TKO - Earnings call transcript Q1 2024 | TKO Group Holdings, Inc.

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Operator

Good afternoon. Thank you for attending today's first quarter TKO 2024 Earnings Call. My name is Tamia, and I will be your moderator for today's call. [Operator Instructions]. I would now like to pass the conference over to your host, Seth Zaslow, Head of Investor Relations.

proceed. may You

Seth Zaslow

this First ago, TKO's can Earnings A at recording Call. on via be Welcome website our issued Quarter a while for of A website. we Investor XX you will press short also our available days. to least Relations XXXX call release, view which

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

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Ariel Emanuel

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

Andrew Schleimer

XXXX. Good for structure on update of afternoon. the with remainder then and start before integration shift and our capital I'll financial outlook to an our discussing results

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WWE. to Turning

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capacity expect have we generate over significant adjusted cash. discussed, as time grow we financial to and previously EBITDA we As

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looked As Moto operational create asset we complement and long-term for thought also publicly our we reported, would an portfolio was control. our under This GP. at value existing that shareholders

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our outlook. to turning Now

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first of continued both strength conclusion, In strong at our generated quarter we businesses. that reflected results

We I'll XXXX prospects beyond. that, are our and to about ahead for and extremely excited Seth. turn back road With the it

Seth Zaslow

Andrew to and Mark ready are Operator, Thanks. questions. field

As call, an FYI Q&A for those the on not today. Ari joining is

Operator

[Operator Instructions].

The first question Swinburne from Stanley. Ben comes Morgan with

Benjamin Swinburne

How NBA I there's opportunity feel better a ask ESPN official your of do NBA sports the context guess it's I is not TKO news. itself, you of for market I the but about to think, up. general what renewal yet, in at you Mark, that has particularly I about certainly the is it. of of lot press the obviously been part coming everyone ahead and got process. It's on making, deal guess in look given

then I sure over the dollar-for-dollar benefits Just Are impact year, settlements no tax year? saying make impact on make essentially from Thank want basically to settlement. the to or sure And cash fund you appreciate this Andrew, I just that comment understood totally the the you, of I the want your help. next that. got course the

Andrew Schleimer

that pay my the we for have otherwise that making Ben. the will one 'XX reduce take in million are a it terms our amount would calendar But benefit cash to and when payments tax that $XXX members, to calculating be me Let to in it of commentary, first, we're of will tax the purposes, second distributions we members. have such deductible will

the given ups on be actually positive $XXX an to of tax to our its given less million structure. overall hand on impact cash members will impact So the liability out cash

Mark Shapiro

mean, I in that days left of the would years XX value going And running to Ben, in hearing then been the I've ESPN, it and programming I about frankly, tell I the mind, at almost you decline ceiling, that keep a ago back they're right, on XXXX. are lot folks your first in in SmackDown doing Ari, getting going pricing of nervous, on Khan had rights, and Nick with sports we're it getting of be the hitting a the we renewals close, And and that. renewals obviously, Raw to we're in. pushback question,

deal NASCAR deal. says The a just rights, "strong a NBC was there strong the NCA a look, deal. to and never strong entertainment Raw sports. for deal sports getting frankly, moving it women's the a now you The sports deal strong all with is including everywhere deal deal". SmackDown Netflix was the And is otherwise, into

laughed NBA, be he get Xx the and And it. like And the premium everyone with sports property that's look outstripping at it. a a that think We laugh, you or the supply have kind the as of is of premium they We doubted growth said we'll I and Adam to have when to Xx. close at this minimum up happens done, X see at end table all good going content. bidders he's product a you they what could if NBA. is And the said didn't sports of great the when live sports feel for ahead And demand with. package potential premium about sports UFC we when

