The company behind the Enhanced Games lost nearly $62 million in the second quarter, driven by the significant cost of staging its debut event in May. Moving forward, the business plans to put more resources toward supplements, its telehealth service, and smaller, less costly events.
Last week, Enhanced Group posted a net loss of $61.9 million on revenue of $17.7 million. The company attributes the loss to the inaugural Enhanced Games, which took place in Las Vegas in May, as well as costs associated with its special purpose acquisition company merger, a clinical trial for one of its supplements, and more.
The $61.9 million loss is more than twice the roughly $30 million that UFC parent company TKO Group said the MMA giant lost in staging its June White House show—although those figures aren’t directly comparable, because the Enhanced Group number is a companywide quarterly loss, while UFC’s reflects losses from a single event. Still, the comparison illustrates the enormous financial burden of staging major sports events.
Enhanced Group’s results “reflect an intentional decision to invest heavily in its inaugural Enhanced Games, as the foundational platform for both its sports business and as a customer acquisition engine for its performance medicine platform,” the company said in its press release. In June, Enhanced Group said it raised $50 million in an investment led by the family office of cofounder and chairman Christian Angermayer.
The company’s cofounder and CEO Max Martin previously told Front Office Sports that planning for next year’s Enhanced Games was already underway, although no details have yet been disclosed.
In a Monday filing with the U.S. Securities and Exchange Commission, Enhanced Group said its “ability to deliver successful Enhanced Games” will be the “most significant near-term determinant of future performance.” For this year’s Enhanced Games, the company secured $32 million from 10 sponsors.
Looking ahead, the company expects to put on additional smaller events, which it calls “Enhanced Breakers,” featuring athletes attempting to break world records in settings more intimate than the custom-built open-air arena at Resorts World Las Vegas where this year’s Enhanced Games were held. The first Enhanced Breakers event took place July 11 in Los Angeles.
The company is also expanding its slate of supplements and other health products, as well as its direct-to-consumer platform and telehealth division.
Enhanced Group, which is backed by billionaire investor Peter Thiel and Donald Trump Jr.’s investment firm, 1789 Capital, went public through a SPAC merger in May that valued the business at $1.2 billion. Shares have since plummeted; as of Tuesday afternoon, it was trading at $1.68 per share, down 28% over the past five days and almost 84% year-to-date.
Still, Martin professed confidence in the business, saying in a statement issued with the second-quarter results that the company has grown into a “globally recognized sports brand” that is the “only organization to have successfully conducted a medically supervised enhanced sporting event in history.”
The Enhanced Games faced a lot of scrutiny leading up to this year’s inaugural event. The World Anti-Doping Agency condemned the games, calling them “dangerous and irresponsible.” The U.S. Anti-Doping Agency warned that the event was “being done purely for the entertainment and shock value, with no bearing on the long-term health of the athlete.” The International Federation of Sports Medicine also criticized the Enhanced Games, with president Fabio Pigozzi saying the organization’s “grave concern” is that “young individuals will be exploited in the quest for fame and fortune and the allure of the Enhanced Games.”
A representative for Enhanced Group did not immediately respond to a request for additional comment.
