Corporate”~~"Corporate" group. The profitability measure employed by the Company’s chief operating decision maker for allocating resources and assessing operating performance is Adjusted EBITDA. Segment information is presented consistently with the basis for the year ended December 31, ~~2020.~~2021. Summarized financial information for the Company’s reportable segments is shown in the following tables (in thousands):

Revenue


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Owned Sports Properties	$	402,272		$	288,521		$	1,030,891		$	830,867
Events, Experiences & Rights		440,605			446,333			1,894,290			1,514,615
Representation		388,335			664,723			1,103,611			1,241,864
Eliminations		(9,796	)		(8,274	)		(21,098	)		(15,189	)
Total consolidated revenue	$	1,221,416		$	1,391,303		$	4,007,694		$	3,572,157

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Owned Sports Properties

$
288,521

$
299,130

$
830,867

$
683,536

Events, Experiences & Rights

446,333

384,257

1,514,615

1,172,867

Representation

664,723

183,583

1,241,864

669,157

Eliminations

(8,274
)

(2,478
)

(15,189
)

(7,757
)
Total consolidated revenue

$
1,391,303

$
864,492

$
3,572,157

$
2,517,803

2927

~~Table of Contents~~

Reconciliation of segment profitability


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020				2022		2021			2022			2021
Owned Sports Properties	$	134,679		$	166,678		$	412,495		$	334,474		$	195,749		$	134,679		$	505,760		$	412,495
Events, Experiences & Rights		84,993			(9,595	)		160,843			16,873			49,668			84,993			290,268			160,843
Representation		141,801			41,666			264,969			162,315			132,923			141,801			345,849			264,969
Corporate		(78,156	)		(22,802	)		(187,476	)		(106,340	)		(75,258	)		(78,156	)		(217,991	)		(187,476	)
Adjusted EBITDA		283,317			175,947			650,831			407,322			303,082			283,317			923,886			650,831
Reconciling items:
Equity losses of affiliates		3,052			3,119			876			4,916
Equity losses (earnings) of affiliates														1,333			3,052			(4,060	)		876
Interest expense, net		(55,783	)		(71,277	)		(207,970	)		(212,954	)		(75,608	)		(55,783	)		(197,385	)		(207,970	)
Depreciation and amortization		(71,661	)		(76,471	)		(208,058	)		(241,669	)		(63,571	)		(71,661	)		(195,177	)		(208,058	)
Equity-based compensation expense		(60,885	)		(20,602	)		(464,393	)		(37,577	)		(48,388	)		(60,885	)		(159,851	)		(464,393	)
Merger, acquisition and earn-out costs		(13,107	)		(6,682	)		(38,291	)		(15,985	)		(30,529	)		(13,107	)		(57,891	)		(38,291	)
Certain legal costs		266			(1,646	)		(4,260	)		(7,805	)		(1,604	)		266			(11,204	)		(4,260	)
Restructuring, severance and impairment		(2,179	)		(952	)		(6,612	)		(213,199	)		(869	)		(2,179	)		(2,829	)		(6,612	)
Fair value adjustment - equity investments		(90	)		1,547			13,614			(4,212	)		291			(90	)		13,635			13,614
COVID-19 related costs		0			1,958			0			(10,155	)
Gain on sale of the restricted Endeavor Content business														—			—			463,641			—
Tax receivable agreements liability adjustment														(10,405	)		—			(61,497	)		—
Other		(9,152	)		6,772			(51,063	)		50,367			6,749			(9,152	)		(24,914	)		(51,063	)
Income (loss) before income taxes and equity losses of affiliates	$	73,778		$	11,713		$	(315,326	)	$	(280,951	)	$	80,481		$	73,778		$	686,354		$	(315,326	)

~~20.~~ 16. COMMITMENTS AND CONTINGENCIES

Claims and Litigation

The Company is involved in legal proceedings, claims and governmental investigations arising in the normal course of business. The types of allegations that arise in connection with such legal proceedings vary in nature, but can include contract, employment, tax and intellectual property matters. The Company evaluates all cases and records liabilities for losses from legal proceedings when the Company determines that it is probable that the outcome will be unfavorable and the amount, or potential range, of loss can be reasonably estimated. While any outcome related to litigation or such governmental proceedings cannot be predicted with certainty, management believes that the outcome of these matters, except as otherwise may be discussed below, individually or in the aggregate, will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

An employee of the Company is one of several individuals and entities named in a complaint by India’s Director of Enforcement ~~(“DE”~~("DE"), initially filed in January 2015, alleging violations of the Foreign Exchange Management Act ~~(“FEMA”~~("FEMA"). The complaint alleges that the employee participated as an advisor in a series of transactions in 2009 that were completed by and on behalf of a client, the Board of Control for Cricket in India (the ~~“BCCI”~~"BCCI"), and that contravened two provisions of FEMA. The subject transactions were pursued under the direction and control of one of the BCCI’s board members. The Company is not alleged to have possessed any funds improperly or to have made or received any of the payments that are alleged to have violated FEMA. The Company is cooperating with the DE’s investigation which, at present, is in its early stages.

In July 2017, the Italian Competition Authority ~~(“ICA”~~("ICA") issued a decision opening an investigation into alleged breaches of competition law in Italy, involving inter alia IMG, and relating to bidding for certain media rights of the Serie A and Serie B football leagues. In April 2018, the European Commission conducted on-site inspections at a number of companies that are involved with sports media rights, including the Company. The inspections were part of an ongoing investigation into the sector and into potential violations of certain antitrust laws that may have taken place within it. The Company investigated these ICA matters, as well as other regulatory compliance matters. In May 2019, the ICA completed its investigation and fined the Company approximately EUR 0.3 million. As part of its decision, the ICA acknowledged the Company’s cooperation and ongoing compliance efforts since the investigation commenced. In July 2019, three football clubs and in June 2020, the Serie A football league (Lega Nazionale Professionisti Serie A or ~~“Lega Nazionale”,~~"Lega Nazionale," and together with the three clubs, the ~~“Plaintiffs”~~"Plaintiffs") each filed separate claims against IMG and certain other unrelated parties in the Court of Milan, Italy, alleging that IMG engaged in anti-competitive practices with regard to bidding for certain media rights of the Serie A and Serie B football leagues. The Plaintiffs seek damages from all defendants in amounts totaling EUR 554.6 million in the aggregate relating to the three football clubs and EUR 1,592.2 million relating to Lega Nazionale, along with attorneys’ fees and costs (the ~~“Damages Claims”~~"Damages Claims"). Since December 2020, four additional football clubs have each filed requests to intervene in the Lega Nazionale proceedings and individually seek to claim amounts in the aggregate totaling EUR 251.5 million. Ten other clubs also filed requests to intervene in support of Lega Nazionale’s claim or alternatively to individually claim in the amount of EUR 92.1 million, in the case of one club, and unspecified amounts (to be quantified as a percentage of the total amount sought by Lega Nazionale) in the other nine cases. Collectively, the interventions of these 14 clubs are the ~~“Interventions”.~~"Interventions." The Company has defended in its submissions to date, and intends to continue to defend, against the Damages Claims, Interventions and any related claims, and management believes that the Company has meritorious defenses to these claims, including the absence of standing of the clubs, and the absence of actual damage. The Company may also be subject to regulatory and other claims and actions with respect to these ICA and other regulatory matters. Any judgment entered against the Company or settlement entered into, including with respect to claims or actions brought by other parties, could materially and adversely impact the Company’s business, financial condition and results of operations.

Zuffa has 5five related class-action lawsuits filed against it in the United States District Court for the Northern District of California (the ~~“District Court”~~"District Court") between December 2014 and March 2015 by a total of 11eleven former UFC fighters. The complaints in the five lawsuits are substantially identical. Each alleges that Zuffa violated Section 2 of the Sherman Act by monopolizing the alleged market for the promotion

~~Table of Contents~~

of elite professional MMA bouts and monopolizing the alleged market for elite professional MMA ~~Fighters’~~fighters’ services. Plaintiffs claim that Zuffa’s alleged conduct injured them by artificially depressing the compensation they received for their services and their intellectual property rights, and they seek treble damages under the antitrust laws, as well as attorneys’ fees and costs, and injunctive relief. On December 14, 2020, the District Court orally indicated its intention to grant ~~Plaintiffs’~~plaintiffs’ motion to certify the Bout Class (comprised of fighters who participated in bouts from December 16, 2010 to September 30, 2017) and to deny ~~Plaintiffs’~~plaintiffs’ motion to certify the Identity Class (a purported class based upon the alleged expropriation and exploitation of fighter identities). The Company is awaiting the official written order from the judge and assuming he rules as previously indicated, then the Company will seek an appeal of this decision. On June 23, 2021, plaintiffs’ lawyers filed a new case against Zuffa and EGH alleging substantially similar claims, but providing for a class period from July 1, 2017 to present. Management believes that the Company has meritorious defenses against the allegations and intends to defend itself vigorously.

In February 2021, the Company signed the Franchise Agreements directly with the WGA. These Franchise Agreements include terms that, among other things, prohibit the Company from (a) negotiating packaging deals after June 30, 2022 and (b) having more than a 20% non-controlling ownership or other financial interest in, or being owned or affiliated with any individual or entity that has more than a 20% non-controlling ownership or other financial interest in, any entity or individual engaged in the production or distribution of works written by WGA members under a WGA collective bargaining agreement. The Franchise Agreements provide for a transition period for the Company to come into compliance with certain of its provisions. During the term of the Franchise Agreements, until the Company is in compliance, the Franchise Agreements require that the Company place into escrow (i) an amount equal to Endeavor Content’s after-tax gross profits from the production of works written by WGA members under a WGA collective bargaining agreement and (ii) an amount equal to the Company’s after tax writer commissions and package fees received in connection with such Endeavor Content productions. As a result, in the third quarter, the Company began marketing the restricted Endeavor Content business for sale and such assets and liabilities are reflected as held for sale in the consolidated balance sheet as of September 30, 2021.

~~Guarantees and Commitments~~

The Company routinely enters into purchase or guarantee arrangements for event, media or other representation rights as well as for advancements for content production or overhead costs with various organizations. Subsequent to December 31, 2020, the Company entered into certain new arrangements increasing its purchase/guarantee agreements by $~~1.3~~ ~~billion, which will be due in 2021 through 2028.~~

In September 2021, the Company signed an agreement to acquire the OpenBet business of Scientific Games Corporation ("OpenBet"). OpenBet consists of companies that provide products and services to sports betting operators for the purposes of sports wagering. Based on the agreement, the Company will pay Scientific Games Corporation consideration of $~~1.0~~ ~~billion in cash and will issue~~ ~~7,605,199~~ ~~shares of the Company's Class A common stock, a value of $200.0~~ million based on the volume-weighted average trading price of the Class A common stock for the twenty trading days ended on September 24, 2021. The closing of this transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the first half of 2022.

~~21.~~ 17. RELATED PARTY TRANSACTIONS

The Company has the following related party transactions as of September 30, ~~2021~~2022 and December 31, ~~2020~~2021 and for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 (in thousands):


	September 30,		December 31,
	2022		2021
Other current assets	$	22,109	$	4,728
Investments		2,174		—
Other assets		—		322
Accrued liabilities		10,800		—
Deferred revenue		2,350		264
Other current liabilities		2,006		2,431

September 30,

December 31,

2021

2020

Other current assets

$
7,430

$
5,572

Other assets

4,451

1,400

Assets held for sale

3,051

0

Current liabilities

0

1,356

Other current liabilities

1,007

969


	Three Months Ended September 30,					Nine Months Ended September 30,				Three Months Ended September 30,					Nine Months Ended September 30,
	2021		2020			2021		2020		2022			2021		2022			2021
Revenue	$	641	$	1,306		$	13,680	$	6,484	$	9,365		$	641	$	26,946		$	13,680
Direct operating costs		772		533			3,629		2,505		9,661			772		14,003			3,629
Selling, general and administrative expenses		1,768		(583	)		6,198		9,678		859			1,768		3,325			6,198
Interest expense, net		0		433			—		911
Other income, net		875		875			2,625		2,625
Other (expense) income, net											(9,925	)		875		(23,175	)		2,625

As of September 30, ~~2021,~~2022, the Company has an equity-method investment in Euroleague, a related party. For the three and nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, the Company recognized revenue of $~~0.2~~0.5 million, $3.8 million, $0.2 million and $~~4.9~~0.2 ~~million and $(2.2~~) million, respectively, for a management fee to compensate it for representation and technical services it provides to Euroleague in relation to the distribution of media rights. This revenue is included in the Owned Sports Properties segment. Also, for the three and nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, the Company recognized revenue of $(~~0.1~~0.3) million, $~~0.1~~5.1 million, $$(~~6.4~~0.1) million and $~~4.7~~0.1 million, respectively, for production services provided to Euroleague as well as direct operating costs of $3.1 million, $5.5 million, less than ahundred thousand, $(0.2) ~~million, $2.2~~ ~~million and $~~1 million, respectively, for the procurement of a license for gaming rights from Euroleague, which are included in the Events,

~~Table of Contents~~

Experiences & Rights segment. As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had a receivable of $~~5.5~~5.1 million and $~~0.7~~1.4 million, respectively, and a payable of $~~NaN~~0.2 million and $~~1.0~~1.4 million, respectively.

~~22. SUBSEQUENT EVENTS~~

~~In October 2021,~~Silver Lake and certain of our executives indirectly own a minority interest in The Raine Group ("Raine"). During the three and nine months ended September 30, 2022, the Company entered into a credit agreement amendment to the New First Lien Term Loan under the Zuffa Credit Facilities. This amendment established a new incremental term loan (the “Incremental Term Loan”) in an aggregate principal amountrecorded expense of $~~600.0~~10.8 million ~~which was fully borrowed~~and $25.8 million, respectively, related to transaction costs for investment banking services in ~~October 2021. The Incremental Term Loan has terms identical to~~connection with the ~~existing term loans and: (i) bears interest at a rate equal to LIBOR or base rate, at~~sale of the ~~option of UFC Holdings, LLC (“UFC”), plus an applicable margin of~~ ~~3.00% for LIBOR loans, or~~ ~~2.00% for base rate loans (with a LIBOR floor equal to 0.75%); (ii) is subject to a~~ ~~25 basis point step-down to 2.75% for LIBOR loans~~ ~~if the First Lien Leverage Ratio is below~~ ~~3.50 to 1.00; and (iii) has a final maturity date of~~ ~~April 29, 2026. The existing term loans~~restricted Endeavor Content business and the ~~Incremental Term Loan collectively comprise a single class~~acquisitions of ~~term loans~~OpenBet and Barrett-Jackson (Note 4). As of September 30, 2022, the Company had accrued liabilities of $10.8 million. In addition, during the nine months ended September 30, 2022, the Company invested $2.2 million in non-marketable funds maintained by Raine.

In September 2022, the Company sold the ten PDL Clubs that operated under the ~~existing credit agreement.~~DBH umbrella to Silver Lake, stockholders of the Company (Note 4).

3229

~~Table of Contents~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report and with our audited financial statements and related notes included in our ~~prospectus dated April 28,~~ 2021 ~~filed with the SEC on April 30,~~Annual Report. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I, Item 1A. "Risk Factors" of our 2021 ~~pursuant to Rule 424(b)~~Annual Report, as updated by Part II, Item 1A. "Risk Factors" in this Quarterly Report, or in other sections of the ~~Securities Act of 1933, as amended (the “Prospectus”). The historical financial data discussed below reflects our historical results of operations~~2021 Annual Report and ~~financial position and relate to periods prior to the reorganization transactions. As a result, the following discussion does not reflect the significant impact that such events will have on us.~~

this Quarterly Report.

BUSINESS OVERVIEW

Endeavor ~~Group Holdings, Inc.~~ is a ~~premium intellectual property, content, events,~~global sports and ~~experiences~~entertainment company. We own and operate premium sports properties, including the UFC, produce and distribute sports and entertainment content, own and manage exclusive live events and experiences, and represent top sports and entertainment talent, as well as blue chip corporate clients. Founded as a client representation business, we expanded organically and through strategic mergers and acquisitions, investing in new capabilities, including sports operations and advisory, events and experiences management, media production and distribution, brand licensing, and experiential marketing. The addition of these new capabilities and insights transformed our business into an integrated global platform anchored by owned and managed premium intellectual property.

Segments

We operate our business in three segments: (i) Owned Sports Properties; (ii) Events, Experiences & Rights; and (iii) Representation.

Owned Sports Properties

Our Owned Sports Properties segment is comprised of a unique portfolio of scarce sports properties, including UFC, ~~PBR~~Professional Bull Riders ("PBR") and Euroleague, that generate significant growth through innovative rights deals and exclusive live events.

Through the UFC, the world’s premier professional MMA organization, we produce more than 40 live events annually which are broadcast in over 160 countries and territories to approximately one billion TV households. UFC was founded in 1993 and has grown in popularity after hosting more than 500 events and reaching a global audience through an increasing array of broadcast license agreements and our owned FIGHT PASS streaming platform. The value of our content is demonstrated by our licensing arrangements with ESPN and other international broadcasters and our increasing consumer engagement is reflected by the growth of FIGHT PASS subscribers and overall follower growth and engagement across our social ~~channels.~~

channels - now reaching 188 million followers.

PBR is the world’s premier bull riding circuit with more than 500 bull riders from the United States, Australia, Brazil, Canada, and Mexico, competing in more than 200 bull riding events each year pre-pandemic. PBR is one of America’s fastest growing sports with annual attendance for its premier series quadrupling since its inception in 1995.

We have an up to 20-year partnership with Euroleague basketball, which could extend into 2036, to manage and capitalize on all of the commercial business of the league, including media rights, sponsorship, content production, licensing, digital distribution, events staging, and hospitality, for which we receive a management fee. ~~Euroleague is one~~

At the end of 2021 and in January 2022, we acquired ten Professional Development League clubs (the "PDL Clubs"), whose results were included in Owned Sports Properties and were being operated under the Diamond Baseball Holdings ("DBH") umbrella. In September 2022, we sold the PDL Clubs to Silver Lake, stockholders of the ~~most popular indoor sports leagues in the world, averaging attendance~~Company, for an aggregate purchase price of ~~over 8,500 per game in the 2019-2020 season.~~

$280 million cash.