UFC, not great the just product. about a volume it's let's thing And forget, not

It's not a a In fact, product. volume it's really volume product. premium

churn Thursday UFC way. once a attractive antidote the we're benefits NFL I think Sunday, like also and and It were to linear subscriber be Football. of Monday we're night, Sort digital the it same to round. was scarcity. acquisition a Night And frankly tool both by year and driven used was before

urgent. optimistic end where will the good experience, are. a potential with. live. I we're We're we about We're the shared We're and up to we we back at point, going mean, feel So initial package

Operator

with comes LightShed The Partners. Ross question next from Brandon

Brandon Ross

there? through up higher was the GP, TKO of see in Formula the strong do closer acquisitions. the about which attempt future Or Moto question you WWE of was is One. expand for to to acquisition Specifically, to desire see of leads this a how your reportedly It bid opportunities you even brought than I guess, outside how a the prepared, Andrew, one-off? and quantity out you And

to acquisition, you through you there have? then sports addition to expanding in where build what organically an other of opportunity are out And see

Mark Shapiro

Yes.

Mark. it's Brandon, So

Let me take that.

of just I is First really overall something Ari to really of interested of and world. kind endeavor years. Media is division ] dating does all, product that the danced for have GP Moto Dona around the back the couple I'll GP [ were something we Dorna with that at ] Moto of remind that in them days. a you and [ IMG distribution

familiar So we're with very it.

some We're with or strong kind up ticketing, of multiple WW stack public what familiar really with fees. the sponsorship, levers, Endeavor of and in been of a site GP company. most are I frankly, of in part, right? them hospitality, the it by investors And kind UFC, for as growth it's kind in our year-round Moto lines following as because premium have do, the doesn't sport and mean, U.S. have driven we a well

for So we thought there there was us. something

knew was of they look, them. FX made it, have sense One Formula with Liberty for why want in would it of But why lot and may we Moto be the a GP, would to potentially motorcycles there, we knew want

And the you way. hoop -- they're with Liberty. in financial raised suspected of QX. danced even made kind nonbinding ultimately, would so for very our around in today, decision We as results adjusted they see And that I go tell EBITDA. a our look, guidance to strong you annual the in we we

adjusted We consolidated XX% EBITDA have at for the quarter. healthy a margin

We of in XX%, for year have in in flow of free strong XX% excess conversion XXXX. the cash excess likely well

low significant TKO we this a a expect is annually. levels of business. overall cash saying CapEx of UFC, free WWE, long all And is generate way And to

a all of We capacity through result that. be in of increasing And as expect opportunistic to and and shareholder of value. our maximizing financial significant a lens thoughtful capital, we deployment intend to have

investments the include we the is which projects, look position, time potential our high ROI Andrew net those could reducing with all uses at something in Board. So debt organic and

There's that of shareholders no to last that And content strictly folks opportunities on premium its more to a to live through is sports on genre President confined two high is hotter point, I Hollywood events. experiences in of which capital say that in all anxious attractive Endeavor, than are about. forms to and repurchases use the of your in M&A it. hear know mean content being demand. universe this are about are Return the or I and lot And I share being dividends, sports. call all here sports companies which

But it make in have significant way at, long-term chase, we with, no accretive mistake, and be that whatever of must look dance finally, ultimately have will we growth disciplined. we will multiple them whatever have deal. levers the whatever be spades. It UFC And to WW we an growth opportunities with in

Brandon Ross

us Great. think could the opportunity premium stage UFC? And replace your is would And I And been across there. what the these over you your there how events could Saudi you them? current you or UFC WWE, quotes about you WWE in reports press tell and couple past then quickly, days, events very addition both relationship -- guess there? many expanding be to about can of and have anything and for some

