Endeavor Group Holdings posted a third quarter net loss three-and-a-half times what it reported the year before, which was dragged down by losses in the company’s Events, Experiences and Rights and Sports, Data & Technology segments.
At the same time, the company boosted its revenues by 66% as its Owned Sports and Representation segments delivered strong growth, driven by continued consumer demand for live events and content.
Here are the company’s the top-line results:
Net Loss: $420.4 million, widening 262.4% from a loss of $115.98 million a year ago
Revenue: $2.03 billion, up 66% year over year, compared to an estimated $2.13 billion expected by analysts surveyed by Zacks Investment Research.
Earnings Per Share: A loss of 86 cents per share, worse than an estimated profit of 62 cents per share expected by analysts surveyed by Zacks Investment Research.
Adjusted EBITDA: $277.6 million, compared to $286.14 million a year ago.
The latest quarterly results come as majority owner Silver Lake is set to acquire Endeavor and take it private at an equity value of $13 billion. When consolidating TKO Group Holdings’ value into Endeavor, the private equity firm estimates the company has a total enterprise value of $25 billion.
The transaction, which is expected to close in the first quarter of 2025, is subject to the satisfaction of customary closing conditions and required regulatory approvals. No other stockholder approval is required. TKO is not party to this transaction and will remain a publicly traded company.
Under the terms of the agreement, Silver Lake which holds approximately 71% of Endeavor’s voting power, will acquire 100% of the outstanding shares it does not already own, other than rolled interests. Endeavor stockholders will receive $27.50 per share in cash, representing a 55% premium to the unaffected share price of $17.72 per share at market close on Oct. 25, the last full day of trading prior to announcing a review of strategic alternatives.
Endeavor is also required to declare and pay a dividend of 6 cents per share in respect of each issued and outstanding share of Class A common stock in each calendar quarter prior to closing.
In October, TKO entered into an agreement to acquire PBR, On Location, and IMG in an all-equity transaction valued at $3.25 billion. Following the transaction’s closing, which is expected in the first half of 2025 and subject to customary closing condition and regulatory approvals, Endeavor is expected to own approximately 59% of TKO. The acquisition of IMG does not include businesses associated with the IMG brand in licensing, models, and tennis representation, nor IMG’s full events portfolio.
Endeavor also revealed it is reviewing a possible sale of certain events within its portfolio, including but not limited to the Miami Open and Madrid Open tennis tournaments and art platform Frieze. No definitive timetable has been set for completion of this review process, and there is no assurance that the review will result in any specific action.
“As we work toward the close of our take-private transaction with Silver Lake, we remain focused on delivering for our clients, partners, and shareholders, maintaining momentum throughout our business, and completing the sale of PBR, On Location and IMG to TKO,” Endeavor CEO Ari Emanuel said in a statement.
The Owned Sports Properties segment saw revenue grow 53.2% to $735.2 million and adjusted EBITDA grow 32.9% to $315.5 million.
The segment’s results were driven by the WWE acquisition, which contributed $275 million during the quarter, partially offset by decreases at UFC due to holding fewer events compared to the prior year period. They also benefitted from growth at Professional Bull Riders due to increase in media rights, ticket sales and PBR teams-related revenue from the addition of two teams.
The Representation segment saw revenues climb 11.3% to $429.2 million, primarily attributed to growth in WME’s talent and music divisions, partially offset by decreases in nonscripted content production. Adjusted EBITDA for the segment grew 29.7% to 124.9 million.
The Events, Experiences & Rights segment saw revenue jump 145.1% to $899.8 million, primarily by the Paris 2024 Olympic and Paralympic Games, for which On Location served as exclusive hospitality provider. But the segment’s adjusted EBITDA swung to a loss of $68 million for the quarter, compared to a profit of $29.85 million for the same quarter in the prior year.
On Location and the NFL reached a multi-year extension of their global hospitality partnership on Nov. 5 that will run through 2036, covering all premier NFL events including the Super Bowl, NFL Draft, Pro Football Hall of Fame game and induction ceremony, Pro Bowl Games and Scouting Combine. Additionally, On Location’s rights to sell and market International Games has been expanded to include all international markets.
Additionally, Endeavor revealed in August that it is actively marketing its Sports, Data & Technology segment, which includes OpenBet and IMG Arena. As a result, the businesses are considered held for sale and presented as discontinued operations. During the quarter, the segment posted a loss of $442.28 million, compared to $10.15 million a year ago.
As of Sept. 30, Endeavor had total cash and cash equivalents of $1 billion and total debt of $5.23 billion, compared to $697.7 million and $5.07 billion respectively, at the end of June. Endeavor did not hold an earnings call in connection with the Silver Lake transaction.
