TKO - Earnings call 4 2023 | TKO Group Holdings, Inc.

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Operator

Good afternoon. Thank you for attending TKO's Full Year 2023 Earnings Call. My name is Cole, and I'll be the moderator for today's call. [Operator Instructions]

I would now like to turn the conference over to our host, Seth Zaslow, Head of Investor Relations. ahead. go Please

Seth Zaslow

welcome and Full XXXX Year Good to Call. Earnings afternoon, TKO's

of a ago, Investor which recording least also XX while for short our press available Relations call via be we A days. our A at on issued release, website will view you website. this can

we'll Executive Ari CFO. our the Joining COO; President open me TKO's and on and After Executive Chief Andrew are call and today's our prepared and from remarks Officer; Andrew, Emanuel, Schleimer, questions. for Ari Chair Mark call Shapiro,

with The the purpose projections and/or remind will detail. Securities year for expressed I from of were you this the discussed call is Commission or statements to incorrect, information assumptions XXXX that uncertainties to or materially provide on filings involve If want risks materialize everyone results this Exchange with further information forward-looking full or to any those implied that our prove risks, the regarding uncertainties and see our include Please differ assumptions. performance. and these may our call.

as and required. only information speak made, they or are of to undertake events in no the obligation future except date statements as update new of them Forward-looking we light legally

financial Our in between GAAP information isolation operating release website. metrics as a non-GAAP issued Reconciliations the from an use commentary well in substitute should for in and as be considered our posted as GAAP. financial information be will IR results measures with not measures, also our evaluating and for today or found prepared can on in press investors which accordance non-GAAP today we provide ongoing tool believe include additional to trends. These

to the call With that, I'll over Ari. turn now

Ariel Emanuel

afternoon, good everyone. and Seth, Thanks,

for grossing agreements TKO, and Throughout during WWE for records Anheuser-Busch. records significant live multiple partnership reflect event We at viewership the our we media most TKO's highest secured each launched for across events Smackdown including rights the records international including We attendance to form our in premium meaningful demand and unified efforts with with achieved strong and NXT merging we including as WWE, Middle teams fees UFC East We year. international as domestic WWE's live UFC and XX inked and and significant global robust well best-in-class events. content viewership and in premium XXXX, site integration notably progress results in the event a increases U.S. for Australia, partnerships and made partnership global UFC organization. new

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Andrew Schleimer

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extremely road prospects are XXXX We our for and ahead excited the about and beyond.

I'll turn to Seth. it that, back With

Seth Zaslow

the we're questions. Andrew. for Thanks, to Operator, ready open call

Operator

Our question Instructions] with [Operator is from first Stanley. Swinburne Ben Morgan

Benjamin Swinburne

a afternoon, deal picture start bigger the you, Good to is Ari, company a This maybe guys. a sort of seminal event for industry. question. kind of with your also Netflix but

dollars, the a over the means and to quick content Andrew for Netflix for it about guidance. WWE all period business what what Beyond time? the globally? follow-up longer Raw the you think a do just And on I And excites bringing had you of

Ariel Emanuel

transformative think same basis. it's your largest on deal first them. and television We with on on think I time non-scripted entertainment question, as the sport. relationship benefits and from have with ton with very excited the do Listen, we We're global Like an with a the and of the deal, We streamer ESPN+, and They're level about indicated the which is we're excited strategic pleased deal them the are you extremely about. with And the a significant. on We're Netflix. this we're relationship side. a the UFC based terms. financial made the movie stuff

reach, is important. going forward our can global We benefit AVOD. that I product So think, in extremely FVOD think and we them for with strategy their

you great for deal left Comcast and I And we for one now PLE. deals. so CW have, Netflix now it's of have a NXP a with as and we SmackDown, good combination. think, assortment And the can see,

all, all So incredible. pretty in

Benjamin Swinburne

It quarter. and and cash And to there a on then, will like this the fourth revenue that. quantify Raw distributed point, point at Andrew, you just be flow to sounds expect finer can't put have just

that there's And make sure in I I nothing so want the to got right. guide. just

Andrew Schleimer

based that got is We on any you a of basis rate exclude currently Yes, terms QX, equivalent right. which upon the run million. deal off to existing income $XX

Ariel Emanuel

them. quarter just for say following. would have anything be fourth believe the will, Raw we in I Again, And don't We aired. the

Andrew you. We said, have no with We pretty the feel he positive that. about further through went than as information it. numbers But

Mark Shapiro

Yes, don't then. numbers assume any

So content, pulled That's going that's the to the and the programming, and on there. can why it get brand we look, dollars. the assume for platform following, of best the our viewership we out best don't but any we're