Events, Experiences & Rights

In our Events, Experiences & Rights segment, we own, operate, and provide services to a diverse portfolio of over 800 live events annually, including sporting events covering 20 sports across 25 countries, international fashion weeks, art fairs and music, culinary and lifestyle festivals. We own and operate many of these events, including the Miami Open, HSBC Champions, Frieze Art Fair, New York Fashion Week, and Hyde Park Winter ~~Wonderland, and we have a strategic partnership with the PGA-sanctioned Asian Tour.~~Wonderland. We also operate other events on behalf of third parties, including the AIG Women’s ~~British~~ Open and ~~Fortnite World Cup.~~Honda Classic. Through On Location, we provide premium experiences, historically providing more than 900 per year for sporting and music events such as the Super Bowl, Ryder Cup, NCAA Final Four and Coachella.

We are one of the largest independent global distributors of sports video programming and data. We sell media rights globally on behalf of more than 150 clients such as the International Olympic Committee, ~~(“IOC”),~~ the ~~NFL,~~National Football League, and the National Hockey League, ~~(“NHL”),~~ as well as for our owned assets and channels. We also provide league advisory services given the array of experience we have to offer. Through IMG ARENA, we work with more than 470 leading sportsbook brands worldwide to deliver live streaming video and data feeds for more than 45,000 sports events annually, as well as for on-demand virtual sports products including our own UFC Event Centre. We also leverage the technology derived from IMG ARENA to provide streaming video solutions to our clients and our owned assets via Endeavor Streaming.

Additionally, we own and operate IMG Academy, a leading academic and sports training institution located in Florida, as well as Next College Student Athlete ("NCSA"), which provides recruiting and admissions services to high school student athletes and college athletic departments and admissions ~~officers.~~officers, (collectively, "Academy").

In April 2022, we acquired the Mutua Madrid Open tennis tournament and additional assets, including the Acciona Open de España golf tournament, from Super Slam Ltd and its affiliates. We paid $386.1 million for consideration and transfer fees at closing, an additional $31.8 million of consideration is payable within two years of closing, and $0.6 million of contingent consideration payable within three years of closing.

In August 2022, we acquired 55% of Barrett-Jackson Holdings, LLC ("Barrett-Jackson"), which is engaged in the business of collector car auctions and sales as well as other collector car related events and experiences, in exchange for consideration having an aggregate value of $256.9 million. The aggregate consideration consisted of $244.4 million of cash and 563,935 newly-issued shares of our Class A common stock valued at $12.5 million.

In September ~~2021,~~2022, we ~~signed an agreement to acquire~~acquired the OpenBet business ("OpenBet") of Light & Wonder, Inc. (formerly known as Scientific Games ~~Corporation~~Corporation) ("~~OpenBet"~~Light & Wonder"). for consideration of $847.1 million, consisting of $800.4 million of cash and 2,305,794 newly-issued shares of our Class A common stock valued at $46.7 million. OpenBet consists of companies that provide products and services to sports betting operators for the purposes of sports wagering. ~~Based on the agreement, we~~We will ~~pay consideration to Scientific Games Corporation cash of $1.0 billion, expected to be funded with cash on hand and additional borrowings under our~~

~~Table of Contents~~

Senior Credit Facilities, and 7,605,199 newly-issued shares of our Class A common stock with a value of $200 million based on the volume-weighted average trading price of the Class A common stock for the twenty trading days ended on September 24, 2021. The closing of this transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the first half of 2022. Upon closing of the acquisition, we expect to create a new reportable segment tothat will include IMG ARENA and the OpenBet ~~business.~~

business in 2023.

Representation

Our Representation segment provides services to more than 7,000 talent and corporate ~~clients and includes our content division, Endeavor Content.~~clients. Our Representation business deploys a subset of our integrated capabilities on behalf of our clients.

Through our client representation and management businesses, including the WME talent agency and IMG Models, we represent a diverse group of talent across entertainment, sports, and fashion, including actors, directors, writers, athletes, models, musicians, and other artists, in a variety of mediums, such as film, television, books, and live events. Through our 160over90 business, we provide brand strategy, marketing, advertising, public relations, analytics, digital, activation, and experiential services to many of the world’s largest brands. Through IMG Licensing, we provide IP licensing services to a large portfolio of entertainment, sports, and consumer product brands, including representing these clients in the licensing of their logos, trade names and trademarks.

Previously, our Representation segment included our restricted Endeavor Content ~~provides~~business, which provided a premium alternative to traditional content studios, offering a range of services including content development, production, financing, sales, and advisory services for creators. In February 2021, the Company signed ~~a new franchise agreement and side letter (the “Franchise Agreements”)~~the Franchise Agreements directly with the ~~Writer’s Guild of America East and the Writer’s Guild of America West (collectively, the “WGA”).~~WGA. These Franchise Agreements ~~include~~included terms that, among other things, ~~prohibit~~prohibited the Company from (a) negotiating packaging deals after June 30, 2022 and (b) having more than a 20% non-controlling ownership or other financial interest in, or being owned or affiliated with any individual or entity that has more than a 20% non-controlling ownership or other financial interest in, any entity or individual engaged in the production or distribution of works written by WGA members under a WGA collective bargaining agreement. As a result, in the third quarter, the Company began marketing the restricted Endeavor Content business for sale and such assets and liabilities ~~are~~were reflected as held for sale in the consolidated balance sheet as of December 31, 2021. The sale of 80% of the restricted Endeavor Content business closed in January 2022. Our retained 20% interest is reflected as an equity method investment as of September 30, ~~2021.~~

2022 and is not part of the Representation segment.

Components of Our Operating Results

Revenue

In our Owned Sports Properties segment, we primarily generate revenue via media rights fees, pay-per-view, sponsorships, ticket sales, subscriptions, and license fees. In our Events, Experiences & Rights segment, we primarily generate revenue from media rights sales, production service and studio fees, sponsorships, ticket and premium experience sales, subscriptions, streaming fees, tuition, profit sharing, and commissions. In our Representation segment, we generate revenue primarily through commissions, packaging fees, marketing and consulting fees, production fees, and content licensing fees.

Direct Operating Costs

Our direct operating costs primarily include third-party expenses associated with the production of events and experiences, content production costs, operation of our training and education facilities, and fees for media rights, including required payments related to sales agency contracts when minimum sales guarantees are not met.

Selling, General and Administrative

Our selling, general and administrative expenses primarily include personnel costs as well as rent, professional service costs and other overhead required to support our operations and corporate structure.

Provision for Income Taxes

EGH was incorporated as a Delaware corporation in January 2019. It was formed as a holding company for the purpose of completing an IPO and other related transactions. As the sole managing member of Endeavor Manager, which is the sole managing member of EOC, EGH operates and controls all the business and affairs of EOC, and through EOC and its subsidiaries, conducts the Company’s business. EGH is subject to corporate income tax on its share of taxable income or loss of EOC, derived from Endeavor Manager. EOC is treated as a partnership for U.S. federal income tax purposes and is therefore not subject to U.S. corporate income tax. However, certain of EOC’s subsidiaries are subject to U.S. or foreign corporate income tax.

Impact of the COVID-19 Pandemic

In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The COVID-19 pandemic ~~has~~ rapidly changed market and economic conditions globally, including significantly impacting the entertainment and sports industries as well as our business, results of operations, financial position and cash ~~flows.~~

~~The COVID-19 pandemic resulted in various governmental restrictions and began to have a significant adverse impact on our business and operations~~flows beginning in March 2020, including the lack of ticketed PBR and UFC events and the early cancellation of the 2019-2020 Euroleague season adversely impacting our Owned Sports Properties segment; the postponement or cancellation of live sporting events and other in-person events adversely impacting our Events, Experiences & Rights segment; and stoppages of entertainment productions, including film, television shows

~~Table of Contents~~

and music events, as well as reduced corporate spending on marketing, experiential and activation, adversely impacting our Representation segment. Furthermore, following the merger of our IMG College business with Learfield, the operating results of the merged business had been weaker than anticipated driven by lower than expected sales and have been further impacted in 2020 by COVID-19 as a result of the delay, cancellation of or shortened college football season and the prohibition of fans by many teams, which resulted in impairment charges at Learfield IMG College in 2020 adversely impacting our equity earnings. In 2020, we also recognized goodwill and intangible asset impairment charges primarily at our Events, Experiences & Rights segment, driven by lower projections as a result of the impact of COVID-19 and restructuring in certain of our businesses. In the future, any further impact to our business as a result of COVID-19 could result in additional impairments of goodwill, intangibles, long-term investments and long-lived assets.

2020. While activity has resumed in all of our businesses and restrictions have been lessened or lifted, restrictions could in the future be increased or reinstated. As a result of this and numerous other uncertainties surrounding the pandemic and the risk that additional postponements or cancellations of live sporting events and other in-person events, and changes in consumer preferences towards our business and the industries in which we operate could occur, we are unable to accurately predict the full impact of COVID-19 on our business, results of operations, financial position and cash flows, but acknowledge that its impact on our business and results of operations may be material. We expect that recovery will continue and that the wider impact on revenue and cash flows will vary, but will generally depend on the factors listed above and the general uncertainty surrounding COVID-19. The Company believes that existing cash, cash generated from operations and available capacity for borrowings under its credit facilities will satisfy working capital requirements, capital expenditures, and debt service requirements for at least the succeeding year.

UFC Buyout

Substantially simultaneous with the closing of the IPO, we consummated ~~the UFC Buyout~~transactions whereby we acquired equity interests in UFC Parent (including warrants of UFC Parent) from the Other UFC Holders (or their affiliates) resulting in Endeavor Operating Company directly or indirectly owning 100% of the equity interests of UFC ~~Parent.~~

Parent (the "UFC Buyout").

As a result of the UFC Buyout, we no longer attribute income (loss) to non-controlling interests related to UFC in our consolidated statement of operations and recognized a reduction in nonredeemable non-controlling interests on our consolidated balance sheet. Furthermore, restrictions on dividends under the UFC LLC Agreement are no longer in place after the UFC Buyout, although restrictions from the UFC Credit Facilities remain in place.

~~Reorganization~~31

Reorganization

Prior to the closing of the IPO on May 3, 2021, we undertook reorganization transactions, following which Endeavor Group Holdings became a holding company, and its principal asset is an equity interest in a newly formed subsidiary of Endeavor Group Holdings, Endeavor Manager, of which Endeavor Group Holdings serves as the managing member. Endeavor Manager is in turn the managing member of Endeavor Operating Company. Endeavor Group Holdings manages and operates the business and controls the strategic decisions and day-to-day operations of Endeavor Manager as its sole managing member, and Endeavor Operating Company as its indirect sole managing member, and also has a substantial financial interest in Endeavor Manager and, indirectly, Endeavor Operating Company. Accordingly, Endeavor Group Holdings consolidates the results of operations of Endeavor Manager and Endeavor Operating Company, and a portion of Endeavor Group Holding’s net income (loss) is allocated to non-controlling interests to reflect the entitlements of certain former members of Endeavor Operating Company who retain ownership interests in Endeavor Manager and Endeavor Operating Company.

After consummation of the IPO and the reorganization transactions, we became subject to U.S. federal, state and local income taxes with respect to our allocable share of any taxable income of Endeavor Manager and Endeavor Operating Company, and we are taxed at the prevailing corporate tax rates. Endeavor Operating Company makes distributions to us in an amount sufficient to allow us to pay our tax obligations and operating expenses, including distributions to fund any ordinary course payments due under the ~~Tax Receivable Agreement.~~

~~In addition, we have begun implementing~~tax receivable agreements ("TRA"). The Company entered into the TRAs with certain persons that held direct or indirect interests in EOC and ~~will continue~~UFC Parent prior to ~~implement additional procedures and processes~~the IPO. The TRAs generally provide for the ~~purpose~~payment by EGH of addressing the standards and requirements applicable to public companies. We expect to continue to incur expenses related to these steps and, among other things, additional directors’ and officers’ liability insurance, director fees, reporting requirements85% of the ~~SEC, transfer agent fees, hiring additional accounting, legal~~amount of any tax benefits that EGH actually realizes as further described below under "Liquidity and ~~administrative personnel, increased auditing~~Capital Resources—Future sources and ~~legal fees and similar expenses. We have recognized and will continue to recognize certain non-recurring costs as part~~uses of ~~our transition to a publicly traded company, consisting of professional fees and other expenses.~~liquidity—Tax receivable agreements".

~~Table of Contents~~

RESULTS OF OPERATIONS

The following is a discussion of our consolidated results of operations for the three and nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021. This information is derived from our accompanying consolidated financial statements prepared in accordance with GAAP.


	Three Months Ended September 30,						Nine months ended September 30,
(in thousands)	2022			2021			2022			2021
Revenue	$	1,221,416		$	1,391,303		$	4,007,694		$	3,572,157
Operating expenses:
Direct operating costs		398,518			673,215			1,601,544			1,790,562
Selling, general and administrative expenses		601,469			520,626			1,729,174			1,686,840
Insurance recoveries		—			(12,233	)		(993	)		(42,100	)
Depreciation and amortization		63,571			71,661			195,177			208,058
Impairment charges		689			754			689			4,524
Total operating expenses		1,064,247			1,254,023			3,525,591			3,647,884
Operating income (loss)		157,169			137,280			482,103			(75,727	)
Other (expense) income:
Interest expense, net		(75,608	)		(55,783	)		(197,385	)		(207,970	)
Loss on extinguishment of debt		—			—			—			(28,628	)
Tax receivable agreements liability adjustment		(10,405	)		—			(61,497	)		—
Other income (expense), net		9,325			(7,719	)		463,133			(3,001	)
Income (loss) before income taxes and equity losses of affiliates		80,481			73,778			686,354			(315,326	)
Provision for (benefit from) income taxes		8,515			(7,718	)		(6,020	)		58,285
Income (loss) before equity losses of affiliates		71,966			81,496			692,374			(373,611	)
Equity losses of affiliates, net of tax		(84,504	)		(17,883	)		(145,026	)		(77,167	)
Net (loss) income		(12,538	)		63,613			547,348			(450,778	)
Less: Net (loss) income attributable to non-controlling interests		(2,499	)		21,128			212,035			(141,980	)
Less: Net loss attributable to Endeavor Operating Company, LLC prior to the reorganization transactions		—			—			—			(31,686	)
Net (loss) income attributable to Endeavor Group Holdings, Inc.	$	(10,039	)	$	42,485		$	335,313		$	(277,112	)

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2021

2020

2021

2020

Revenue

$
1,391,303

$
864,492

$
3,572,157

$
2,517,803

Operating expenses:

Direct operating costs

673,215

422,070

1,790,562

1,275,997

Selling, general and administrative expenses

520,626

318,933

1,686,840

1,009,951

Insurance recoveries

(12,233
)

(19,563
)

(42,100
)

(53,523
)
Depreciation and amortization

71,661

76,471

208,058

241,669

Impairment charges

754

—

4,524

175,282

Total operating expenses

1,254,023

797,911

3,647,884

2,649,376

Operating income (loss)

137,280

66,581

(75,727
)

(131,573
)
Other (expense) income:

Interest expense, net

(55,783
)

(71,277
)

(207,970
)

(212,954
)
Loss on extinguishment of debt

—

—

(28,628
)

—

Other (expense) income, net

(7,719
)

16,409

(3,001
)

63,576

Income (loss) before income taxes and equity losses of affiliates

73,778

11,713

(315,326
)

(280,951
)
(Benefit from) provision for income taxes

(7,718
)

(941
)

58,285

43,614

Income (loss) before equity losses of affiliates

81,496

12,654

(373,611
)

(324,565
)
Equity losses of affiliates, net of tax

(17,883
)

(34,473
)

(77,167
)

(244,280
)
Net income (loss)

63,613

(21,819
)

(450,778
)

(568,845
)
Less: Net income (loss) attributable to non-controlling interests

21,128

58,430

(141,980
)

32,914

Less: Net loss attributable to Endeavor Operating Company, LLC prior to the reorganization transactions

—

(80,249
)

(31,686
)

(601,759
)
Net income (loss) attributable to Endeavor Group Holdings, Inc.

$
42,485

$
—

$
(277,112
)

$
—

Revenue

Revenue ~~increased $526.8~~decreased $169.9 million, or ~~60.9%~~12.2%, to ~~$1,391.3~~$1,221.4 million for the three months ended September 30, ~~2021~~2022 compared to the three months ended September 30, ~~2020~~2021.

•

Owned Sports Properties increased by $113.8 million, or 39.4%. The increase was driven primarily by growth at UFC due to increased media rights fees, greater sponsorship, licensing, commercial PPV and event related revenue, and an increase at PBR primarily due to the new team series format. In addition, the acquisition of ten PDL Clubs in December 2021 and January 2022 that operated under the DBH umbrella contributed $33 million.

•

Events, Experiences & Rights decreased by $5.7 million, or 1.3%. The decrease was primarily driven by a decrease of $27 million in media rights fees and media production revenue, primarily due to events that occurred in 2021 but not in 2022. This decrease was partially offset by a net increase of $21 million attributable to new and returning live events in 2022, as well as growth at Academy, offset by the timing of certain events.

•

Representation decreased by $276.4 million, or 41.6%. The decrease was primarily driven by the $334 million of revenue related to the restricted Endeavor Content business recorded in the prior year, which was sold in January 2022. This decrease was partially offset by a $62 million increase in client commissions, primarily from continued strong demand for our talent and the recovery of live entertainment, and corporate spending on marketing and experiential activations as the ~~Company rebounds from~~prior year continued to be impacted by COVID-19.

Excluding the ~~impact of COVID-19.~~revenue attributable to the restricted Endeavor Content business, revenue for the three months ended September 30, 2022 increased 15% compared to the three months ended September 30, 2021.

Revenue increased $435.5 million, or 12.2%, to $4,007.7 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.

•

Owned Sports Properties ~~decreased~~increased by ~~$10.6~~$200.0 million, or ~~3.5%~~24.1%. The ~~decrease~~increase was driven primarily by growth at UFC due to ~~a decrease in UFC~~increased media rights fees, greater sponsorship, licensing, commercial PPV and event related revenue ~~attributable to~~from more events being held in 2020 caused by the shifting of events from the second quarter due to COVID-19 and a $25 million contract termination fee recognized in the third quarter of 2020, which did not recur in 2021,with live audiences partially offset by Residential PPV revenue. The increase was also due to an increase at PBR from the change in timing of the Unleash The Beast finals and the new team series format, an increase in ~~ticket sales due to~~the number of events and the elimination of fan attendance ~~restrictions~~restrictions. In addition, the acquisition of ten PDL Clubs in December 2021 and ~~new sponsorship deals. This decrease in UFC revenue was partially offset by an increase in revenue at PBR due to additional events held in~~January 2022 that operated under the ~~current period, including ticket sales as a result of eliminating fan attendance restrictions in 2021.~~DBH umbrella contributed $64 million.

