TKO Earnings Dented by Legal Settlement But 2025 Guidance Forecasts Big Year for WWE, UFC

by

As a cinephile and wrestling enthusiast, I’m anticipating an action-packed year for both WWE and UFC! The latest financial reports reveal that the company is gearing up for a strong 2024, despite having to shoulder a significant $375 million legal settlement with ex-UFC fighters from last autumn. Here’s to hoping the fights remain as thrilling as ever, with the added drama of these behind-the-scenes financial maneuvers!

In the recent quarter, TKO reported a total revenue of approximately $642.2 million and an adjusted earnings figure before taxes, interest, depreciation, and amortization (EBITDA) of around $238.1 million. For the entire year 2024, the company’s revenue reached $2.804 billion, while its adjusted EBITDA amounted to $1.251 billion. However, unlike the net income for 2023 which stood at $175.7 million, the net income for 2024 dropped significantly to $6.4 million. This reduction can be attributed to the full cost of the settlement being accounted for as a charge incurred during 2024.

For the year 2025, TKO is providing its initial financial projections, predicting a revenue range between $2.930 billion and $3 billion. The estimated Adjusted EBITDA stands at $1.350 billion to $1.390 billion. These figures do not account for the potential influence of assets that TKO is in the process of acquiring from its parent company, Endeavor. By the end of this transition, companies such as Professional Bull Riders, IMG, and event hospitality service On Location will be part of the TKO group, as Endeavor readjusts to private ownership.

In September 2023, the merger of WWE and UFC resulted in TKO, a move that brought substantial revenue growth from live events. Both brands saw record-breaking ticket sales and sponsorship deals. In January, WWE secured a new 10-year TV rights agreement with Netflix, an arrangement predicted to substantially increase its earnings. The positive impact of this deal has been reflected in TKO’s shares, which have risen by 12% so far this year, closing at $159.80 on Wednesday.

Moving “Raw” from NBCUniversal affected WWE’s fourth-quarter media rights income significantly, causing a decrease of approximately $55.9 million compared to the previous year. However, this negative impact was somewhat balanced by an uptick in live events revenue ($10.8 million), sponsorship revenue ($7.4 million), and consumer products revenue ($4.8 million). In total, WWE’s quarterly income amounted to $298.3 million.

For the past quarter, UFC experienced a 22% rise in total earnings compared to the same period last year, amounting to $343.9 million. This growth was driven by a $29.9 million boost in media rights and content revenue, a $18.8 million hike in sponsorship income, and a $12.3 million surge in live event revenue. In the coming years, UFC is poised to negotiate a potentially monumental TV rights agreement for the period starting from 2026.

2024 saw TKO, led by Ariel Emanuel, its executive chair and CEO, achieve unprecedented financial success across both UFC and WWE. This outstanding result underscores the power of our intellectual properties, the vibrant audiences we cater to, and the exceptional team we’ve built. Looking forward, our primary objectives for the coming year will revolve around securing long-term domestic media rights contracts for both UFC and WWE’s Premium Live Events, integrating IMG, On Location, and Professional Bull Riders into our collection, developing more captivating live events, and implementing our shareholder-friendly capital return program.

More to come

Read More

2025-02-27 00:16