Mark Shapiro

with has doing events. were a say primarily nurtured from I year. of What on a and fat. been strong there and for of And and remember, it. a Brandon. very those cultivated, strong a have they that would highly delivering We've probably those in in annual each avoidance there out speculation I of other. through is, just deals way? you, let's have events relationship lot doubt, And with relationship Vince. McMahon. a very, Thank impact particular, Khan, would sustained and get the remind Kingdom in WWE would Vince Nick be I'll lot trust tied relationship gone, the healthy a we was being in looking say to a And that negative developed they X Vince handoff of folks They And of the lot Would a to have

event, do. events, perspective, is first time. and more we didn't at investment than more to which potentially, ironically or willing to will that story continue events I more in UFC event, try look to out for those which would we for WWE a festivalizing much a nothing got look already to frankly, give could commit was beyond And a their on assumed the because was [ events want of for at our this June UFC. eventizing first PFL Dana in And we planned X we but those us is until too gates great From do mean everybody live ] really this thought

you that means. it's And in tandem developed contrary. relationship well Nick. [ ] and I And quite think know as what a Dana the has great with

we And so were much that another to to willing to -- event year. commit willing next so they were

X of event. you see a more frankly, beyond no now, more going event right nothing and sponsorship plans So just we that than event that for next the Sphere with And that. as announced in year. for it's There's year. year this our But can they're September, invest to

side, and PIF have call history Endeavor way, lot the this events. with in them whatsoever, an but tennis the in over we is investing on not our a Endeavor by just and of And tennis

feeling good it getting continues good that C-suite across relationships, such. out good gate, board, relationships plan if build Andrew? experiences, we and each So the other the on out, to as of

Andrew Schleimer

site I'd output this Brandon, not we calendar, say would terms specifically an it Saudi only our note, meaningful XXXX, be in does of never we've fee is But a or The thing whether in existing what the Arabia. event really events. carry can or in one additional increase is discussed in of

comment incremental but output. likely, So and to talking get going not the on stay into tuned we're year 'XX, start we I'm deeper about as

present opportunities obviously those do us. available and While are to themselves

Mark Shapiro

that of track I saying, And do long without multitude -- and expanding record we and it annual an partner of strong goes talked we experienced about on UFC. DCT Obviously, mean Abu in and there basis. a they committed We're a events Dhabi great is ways. term. have relationship

in have Middle a expand with We East the events to UFC partnership them.

we So Saudi with a of do Arabia or else. anything part anybody they're

We've one potentially institutes of there. talked launching about performance our

So tandem everything strong we do friends communication conjunction we do in at it our and the Middle DCT. with in East, in

Operator

Robert question Thank you. comes from next you. Thank Fishman The with MoffettNathanson.

Robert Fishman

on both actually, Media for you Rights. questions guys, Two

a So college rights partner? ongoing keep locked are their playoffs multiple doing? you all NBA ended ESPN one exclusive football strong with partners have future exclusive but deal the to partners I'm your like and different negotiations curious, preference Or to NASCAR to angle, do up in hoping bring with multiple into a you

second in to rights you that if you as Or negotiation rights? the set would has be separate share UFC then with a Can And matches? Disney ESPN lead existing for include included to tile. question, -- those to the would a Disney

Mark Shapiro

Robert. Thanks,

deal second events. our one, the to have UFC On the include yes, they current rights the in

far as we'll multiple there. when As get what partner, see happens partners, one we

Our window opens UFC X-month Disney up a It's window Walt mid-January. Company. a with the They're partner. great and in

best premier everywhere, They when certainly for first that automatic business, is they in the the the machine fans are are but it stop events. sports go-to destination shop and the #X the for is that looking sports in marketing U.S., comes the to

our in we'll So looking But do get to We're we'll time, commitments. we'll from forward. we're the away looking at not have reduce not best what's to of them. window, a and going -- interest we listen, same talk the UFC we're

Operator

MKM. next from Eric comes question the Handler Roth with

Eric Handler

Two questions.

you too? terms of was bit looked wondered to up matches. how the about a regards maybe pricing about year but sponsored with the considerably It sponsorships. this in could of can like number I volume not little if went year-over-year of But WrestleMania, talk volume increases, you First, just sponsorship talk