•

Events, Experiences & Rights increased by ~~$62.1~~$379.7 million, or ~~16.2%~~25.1%. The increase was primarily driven by an increase of ~~$113~~$716 million ~~of events revenue and $22 million of production revenue~~ attributable to the return of live events in 2022 that were cancelled in 2021 ~~and $26 million attributable~~or experienced fan restrictions due to COVID-19. Increases were also due to the ~~acquisition of~~Madrid Open, which was acquired in April 2022, as well as growth in Academy and NCSA, which was acquired in June 2021. These increases were partially offset by a decrease of ~~$100~~$337 million in media rights fees and media production revenue, primarily due to ~~the return to a normal schedule of European soccer matches in the quarter and~~ the expiration of two European soccer contracts in the second quarter of ~~2021.~~2021 that were not renewed.

•

Representation ~~increased~~decreased by ~~$481.1~~$138.3 million, or ~~262.1%~~11.1%. The ~~increase~~decrease was primarily driven by ~~a $341~~the $407 million ~~increase in content deliveries at~~of revenue related to the restricted Endeavor Content ~~and a $124~~business recorded in the prior year, which was sold in January 2022. This decrease was partially offset by an increase of $254 million ~~increase in~~related to client commissions, ~~licensing~~due primarily from the continued strong demand for our talent and the recovery of live entertainment, and corporate spending on marketing and experiential activations as the prior year was ~~significantly~~ impacted by COVID-19.

Excluding the revenue attributable to the restricted Endeavor Content business, revenue for the nine months ended September 30, 2022 increased 27% compared to the nine months ended September 30, 2021.

~~Revenue increased $1,054.4~~Direct operating costs

Direct operating costs decreased $274.7 million, or ~~41.9%~~40.8%, to ~~$3,572.2~~$398.5 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. A decrease of $285 million related to the sale of the restricted Endeavor Content business was partially offset by the increases in costs associated with the revenue growth as described above.

Direct operating costs decreased $189.0 million, or 10.6%, to $1,601.5 million for the nine months ended September 30, ~~2021~~2022 compared to the nine months ended September 30, ~~2020 as the Company rebounds from the impact of COVID-19.~~



~~Owned Sports Properties~~ ~~increased by $147.3 million, or 21.6%.~~2021. The ~~increase~~decrease was ~~primarily~~ driven by ~~an increase~~the $345 million decrease related to the sale of the restricted Endeavor Content business and the decrease in media rights ~~fees, new sponsorship deals~~ and ~~event related revenue due to the increase in the number~~media production costs of ~~events held at UFC, partially offset by a contract termination fee recognized in the prior year.~~



~~Events, Experiences & Rights~~ ~~increased by $341.7~~$391 million or 29.1%. The increase was primarily attributable to an increase in media rights fees of $271 million primarily driven by the impact of COVID-19 on both the 2019/2020 and 2020/2021 European soccer seasons, which resulted in reduced matches for most leagues in the first half of 2020, and an increased schedule of matches in the first quarter of 2021 and $86 million of sports production revenue related to the return of live events in 2021. These increases were partially offset by a net decrease of $16 million in our event and performance revenue due to the cancellation or restricted attendance at certain of our events.

~~Table of Contents~~



~~Representation~~ increased by $572.7 million, or 85.6%. The increase was primarily driven by a $384 million increase in content deliveries at Endeavor Content and an increase of $174 million in client commissions, licensing and corporate spending on marketing and experiential activations as the prior year was significantly impacted by COVID-19.

~~Direct operating costs~~

Direct operating costs increased $251.1 million, or 59.5%, to $673.2 million for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. The increase was primarily attributable to an increase of $301 million related to an increase in content deliveries at Endeavor Content and $88 million of increased event costs related to the return of live events. This increase was partially offset by a decrease of $179 million in media rights costs due to the decrease in revenue described above, ~~including~~primarily due to the expiration of ~~two European soccer~~certain contracts in the second quarter of 2021 whose costs were in excess of revenue. These decreases were partially offset by increases of $545 million for costs related to live events and marketing and experiential activations due to the increases in revenue as described above.

Selling, general and administrative expenses

~~Direct operating costs~~Selling, general and administrative expenses increased ~~$514.6~~$80.8 million, or ~~40.3%~~15.5%, to ~~$1,790.6~~$601.5 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. The increase was primarily due to higher cost of personnel, travel expenses and other operating expenses.

Selling, general and administrative expenses increased $42.3 million, or 2.5%, to $1,729.2 million for the nine months ended September 30, ~~2021~~2022 compared to the nine months ended September 30, ~~2020.~~2021. The increase was primarily attributable to an increase of $351 million related to an increase in content deliveries at Endeavor Content, $149 million in media rights and $67 million in media production costs, partially offset by a decrease in costs of $50 million related to events and performance due to ~~the changes in revenue described above.~~

~~Selling, general and administrative expenses~~

Selling, general and administrative expenses increased $201.7 million, or 63.2%, to $520.6 million for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. The increase was principally due to increased equity-based compensation expense of $40 million, higher cost of personnel, ~~including bonuses accrued in the current year versus lower to no bonuses accrued in the prior year,~~travel expenses and other operating ~~expenses as the business recovers from the impact of COVID-19.~~

~~Selling, general and administrative expenses increased $676.9 million, or 67.0%, to $1,686.8 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.~~expenses. The increase was ~~principally due to increased~~partially offset by lower equity-based compensation expense ~~of $427 million, of which $251.9 million is due to~~as the prior period included charges for modifications of certain pre-IPO awards to remove certain forfeiture and discretionary call terms, higher cost of personnel, including bonuses accrued in the current year versus lower to no bonuses accrued in the prior year, and other operating expenses as the business recovers from the impact of COVID-19.terms.

Insurance recoveries

We maintain events cancellation insurance policies for a significant number of our events. For the three and nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, we recognized none, $1.0 million, $12.2 million ~~$42.1 million, $19.6 million~~ and ~~$53.5~~$42.1 million of insurance recoveries, respectively, which primarily related to cancelled events in our Events, Experiences & Rights and Owned Sports Properties segments due to COVID-19.

Depreciation and amortization

Depreciation and amortization decreased ~~$4.8~~$8.1 million, or ~~6.3%~~11.3%, to ~~$71.7~~$63.6 million for the three months ended September 30, ~~2021~~2022 compared to the three months ended September 30, ~~2020.~~2021. Depreciation and amortization decreased ~~$33.6~~$12.9 million, or ~~13.9%~~6.2%, to ~~$208.1~~$195.2 million for the nine months ended September 30, ~~2021~~2022 compared to the nine months ended September 30, ~~2020.~~ 2021.The decreases were primarily driven by certain ~~UFC~~ intangible assets becoming fully amortized ~~in August 2020.~~

partially offset by intangible assets acquired through acquisitions.

Impairment charges

Impairment charges of $0.7 million for the three and nine months ended September 30, 2022, related to goodwill in our Events, Experiences & Rights segment.

Impairment charges of $0.8 million and $4.5 million for the three and nine months ended September 30, 2021, respectively, related to goodwill in our Events, Experiences & Rights and Representation segments. ~~Impairment charges of $175.3~~

Interest expense, net

Interest expense, net increased $19.8 million, or 35.5% to $75.6 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. The increase was primarily driven by higher interest rates and higher average debt outstanding during the three months ended September 30, 2022 as compared to the three months ended September 30, 2021.

Interest expense, net decreased $10.6 million, or 5.1% to $197.4 million for the nine months ended September 30, 2020 related to goodwill and intangible asset impairment driven by lower projections as a result of the impact of COVID-19 and restructuring in certain of our businesses, primarily in our Events, Experiences & Rights and Representation segments.

~~Interest expense, net~~

Interest expense, net decreased $15.5 million, or 21.7% to $55.8 million for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. Interest expense, net decreased $5.0 million, or 2.3% to $208.0 million for the nine months ended September 30, 20212022 compared to the nine months ended September 30, ~~2020. These decreases were~~2021. The decrease was primarily driven by lower ~~indebtedness~~average debt outstanding partially offset by higher interest rates during the nine months ended September 30, 2022 as ~~a result of~~compared to the ~~repayment of debt in June~~nine months ended September 30, 2021.

Loss on extinguishment of debt of $28.6 million for the nine months ended September 30, 2021 was due to fees and expenses incurred for the early redemption of our term loans issued in May 2020.

Tax receivable agreements liability adjustment

The Company recorded $(10.4) million and $(61.5) million of adjustments in the three and nine months ended September 30, 2022, respectively, for the tax receivable agreements liability related to the expected realization of certain tax benefits after concluding that such TRA payments would be probable based on estimates of future taxable income over the terms of the TRAs.

Other income (expense) ~~income,~~, net

Other income (expense) ~~income,~~, net for the three months ended September 30, ~~2021~~2022 was income of $9.3 million compared to expense of $7.7 ~~million compared to income of $16.4~~ million for the three months ended September 30, ~~2020.~~2021. The income for the three months ended September 30, 2022 primarily included a gain of $23.3 million for the sale of DBH partially offset by $12.4 million for foreign currency transaction losses. The expense for the three months ended September 30, 2021 ~~primarily was attributable to foreign~~

~~Table of Contents~~

~~currency transaction losses. The income for the three months ended September 30, 2020~~ was primarily attributable to ~~the gain on the sale of an investment.~~

foreign currency transaction losses.

Other income (expense) ~~income,~~, net for the nine months ended September 30, ~~2020 was expense~~2022 included a gain of ~~$3.0 million compared to income of $63.6~~$463.6 million for the ~~nine months ended September 30, 2020.~~sale of the restricted Endeavor Content business, a gain of $23.3 million for the sale of DBH and $16.6 million of gains from changes in fair value of equity investments partially offset by $33.2 million for foreign currency transaction losses and $8.8 million of losses due to the change in the fair value of embedded foreign currency derivatives. The expense for the nine months ended September 30, 2021 included $15.7 million of foreign currency transaction losses and $10.4 million of losses due to the change in the fair value of embedded foreign currency derivatives partially offset by $23.1 million of gains primarily from sales and changes in the fair value of equity investments. The income for the nine months ended September 30, 2020 primarily included gains of $27.1 million, $8.1 million, $15.3 million and $11.0 million recorded for the acquisition of the remaining 50% of the membership interests of FC Diez Media, the deconsolidation of Asian Tour Media, the gain on the sale of an investment and the change in the fair value of embedded foreign currency derivatives, respectively.

~~(Benefit~~Provision for (benefit from) ~~provision for~~ income taxes

For the three months ended September 30, ~~2021,~~2022, we recorded ~~$7.7~~a provision for income taxes of $8.5 million compared to a benefit from income taxes ~~compared to $0.9~~of $7.7 million ~~benefit from income taxes~~ for the three months ended September 30, ~~2020.~~2021. For the nine months ended September 30, ~~2021,~~2022, we recorded ~~$58.3~~a benefit from income taxes of $6.0 million compared to a provision for income taxes ~~compared to $43.6~~of $58.3 million ~~provision for income taxes~~ for the nine months ended September 30, ~~2020.~~2021. The tax expense for the three months ended September 30, ~~2021~~2022 differs from the same period in ~~2020~~2021 primarily due to ~~the impact of~~ additional estimated annual pre-tax income ~~for~~in 2022 partially offset by the ~~three months ended September 30, 2021.~~release of a $12.2 million valuation allowance on deferred tax assets in 2022. The tax expense for the nine months ended September 30, ~~2021~~2022 differs from the same period in ~~2020~~2021 primarily due to the ~~impact~~release of ~~additional stock compensation expense~~a $65.9 million valuation allowance on deferred tax assets in 2022. The release of the ~~annual effective~~valuation allowance was due to the expected realization of certain tax ~~rate,~~benefits in connection with a TRA liability. In addition, during the nine months ended September 30, 2021, $7.4 million of deferred tax liabilities associated with indefinite lived intangibles were recorded as a result of the IPO and tax expense of $10.2 million was recorded related to a change in ~~the~~ tax rate in the United Kingdom.

Equity losses of affiliates, net of tax

Equity losses of affiliates ~~decreased $16.6~~increased $66.6 million to ~~$17.9~~$84.5 million and ~~decreased $167.1~~increased $67.9 million to ~~$77.2~~$145.0 million for the three and nine months ended September 30, ~~2021, respectively,~~2022 compared to the three and nine months ended September 30, ~~2020. Equity~~2021. Our equity losses ~~for the three and nine months ended September 30, 2021 are~~ primarily ~~due to the losses~~ related to our investment in Learfield IMG ~~College.~~College and the 20% interest we retained in the restricted Endeavor Content business, which we sold in January 2022.

During the three and nine months ended September 30, ~~2020~~2022 and the three and nine months ended September 30, 2021, we recorded ~~$31.4~~$78.7 million and ~~$238.9~~$137.5 million, respectively, and $17.9 million and $77.2 million, respectively, in equity losses resulting from ~~continued~~ losses ~~and the impact of COVID-19 on~~related to our investment in Learfield IMG ~~College’s operating~~College. For the three and nine months ended September 30, 2022, our share of the results ~~resulting in~~of Learfield IMG College included a $56.1 million charge as a result of its annual goodwill and ~~indefinite-lived~~indefinite lived intangible asset ~~impairments.~~impairment test, primarily due to continued losses.

Net (loss) income ~~(loss)~~ attributable to non-controlling interests

Subsequent to the IPO and associated reorganization transactions, non-controlling interests primarily relate to interests held by certain former members of Endeavor Operating Company who retained their ownership interests in Endeavor Manager and Endeavor Operating Company.

Net loss attributable to non-controlling interests was $2.5 million for the three months ended September 30, 2022 compared to net income attributable to non-controlling interests ~~decreased $37.3 million to~~of $21.1 million for the three months ended September 30, ~~2021 compared~~2021. The change was primarily due to the change in the amount of reported net loss for the three months ended September 30, ~~2020. The decrease was primarily driven by~~2022 versus the ~~effect of~~reported net income for the ~~reorganization transactions.~~

three months ended September 30, 2021.

Net income attributable to non-controlling interests was $212.0 million for the nine months ended September 30, 2022 compared to net loss attributable to non-controlling interests ~~was~~of $142.0 million for the nine months ended September 30, ~~2021 compared~~2021. The change was primarily due to the change in the amount of reported net income ~~attributable to non-controlling interests of $32.9 million~~ for the nine months ended September 30, ~~2020. The change from income to~~2022 versus the reported net loss ~~was primarily driven by~~for the nine months ended September 30, 2021 as well as the effect of the reorganization ~~transactions offset by net income attributable to the UFC prior to the UFC Buyout.~~transactions.

SEGMENT RESULTS OF OPERATIONS

We classify our business into three reporting segments: Owned Sports Properties; Events, Experiences & Rights; and Representation. Our chief operating decision maker evaluates the performance of our segments based on segment Revenue and segment Adjusted EBITDA. Management believes segment Adjusted EBITDA is indicative of operational performance and ongoing profitability and is used to evaluate the operating performance of our segments and for planning and forecasting purposes, including the allocation of resources and capital.

Segment operating results reflect earnings before corporate and unallocated shared expenses. Segment operating results include allocations of certain costs, including facilities, technology, and other shared services costs, which are allocated based on metrics designed to correlate with consumption. These allocations are agreed-upon amounts between the businesses and may differ from amounts that would be negotiated in arm’s length transactions.

~~Table of Contents~~

The following tables display Revenue and Adjusted EBITDA for each of our segments:

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2021

2020

2021

2020

Revenue:

Owned Sports Properties

$
288,521

$
299,130

$
830,867

$
683,536

Events, Experiences & Rights

446,333

384,257

1,514,615

1,172,867

Representation

664,723

183,583

1,241,864

669,157

Eliminations

(8,274
)

(2,478
)

(15,189
)

(7,757
)
Total Revenue

$
1,391,303

$
864,492

$
3,572,157

$
2,517,803

Adjusted EBITDA:

Owned Sports Properties

$
134,679

$
166,678

$
412,495

$
334,474

Events, Experiences & Rights

84,993

(9,595
)

160,843

16,873

Representation

141,801

41,666

264,969

162,315

Corporate

(78,156
)

(22,802
)

(187,476
)

(106,340
)


	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2022			2021			2022			2021
Revenue:
Owned Sports Properties	$	402,272		$	288,521		$	1,030,891		$	830,867
Events, Experiences & Rights		440,605			446,333			1,894,290			1,514,615
Representation		388,335			664,723			1,103,611			1,241,864
Eliminations		(9,796	)		(8,274	)		(21,098	)		(15,189	)
Total Revenue	$	1,221,416		$	1,391,303		$	4,007,694		$	3,572,157
Adjusted EBITDA:
Owned Sports Properties	$	195,749		$	134,679		$	505,760		$	412,495
Events, Experiences & Rights		49,668			84,993			290,268			160,843
Representation		132,923			141,801			345,849			264,969
Corporate		(75,258	)		(78,156	)		(217,991	)		(187,476	)

Owned Sports Properties

The following table sets forth our Owned Sports Properties segment results for the three and nine months ended September 30, ~~2021~~2022 and ~~2020:~~2021:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
(in thousands)
Revenue	$	402,272		$	288,521		$	1,030,891		$	830,867
Direct operating costs	$	131,537		$	102,641		$	329,102		$	275,935
Selling, general and administrative expenses	$	72,345		$	48,060		$	192,709		$	140,162
Adjusted EBITDA	$	195,749		$	134,679		$	505,760		$	412,495
Adjusted EBITDA margin		48.7	%		46.7	%		49.1	%		49.6	%

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(in thousands)

Revenue

$
288,521

$
299,130

$
830,867

$
683,536

Direct operating costs

$
102,640

$
80,782

$
275,935

$
219,798

Selling, general and administrative expenses

$
48,061

$
54,264

$
140,162

$
129,684

Adjusted EBITDA

$
134,679

$
166,678

$
412,495

$
334,474

Adjusted EBITDA margin

46.7
%

55.7
%

49.6
%

48.9
%

Three months ended September 30, ~~2021~~2022 compared to three months ended September 30, ~~2020~~

2021

Revenue for the three months ended September 30, ~~2021 decreased $10.6~~2022 increased $113.8 million, or ~~3.5%~~39.4%, to ~~$288.5~~$402.3 million, compared to the three months ended September 30, ~~2020.~~2021. The ~~decrease~~increase was driven primarily by ~~a decrease in revenue~~growth at UFC ~~attributable~~due to increased media rights fees, greater sponsorship, licensing, commercial PPV and event related revenue driven by an additional PPV event as well as more events ~~being held in 2020 caused by the shifting of events from the second quarter due to COVID-19~~with live audiences, and ~~a $25 million contract termination fee recognized in the third quarter of 2020 which did not recur in 2021 partially offset by~~ an increase ~~in ticket sales~~at PBR primarily due to the ~~elimination~~new team series format. In addition, the acquisition of ~~fan attendance restrictions~~ten PDL Clubs in December 2021 and ~~new sponsorship deals. This decrease~~January 2022 that operated under the DBH umbrella contributed $33 million. DBH was sold in UFC revenue was partially offset by increased revenue at PBR due to additional PBR events held in 2021 compared to the prior year period, including ticket sales as a result of eliminating fan attendance restrictions in 2021.September 2022.

