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Endeavor grew revenue 25% last quarter to $1.58 billion, beating forecasts, and shrunk losses to $29 million from $226 million as CEO Ari Emanuel reminded Wall Street that it’s still looking at strategic options – four months after the company said it was evaluating its businesses, and its largest shareholder Silver Lake floated the idea of taking the company private.
The giant fund said then it was working towards making proposal but no offer has yet emerged. Endeavor started a formal review of its assets and has said only that it would not consider a sale or disposition of its stake in TKO Group, the publicly traded parent of WWE and UFC – implying that it might consider a sale or disposition of its other assets.
Execs will likely be asked about that on a post-earnings call at 8 am ET.
Adjusted fourth-quarter EBIDTA, another gauge of profitability, was $293 billion,
The company noted a few financial hits for the quartersincluded $29 million in legal and regulatory costs (from $4.8 million the year before). Of that, $20 million was to settle an antitrust settlement filed against WWE by MLW Media, alleging that WWE interfered with MLW’s contractual relationship with certain media platforms and engaged in other anticompetitive and unfair business practices in violation of the Sherman Antitrust Act and California law. The parties settled and the case was dismissed Dec. 26.
Restructuring costs and impairment charges totaled $56 million (vs $10.4 million) as Endeavor said it implemented an ongoing cost reduction program related to realizing synergy opportunities and integrating the combined operations of WWE and UFC, which resulted in some layoffs.
By segment: Owned Sports Properties’ revenue of $643 million jumped by $341 million, or 113%, mostly on the acquisition of WWE last September. Profit of $225 million was up 58%. Endeavor acquired WWE from Vince McMahon and merged it with UFC into TKO, which yesterday reported quarterly revenue of $641 million.
Emanuel in a statement called 2023 “a transformational year for Endeavor as we strengthened our positions in sports and entertainment through many of our industry-leading assets.”
“Endeavor’s work with TKO to secure innovative media rights deals and landmark partnership agreements is proving our thesis, and we continue to benefit from demand for premium content and live experiences. We remain focused on maximizing shareholder value through quarterly dividend payments and our evaluation of strategic alternatives.”
By division: Representation revenue rose 5% to $427 million as the impact of the WGA and SAG-AFTRA strikes was offset by growth in WME’s music, sports, and fashion divisions, and increases at marketing agency 160over90, licensing, and non-scripted content production content deliveries. Profit of $103 million for the quarter fell 16.5%.
Events, Experiences & Rights sales dipped 8% to $415 million, impacted by the sale of IMG Academy last summer. Profit fell 55% to $13.7 million.
And Sports Data & Technology saw sales of $114 million, up 5%. Profit was down 5% at $20.5 million.
Endeavor’s debt stood at $5 billion at year end, a hair lower than at the close of the 2023 third quarter. Cash and cash equivalents totaled $1.17 billion, compared to $1.34 billion the quarter before.
Emanuel may also get questions on the call about McMahon, who is TKO’s largest shareholder who is facing a a rather graphic and disturbing sexual trafficking and abuse lawsuit. McMahon, who stepped down from the company after the suit — which he says he will fight — sold a big chunk of stock last fall. Asked about future sales, TKO president and COO Mark Shapiro “He’ll do whatever he’s going to do, and we’re all on the sidelines.”
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