Mark Shapiro

and/or pricing in sponsorships, strong the metric our terrific it ticket attendance, north, or you into But is on yields and volume team a Yes. Eric I number. both put Philadelphia can measure. tell -- think pricing, guide the specifics and both what I was WrestleMania that social specifically look, we release viewership, to partnerships a global don't sponsorship we or were in for us clearly ticket mean, hits. which And a by every had I on together on overall get sales,

be Vegas -- announced NBC Great really biggest really happy the with board. mean event year. the across going we've in I just extraordinary I Obviously, is with results. Peacock we're the to viewed next Comcast, history, know

jewel WrestleMania it the comes with in way. And it when So every to is regard to just to expand continues sponsorship. WWE frankly,

long-term major WWE. partnerships sponsorship, growth global both lever for view to group continue leagues, a we of mean our our as UFC I and

an new team by their expanding year. We Grant and with doing focus to continues be led hitting reliance fan crossover for and our and and closing both categories their on our core strong have well unified this a one job on strategy to [indiscernible] Norris way consumer partnerships And extraordinary numbers and brands. best-in-class now

an The it's That's off a comments. long-term is see We that, to in opportunities of prime expand for hydration Budweiser opening was that WWE deal in-ring the in or talked term. the maybe the of partnership sponsor and of first our we the charts. our deal into center right WWE course, math. UFC, UFC the having whether long And on deal the potentially about

we're job just So I there. market, to ESPN. doing better it cross NBC would we're add, a going are They selling and selling a partnership. cross-platform And story and great doing finally, of with as channel, a

and with in And vice packaging activation and partners, we're and will, media a that's on official versa marketing dollars if we're front. partnerships there perspective. out And in-store going only So story our sponsorships benefit their you work long -- a will happy. for be that good And our are be story us, to that to term if for but partners. partners our will a not good from

Eric Handler

the UFC events a number markets there take which demand to good at as given And secondly, understand Apex, UFC and is of larger That's arenas. of strong business are Okay. for little I them events, try with why how helpful. some take better, a to then not those

Mark Shapiro

Yes.

of have meaningfully. we Las significant do our down there we Apex amount since UFC a So hold our in have numbers those Vegas, that you've those seen of I have COVID, on think outside what we out campus held gone events of worked is way and

about events view fan there's our much also road it's is it doing a bringing us the that but on profile, costs of as for generating Apex. income, domestically, about is them as at certain growing said, we opportunity profitability analysis base margins holding being benefit and internationally and events that cost That ensuring we maintain and

to Las them I'm in as not could carry ensure those Apex terming events Vegas. turf the And sure to is to generate structure what lowest profitability. cycle, but cost And we in appreciate, for any home do revenue you right our just mix us hold top line in do the budget

to perfect we working but rest So I at do the we're assured and mix yet, numbers the that found think don't looking so.

Andrew Schleimer

to to there, side on fan being base. no to city, to we're air global DMA for Dana of right, introducing state the a substitute the of out and there's side, And region, that. region getting consumer, DMA and touching road. Eric, sport going built And a new the if to to with [indiscernible] going going the err we're White on Forties the on one UFC,

a Nashville. that that about to And time in why in like you're the here we feedback. been we that couple go So When sellout here, we're of to a city we just hundred it's and hear it the the not getting get we experience, you're long since go people, and Columbus, getting same not reason yield is a touch. the like are there's When you've we of Apex a a front ticket getting. city

we So very take that seriously.

to of kind err If -- [indiscernible] on the Vegas, it's under we're the on our going road. side of to or going be the on own road

Operator

The next with Laszczyk Goldman Stephen Sachs. from question is

Stephen Laszczyk

for on Events. Live Maybe Mark

opportunity the out follow-up quarter. growth business see thinking the about in called growth the for site then forward, most where for Curious, going year. pricing the fees you between through of that for You the you're opportunity balance a and Andrew. strength And the attendance, sizing

flow free there on cash settlement cash of benefit, to the the Just a year? to free clarify the underlying tax guidance, change the flow was net and for