Operator

Brandon from is question Partners. next LightShed Our Ross with

Brandon Ross

allocation. with I up wanted on First, to follow commentary Andrew's capital

look check said that to that open until situations. to lot a generally there you're of you large did on double off would very If stock be hold wanted special mention to you shareholder buying XXXX. going And you stock were Just you for sell directly? that at that to once, would potentially in a

my then -- to question to I'm trying second political. be learn was And

Mark Shapiro

your was What question? second

Brandon Ross

And then is, question this global Netflix. you did with deal second the

markets the I think on didn't contemplated the not clarity the at give international what long deal or are real term. in over covered you time

would helpful. clarity be on could that you any that give So

Andrew Schleimer

free one, Yes. flow. have XXXX. expect cash Look, We did in What say cash first some on conversion is to EBITDA on to hand of the cash terms in that adjusted Brandon, we gave me or let take flow capital meaningful we allocation. guidance

around means, And balance. adjusted a look building for anticipate this year. limit income point fine think healthy. over to was You exploration up next was point but the the potential commentary any over the was months, 'XX. doesn't, by be at in for the our our That's XX cash sans just balance cash of I rather X the any position things That cash QX. range EBITDA meaningful the raw we'd end We of by of the

value. we creating or lens was we through On stock. the a opportunistic, look, and any the question, second opportunistic be There view that generally shareholder sold would of be to think shareholder opportunity look I

participated, know, you X.X million, As we the roughly mentioned million $XXX of remarks tune in I our as prepared of shares.

Ariel Emanuel

based just with as on and first over I said add, $X would I the an It's incredible is this, listen, answer Netflix billion. Ben partner.

a the the in opening said of We $X.X million. I very in I -- with long-term a risk We it. remarks, lot deal. business. my take mitigated were think we've happy it's

I whether people throwing to think were get made ton deal certain ever that with you right And it's a we're now after questioning we the as deal. can see, would talking SmackDown Raw a we deal cash. off an of incredible

Mark Shapiro

And Exactly. Brandon, the I do Vince call look. million -- and shares. And terms it We'll have out. going do sideline. specifically It's I to let's he'll He of mean, still all on obviously, in stock. he's we're whatever registered. talking believe, McMahon see. XX about just a we're We'll cashing holds,

sell we're idea if no if timing. or to his out with not any on We're wait or like discussions or no not have him. plans We so he on sell he us just you. much, and going having does, of find He's view motive to given how point around

Andrew Schleimer

that become that And of out Netflix fine as international in right when in I put on just to -- and terms a one, all available. to point and the Netflix, a clear they think what's of has point Brandon, be deal, and territories on

Mark Shapiro

with off LatAm. kicking But we're

Andrew Schleimer

roll are not would become Obviously, X, of time LatAm as that X. available as of of that that initial Those in Canada, importance markets key and that in available our if subsequent that were we are core 'XX. put January January to available press the and they when some of release

Mark Shapiro

and definite And was priority -- them. for Yes. I markets -- Brandon. those really was a priority definite them. are U.K. LatAm for just mean a premier them, for

and a across big to we have that and told be to mean the glad expose excited kind Ari subscribers. we're we media the So the I the most their be WWE X.X of time, up the world, one properties. billion X with XXX world, that's We out about. happen fact is in laid Netflix. exceeded rest to as right? shown available. with deals Street, one in brands seeing articularly the all they'll the something way, page And Raw our to beyond world, the guidance, board over the they've Andrew platform with for idea exceeded doing a the best of in and saw come go world, And want million best are excited point that obviously, We global the almost page, they we and guidance, so the we're just about out, arguably best that those got of these marketers it see in deal when really the biggest the When the just the headline. Netflix of front content $X.X the you're audience you by WWE the on the we're and front jumping

Operator

Our next question MKM. is from Eric ROTH Handler with

Eric Handler

Two questions actually.

do you of have does you Europe, afterwards. brand may what how sort like question back with or what international WWE second UK. with deal, And Netflix now not extension this may the come with to regards with impact First, I'll WWE

Ariel Emanuel

question. that understand I really first don't

Eric Handler

on of does have or you partner impact like Latin at partnering brand extensions with does future that help all morphed one NXT up Just with or now America with sort what those may Europe UK, NXT NXT any with what it you lines? something Netflix into do along having WWE NXT you help as global of U.K. have you maybe

Mark Shapiro

the call he on WWE, Nick? can also on is from Khan it. and Nick comment

Nick Khan

Yes.

global us, Netflix helps a us think a that. has product We So always with priority. for been localized

to stars Perth, weekend, more France, local calendar tryouts the those international for as live all event this the scheduled at Australia, you for if Riyadh, our even from look past this So Berlin, markets Canada, down expand road we over Lyon, premium year, markets. the look world,

time that and Netflix So will covered of we that be be feel will deal. confident part over the all