Direct operating costs for the three months ended September 30, ~~2021~~2022 increased ~~$21.9~~$28.9 million, or ~~27.1%~~28.2%, to ~~$102.6~~$131.5 million, compared to the three months ended September 30, ~~2020.~~2021. The increase ~~was attributable~~is due to ~~increases~~the changes in ~~athlete compensation, production and marketing expenses at UFC, as well as an increase in the number of PBR events held.~~

revenue described above.

Selling, general and administrative expenses for the three months ended September 30, ~~2021 decreased $6.2~~2022 increased $24.3 million, or ~~11.4%~~50.5%, to ~~$48.1~~$72.3 million, compared to the three months ended September 30, ~~2020.~~2021. The ~~decrease~~increase was primarily attributable to ~~lower~~$14 million of expenses incurred by DBH, an increase in travel expenses related to UFC due to ~~fewer~~an increase in events held outside of Las Vegas, including in Europe, and ~~less international events.~~

an increase in cost of personnel.

Adjusted EBITDA for the three months ended September 30, ~~2021 decreased $32.0~~2022 increased $61.1 million, or ~~19.2%~~45.3%, to ~~$134.7~~$195.7 million, compared to the three months ended September 30, ~~2020.~~2021. The ~~decrease~~increase in Adjusted EBITDA was primarily driven by ~~a decrease~~increases in revenue ~~an increase~~partially offset by increases in direct operating costs and ~~a decrease in insurance recoveries related to cancelled PBR events partially offset by lower~~ selling, general and administrative expenses.

Nine months ended September 30, ~~2021~~2022 compared to nine months ended September 30, ~~2020~~2021

Revenue for the nine months ended September 30, ~~2021~~2022 increased ~~$147.3~~$200.0 million, or ~~21.6%~~24.1%, to ~~$830.9~~$1,030.9 million, compared to the nine months ended September 30, ~~2020.~~2021. The increase was ~~primarily~~driven by growth at UFC due to increased media rights fees, greater sponsorship, licensing, commercial PPV and event related ~~to the UFC~~revenue from more events with live audiences partially offset by Residential PPV revenue. The increase was also due to an increase at PBR from the change in ~~media rights fees,~~timing of the Unleash The Beast finals and the new ~~sponsorship deals and event related revenue due to~~team series format, an increase in the number of events ~~held, partially offset by~~and the ~~contract termination fee~~elimination of fan attendance restrictions. In addition, the acquisition of ten PDL Clubs in December 2021 and January 2022 that operated under the ~~prior year.~~

DBH umbrella contributed $64 million. DBH was sold in September 2022.

Direct operating costs for the nine months ended September 30, ~~2021~~2022 increased ~~$56.1~~$53.2 million, or ~~25.5%~~19.3%, to ~~$275.9~~$329.1 million, compared to the nine months ended September 30, ~~2020.~~2021. The increase ~~was attributable~~is due to the ~~increase~~change in ~~the number of UFC events held~~revenue described above partially offset by lower ~~operating~~athlete costs ~~at PBR.~~for UFC.

Selling, general and administrative expenses for the nine months ended September 30, ~~2021~~2022 increased ~~$10.5~~$52.5 million, or ~~8.1%~~37.5%, to ~~$140.2~~$192.7 million, compared to the nine months ended September 30, ~~2020.~~2021. The increase was primarily attributable to $37 million of expenses incurred by DBH and an increase in cost of personnel ~~as well as~~and travel ~~expenses related to the increase in the number of UFC events held.~~expenses.

~~Table of Contents~~

Adjusted EBITDA for the nine months ended September 30, ~~2021~~2022 increased ~~$78.0~~$93.3 million, or ~~23.3%~~22.6%, to ~~$412.5~~$505.8 million, compared to the nine months ended September 30, ~~2020.~~ 2021. The increase in Adjusted EBITDA was primarily driven by ~~the increase~~increases in revenue partially offset by ~~the increase~~increases in direct operating costs and selling, general and administrative expenses.

Events, Experiences & Rights

The following table sets forth our Events, Experiences & Rights segment results for three and nine months ended September 30, ~~2021~~2022 and ~~2020:~~2021:

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(in thousands)

Revenue

$
446,333

$
384,257

$
1,514,615

$
1,172,867

Direct operating costs

$
235,645

$
327,388

$
1,046,714

$
934,385

Selling, general and administrative expenses

$
138,567

$
85,424

$
351,642

$
284,532

Adjusted EBITDA

$
84,993

$
(9,595
)

$
160,843

$
16,873

Adjusted EBITDA margin

19.0
%

-2.5
%

10.6
%

1.4
%


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
(in thousands)
Revenue	$	440,605		$	446,333		$	1,894,290		$	1,514,615
Direct operating costs	$	224,598		$	235,645		$	1,119,855		$	1,046,714
Selling, general and administrative expenses	$	169,125		$	138,567		$	494,087		$	351,642
Adjusted EBITDA	$	49,668		$	84,993		$	290,268		$	160,843
Adjusted EBITDA margin		11.3	%		19.0	%		15.3	%		10.6	%

Three months ended September 30, ~~2021~~2022 compared to three months ended September 30, ~~2020~~2021

Revenue for the three months ended September 30, ~~2021 increased $62.1~~2022 decreased $5.7 million, or ~~16.2%~~1.3%, to ~~$446.3~~$440.6 million, , compared to the three months ended September 30, ~~2020.~~2021. Media rights fees and media production revenue decreased $26 million primarily due to the timing of the 2021 UEFA Euro Championship and the 2021 CONCACAF World Cup qualifying matches, which take place every four years. Total event and academy revenue increased $21 million primarily due to new events, including Frieze Seoul, and events returning in 2022 that were cancelled in 2021, including the Aer Lingus Classic and various music events, as well as growth in Academy due to increased enrollment in summer camps and NCSA memberships. These increases in event and academy revenue were partially offset by certain events held in Q2 2022 that were held in Q3 2021 as well as the 2021 Ryder Cup, which is a biennial event.

Direct operating costs for the three months ended September 30, 2022 decreased $11.0 million, or 4.7%, to $224.6 million, compared to the three months ended September 30, 2021. The decrease is due to the changes in revenue described above.

Selling, general and administrative expenses for the three months ended September 30, 2022 increased $30.6 million, or 22.1%, to $169.1 million, compared to the three months ended September 30, 2021. The increase was primarily driven by increased cost of personnel, including the build out of the Olympics business, and the expense incurred by Barrett Jackson, acquired in August 2022.

Adjusted EBITDA for the three months ended September 30, 2022 decreased $35.3 million, or 41.6%, to $49.7 million, compared to the three months ended September 30, 2021. The decrease in Adjusted EBITDA was primarily driven by increases in selling, general and administrative expenses and insurance recoveries received in the prior year related to cancelled events.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021

Revenue for the nine months ended September 30, 2022 increased $379.7 million, or 25.1%, to $1,894.3 million, compared to the nine months ended September 30, 2021. Event and ~~performance~~academy revenue increased ~~$113~~$716 million primarily due to events returning in ~~2021, including Ryder Cup, The Big Feastival and Taste of London~~2022 that were cancelled in ~~2020~~2021 or experienced fan restrictions due to COVID-19, including Super Bowl LVI, NCAA Men’s March Madness, Miami Open, and various music events. Increases were also due to the Madrid Open, which was acquired in April 2022, as well as ~~the return of IMG~~growth in Academy summer camps at full capacity, which were cancelled or had attendance restrictions in 2020 and an increase of $26 million related to the acquisition of NCSA. Media production revenue increased $22 million due to ~~the return to a full schedule of events~~increased enrollment and NCSA, which was acquired in ~~2021 as compared to the impact of COVID-19 on event schedules in 2020, including coverage of golf and tennis events which were cancelled.~~June 2021. Media rights fees and media production revenue decreased ~~$100~~$337 million primarily due to the return to a normal schedule of European soccer matches in 2021 compared to the impact of COVID-19 on the 2019/2020 season, which resulted in matches for most leagues rescheduled to the third quarter of 2020, as well as the expiration of two European soccer contracts in the second quarter of 2021 that were not renewed.

Direct operating costs for the ~~three~~nine months ended September 30, ~~2021 decreased $91.7~~2022 increased $73.1 million, or ~~28.0%~~7.0%, to ~~$235.6~~$1,119.9 million, compared to the ~~three~~nine months ended September 30, ~~2020. Media~~2021. Live event and performance costs increased $462 million due to the increases in related revenue. This increase was partially offset by a decrease in media rights ~~expenses decreased $179~~and media production costs of $391 million due to the decrease in revenue described above, ~~including~~primarily due to the expiration of ~~two European soccer~~certain contracts in the second quarter of 2021 whose costs were in excess of revenue. ~~This decrease was partially offset by increases in live event and performance costs and media production costs of $66 million and $19 million, respectively, due to the increases in related revenue.~~

Selling, general and administrative expenses for the ~~three~~nine months ended September 30, ~~2021~~2022 increased ~~$53.1~~$142.4 million, or ~~62.2%~~40.5%, to ~~$138.6~~$494.1 million, compared to the ~~three~~nine months ended September 30, ~~2020.~~2021. The increase was primarily driven by increased cost of personnel, asincluding the buildout of the Olympics business, ~~recovers from~~and the ~~impact of COVID-19. The acquisition of~~expenses incurred by NCSA, ~~contributed approximately $23 million~~acquired in ~~selling, general and administrative expenses for the three months ended September 30,~~June 2021.

Adjusted EBITDA for the ~~three~~nine months ended September 30, ~~2021 improved $94.6~~2022 increased $129.4 million, or 80.5%, to ~~$85.0~~$290.3 million, compared to the ~~three~~nine months ended September 30, ~~2020.~~2021. The increase in Adjusted EBITDA was primarily driven by the growth in revenue ~~and decreases~~partially offset by increases in related direct operating costs ~~partially offset by an increase in~~and selling, general and administrative expenses ~~and~~as well as a decrease in insurance recoveries related to cancelled events.

~~Nine months ended September 30, 2021 compared to nine months ended September 30, 2020~~

Revenue for the nine months ended September 30, 2021 increased $341.7 million, or 29.1%, to $1,514.6 million, compared to the nine months ended September 30, 2020. Media rights fees increased $271 million primarily driven by the impact of COVID-19 on both the 2019/2020 and 2020/2021 European soccer seasons, which resulted in reduced matches for most leagues in the first half of 2020, and an increased schedule of matches in the first quarter of 2021, which was partially offset by the expiration of two European soccer contracts in the second quarter of 2021 that were not renewed. Media Production revenue increased $86 million due to the return to a largely full schedule of events in 2021 as compared to the impact of COVID-19 on event schedules in 2020, including coverage of the English Premier League which was partially rescheduled to the second half of 2020, and golf and tennis events which were cancelled. Event and performance revenue decreased $16 million due primarily to attendance restrictions at the 2021 Super Bowl, as well as the cancellation of certain events in 2021 due to COVID-19 that were held in the prior year, including Hyde Park Winter Wonderland, Frieze LA and Rio Open. This decrease was partially offset by certain events taking place in 2021 which were cancelled in 2020 due to COVID-19, including the Miami Open, Ryder Cup, HSBC Women’s World Championship, Honda LPGA, ANA Inspiration, Frieze NY and Miss Universe pageant, and all summer camps taking place at the IMG Academy at full capacity in 2021 that were cancelled or had attendance restrictions in 2020 in addition to the impact of the NCSA acquisition.

Direct operating costs for the nine months ended September 30, 2021 increased $112.3 million, or 12.0%, to $1,046.7 million, compared to the nine months ended September 30, 2020. Media rights expenses and media production expenses increased $149 million and $67 million, respectively, partially offset by a reduction in live event and performance costs of $106 million due to the changes in revenue as described above.

~~Table of Contents~~

Selling, general and administrative expenses for the nine months ended September 30, 2021 increased $67.1 million, or 23.6%, to $351.6 million, compared to the nine months ended September 30, 2020. The increase was primarily driven by increased cost of personnel as the business recovers from the impact of COVID-19. The acquisition of NCSA contributed approximately $30 million in selling, general and administrative expenses for the nine months ended September 30, 2021.

Adjusted EBITDA for the nine months ended September 30, 2021 increased $144.0 million to $160.8 million, compared to the nine months ended September 30, 2020. The increase in Adjusted EBITDA was primarily driven by the increase in revenue partially offset by the increase in related direct operating costs and selling, general and administrative expenses and a decrease in insurance recoveries related to cancelled events.

Representation

The following table sets forth our Representation segment results for three and nine months ended September 30, ~~2021~~2022 and ~~2020:~~2021:

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(in thousands)

Revenue

$
664,723

$
183,583

$
1,241,864

$
669,157

Direct operating costs

$
341,895

$
25,053

$
481,796

$
126,475

Selling, general and administrative expenses

$
181,322

$
117,972

$
495,173

$
381,801

Adjusted EBITDA

$
141,801

$
41,666

$
264,969

$
162,315

Adjusted EBITDA margin

21.3
%

22.7
%

21.3
%

24.3
%


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
(in thousands)
Revenue	$	388,335		$	664,723		$	1,103,611		$	1,241,864
Direct operating costs	$	52,163		$	341,895		$	173,614		$	481,796
Selling, general and administrative expenses	$	203,016		$	181,322		$	583,851		$	495,173
Adjusted EBITDA	$	132,923		$	141,801		$	345,849		$	264,969
Adjusted EBITDA margin		34.2	%		21.3	%		31.3	%		21.3	%

Three months ended September 30, ~~2021~~2022 compared to three months ended September 30, ~~2020~~

2021

Revenue for the three months ended September 30, ~~2021 increased $481.1~~2022 decreased $276.4 million, or ~~262.1%~~41.6%, to ~~$664.7~~$388.3 million, compared to the three months ended September 30, ~~2020.~~2021. The ~~increase~~decrease was primarily attributable to ~~a $341~~the $334 million ~~increase at~~of revenue related to the restricted Endeavor Content ~~in connection with the delivery of new content that was negligible~~business recorded in the prior year, ~~due to the COVID-19 shutdown of productions and~~which was sold in January 2022. This decrease was partially offset by an increase of ~~$124~~$62 million related to client commissions, due primarily to the ~~return~~continued strong demand for our talent and the recovery of ~~productions and personal appearances, as well as licensing~~live entertainment, predominantly music, and corporate spending on marketing and experiential ~~activations.~~

activations as the prior year continued to be impacted by COVID-19. Excluding the revenue attributable to the restricted Endeavor Content business, revenue for the three months ended September 30, 2022 increased 17% compared to the three months ended September 30, 2021.

Direct operating costs for the three months ended September 30, ~~2021 increased $316.8~~2022 decreased $289.7 million, or 84.7%, to ~~$341.9~~$52.2 million, compared to the three months ended September 30, ~~2020.~~2021. The ~~increase~~decrease was ~~predominantly~~primarily attributable to the ~~above mentioned increase in content deliveries at~~sale of the restricted Endeavor Content ~~and marketing and experiential activations.~~

business.

Selling, general and administrative expenses for the three months ended September 30, ~~2021~~2022 increased ~~$63.4~~$21.7 million, or ~~53.7%~~12.0%, to ~~$181.3~~$203.0 million, compared to the three months ended September 30, ~~2020.~~2021. The increase was primarily driven by cost of personnel ~~including bonuses accrued~~and travel expenses partially offset by the sale of the restricted Endeavor Content business in ~~the current year versus lower to no bonuses accrued in the prior year, as the business recovers from the impact of COVID-19.~~

January 2022.

Adjusted EBITDA for the three months ended September 30, ~~2021 increased $100.1~~2022 decreased $8.9 million, or ~~240.3%~~6.3%, to ~~$141.8~~$132.9 million, compared to the three months ended September 30, ~~2020.~~2021. The ~~increase in~~decrease was primarily attributable to the $26 million of Adjusted EBITDA in the prior year related to the restricted Endeavor Content business, which was ~~driven by the growth~~sold in ~~revenue~~January 2022. This was partially offset by the ~~increase~~revenue growth from the rest of the segment, as discussed above, net of the increases in ~~direct operating costs and~~ selling, general and administrative expenses.

Nine months ended September 30, ~~2021~~2022 compared to nine months ended September 30, 2021

Revenue for the nine months ended September 30, ~~2021 increased $572.7~~2022 decreased $138.3 million, or ~~85.6%~~11.1%, to ~~$1,241.9~~$1,103.6 million, compared to the nine months ended September 30, ~~2020.~~2021. The ~~increase~~decrease was primarily attributable to ~~a $384~~the $407 million ~~increase in content deliveries at~~of revenue related to the restricted Endeavor Content ~~and~~business recorded in prior year, which was sold in January 2022. This decrease was partially offset by an increase of ~~$174~~$254 million inrelated to client commissions, ~~licensing~~due primarily to the continued strong demand for our talent and the recovery of live entertainment, predominantly music, and corporate spending on marketing and experiential activations ~~which were all significantly~~as the prior year was impacted by ~~COVID-19 in~~COVID-19. Excluding the ~~prior year.~~

revenue attributable to the restricted Endeavor Content business, revenue for the nine months ended September 30, 2022 increased 32% compared to the nine months ended September 30, 2021.

