Endeavor Group Holdings posted a third-quarter net loss three-and-a-half times larger than a year earlier, which was impacted by losses in the company’s events, experiences, rights, sports, data and technology segments.
Meanwhile, the company increased revenue by 66% as its owned and represented sports segments saw strong growth, driven by continued consumer demand for live content and events.
Here are the company’s key results:
Net loss: 420.4 million dollars, up 262.4% from a loss of 115.98 million dollars a year ago
Profit: $2.03 billion, up 66% year-over-year, compared to the $2.13 billion estimate expected by analysts surveyed by Zacks Investment Research.
Earnings per share: A loss of 86 cents per share, worse than the 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 will acquire Endeavour and take it private with an equity value of $13 billion. By incorporating the value of TKO Group Holdings into Endeavour, the private equity firm estimates that the company’s total value is $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 further shareholder approval is required. TKO is not a party to this transaction and will remain a publicly traded company.
Under the terms of the transaction, Silver Lake, which owns approximately 71% of Endeavour’s voting power, will receive 100% of the outstanding shares it does not already own, separate from the refinanced shares. Endeavour shareholders 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 October 25, the last full day of operations prior to the announcement of the strategic alternatives review.
Endeavour must also declare and pay a dividend of 6 cents per share in respect of each Class A common share issued and outstanding in each calendar quarter prior to closing.
In October, TKO entered into an agreement to acquire PBR, On Location and IMG in a $3.25 billion equity transaction. Upon closing of the transaction, which is expected to occur in the first half of 2025 and is subject to customary closing conditions and regulatory approvals, Endeavour is expected to own approximately 59% of TKO. The IMG acquisition does not include companies associated with the IMG brand in the tennis licensing, modeling and representation business, or the entire IMG events portfolio.
Endeavor also revealed that it is reviewing the potential sale of certain events within its IMG portfolio, including, among others, the Miami Open and Madrid Open tennis tournaments and the Frieze art platform. No specific timeline has been set for the completion of this review process and there is no guarantee that the review will result in any specific action.
“As we work to finalize our private transaction with Silver Lake, we remain focused on servicing our clients, partners and shareholders, maintaining momentum across our businesses, and completing the sale of PBR, On Location and IMG to TKO. Endeavor CEO Ari Emanuel said in a statement.
The sports real estate owned segment saw revenue grow 53.2% to US$735.2 million and adjusted EBITDA grew 32.9% to US$315.5 million.
This segment’s results were driven by the WWE acquisition, which contributed $275 million during the quarter, partially offset by declines at UFC due to holding fewer events compared to the prior year period. They also benefited from the growth of Professional Bull Riders due to increased media rights, ticket sales and revenue associated with PBR thanks to the addition of two teams.
The Performance segment reported revenue growth of 11.3% to $429.2 million, primarily due to growth in WME’s talent and music divisions, partially offset by a decline in unscripted content production. Adjusted EBITDA for the segment increased 29.7% to 124.9 million.
The Events, Experiences & Rights segment saw revenue increase 145.1% to US$899.8 million, primarily driven by the 2024 Olympic and Paralympic Games in Paris, where On Location served as the exclusive hospitality provider. But the segment’s adjusted EBITDA turned into a loss of $68 million for the quarter, compared to a profit of $29.85 million.
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 major NFL events, including the Super Bowl, NFL Draft, Pro Football Hall of Fame and Pro Bowl games. And the Scouts. Collects. In addition, On Location’s rights to sell and market international games have been expanded to all international markets.
In addition, Endeavour disclosed that it was actively commercializing its Sports, Data and Technology segment, which includes OpenBet and IMG Arena. Consequently, the businesses are considered held for sale and are presented as discontinued operations. During the quarter, the segment posted a loss of $442.28 million, compared to $10.15 million last year.
As of Sept. 30, total cash and cash equivalents were $1 billion and total debt was $5.23 billion, compared to $697.7 million and $5.07 billion, respectively, at the end of June. Endeavor did not hold an earnings conference call in connection with the Silver Lake transaction.