Mark Shapiro

it -- then for deal Netflix to everybody. is just doesn't also And important our remember know

on from creating global content a they programming basis. look essentially some evaluate. first We and us preclude and a doesn't new window deal Netflix Our that have just have events to rights would

for doesn't opportunity of have they're incremental an sell we all create to NXT kinds that but be rights So just it fee. to across the new line first in pay and board, to an fee, going -- it rights material,

Ariel Emanuel

we had UFC, Contender after created have have we the we Like with the we Ultimate Series, Fighter. which

see -- bull team as can relates and you individual and in we're it event. created we creative a So had riding, the we

do this So ability within to we have deal. the that

Mark Shapiro

is because on they incremental any well a there they Netflix collecting program Ari's on we're ESPN similar first as And out new to when no, point look very right. say, and have

Eric Handler

Got it.

Okay. That's helpful.

talked Secondly, and events past UFC the weekend with having in about you've WWE. back-to-back

synergies do in I'm Anaheim. You just that when city? the curious revenue back-to-back and/or same you in events you did how think like cost about that

Ariel Emanuel

So XXXX There as the promoting of Monday you regard revenue site all Utah star at was did, significantly. X now arena. licensing as in Night, you only it Saturday is kind Night, City, on WWE Office, This a as alone, Saturday The you be opportunity, Box for time. significant -- et was stuff. fees, ticket And Mexico to know, at are was looking Those we we a out, will on calendar. Raw savings And SmackDown Night cetera. pointed there at the Monday the was saw you was significant in just Anaheim, in UFC in There's the there so a with sponsorship you as Chandler event. revenue, the was growing WWE could saw imagine X. there package, which there, Night,

and more lot our just of was will of a more that some recognize, be we and there's there's cost synergies but that there's events, to there So because come. X crossover there,

Andrew Schleimer

one, just hit the on a that to topline. Ari, put Yes, pin

deal, Eric, and realize both venue we the We these topline, doesn't rent benefit rent a negotiate to ticket properties programs of economics virtue economics weekend. can cost On necessarily weekend. the this or both the of Ari same more bringing from preferential multi-visit the and the that as same packaging the by about past and venue together same we talked to shows building with did have if will, be, bring side, in it beneficial venue. by same rebates you beneficial virtue X

logistical on get really and starts interesting, production otherwise. efficiencies operation and So T&E, to look, event it any before that's savings other

well in here. works something So that's that's the look,

Mark Shapiro

ESPN This ABC there that and time, years of night night even is any very having savings, there Eric, satellite I it. good were So region, back-to-back personnel, in -- think were and cost right? name to Sunday you shows truck, is was same just Monday football, this here time analogy a analogous the substantial kind back.

production So we the of the effect cost real synergies. us think on for a halo there's side

Operator

next David question from with JPMorgan. Our Karnovsky is

David Karnovsky

Ari, joint of as latest seeing obviously venture thoughts I to get you then rights the linear distribution pressure upcoming legacy positioned? on the sports wanted also just Network for the sports renewals the on your agreement with landscape, firms WWE UFC but with kind how and Netflix, media continued given and are some

Ariel Emanuel

have we there's Netflix. mean, latter just our to Well, you partnerships have what players with did have the Comcast marketplace subs ESPN/ESPN+ as know, the what the PLEs that good relates about we've But UFC regard playoffs with deal Mark as feel on to negotiation currently the up. PLEs we based I and and the UFC. a it strongly we pretty have. that the and we we on in with very just We point, the the just done coming and many for completed football

said, moving important conversation. I in service. going a linear paying this, Warner happens of do. are I now with new think really to be entry everybody think That what Fox, kind ESPN. and they're and them that is the I going We're to I either or to our think in to with assets going attention the to the Bros. And NBA. player now and all AVOD see what with they're And SVOD being they're a think

think going that's I positively.

And are where good so very going. general sports rights we about feel in

specifically more upward all but college talk on can an it's Mark trend. on football,

Mark Shapiro

Yes.

have the David, I to We're the venture, not WBD, on get Disney going combination. and comment of Mark, on no first I into all, whole Ari that. joint it's think,

we're still I'll But ESPN are the and games. Ari on have you you, properties and linear cap and just been college have a increase blessed X you you from great went just geez, the that premium deal Just -- going lot just the the front, to X back games bidders, when they're to pay NCAA bubble, when when was out football as and about those And the by renewals. talking faced bid and part which have about WWE having but ESPN of rights for like commentary since are also UFC. the it on was from content, is you keep pretty got remind off. several the healthy going linear a And sports platforms a alive, premium you And content you for there Xx, to CFP, have sports about I premium headwinds there, that content in the robust WWE clearly think, to renewal have burst? That did, that we move is the a rights, digital, When it XX certainly it's coming? Xx. marketplace. the we to talks know, UFC, bought the better Then the

was with of million year did up takes on for for and And on first it and $XXX went big then on negotiating first end that they game, Peacock jump WME wildcard then the NFL to they Amazon a of refusal, and for $XXX million, it and playoff players next NWSL a which that soccer, have IMG also right Sports a big women multitude number. the hit which

year-round, when to live was very have, sports, a you a So which we volume place. what NASCAR really deal deal. Sports, not sitting and healthy have is mention good we're especially in the