Direct operating costs for the nine months ended September 30, ~~2021 increased $355.3~~2022 decreased $308.2 million, or ~~280.9%~~64.0%, to ~~$481.8~~$173.6 million, compared to the nine months ended September 30, ~~2020.~~2021. The ~~increase was predominantly~~decrease attributable to the ~~above mentioned~~sale of the restricted Endeavor Content business of $345 million was partially offset by an increase in ~~content deliveries at Endeavor Content.~~marketing and experiential activations due to the increase in revenue described above.

Selling, general and administrative expenses for the nine months ended September 30, ~~2021~~2022 increased ~~$113.4~~$88.7 million, or ~~29.7%~~17.9%, to ~~$495.2~~$583.9 million, compared to the nine months ended September 30, ~~2020.~~2021. The increase was primarily driven by ~~growth in~~ cost of personnel ~~including bonuses accrued in~~and travel expenses partially offset by the ~~current year versus lower to no bonuses accrued in~~sale of the ~~prior year, as the business recovers from the impact of COVID-19.~~

restricted Endeavor Content business.

Adjusted EBITDA for the nine months ended September 30, ~~2021~~2022 increased ~~$102.7~~$80.9 million, or ~~63.2%~~30.5%, to ~~$265.0~~$345.8 million, compared to the nine months ended September 30, ~~2020.~~2021. The increase in Adjusted EBITDA was ~~driven by~~primarily due to the ~~increase~~growth in revenue, excluding the Endeavor Content business which was sold in January 2022, partially offset by the increase in ~~direct operating costs and~~ selling, general and administrative expenses.

Corporate

Corporate primarily consists of overhead, personnel costs, and costs associated with corporate initiatives that are not fully allocated to the operating divisions. Such expenses include compensation and other benefits for corporate office employees, rent, professional fees related to internal

~~Table of Contents~~

control compliance and monitoring, financial statement audits and legal, information technology and insurance that is managed through our corporate office.

The following table sets forth our results for Corporate for the three and nine months ended September 30, ~~2021~~2022 and ~~2020:~~2021:

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(in thousands)

Adjusted EBITDA

$
(78,156
)

$
(22,802
)

$
(187,476
)

$
(106,340
)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
(in thousands)
Adjusted EBITDA	$	(75,258	)	$	(78,156	)	$	(217,991	)	$	(187,476	)

Adjusted EBITDA for the three months ended September 30, ~~2021 decreased $55.4~~2022 improved $2.9 million, or ~~242.8%~~ 3.7%, to ~~$78.2~~$(75.3) million, compared to the three months ended September 30, ~~2020.~~2021. The ~~decline~~improvement was driven by ~~an increase~~a decrease in cost of ~~personnel, including bonuses accrued in the current year versus lower to no bonuses accrued in the prior year and other general and administrative expenses.~~

personnel.

Adjusted EBITDA for the nine months ended September 30, ~~2021~~2022 decreased ~~$81.1~~$30.5 million, or ~~76.3%~~16.3%, to ~~$187.5~~$(218.0) million, compared to the nine months ended September 30, ~~2020.~~2021. The ~~decline~~decrease was driven by an increase in cost of personnel ~~including bonuses accrued in the current year versus lower to no bonuses accrued in the prior year~~ and other general and administrative expenses.

NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA is a non-GAAP financial measure and is defined as net income (loss), excluding income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger, acquisition and earn-out costs, certain legal costs, restructuring, severance and impairment charges, certain non-cash fair value adjustments, certain equity earnings, ~~COVID-19 related expenses,~~tax receivable agreements liability adjustment, and certain other items, including gains/losses on business divestitures, when applicable. Adjusted EBITDA margin is a non-GAAP financial measure defined as Adjusted EBITDA divided by Revenue.

Management believes that Adjusted EBITDA is useful to investors as it eliminates the significant level of non-cash depreciation and amortization expense that results from our capital investments and intangible assets recognized in business combinations, and improves comparability by eliminating the significant level of interest expense associated with our debt facilities, as well as income taxes, which may not be comparable with other companies based on our tax structure.

Adjusted EBITDA and Adjusted EBITDA margin are used as the primary bases to evaluate our consolidated operating performance.

Adjusted Net Income is a non-GAAP financial measure and is defined as net income (loss) attributable to Endeavor Group Holdings adjusted to exclude our share (excluding those relating to certain non-controlling interests) of the adjustments used to calculate Adjusted EBITDA, other than income taxes, net interest expense and depreciation, on an ~~after tax~~after-tax basis, the release of tax valuation allowances and other tax items.

Adjusted Net Income adjusts income or loss attributable to the Company for items that are not considered to be reflective of our operating performance. Management believes that such non-GAAP information is useful to investors and analysts as it provides a better understanding of the performance of our operations for the periods presented and, accordingly, facilitates the development of future projections and earnings growth prospects.

Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net Income have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

•

they do not reflect every cash expenditure, future requirements for capital expenditures, or contractual commitments;

•

Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt;

•

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net Income do not reflect any cash requirement for such replacements or improvements; and

•

they are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows.

We compensate for these limitations by using Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Net Income along with other comparative tools, together with GAAP measurements, to assist in the evaluation of operating performance.

Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Net Income should not be considered substitutes for the reported results prepared in accordance with GAAP and should not be considered in isolation or as alternatives to net (loss) income as indicators of our financial performance, as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our

obligations. Although we use Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Net Income as financial measures to assess the performance of our business, such use is limited because it does not include certain material costs necessary to operate our business. Our presentation of Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Net Income should not be construed as indications that our future results will be unaffected by unusual or nonrecurring items. These non-GAAP financial measures, as determined and presented by us, may not be comparable to related or similarly titled measures reported by other companies. Set forth below are reconciliations of our most directly comparable financial measures calculated in accordance with GAAP to these non-GAAP financial measures on a consolidated basis.

~~Table of Contents~~

Adjusted EBITDA

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2021

2020

2021

2020

Net income (loss)

$
63,613

$
(21,819
)

$
(450,778
)

$
(568,845
)
(Benefit from) provision for income taxes

(7,718
)

(941
)

58,285

43,614

Interest expense, net

55,783

71,277

207,970

212,954

Depreciation and amortization

71,661

76,471

208,058

241,669

Equity-based compensation expense (1)

60,885

20,602

464,393

37,577

Merger, acquisition and earn-out costs (2)

13,107

6,682

38,291

15,985

Certain legal costs (3)

(266
)

1,646

4,260

7,805

Restructuring, severance and impairment (4)

2,179

952

6,612

213,199

Fair value adjustment - Droga5 (5)

—

—

—

473

Fair value adjustment - equity investments (5)

90

(1,547
)

(13,614
)

4,212

Equity method losses - Learfield IMG College (6)

14,831

31,354

76,291

238,891

COVID-19 related costs (7)

—

426

—

2,829

Other (8)

9,152

(6,772
)

51,063

(50,367
)
Adjusted EBITDA

$
283,317

$
178,331

$
650,831

$
399,996

Net income (loss) margin

4.6
%

(2.5
%)

(12.6
%)

(22.6
%)
Adjusted EBITDA margin

20.4
%

20.6
%

18.2
%

15.9
%


	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2022			2021			2022			2021
Net (loss) income	$	(12,538	)	$	63,613		$	547,348		$	(450,778	)
Provision for (benefit from) income taxes		8,515			(7,718	)		(6,020	)		58,285
Interest expense, net		75,608			55,783			197,385			207,970
Depreciation and amortization		63,571			71,661			195,177			208,058
Equity-based compensation expense (1)		48,388			60,885			159,851			464,393
Merger, acquisition and earn-out costs (2)		30,529			13,107			57,891			38,291
Certain legal costs (3)		1,604			(266	)		11,204			4,260
Restructuring, severance and impairment (4)		869			2,179			2,829			6,612
Fair value adjustment - equity investments (5)		(291	)		90			(13,635	)		(13,614	)
Equity method losses - Learfield IMG College and Endeavor Content (6)		83,171			14,831			149,086			76,291
Gain on sale of the restricted Endeavor Content business(7)		—			—			(463,641	)		—
Tax receivable agreements liability adjustment (8)		10,405			—			61,497			—
Other (9)		(6,749	)		9,152			24,914			51,063
Adjusted EBITDA	$	303,082		$	283,317		$	923,886		$	650,831
Net (loss) income margin		(1.0	%)		4.6	%		13.7	%		(12.6	%)
Adjusted EBITDA margin		24.8	%		20.4	%		23.1	%		18.2	%

Adjusted Net Income

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2021

2020

2021

2020

Net income (loss)

$
63,613

$
(21,819
)

$
(450,778
)

$
(568,845
)
Net loss (income) attributable to non-controlling interests

(21,128
)

(58,430
)

141,980

(32,914
)
Net loss attributable to Endeavor Operating Company, LLC
prior to the reorganization transactions

—

—

31,686

—

Net income (loss) attributable to Endeavor Group Holdings, Inc.

42,485

—

(277,112
)

—

Net loss attributable to Endeavor Operating Company, LLC
prior to the reorganization transactions

—

(80,249
)

(601,759
)
Amortization

48,646

55,315

141,023

178,773

Equity-based compensation expense (1)

60,885

20,602

464,393

37,577

Merger, acquisition and earn-out costs (2)

13,107

6,682

38,291

15,985

Certain legal costs (3)

(266
)

1,646

4,260

7,805

Restructuring, severance and impairment (4)

2,179

952

6,612

213,199

Fair value adjustment - Droga5

—

—

—

473

Fair value adjustment - equity investments (5)

90

(1,547
)

(13,614
)

4,212

Equity method losses - Learfield IMG College (6)

14,831

31,354

76,291

238,891

COVID-19 related costs (7)

—

426

—

2,829

Other (8)

9,152

(6,772
)

51,063

(50,367
)
Tax effects of adjustments (9)

19,176

(6,960
)

90,407

(11,948
)
Other tax items (10)

—

—

17,608

32,338

Adjustments allocated to non-controlling interests (11)

(66,566
)

(13,051
)

(404,028
)

(52,744
)
Adjusted Net Income

$
143,719

$
8,398

$
195,194

$
15,264


	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2022			2021			2022			2021
Net (loss) income	$	(12,538	)	$	63,613		$	547,348		$	(450,778	)
Net (income) loss attributable to non-controlling interests		2,499			(21,128	)		(212,035	)		141,980
Net loss attributable to Endeavor Operating Company, LLC prior to the reorganization transactions		—			—			—			31,686
Net (loss) income attributable to Endeavor Group Holdings, Inc.		(10,039	)		42,485			335,313			(277,112	)
Amortization		39,153			48,646			123,449			141,023
Equity-based compensation expense (1)		48,388			60,885			159,851			464,393
Merger, acquisition and earn-out costs (2)		30,529			13,107			57,891			38,291
Certain legal costs (3)		1,604			(266	)		11,204			4,260
Restructuring, severance and impairment (4)		869			2,179			2,829			6,612
Fair value adjustment - equity investments (5)		(291	)		90			(13,635	)		(13,614	)
Equity method losses - Learfield IMG College and Endeavor Content (6)		83,171			14,831			149,086			76,291
Gain on sale of the restricted Endeavor Content business(7)		—			—			(463,641	)		—
Tax receivable agreements liability adjustment (8)		10,405			—			61,497			—
Other (9)		(6,749	)		9,152			24,914			51,063
Tax effects of adjustments (10)		(8,952	)		19,176			1,323			90,407
Other tax items (11)		(12,241	)		—			(65,924	)		17,608
Adjustments allocated to non-controlling interests (12)		(67,416	)		(66,566	)		(16,044	)		(404,028	)
Adjusted Net Income	$	108,431		$	143,719		$	368,113		$	195,194

(1)

Equity-based compensation represents primarily non-cash compensation expense associated with our equity-based compensation plans.

The decrease for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021 was primarily due to grants under the 2021 Incentive Award Plan that were issued in connection with the IPO.

The ~~increase~~decrease for the ~~three and~~ nine months ended September 30, ~~2021~~2022 as compared to the ~~three and~~ nine months ended September 30, ~~2020~~2021 was primarily due to modification of certain pre-IPO equity-based awards primarily to remove certain forfeiture and discretionary call terms as well as grants under the 2021 Incentive Award Plan that were issued in connection with the IPO.

Equity-based compensation was recognized in all segments and Corporate for the three and nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021.

(2)

Includes (i) certain costs of professional advisors related to mergers, acquisitions, dispositions or joint ventures and (ii) fair value adjustments for contingent consideration liabilities related to acquired businesses and compensation expense for deferred consideration associated with selling shareholders that are required to remain our employees.

Such costs for the three months ended September 30, 2022 primarily related to professional advisor costs, which were approximately $21 million and primarily related to our Events, Experiences & Rights segment and Corporate. Fair value adjustments for contingent consideration liabilities related to acquired businesses and acquisition earn-out adjustments were approximately $10 million, which primarily related to our Representation segment.

Such costs for the three months ended September 30, 2021 primarily related to professional advisor costs, which were approximately $9 million and primarily related to Corporate. Fair value adjustments for contingent consideration liabilities related to acquired businesses and acquisition earn-out adjustments ofwere approximately $4 million, which primarily related to our Representation and Events, Experiences & Rights segments.

Such costs for the ~~three~~nine months ended September 30, ~~2020~~2022 primarily related to professional advisor costs of approximately $33 million and related to all of our segments. Fair value adjustments for contingent consideration liabilities related to acquired businesses and acquisition earn-out adjustments ofwere approximately $6$25 million, which primarily related to our Representation segment. ~~Professional advisor costs were approximately $1 million primarily related to our Events, Experiences & Rights and Owned Sports Properties segments.~~

~~Table of Contents~~

Such costs for the nine months ended September 30, 2021 primarily related to fair value adjustments for contingent consideration liabilities related to acquired businesses and acquisition earn-out adjustments of approximately $24 million, which primarily related to our Events, Experiences & Rights and Representation segments. Professional advisor costs were approximately $14 million and primarily related to our Events, Experiences & Rights segment and Corporate.

Such costs for the nine months ended September 30, 2020 primarily related to professional advisor costs of approximately $10 million primarily related to our Events, Experiences & Rights and Representation segments. Fair value adjustments for contingent consideration liabilities related to acquired businesses and acquisition earn-out adjustments of approximately $6 million, which primarily related to our Representation segment.

(3)

Includes costs related to certain litigation or regulatory matters in each of our segments and Corporate.

(4)

Includes certain costs related to our restructuring activities and non-cash impairment charges.

Such costs for the three months ended September 30, 2022 primarily related to restructuring expenses in our Events, Experiences & Rights segment.

Such costs for the three months ended September 30, 2021 primarily ~~relates~~related to the impairment of goodwill in our Representation segment.

Such costs for the ~~three~~nine months ended September 30, ~~2020 included approximately $1 million for severance and restructuring expenses~~2022 primarily related to ~~COVID-19~~a write off of an asset in Corporate and the restructuring expenses in our Events, Experiences & Rights ~~segment.~~and Representation segments.

Such costs for the nine months ended September 30, 2021 primarily related to the impairment of goodwill in our Representation and Events, Experiences & Rights segments.

Such costs for the nine months ended September 30, 2020 included approximately $11 million related to the impairment of certain other assets and investments, approximately $175 million related to the impairment of intangible assets and approximately $27 million for severance and restructuring expenses, in each case primarily related to COVID-19, and primarily related to our Representation and Events, Experiences & Rights segments.

(5)

Includes the net change in fair value for certain equity investments with and without readily determinable fair values, based on observable price changes.

(6)

Relates to equity method losses, including impairment charges, from our investment in Learfield IMG College ~~following~~as well as losses from the ~~merger of our IMG College~~20% interest we retained in the restricted Endeavor Content business, ~~with Learfield~~which we sold in ~~December 2018.~~January 2022.

(7)

Relates to the gain recorded for the sale of the restricted Endeavor Content business, net of transactions costs of $15.0 million.

(8)

Includes ~~COVID-19 related costs that are non-recurring and incremental costs that would have otherwise not been incurred. Such~~the adjustment for the tax receivable agreements liability related to the expected realization of certain tax benefits after concluding that such TRA payments would be probable based on estimates of future taxable income over the terms of the TRAs.

(9)

For the three months ended September 30, ~~2020 does not include~~2022, other costs were comprised primarily of a gain of approximately $23 million related to the ~~write-off~~sale of $2DBH, which related to our Owned Sports Properties segment, losses of approximately $13 million on foreign exchange transactions, which related to all of ~~deferred event costs, net~~our segments and Corporate, a loss of ~~insurance recoveries,~~approximately $8 million related to non-cash fair value adjustments of embedded foreign currency derivatives, which ~~is adjusted in~~related primarily to our Events, Experiences & Rights segment, ~~profitability measure. Such adjustment for the nine months ended September 30, 2020 does not include the write-off~~and losses of $7approximately $4 million ~~of deferred event costs, net of insurance recoveries, which is adjusted in our Events, Experiences & Rights segment profitability measure.~~related to foreign exchange hedge contracts.

~~(8)~~

For the three months ended September 30, 2021, other costs were comprised primarily of losses of approximately $13 million on foreign exchange transactions, which related to all of our segments and Corporate, approximately a $2 million gain from an earnout related to the sale of an investment related to our Representation segment and a $2 million fee received from our Learfield IMG College investment in our Events, Experiences & Rights segment.

For the ~~three~~nine months ended September 30, ~~2020,~~2022, other costs were comprised primarily of losses of approximately $33 million on foreign exchange transactions, which related to all of our segments and Corporate, a gain of approximately ~~$17~~$23 million related to ~~sales~~the sale of ~~investments~~DBH, which related to our ~~Representation~~Owned Sports Properties segment, a loss of approximately $2$9 million related to non-cash fair value adjustments of embedded foreign ~~currency~~ derivatives, which related primarily to our Events, Experiences & Rights segment, and losses of approximately $7 million onrelated to foreign exchange ~~transactions,~~hedge contracts which related to ~~all of~~ our ~~segments~~Events, Experiences & Rights segment and Corporate.

For the nine months ended September 30, 2021, other costs were comprised primarily of approximately $29 million related to a loss on debt extinguishment, which related primarily to Corporate, losses of approximately $15 million on foreign exchange transactions, which related to all of our segments and Corporate, and a loss of approximately $10 million related to non-cash fair value adjustments of embedded foreign currency derivatives ~~and a $2 million fee received from our Learfield IMG College investment, both of which~~primarily related primarily to our Events, Experiences & Rights segment, approximately $2 million related to transaction costs associated with the repricing of the UFC Credit Facilities in our Owned Sports Properties segment and approximately a $2 million gain from an earnout related to the sale of an investment related to our Representation segment.