Andrew Schleimer

Yes.

free the to cash -- changed $XXX on payments excess our and with me, the make operating me, an closest flow flow. to fact flow million cash will to which starts cash hit operating due of second GAAP from that to excuse guidance our in free the of metric cash excess operating of reconciles solely the -- one, XX% we So excuse cash metric, due XX%, that

to payments. those solely it's So impact reflect the of

Mark Shapiro

are Stephen, on good you that? And

Stephen Laszczyk

great. was that Yes,

Mark Shapiro

more Okay. second we And think your have I on one question. do -- just then

kind you and if -- Ari would to, the I when up because if you would business final way Okay. thoughts, the overall about it think we tease we are experienced TKO will. right you momentum me in gaining of Look, economy. just Great. tell I look the at you XXX% look, still post-COVID just in this this We major been busters us. in of quarter event are world, mean, a to has this sustain want I kind for

brands effectively reason it's to It's of competition a we of a strong had out the strong and not mention and, raise putting are such the year. And for our course, hot. the beat QX the writing that

events both properties. across is strength business brisk the We're seeing at live board. in Our the

frankly, city. we're point are our norm. When on going and/or we're events site we on Our that, already beyond cash to to fees. the your subsidies And fees, show your the up. ticket becoming where need they're in yields site To road, cities the the take getting to bring order

for So year coming fees back site seeing we're increase. those we're X,

high is demand the cities is for call willing that pay have. increasing our business and So dollars with we every are to phone

Our the in to up UFC slightly of where to on the discussed, synergies your is global magnitude cost net antitrust guidance. us. partnerships have just of got north. look of at of track, going We've end events, we we've settled a north and I timing Arguably our end front going our we're are the the take on slightly what think and at the guide as are the upper point lawsuit

the Conor will one wasn't event XXX, That's that UFC event. UFC for just will Sphere it although and for UFC not be to done. events. an on. And The a a normal expensive be Sphere, necessarily McGregor June put September, Sphere in XXX. The built record. is in and it the

do That what going it Dana done. to make told one special. it White us, and has is and will We he's extra

yet. Garden fall, haven't we in which got We've Square Madison announced the

next a UFC In mentioned, no XXXX. the And a due partnership a NBC stub of got to $XX extension for we And Vegas for the We year. right of the dates. specifics oh, where and strong the and a stub million looked at able Saudi and by the period had got get be get like in we it the And year, powerhouse. were detailed terms deal this anyone I that end past WWE way, of period. at WrestleMania set really Comcast reason as to we've to from which will

here. cooking are things all So

Operator

with final comes Gravett The from UBS. question Ryan

Ryan Gravett

Great.

Just for Andrew.

opportunity the related rights some the it for You that of macro interest across? up you at the -- mentioned through to business can getting or the Xx that end media range? in higher you business an operate or what confidence company I renewals the versus rate if operating guess, towards comes maybe more rounds the give Is me room leaving next will leverage. think of M&A

Andrew Schleimer

I more it's think simple. much

on for contracted meaningful amount line company the next round plan, media and As a this through to flow. just generates profile we've given our of articulated bullish contracted our and here amount cash demonstrated top margins revenue performance accrete a and continue sort and up and free financial is the will significant properties. of rights nature of grow of that our key the renewals That

reasonable range end. a to even the upper that's and manageable believe We very

this transaction financial the the is and to numbers. business key -- So thesis this underpinning our in of of investment the those what profile really, really comfort underpins

Seth Zaslow

you right. today. conclude All the on Operator, call joining for you, Ryan. everyone, call. Well, Thanks, can thank us the

Operator

TKO earnings first the for quarter your XXXX you call. concludes Thank This participation.

your You lines. disconnect may now

TKO (TKO) 8 May 242024 Q1 Earnings call transcript