Ariel Emanuel

premium When premium the bubble I EDR television, to This just content burst burst a went would here, it's or be said. appreciate same has have content, got with the everybody never motion which Mark exactly when to we at on, it content. sells to premiums. for conversation picture I regard is you eventually been you, conversation say whether and going -- sit with what

David Karnovsky

a on to just heading I against be class on lawsuit is separate the wanted I My could then in months. guess, that update to happen period? look lawsuit provide thinking And could a later your from here? on second representing how read-through do about a any you could what with context, trial And understanding action this ask coming UFC. we the topic, to that in the

Andrew Schleimer

we've and side. jury talking our and our And since simultaneously case comment been we've said, always making as Look, But a in that's the in typical this look forward prepared law with what we Yes. publicly, we at our our consistent to like And mediation we facts preparations. is this strongly trial. are on a is the this, of started believe that to arguments private message as to terms case on engaged trial we're timing in this time. about

Operator

Wolfe Our from Supino with Peter next question is Research.

Peter Supino

could. I if Two,

in about corporate programming Disney a commitment there contract to which period going for of UFC. and context all in Are funding broader programming First, you X-year time renewals competing ESPN's in reduce worried costs? their be regarding inflation other budget at NBA to several of

behavior And since is I you've PFL second if on outside competition. in changes took any question seen they the capital? wondered at

Ariel Emanuel

ratings relates and the the second video lot ratings We're mean, do them and but as it only just competition, competition. part that we a a That space. just MMA happy competition, with better There's of PFL than games at or said, favor, at that place I happened. being yourself basketball take a of to first. competition, significantly competition there's in competition, not recently. lot took performed I'll the look football's competition, the Bellator

be to Amazon, Warner We're with know how and at we whether relates much et the our Comcast, ESPN, and going ESPN/ESPN+. to it they're the NBA cetera, happy relationship. Bros., budgets, UFC their drives As

happy and come. to I going we us, feel with very positive think and what's they're relationship about that

right all now. that's I'll say So

Seth Zaslow

question. let's Operator, last take X

Operator

UBS. will from question be last Gravett Our Ryan with

Ryan Gravett

that? the by going your way realize savings like the largely are programming and deal, internationally, one having WWE cost you to Network there of partner the majority sunsetting quantify that for any Just to just back can Netflix

initial sponsorship sponsors cross-selling on And here when could then your the any reception that WWE to frame on revenues? the just curious opportunity from in way drive higher

Andrew Schleimer

take And X Netflix to Andrew. take operating know, hit as part, of that will the market, one then which Ryan, share in there the the of are Netflix, inclusive be first is longer-tail to will WWE the shift time at those the of the is lion's Yes, content I'll that extent day WWE will head Network licensed this you Mark the I second with one. deals on Netflix. our the opportunities vis-a-vis network think on nail up. -- the deal I'll you to internationally the our at

sunsetting that we certainly network said prepared license and is model, over the remarks. yield our cost as of So plan my to in transfer savings when I part will

Mark Shapiro

forward. among side of the on which business, just the arguably revenue we for going the even maybe top synergies is then see And partnership X obviously and TKO

we've a well in I meaning locally good not million in roughly and were here inventory really national they bought selling sell UFC, revenue. well. which, global line year. they They now we local staff very mean a partnership only is a robust folks, way, when got sight of clear Endeavor end WWE not identified, it the a partnership need clear remember, lot strategy, not not revenue doing And of XXXX, of Let's the $XX at. in work. by million February to we are over It's $XXX in and for

So a story great for it's been us. growth

not but Netflix, are great only a these similar dollars partners. good good, is just and marketing recurring the to And reminder, as revenue the are the good and margin

to brand marketing et Energy Anheuser-Busch, than Monster going and our partners better cetera. You're not find for

a the especially merged results really street side, So we're same the have since best-in-class can team the now is really confident that selling we that materialize partnership on kind WWE we properties. on of both global

Seth Zaslow

us Great. on interest TKO. now. Well, the Operator, and thank you, call today's can your in conclude for everyone, joining for you call

Operator

call. your Thank for today's concludes That all you participation.

now disconnect You may line. your

TKO (TKO) 27 Feb 242023 Q4 Earnings call transcript