For the nine months ended September 30, 2020, other costs were comprised primarily of a gain of approximately $27 million related to the consolidation of a previously held equity interest in FC Diez Media, a gain of approximately $15 million related to the sale of an investment, a gain of approximately $8 million associated with the deconsolidation of Asian Tour Media Pte. Ltd., a gain of approximately $11 million related to non-cash fair value adjustments of embedded foreign currency derivatives and an approximately $4 million increase related to purchase price adjustments to deferred revenue and ticket inventory at On Location, all of which related primarily to our Events, Experiences & Rights segment.

~~(9)~~(10)

Reflects the tax ~~impacts with respect to each adjustment noted above by applying the annual effective tax rate, as applicable with the exception~~effect of the ~~equity method losses recorded from our investment in Learfield IMG College, which is calculated on a discrete basis.~~adjustments noted above.

~~(10)~~(11)

Such items for the three and nine months ended September 30, 2022 reflects the release of a valuation allowance on deferred tax assets due to the expected realization of certain tax benefits in connection with a TRA liability. Such items for the nine months ended September 30, 2021 includes $7.4 million of deferred tax liabilities associated with indefinite lived intangibles recorded as a result of the IPO ~~associated with indefinite lived intangibles~~ and tax expense of $10.2 million related to a change in tax rate in the United Kingdom. ~~Such items for the nine months ended September 30, 2020 relate to a $32.3 million tax expense recorded as a result of acquisitions and subsequent tax restructurings.~~

~~Table of Contents~~

~~(11)~~(12)

Prior to the IPO and associated reorganization transactions, reflects the share of adjustments attributable to the non-controlling interests in UFC. Subsequent to the IPO and associated reorganization transactions, reflects the share of adjustments attributable to the non-controlling interests of certain former members of Endeavor Operating Company who retain ownership interests in Endeavor Manager and Endeavor Operating Company.

LIQUIDITY AND CAPITAL RESOURCES

Historical liquidity and capital resources s~~ources~~

Sources and uses of cash

Cash flows from operations have historically funded our day-to-day operations, revenue-generating activities, and routine capital expenditures, as well as serviced our long-term debt. Our other principal use of cash has been the acquisition of businesses, which have historically been funded primarily through equity contributions from our pre-IPO institutional investors, ~~and~~ the issuance of long-term ~~debt.~~

debt and proceeds received from our initial public offering and private placement.

Debt facilities

As of September 30, ~~2021,~~2022, we had an aggregate of ~~$5.0~~$5.3 billion outstanding indebtedness under our first lien credit agreement entered into by certain of our subsidiaries in May 2014 in connection with the acquisition of IMG (as amended, restated, modified and/or supplemented from time to time, the ~~“Credit Facilities”~~"Credit Facilities") and UFC Holdings, LLC’s term loan and revolving credit facilities (the ~~“UFC~~"UFC Credit ~~Facilities”~~Facilities" and, collectively with the Credit Facilities, the ~~“Senior~~"Senior Credit ~~Facilities”~~Facilities"). As of September 30, ~~2021~~2022, we had ~~available~~total borrowing capacity of ~~approximately $370~~$405 million under the Senior Credit ~~Facilities.~~Facilities, of which approximately $376 million was available to borrow.

Credit Facilities

As of September 30, ~~2021,~~2022, we have borrowed an aggregate of ~~$2.8~~$2.5 billion of term loans under the Credit Facilities. The loans bear interest at a variable interest rate equal to either, at our option, adjusted LIBOR or the Alternate Base Rate (the ~~“ABR”~~"ABR") plus, in each case, an applicable margin. LIBOR term loans accrue interest at a rate equal to adjusted LIBOR plus 2.75%, with a LIBOR floor of 0.00%. ABR term loans accrue interest at a rate equal to (i) the highest of (a) the Federal Funds Effective Rate plus 0.5%, (b) the prime rate, (c) adjusted LIBOR for a one-month interest period plus 1.00% and (d) 1.00%, plus (ii) 1.75%. The term loans under the Credit Facilities include 1% principal amortization payable in equal quarterly installments and mature on May 18, 2025.

In September 2022, we repaid $250.0 million of term loans under the Credit Facilities.

In May 2020, we issued $260.0 million as a separate tranche of term loans, which accrued interest at a rate equal to adjusted LIBOR plus 8.50%, with a LIBOR floor of 1%. OnIn June ~~29,~~ 2021, we repaid the outstanding principal of $256.7 million as well as associated fees and expenses incurred due to early redemption of $28.6 million.

OnIn May ~~20,~~ 2019, we executed $1.5 billion in interest rate hedges to swap a portion of our debt from floating interest expense to fixed. The LIBOR portion of the facility has been fixed at a coupon of 2.12% ~~for five years~~ commencing from June 2019 until June 2024. In August 2022, the Company entered into $750 million of an additional interest rate hedge to swap a portion of our debt from floating interest expense to fixed. The LIBOR portion of the facility has been fixed at a coupon of 3.162% commencing from August 2022 until August 2024. As of September 30, ~~2021,~~2022, approximately ~~54%~~90% of our ~~Term Loans~~term loans is hedged. See Note ~~12, “Debt”~~10, "Debt" to our unaudited consolidated financial statements included elsewhere in this Quarterly Report for further detail on the Credit Facilities.

As of September 30, ~~2021,~~2022, we have the option to borrow incremental term loans in an aggregate amount equal to at least $550.0 million, subject to market demand, and may be able to borrow additional funds depending on our First Lien Leverage Ratio (as defined under the Credit Facilities). The credit agreement governing our Credit Facilities includes certain mandatory prepayment provisions relating to, among other things, the incurrence of additional debt.

The Credit Facilities also include a revolving credit facility which has $200.0 million of capacity with letter of credit and swingline loan sub-limits of up to $75.0 million and $20.0 million, respectively. Revolving credit facility borrowings under the Credit Facilities bear interest at a variable interest rate equal to either, at our option, adjusted LIBOR or the ABR plus, in each case, an applicable margin. LIBOR revolving loans accrue interest at a rate equal to adjusted LIBOR plus 2.00-2.50%, depending on the First Lien Leverage Ratio, with a LIBOR floor of 0.00%. ABR revolving loans accrue interest at a rate equal to (i) the highest of (a) the Federal Funds Effective Rate plus 0.50%, (b) the prime rate, (c) adjusted LIBOR for a one-month interest period plus 1.00% and (d) 1.00%, plus (ii) 1.00-1.50%, depending on the First Lien Leverage Ratio. We pay Letter of Credit fees of 0.125% and a commitment fee of 0.25-0.50%, based on our First Lien Leverage Ratio. On June 29, 2021, we repaid $163.1 million under the revolving credit facility. As of September 30, ~~2021,~~2022, we had no borrowings outstanding under this revolving credit facility and outstanding letters of credit of ~~$26.0~~$19.3 million. The revolving facility matures on May 18, 2024.

The revolving facility under the Credit Facilities is subject to a financial covenant if greater than 35% of the borrowing capacity of the revolving credit facility is utilized (excluding cash collateralized letters of credit and non-cash collateralized letters of credit of up to $50.0 million) at the end of each quarter. This covenant was not applicable on September 30, ~~2021,~~2022, as we had no ~~borrowing~~borrowings outstanding under the revolving credit facility.

In April 2021, we entered into an amendment to the credit agreement governing the Credit Facilities to, among other things, waive the financial covenant for the test periods ending June 30, 2021, September 30, 2021 and December 31, 2021.

The Credit Facilities contain certain restrictive covenants around indebtedness, liens, fundamental changes, guarantees, investments, asset sales, and transactions with affiliates.

4541

~~Table of Contents~~

The borrower’s obligations under the Credit Facilities are guaranteed by certain of our indirect wholly-owned domestic restricted subsidiaries, subject to certain exceptions. All obligations under the Credit Facilities and the related guarantees are secured by a perfected first priority lien on substantially all of the borrower’s and the guarantors’ tangible and intangible assets, in each case, subject to permitted liens and certain exceptions.

UFC Credit Facilities

As of September 30, ~~2021,~~2022, we have borrowed an aggregate of ~~$2.2~~$2.8 billion of first lien term loans under the UFC Credit Facilities. Following a repricing under the UFC Credit Facilities in January 2021, borrowings under the UFC Credit Facilities bear interest at a variable interest rate equal to either, at our option, adjusted LIBOR or the ABR plus, in each case, an applicable margin. LIBOR term loans accrue interest at a rate equal to an adjusted LIBOR plus 2.75%-3.00%, depending on the First Lien Leverage Ratio, in each case with a LIBOR floor of 0.75%. ABR term loans accrue interest at a rate equal to (i) the highest of (a) the Federal Funds Effective Rate plus 0.5%, (b) the prime rate, (c) adjusted LIBOR for a one-month interest period plus 1.00% and (d) 1.75%, plus (ii) 1.75%-2.00%. The term loans under the UFC Credit Facilities include 1.00% principal amortization payable in equal quarterly installments and mature on April 29, 2026. See Note ~~12, “Debt” and Note 22, "Subsequent Events"~~10, "Debt" to our unaudited consolidated financial statements included elsewhere in this Quarterly Report for further detail on the UFC Credit Facilities.

As of September 30, ~~2021,~~2022, we have the option to borrow incremental loans in an aggregate amount equal to at least $455.0 million, subject to market demand, and may be able to borrow additional funds depending on our First Lien Leverage Ratio (as defined under the UFC Credit Facilities). The credit agreement governing the UFC Credit Facilities includes certain mandatory prepayment provisions relating to, among other things, the incurrence of additional debt. On June 29, 2021, we repaid $180.2 million of first lien term loans under the UFC Credit Facilities. On October 27, 2021, we amended the facility to provide for a $600 million term loan, which we borrowed in full.

The UFC Credit Facilities also include a revolving credit facility, which has $205.0 million of total borrowing capacity and letter of credit and swingline loan sub-limits of up to $40.0 million and $15.0 million, respectively. Revolving credit facility borrowings under the UFC Credit Facilities bear interest at a variable interest rate equal to either, at our option, adjusted LIBOR or ABR plus, in each case, an applicable margin. LIBOR revolving loans accrue interest at a rate equal to an adjusted LIBOR plus 3.50-4.00%, depending on the First Lien Leverage Ratio, in each case with a LIBOR floor of 0.00%. ABR revolving loans accrue interest at a rate equal to (i) the highest of (a) the Federal Funds Effective Rate plus 0.50%, (b) the prime rate, (c) adjusted LIBOR for a one-month interest period plus 1.00% and (d) 1.00%, plus (ii) 2.50-3.00%, depending on the First Lien Leverage Ratio. We pay a commitment fee on the revolving credit facility under the UFC Credit Facilities of 0.25-0.50%, based on the First Lien Leverage Ratio and Letter of Credit fees of 0.125%. As of September 30, ~~2021,~~2022, we had no borrowings outstanding under this revolving credit facility and outstanding letters of credit of $10.0 million. The revolving facility under the UFC Credit Facilities matures on April 29, 2024.

The revolving facility under the UFC Credit Facilities is subject to a financial covenant if greater than 35% of the borrowing capacity of the revolving credit facility (excluding cash collateralized letters of credit and non-cash collateralized letters of credit of up to $10.0 million) is utilized at the end of any fiscal quarter. This covenant was not applicable on September 30, ~~2021,~~2022, as we had no borrowings outstanding under this revolving credit facility.

The UFC Credit Facilities contain certain restrictive covenants around indebtedness, liens, fundamental changes, guarantees, investments, asset sales and transactions with affiliates.

The borrower’s obligations under the UFC Credit Facilities are guaranteed by certain of UFC Parent’s indirect wholly-owned domestic restricted subsidiaries, subject to certain exceptions. All obligations under the UFC Credit Facilities and the related guarantees are secured by a perfected first priority lien on substantially all of the borrower’s and the guarantors’ tangible and intangible assets, in each case, subject to permitted liens and certain exceptions.

Restrictions on dividends

Both the Credit Facilities and the UFC Credit Facilities contain restrictions on our ability to make distributions and other payments from the respective credit groups and which therefore limit our ability to receive cash from our operating units to make dividends to the holders of Class A common stock. These restrictions on dividends include exceptions for, among other things, (1) amounts necessary to make tax payments, (2) a limited annual amount for employee equity repurchases, (3) distributions required to fund certain parent entities, (4) other specific allowable situations and (5) a general restricted payment basket, as defined in each of the Credit Facilities and the UFC Credit Facilities.

Other debt

As of September 30, ~~2021,~~2022, we had certain other revolving line of credit facilities and long-term debt liabilities, primarily related to ~~Endeavor Content and~~ On Location, with total committed amounts of ~~$528.7~~$62.9 million, of which ~~$233.0~~$13.0 million was outstanding and ~~$123.0~~$49.9 million was available for borrowing based on the supporting asset base. Such facilities have maturity dates in 2023 and ~~2026,~~2025, bearing interest at rates ~~ranging from 1.75% to~~of 2.75%. plus LIBOR.

Other debt includes our Endeavor Content facility (the “Endeavor Content Facility,” which is an asset-based facility (“ABL”) used to fund television and film production). As of September 30, 2021, our Endeavor Content Facility had total capacity of $430.0 million, and we had $204.6 million borrowed. Our ability to borrow under the facility depends on there being sufficient borrowing base capacity, which in turn depends on the number and size of productions we are engaged in and the value of future receipts for the productions. The amounts borrowed under the facility will increase if we enter into additional productions, or decrease if we reduce our production activity. The Endeavor Content Facility matures on March

~~Table of Contents~~

31, 2025. In July 2021, the capacity under the Endeavor Content Facility was increased from $325.0 million to $430.0 million. The outstanding borrowings under this facility have been classified as assets held for sale as of September 30, 2021.

~~Other debt also includes our~~ On Location revolving credit agreement ~~which~~ has $42.9 million of total borrowing capacity and letter of credit and swingline loan sub-limits of up to $3.0 million each (the ~~“OL~~"OL Credit ~~Facility”~~Facility"). As of September 30, ~~2021,~~2022, we had no borrowings outstanding under the OL Credit Facility and no letters of credit outstanding. The OL Credit Facility matures on February 27, 2025. In August, On Location increased its borrowing capacity under its revolving credit agreement from $20.0 million to $42.9 million and the maturity date was extended from February 2025 to the earlier of August 2026 or the date that is 91 days prior to the maturity date of the term loans under the Credit Facilities.

~~Both the Endeavor Content Facility and the~~ The OL Credit Facility ~~contain~~contains restrictions that are substantially similar to those in the Credit Facilities and the UFC Credit Facilities.

Cash Flows Overview

Nine months ended September 30, ~~2021~~2022 and ~~2020~~2021

Nine Months Ended September 30,

(in thousands)
2021

2020

Net income, adjusted for non-cash items
$
741,224

$
183,401

Changes in working capital

64,987

131,478

Changes in non-current assets and liabilities

(618,142
)

(208,919
)
Net cash provided by operating activities
$
188,069

$
105,960

Net cash used in investing activities
$
(408,630
)

$
(323,843
)
Net cash provided by financing activities
$
371,055

$
473,305


	Nine Months Ended September 30,
(in thousands)	2022			2021
Net income, adjusted for non-cash items	$	662,590		$	741,224
Changes in working capital		(291,564	)		64,987
Changes in non-current assets and liabilities		34,143			(618,142	)
Net cash provided by operating activities	$	405,169		$	188,069
Net cash used in investing activities	$	(661,049	)	$	(408,630	)
Net cash (used in) provided by financing activities	$	(268,171	)	$	371,055

Operating activities ~~changed~~increased from ~~$106.0 million of cash provided in the nine months ended September 30, 2020 to~~ $188.1 million of cash provided in the nine months ended September 30, ~~2021.~~2021 to $405.2 million of cash provided in the nine months ended September 30, 2022. Cash provided in the nine months ended September 30, 2022 was primarily due to net income, adjusted for non-cash items, of $669.1 million offset by the increase in accounts receivable of $299.4 million due to timing of events and the decrease in deferred revenue of $43.6 million due to events taking place in 2022, such as Super Bowl LVI and various music events. Cash provided in the nine months ended September 30, 2021 primarily represents a ~~smaller~~ net loss of $450.8 million from the continued recovery from COVID-19 and higher amortization of content costs of $319.8 million from content deliveries at Endeavor Content partially offset by an increase in other assets of $699.7 million from additional investments in Endeavor Content film assets. Cash provided in the nine months ended September 30, 2020 primarily represents a decrease in accounts receivable and deferred costs of $263.8 million and $71.6 million due to the adverse impact from COVID-19 resulting in changes to the timing of collections and payments from modified event and media rights schedules.

Investing activities ~~changed~~increased from ~~$323.8 million of cash used in the nine months ended September 30, 2020 to~~ $408.6 million of cash used in the nine months ended September 30, ~~2021.~~2021 to $661.1 million of cash used in the nine months ended September 30, 2022. Cash used in the nine months ended September 30, 2022 primarily reflects payments for acquisitions of businesses, primarily for OpenBet, Madrid Open and Barrett Jackson of $1,434.5 million as well as capital expenditures and investments in non-controlled affiliates totaling $141.5 million offset by net cash proceeds received from the sale of the restricted Endeavor Content business and the sale of DBH of $910.8 million. Cash used in the nine months ended September 30, 2021 primarily reflects payments for acquisitions of businesses, primarily for NCSA, Mailman and FlightScope, of $258.5 million, and investments in non-controlled affiliates, primarily Learfield IMG College, of $139.7 million. Cash used in the nine months ended September 30, 2020 primarily reflects payments for acquisitions of businesses, primarily On Location, of $314.7 million, capital expenditures of $59.9 million and investments in non-controlled affiliates of $33.0 million.

Financing activities ~~changed~~decreased from ~~$473.3 million of cash provided in the nine months ended September 30, 2020 to~~ $371.1 million of cash provided in the nine months ended September 30, ~~2021.~~2021 to $268.2 million of cash used in the nine months ended September 30, 2022. Cash used in the nine months ended September 30, 2022 primarily reflects net payments on debt of $314.0 million as well as distributions, payments of contingent consideration related to acquisitions and redemption of certain pre-IPO equity interests totaling $45.7 million offset by net cash proceeds received in connection with the acquisition of non-controlling interests of $92.5 million. Cash provided in the nine months ended September 30, 2021 primarily reflects proceeds from the equity offerings, net of underwriting discounts, primarily from the IPO and private placements, of $1,886.6 million partially offset by $835.7 million used for the UFC Buyout and net payments on debt of $654.9 million. ~~Cash provided in the nine months ended September 30, 2020 primarily reflects net proceeds from debt of $591.4 million partially offset by distributions of $83.5 million primarily made by UFC.~~

Future sources and uses of liquidity

Our sources of liquidity are (1) cash on hand, (2) cash flows from operations, (3) available borrowings under our Senior Credit Facilities ~~including $600 million that was borrowed in October 2021~~ (which borrowings would be subject to certain restrictive covenants contained therein) and (4) proceeds from ~~the~~ potential ~~sale of the restricted Endeavor Content business.~~divestitures. Based on our current expectations, we believe that these sources of liquidity will be sufficient to fund our working capital requirements and to meet our commitments, including long-term debt service for at least the next 12 months. However, the ongoing COVID-19 pandemic has had and continues to have a significant impact on cash flows from operations. We expect that the impact of COVID-19 on revenue and cash flows will vary, but will generally depend on the duration of the pandemic, the extent and effectiveness of mass vaccinations, emerging variants of the virus, additional actions that may be taken by governmental authorities, changes in consumer preferences towards our business and the industries in which we operate and additional postponements or cancellation of live sporting events and other in person events.

Our cash and cash equivalents consist primarily of cash on deposit with banks and liquid investments in money market funds. As of September 30, 2021, cash and cash equivalents totaled $1,028.7 million, including cash held at non-wholly owned consolidated subsidiaries where cash distributions may be subject to restriction under applicable operating agreements or debt agreements and, due to such restrictions, may not be readily available to service obligations outside of those subsidiaries. These balances, which primarily consist of Endeavor China and On Location were $118.9 million as of September 30, 2021.

We expect that our primary liquidity needs will be cash to (1) provide capital to facilitate organic growth of our business, (2) fund future investments, acquisitions, ~~(including OpenBet)~~ and ~~settle acquisition~~ earn-outs and deferred purchase price payments from prior acquisitions, (3) pay operating expenses, including cash

~~Table of Contents~~

compensation to our employees, (4) fund capital expenditures, (5) pay interest and principal when due on our Senior Credit Facilities, (6) make payments under the tax receivable agreements, (7) pay income taxes, (8) ~~repurchase employee equity (9)~~ make distributions to members and ~~stockholders and (10) reduce our outstanding indebtedness under our Senior Credit Facilities.~~

(9) an expected additional $250 million reduction of debt by the end of 2022.

We expect to refinance the Senior Credit Facilities prior to the maturity of the outstanding loans with the first maturity for outstanding term loans under the Senior Credit Facilities occurring in 2025. We currently anticipate being able to secure funding for such refinancing at favorable ~~terms,~~terms; however, our ability to do so may be impacted by many factors, including our growth and other factors specific to our business as well as ~~macro- economic~~macro-economic factors beyond our ~~control, including as a result of COVID-19.~~

control.

Tax distributions by Endeavor Operating Company

Other than as described below, we expect to retain all our future earnings for use in the operation and expansion of our business and do not anticipate paying any cash dividends for the foreseeable future.

Subject to funds being legally available, we expect that Endeavor Operating Company will make distributions to each of its members, including the Endeavor Profits Units holders and Endeavor Manager, in amounts sufficient to pay applicable taxes attributable to each member’s allocable share of taxable income of Endeavor Operating Company. Tax distributions made in respect of Endeavor Operating Company Units (but not Endeavor Profits Units) will generally be made pro rata in respect of such Units, as described in the Endeavor Operating Company LLC Agreement. However, in certain situations, tax distributions made to Endeavor Manager may be reduced (relative to those tax distributions made to the other members of Endeavor Operating Company) to reflect the income tax rates to which Endeavor Manager and Endeavor Group Holdings are subject and certain other factors. Non pro-rata tax distributions may be paid to holders of Endeavor ~~Profit~~Profits Units.

Tax Receivable Agreements

Generally, we are required under the tax receivable agreements to make payments to certain persons that held direct or indirect interest in EOC and UFC Parent prior to the IPO ("TRA ~~Holders~~Holders") that are generally equal to 85% of the applicable cash tax savings, if any, in U.S. federal, state and local income tax or franchise tax that we realize or are deemed to realize (determined by using certain assumptions) as a result of favorable tax attributes that will be available to us as a result of certain transactions contemplated in connection with our IPO, exchanges of Endeavor Operating Company Units for Class A common stock or cash and payments made under the tax receivable agreements. We will generally be entitled to retain the remaining 15% of these cash tax savings. Payments will be due only after we have filed our U.S. federal and state income tax returns. ~~The first payment would be due after the filing of our tax return for the year ending December 31, 2021, which is due April 15, 2022, but the due date can be extended until October 15, 2022.~~ Payments under the tax receivable agreements will bear interest from the due date of the tax return reflecting the applicable tax benefits. We currently expect to fund these payments from cash flows from operations generated by our subsidiaries as well as from excess tax distributions that we receive from our subsidiaries.

The amounts payable under the tax receivable agreements will vary depending upon a number of factors, including the amount, character and timing of the taxable income of EGH in the future. If the existing valuation allowance recorded against deferred tax assets is released in a future period as a result of having sufficient taxable income, among other criteria, or other tax attributes subject to the tax receivable agreements are determined to be payable, additional tax receivable agreements liabilities may be recorded. We continue to evaluate the possibility that during 2022, the relevant criteria may be met, and at that time, we would release a valuation allowance, which such benefit may exceed $700 million. In addition, we would record the associated tax receivable agreements liability, which if based on all exchanges that have occurred as of September 30, 2022, would exceed $900 million.

Under the tax receivable agreements, as a result of certain types of transactions or occurrences, including a transaction resulting in a change of control or a material breach of our obligations under the tax receivable agreements, we may also be required to make payments to the TRA Holders in amounts equal to the present value of future payments we are obligated to make under the tax receivable agreements. If the payments under the tax receivable agreements are accelerated, we may be required to raise additional debt or equity to fund such payments. To the extent that we are unable to make payments under the tax receivable agreements as a result of having insufficient funds (including because our credit agreements restrict the ability of our subsidiaries to make distributions to us) such payments will generally be deferred and will accrue interest until paid.

Critical Accounting Estimates

For a description of our policies regarding our critical accounting estimates, see ~~“Critical~~"Critical Accounting Policies and ~~Estimates”~~Estimates" in ~~the Prospectus.~~our 2021 Annual Report. During the nine months ended September 30, ~~2021,~~2022, there were no significant changes in our critical accounting policies and estimates or the application or the results of the application of those policies to our unaudited consolidated financial statements from those previously ~~disclosed.~~

disclosed in the 2021 Annual Report.

Recent Accounting Standards

See Note 3 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report for further information on certain accounting standards that have been recently adopted or that have not yet been required to be implemented and may be applicable to our future operations.

~~Off-Balance Sheet Arrangements~~

We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our unaudited consolidated financial statements except for those described under “Contractual Obligations, Commitments and Contingencies” below.

~~Contractual Obligations, Commitments and Contingencies~~

As described in Note 20 to our unaudited consolidated financial statements, during 2021, we entered into new arrangements increasing our purchase/guarantee agreements by $1.3 billion, which will be due in 2021 through 2028. There have been no other material changes to our contractual obligations disclosed in the Prospectus.

~~Table of Contents~~

Item 3. Quantitative and Qualitative Disclosures ~~about~~About Market Risk

Interest rate risk

Our exposure to changes in interest rates relates primarily to the floating interest component on our long-term debt. The Senior Credit Facilities bear interest at floating rates and we regularly monitor and manage interest rate risks. ~~$1.5~~$2.25 billion of our Senior Credit Facilities have been swapped to fixed rates. For the remainder, holding debt levels constant, ~~as of September 30, 2021,~~ a 1% increase in the effective interest rates would have increased our annual interest expense by ~~$39 million.~~

$32 million for the nine months ended September 30, 2022.

Certain tenors of LIBOR ~~will be eliminated at the end of~~were discontinued on December 31, 2021 and the remaining tenors are expected to be discontinued on or after June 30, 2023. Our loans are benchmarked off LIBOR tenors, including 1 month and 3 month LIBOR, expiring in June 2023. Our Credit Agreement includes fallback language for the new standard benchmark rate that will be offered, Secured Overnight Financing Rate ~~“SOFR”.~~"SOFR." We cannot quantify the impact of LIBOR’s replacement benchmark rate at this time.

Foreign currency risk

We have operations in several countries outside of the United States, and certain of our operations are conducted in foreign currencies, principally the British Pound and the Euro. The value of these currencies fluctuates relative to the U.S. dollar. These changes could adversely affect the U.S. dollar equivalent of our non-U.S. dollar revenue and operating costs and expenses and reduce international demand for our content and services, all of which could negatively affect our business, financial condition and results of operations in a given period or in specific territories.

Holding other variables constant (such as interest rates and debt levels), if the U.S. dollar appreciated by 10% against the foreign currencies used by our operations in the nine months ended September 30, ~~2021,~~2022, revenues would have decreased by approximately ~~$94.7~~$72.6 million and operating income would have improved by approximately ~~$7.5~~$0.6 million.

We regularly review our foreign exchange exposures that may have a material impact on our business and from time to time use foreign currency forward exchange contracts or other derivative financial instruments to hedge the effects of potential adverse fluctuations in foreign currency exchange rates arising from these exposures. We do not enter into foreign exchange contracts or other derivatives for speculative purposes.

Item 4. Control Procedures

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

The Company’s management has evaluated, with the participation of the chief executive officer and the chief financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on this evaluation, the chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of September 30, ~~2021.~~

2022.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

From time to time we may be involved in claims and proceedings arising in the course of our business. The outcome of any such claims or proceedings, regardless of the merits, is inherently uncertain. For a description of our legal proceedings, see Note 2016 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report.

Item 1A. Risk Factors

Our business, financial condition and operating results can be affected by a number of factors, whether current known or unknown, including but not limited to those described as risk factors, any one or more of which could, directly or indirectly, cause our actual operating results and financial condition to vary materially from past, or anticipated future, operating results and financial condition. For a discussion of these potential risks and uncertainties, see Part I, Item 1A. "Risk Factors" in our 2021 Annual Report and Part II, Item 1A. ~~“Risk Factors” of~~"Risk Factors" in our Quarterly Report on Form 10-Q for the quarterly period ended ~~March 31, 2021~~ ~~and of~~ ~~Amendment No.1 to our Quarterly Report on Form 10-Q/A for the quarterly period ended~~ June 30, ~~2021~~2022, which risk factors are incorporated

~~Table of Contents~~

herein by reference. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and the price of our common stock. Other than the risk factors set forth below, there have been no material changes in our risk factors to those included in our 2021 Annual Report.

50Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Except as previously disclosed in the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 11, 2022 in connection with an acquisition, no unregistered sales of the Company's equity securities were made during the three months ended September 30, 2022. The shares of Class A common stock relating to such acquisition were offered and sold in private placements exempt from registration under Section 4(a)(2) of the Securities Act.

Item 5. Other Information

On November 8, 2022, Christian Muirhead ceased performing the functions and responsibilities of chief communications officer and, in his capacity of Co-Chairman of WME Talent Agency, reports solely to Mark Shapiro, the Company’s President, resulting in Mr. Muirhead ceasing to be an executive officer of the Company. In connection with the foregoing, on November 8, 2022, Mr. Muirhead’s employment agreement, dated as of April 19, 2022, was amended to reflect these changes (the “Amendment”).

The foregoing summary of the Amendment is not complete and is qualified in its entirety by reference to the Amendment, a copy of which is attached hereto as Exhibit 10.2 and incorporated herein by reference.

~~Table of Contents~~

Item 6. Exhibits

Exhibit Number
Description
Form
File No.
Exhibit
Filing Date
Filed/Furnished Herewith
2.1#
Equity Purchase Agreement, dated September 27, 2021, by and among Endeavor Group Holdings, Inc., Endeavor Operating Company LLC and Scientific Games Company
8-K
001-40373
2.1
09/28/2021

3.1
Amended and Restated Certificate of Incorporation of Endeavor Group Holdings, Inc.
10-Q
001-40373
3.1
06/02/2021

3.2
Amended and Restated Bylaws of Endeavor Group Holdings, Inc.

*

4.1
Specimen Stock Certificate
S-1
333-254908
4.1
03/31/2021

10.1
Amendment No. 1, dated August 12, 2021 to Revolving Credit Agreement dated February 27, 2020, among Endeavor OLE Buyer, LLC, On Location Events, LLC, PrimeSport Holdings, Inc., and JP Morgan Chase Bank, N.A., as administrative agent, and the lenders party thereto.
10-Q
001-40373
10.24
08/16/2021

10.2
Eighth Amendment, dated October 27, 2021, to the First Lien Credit Agreement, dated as of August 18, 2016 among Zuffa Guarantor, LLC, UFC Holdings, LLC, Goldman Sachs Bank USA, as administrative agent, and the lenders party thereto, as amended.
8-K
001-40373
10.1
10/27/2021

31.1
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*

31.2
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*

32.1
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

**

32.2
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

**

101.INS
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

*

101.SCH
Inline XBRL Taxonomy Extension Schema Document

*

101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document

*

101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document

*

101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document

*

101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document

*

104
Cover Page Interactive Data File – formatted as Inline XBRL and contained in Exhibit 101

*


Exhibit Number	Description	Form	File No.	Exhibit	Filing Date	Filed/Furnished Herewith
3.1	Amended and Restated Certificate of Incorporation of Endeavor Group Holdings, Inc.	10-Q	001-40373	3.1	06/02/2021

3.2	Amended and Restated Bylaws of Endeavor Group Holdings, Inc.	10-Q	001-40373	3.2	11/15/2021

4.1	Specimen Stock Certificate	S-1	333-254908	4.1	03/31/2021

10.1†	Amendment No. 2 to the Equity Purchase Agreement, dated August 2, 2022 by and among Endeavor Group Holdings, Inc., Endeavor Operating Company, LLC and Light & Wonder, Inc.	10-Q	001-40373	10.2	08/12/2022

10.2	Amendment, dated November 8, 2022, to Term Employment Agreement by and among Endeavor Group Holdings, Inc., Endeavor Operating Company, LLC and Christian Muirhead, dated April 19, 2021					*

31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					*

31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					*

32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					**

32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					**

101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document					*

101.SCH	Inline XBRL Taxonomy Extension Schema Document					*

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document					*

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document					*

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document					*

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document					*

104	Cover Page Interactive Data File – formatted as Inline XBRL and contained in Exhibit 101					*

* Filed herewith

** Furnished herewith

#† Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The ~~Registrant~~Company undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.

~~Table of Contents~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		ENDEAVOR GROUP HOLDINGS, INC.

Date: November ~~15, 2021~~10, 2022	By:		/s/ Ariel Emanuel
			Ariel Emanuel
			Chief Executive Officer
			(Principal Executive Officer)

Date: November ~~15, 2021~~10, 2022	By:		/s/ Jason Lublin
			Jason Lublin
			Chief Financial Officer
			(Principal Financial Officer)


Delaware	83-3340169
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.00001 per share	EDR	The New York Stock Exchange


Part I – FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)	43
Consolidated Balance Sheets as of September 30, ~~2021~~2022 and December 31, ~~2020~~2021	43
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021	4
Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2022 and 2021	5
Consolidated Statements of ~~Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2021 and 2020~~	6
~~Consolidated Statements of~~ Redeemable Interests and Shareholders’/ ~~Members’~~Members' Equity for the Three and Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021	98
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021	1011
Notes to Consolidated Financial Statements	1112
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3330
Item 3. Quantitative and Qualitative Disclosures ~~about~~About Market Risk	4944
Item 4. Controls and Procedures	4945
Part II – OTHER INFORMATION
Item 1. Legal Proceedings	4945
Item 1A. Risk Factors	4945
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 5. Other Information	45
Item 6. Exhibits	5146


	September 30,			December 31,
	2021			2020
ASSETS
Current Assets:
Cash and cash equivalents	$	1,028,709		$	1,008,485
Restricted cash		250,021			181,848
Accounts receivable (net of allowance for doubtful accounts of $60,278 and $67,975, respectively)		639,429			445,778
Deferred costs		230,305			234,634
Assets held for sale		960,677			0
Other current assets		200,959			194,463
Total current assets		3,310,100			2,065,208
Property and equipment, net		598,433			613,139
Operating lease right-of-use assets		363,040			386,911
Intangible assets, net		1,554,108			1,595,468
Goodwill		4,415,891			4,181,179
Investments		285,842			251,078
Other assets		203,444			540,651
Total assets	$	10,730,858		$	9,633,634
LIABILITIES, REDEEMABLE INTERESTS AND SHAREHOLDERS'/MEMBERS' EQUITY
Current Liabilities:
Accounts payable	$	556,179		$	554,260
Accrued liabilities		503,953			322,749
Current portion of long-term debt		75,858			212,971
Current portion of operating lease liabilities		60,643			58,971
Deferred revenue		636,531			606,530
Deposits received on behalf of clients		235,308			176,572
Liabilities held for sale		548,846			0
Other current liabilities		89,805			65,025
Total current liabilities		2,707,123			1,997,078
Long-term debt		5,032,543			5,712,834
Long-term operating lease liabilities		364,608			395,331
Other long-term liabilities		371,902			373,642
Total liabilities		8,476,176			8,478,885
Commitments and contingencies (Note 20)
Redeemable non-controlling interests		208,890			168,254
Redeemable equity		0			22,519
Shareholders'/Members' Equity:
Class A common stock, $.00001 par value; 5,000,000,000 shares authorized; 261,970,674 shares issued and outstanding as of September 30, 2021		2			0
Class B common stock, $.00001 par value; 5,000,000,000 shares authorized; NaN issued and outstanding as of September 30, 2021		0			0
Class C common stock, $.00001 par value; 5,000,000,000 shares authorized; NaN issued and outstanding as of September 30, 2021		0			0
Class X common stock, $.00001 par value; 5,000,000,000 shares authorized; 187,515,124 shares issued and outstanding as of September 30, 2021		1			0
Class Y common stock, $.00001 par value; 1,000,000,000 shares authorized; 238,154,296 shares issued and outstanding as of September 30, 2021		2			0
Additional paid-in capital		1,580,638			0
Accumulated deficit		(277,112	)		0
Members' capital		0			468,633
Accumulated other comprehensive loss		(95,811	)		(190,786	)
Total Endeavor Group Holdings, Inc./Endeavor Operating Company, LLC shareholders'/members' equity		1,207,720			277,847
Nonredeemable non-controlling interests		838,072			686,129
Total shareholders'/members' equity		2,045,792			963,976
Total liabilities, redeemable interests and shareholders'/members' equity	$	10,730,858		$	9,633,634


	September 30,			December 31,
	2022			2021
ASSETS
Current Assets:
Cash and cash equivalents	$	970,782		$	1,560,995
Restricted cash		294,203			232,041
Accounts receivable (net of allowance for doubtful accounts of $65,695 and $57,102, respectively)		893,369			615,010
Deferred costs		247,864			255,371
Assets held for sale		27,301			885,633
Other current assets		253,620			204,697
Total current assets		2,687,139			3,753,747
Property and equipment, net		642,891			629,807
Operating lease right-of-use assets		324,340			373,652
Intangible assets, net		2,199,670			1,611,684
Goodwill		5,237,971			4,506,554
Investments		407,435			298,212
Other assets		416,469			260,861
Total assets	$	11,915,915		$	11,434,517
LIABILITIES, REDEEMABLE INTERESTS AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	540,142		$	558,863
Accrued liabilities		580,001			524,061
Current portion of long-term debt		89,039			82,022
Current portion of operating lease liabilities		59,355			59,743
Deferred revenue		609,715			651,760
Deposits received on behalf of clients		279,402			216,632
Liabilities held for sale		4,866			507,303
Other current liabilities		186,289			105,053
Total current liabilities		2,348,809			2,705,437
Long-term debt		5,338,364			5,631,714
Long-term operating lease liabilities		308,828			363,568
Other long-term liabilities		496,378			402,472
Total liabilities		8,492,379			9,103,191
Commitments and contingencies (Note 16)
Redeemable non-controlling interests		254,699			209,863
Shareholders' Equity:
Class A common stock, $0.00001 par value; 5,000,000,000 shares authorized; 289,330,904 and 265,553,327 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		2			2
Class B common stock, $0.00001 par value; 5,000,000,000 shares authorized; none issued and outstanding as of September 30, 2022 and December 31, 2021		—			—
Class C common stock, $0.00001 par value; 5,000,000,000 shares authorized; none issued and outstanding as of September 30, 2022 and December 31, 2021		—			—
Class X common stock, $0.00001 par value; 4,987,036,068 and 5,000,000,000 shares authorized; 183,173,428 and 186,222,061 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		1			1
Class Y common stock, $0.00001 par value; 997,261,325 and 1,000,000,000 shares authorized; 229,875,648 and 238,154,296 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		2			2
Additional paid-in capital		2,061,760			1,624,201
Accumulated deficit		(10,039	)		(296,625	)
Accumulated other comprehensive loss		(61,223	)		(80,535	)
Total Endeavor Group Holdings, Inc. shareholders' equity		1,990,503			1,247,046
Nonredeemable non-controlling interests		1,178,334			874,417
Total shareholders' equity		3,168,837			2,121,463
Total liabilities, redeemable interests and shareholders' equity	$	11,915,915		$	11,434,517


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☐


	Three Months Ended September 30, 2022
																								Accumulated			Total Shareholders'
	Redeemable																	Additional						Other			Equity Attributable			Nonredeemable			Total
	Non-controlling			Class A Common Stock				Class X Common Stock					Class Y Common Stock					Paid-In			Accumulated			Comprehensive			to Endeavor Group			Non-controlling			Shareholders'
	Interests			Shares		Amount		Shares			Amount		Shares			Amount		Capital			Deficit			Loss			Holdings, Inc.			Interests			Equity

Balance at July 1, 2022	$	48,630			285,731,884	$	2		183,897,784		$	1		235,001,875		$	2	$	1,962,051		$	-		$	(61,265	)	$	1,900,791		$	1,175,928		$	3,076,719
Comprehensive income		(921	)		—		—		—			—		—			—		—			(10,039	)		722			(9,317	)		(1,163	)		(10,480	)
Equity-based compensation		—			—		—		—			—		—			—		43,754			—			—			43,754			1,373			45,127
Issuance of Class A common stock due to exchanges		—			658,573		—		(724,356	)		—		(5,126,227	)		—		—			—			—			—			—			—
Issuance of Class A common stock due to releases of RSUs		—			70,718		—		—			—		—			—		—			—			—			—			—			—
Distributions		—			—		—		—			—		—			—		—			—			—			—			(329	)		(329	)
Accretion of redeemable non- controlling interests		(3,160	)		—		—		—			—		—			—		3,160			—			—			3,160			—			3,160
Issuance of Class A common stock due to an acquisition		—			2,869,729		—		—			—		—			—		59,240			—			—			59,240			—			59,240
Establishment and acquisition of non-controlling interests		210,150			—		—		—			—		—			—		—			—			—			—			—			—
Non-controlling interests for sale of businesses		—			—		—		—			—		—			—		—			—			—			—			(4,644	)		(4,644	)
Equity reallocation between controlling and non-controlling interests		—			—		—		—			—		—			—		(6,489	)		—			(680	)		(7,169	)		7,169			—
Tax receivable agreements in connection with exchanges		—			—		—		—			—		—			—		44			—			—			44			—			44
Balance at September 30, 2022	$	254,699			289,330,904	$	2		183,173,428		$	1		229,875,648		$	2	$	2,061,760		$	(10,039	)	$	(61,223	)	$	1,990,503		$	1,178,334		$	3,168,837


	Three Months Ended September 30, 2020
	Redeemable Non-controlling Interests			Redeemable Equity		Members' Capital			Accumulated Other Comprehensive (Loss) Income			Total Endeavor Operating Company, LLC Members' Equity			Nonredeemable Non-controlling Interests			Total Members' Equity
Balance at July 1, 2020	$	175,304		$	43,693	$	549,420		$	(220,309	)	$	329,111		$	666,762		$	995,873
Comprehensive (loss) income		(1,793	)		—		(80,249	)		14,001			(66,248	)		60,223			(6,025	)
Equity-based compensation expense		—			—		9,756			—			9,756			2,153			11,909
Distributions		—			—		(11,970	)		—			(11,970	)		(1,869	)		(13,839	)
Accretion of redeemable non-controlling interests		(2,180	)		—		2,180			—			2,180			—			2,180
Redemption of units		—			—		(3,588	)		—			(3,588	)		—			(3,588	)
Acquisition of non-controlling interests		—			—		(3,075	)		—			(3,075	)		1,075			(2,000	)
Reclassification to redeemable equity		—			5,703		(5,703	)		—			(5,703	)		—			(5,703	)
Balance at September 30, 2020	$	171,331		$	49,396	$	456,771		$	(206,308	)	$	250,463		$	728,344		$	978,807


	Nine Months Ended September 30, 2020
	Redeemable Non-controlling Interests			Redeemable Equity		Members' Capital			Accumulated Other Comprehensive (Loss) Income			Total Endeavor Operating Company, LLC Members' Equity			Nonredeemable Non-controlling Interests			Total Members' Equity
Balance at January 1, 2020	$	136,809		$	43,693	$	1,038,678		$	(125,404	)	$	913,274		$	774,309		$	1,687,583
Cumulative transition adjustment of ASU 2016-13 adoption		—			—		(1,803	)		—			(1,803	)		—			(1,803	)
Comprehensive (loss) income		(20,401	)		—		(601,759	)		(80,904	)		(682,663	)		53,315			(629,348	)
Equity-based compensation expense		—			—		18,922			—			18,922			7,965			26,887
Contributions		—			—		26,476			—			26,476			—			26,476
Distributions		—			—		(14,440	)		—			(14,440	)		(112,208	)		(126,648	)
Accretion of redeemable non-controlling interests		(10,281	)		—		10,281			—			10,281			—			10,281
Redemption of units		—			—		(10,806	)		—			(10,806	)		—			(10,806	)
Acquisition of non-controlling interests		65,204			—		(3,075	)		—			(3,075	)		6,710			3,635
Business deconsolidation		—			—		—			—			—			(1,747	)		(1,747	)
Reclassification to redeemable equity		—			5,703		(5,703	)		—			(5,703	)		—			(5,703	)
Balance at September 30, 2020	$	171,331		$	49,396	$	456,771		$	(206,308	)	$	250,463		$	728,344		$	978,807


Issuance of Class A common stock for vested RSUs subsequent to reorganization and IPO		—		—		—	1,557,587		—	—		—	—		—		—			—			—			—			—			—
Contributed capital subsequent to Reorganization and IPO		5,400		—		—	—		—	—		—	—		—		—			—			—			—			—			—
Distributions subsequent to Reorganization and IPO		—		—		—	—		—	—		—	—		—		—			—			—			—			(162	)		(162	)
Accretion of redeemable non-controlling interests subsequent to Reorganization and IPO		34,688		—		—	—		—	—		—	—		—		(34,688	)		—			—			(34,688	)		—			(34,688	)
Establishment of non-controlling interests subsequent to Reorganization and IPO		2,121		—		—	—		—	—		—	—		—		—			—			—			—			(2,121	)		(2,121	)
Non-controlling interests for sale of businesses		—		—		—	—		—	—		—	—		—		—			—			—			—			(2,868	)		(2,868	)
Equity reallocation between controlling and non-controlling interests		—		—		—	—		—	—		—	—		—		7,426			—			—			7,426			(7,426	)		—
Establishment of tax receivable agreements liability		—		—		—	—		—	—		—	—		—		(32,081	)		—			—			(32,081	)		—			(32,081	)
Balance at September 30, 2021	$	208,890	$	—	$	—	261,970,674	$	2	187,515,124	$	1	238,154,296	$	2	$	1,580,638		$	(277,112	)	$	(95,811	)	$	1,207,720		$	838,072		$	2,045,792


Class of Common Stock	Par Value		Votes	Economic Rights
Class A common stock	$	0.00001	1	Yes
Class B common stock	$	0.00001	None	Yes
Class C common stock	$	0.00001	None	Yes
Class X common stock	$	0.00001	1	None
Class Y common stock	$	0.00001	20	None


	DBH			Madrid Open			Barrett-Jackson			OpenBet
Cash and cash equivalents	$	—		$	18,659		$	10,783		$	49,795
Accounts receivable		89			2,123			1,706			34,062
Deferred costs		—			1,124			—			12,276
Other current assets		491			470			1,386			12,653
Property and equipment		4,403			162			4,290			6,889
Right of use assets		7,270			—			9,054			8,401
Investments		—			—			—			1,100
Other assets		103			381			—			6,033
Intangible assets:
Trade names		—			—			120,900			70,000
Customer relationships		1,960			—			12,300			135,000
Internally developed software		—			—			1,300			155,000
Owned events		—			407,070			—			—
Other		35,410			—			—			14,500
Goodwill		25,585			15,385			328,854			468,192
Accounts payable and accrued expenses		(93	)		(1,609	)		(7,009	)		(13,784	)
Other current liabilities		(56	)		—			—			(14,517	)
Operating lease liability		(9,470	)		—			(4,458	)		(8,401	)
Deferred revenue		(1,455	)		(20,780	)		(667	)		(5,983	)
Debt		—			—			(11,439	)		—
Other liabilities		—			(4,474	)		—			(84,130	)
Redeemable non-controlling interests		—			—			(210,150	)		—
Net assets acquired	$	64,237		$	418,511		$	256,850		$	847,086


	FlightScope			NCSA			Mailman
Cash and cash equivalents	$	1,042		$	3,655		$	16,598
Accounts receivable		475			5,619			11,292
Deferred costs		94			1,096			476
Other current assets		1,640			10,238			1,713
Property and equipment		1,089			2,804			585
Right of use assets		1,272			4,951			359
Other assets		1,056			5,472			2,172
Intangible assets:
Trade names		—			21,100			800
Customer relationships		2,700			10,000			12,400
Internally developed software		15,400			37,100			—
Goodwill		33,550			193,030			21,350
Accounts payable and accrued expenses		(806	)		(20,855	)		(16,137	)
Other current liabilities		(187	)		(10,318	)		(2,958	)
Operating lease liability		(1,272	)		(4,951	)		(359	)
Deferred revenue		(631	)		(37,636	)		(972	)
Other liabilities		(4,334	)		(24,508	)		(4,445	)
Net assets acquired	$	51,088		$	196,797		$	42,874




~~Cash and cash equivalents~~	$	~~58,506~~
~~Restricted cash~~		~~998~~
~~Accounts receivable~~		~~125,600~~
~~Other current assets~~		~~35,531~~
~~Property and equipment~~		~~124~~
~~Operating lease right-of-use assets~~		~~136~~
~~Goodwill~~		~~10,808~~
~~Investments~~		~~14,682~~
~~Other assets~~		~~714,292~~
~~Total assets held for sale~~	$	~~960,677~~
~~Accounts payable and accrued expenses~~	$	~~34,517~~
~~Deposits received on behalf of clients~~		~~230~~
~~Deferred revenue~~		~~239,623~~
~~Other current liabilities~~		~~1,214~~
~~Debt~~		~~223,038~~
~~Operating lease liabilities~~		~~125~~
~~Other long-term liabilities~~		~~50,099~~
~~Total liabilities related to assets held for sale~~	$	~~548,846~~


	OLE

Cash and cash equivalents	$	45,230
Restricted cash		86
Accounts receivable		10,316
Deferred costs		99,184
Other current assets		53,893
Property and equipment		4,361
Operating lease right-of-use assets		3,509
Other assets		74,193
Intangible assets:
Trade names		75,400
Customer and client relationships		198,819
Goodwill		387,542
Accounts payable and accrued expenses		(55,927	)
Other current liabilities		(28,224	)
Deferred revenue		(175,790	)
Debt		(217,969	)
Operating lease liabilities		(3,509	)
Other long-term liabilities		(24,377	)
Non-redeemable non-controlling interest		(5,635	)
Net assets acquired	$	441,102


	Balance at		Additions/Charged											Balance at
	Beginning		to Costs and					Foreign			Assets Held			End of
	of Year		Expenses, Net		Deductions			Exchange			for Sale			Period
Nine Months Ended September 30, 2022	$	57,102	$	12,577	$	(203	)	$	(3,581	)	$	(200	)	$	65,695


Foreign Currency	Foreign Currency Amount		US Dollar Amount		Weighted Average Exchange Rate Per $1 USD
British Pound Sterling	£ 24,500	in exchange for	$	33,781	£ 0.73
Canadian Dollar (*)	C$ 35,717	in exchange for	$	27,410	C$ 1.30
Swedish Krona	kr 4,500	in exchange for	$	526	kr 8.56
Australian Dollar (*)	AUD$ 14,300	in exchange for	$	10,639	AUD$ 1.34
Singapore Dollar	S$ 1,300	in exchange for	$	960	S$ 1.35
(*) C$ 35,717 and AUD$ 14,300 of the outstanding forward foreign exchange contracts are related to assets held for sale as of September 30, 2021 (See Note 6).


	Fair Value Measurements as of
	September 30, 2021
	Level I		Level II		Level III		Total
Assets:
Investments in equity securities with readily determinable fair values	$	779	$	—	$	—	$	779
Forward foreign exchange contracts		—		460		—		460
Total	$	779	$	460	$	—	$	1,239
Liabilities:
Contingent consideration	$	—	$	—	$	25,421	$	25,421
Interest rate swaps		—		71,834		—		71,834
Forward foreign exchange contracts		—		10,187		—		10,187
Total	$	—	$	82,021	$	25,421	$	107,442


	Fair Value Measurements as of
	December 31, 2020
	Level I		Level II		Level III		Total
Assets:
Investments in equity securities with readily determinable fair values	$	7,037	$	—	$	—	$	7,037
Forward foreign exchange contracts		—		1,794		—		1,794
Total	$	7,037	$	1,794	$	—	$	8,831
Liabilities:
Contingent consideration	$	—	$	—	$	9,026	$	9,026
Interest rate swaps		—		107,909		—		107,909
Forward foreign exchange contracts		—		5,023		—		5,023
Total	$	—	$	112,932	$	9,026	$	121,958



	Three Months Ended September 30, 2021		May 1, 2021 - September 30, 2021
Basic net income (loss) per share
Numerator
Consolidated net income (loss)	$	63,613	$	(457,841	)
Net income (loss) attributable to NCI (Endeavor Operating Company)		17,177		(154,395	)
Net income (loss) attributable to NCI (Endeavor Manager Units)		3,951		(26,334	)
Net income (loss) attributable to the Company		42,485		(277,112	)
Adjustment to net loss attributable to the Company	-			(1,399	)
Net income (loss) attributable to EGH common shareholders	$	42,485	$	(278,511	)
Denominator
Weighted average Class A Common Shares outstanding - Basic		262,891,070		261,048,116
Basic net income (loss) per share	$	0.16	$	(1.07	)


	Three Months Ended September 30, 2021

Diluted net income per share
Numerator
Consolidated net income	$	63,613
Net loss attributable to NCI (Endeavor Operating Company)		(5,507	)
Net income attributable to NCI (Endeavor Manager Units)		-
Net income attributable to EGH common shareholders	$	69,120
Denominator
Weighted average Class A Common Shares outstanding - Basic		262,891,070
Additional shares assuming exchange of all Endeavor Profits Units		3,569,639
Additional shares from stock options and RSUs, as calculated using the treasury stock method		202,490
Additional shares assuming exchange of all Endeavor Operating Units and Endeavor Manager Units		169,259,312
Weighted average number of shares used in computing diluted income per share		435,922,511
Diluted net income per share	$	0.16


	Time Vested RSUs					Market/ Market and Time Vested RSUs
	Units			Value *		Units			Value *
Outstanding at January 1, 2021		0		$	0		0		$	0
Granted		7,367,065		$	29.96		3,139,363		$	28.09
Released		(781,143	)	$	30.81		(830,857	)	$	29.04
Forfeited		(9,191	)	$	30.81		(39,199	)	$	27.57
Outstanding at September 30, 2021		6,576,731		$	29.86		2,269,307		$	27.74
Vested and releasable at September 30, 2021		1,268,130		$	30.53		4,130		$	28.21


	Stock Options
	Options			Weighted average exercise price
Outstanding at January 1, 2021		0		$	0
Granted		3,234,561		$	24.03
Forfeited or expired		(17,187	)	$	24.00
Outstanding at September 30, 2021		3,217,374		$	24.03
Vested and exercisable at September 30, 2021		563,367		$	24.00