Endeavor’s Sports Revenue Spikes

Endeavor reported earnings on Wednesday for the first time since going public in April, revealing the extent to which its sports properties are driving the company’s growth.

In a quarter that saw overall revenue decrease to $1.07 billion from $1.19 billion in Q1 2020, Endeavor’s sports businesses recorded a 22.1% year-over-year increase in revenue — up to $283.5 million.

Though events and rights accounted for about half of Endeavor’s first-quarter earnings, revenue from the segment was down to $539.6 million, a 19.3% drop. Representation revenue fell 15% to $248.9 million.

The parent company of UFC, IMG, and WME has had an incredibly active year so far.

• June: On Location Experiences, purchased by Endeavor for $660 million in 2020, became the exclusive global hospitality partner of the 2024, 2026, and 2028 Olympics in a deal worth at least $1.3 billion, per Sports Business Journal.
• May: Endeavor agreed to acquire sports digital agency Mailman Group for roughly $60 million, according to Sports Business.
• April: The company raised $511 million in its IPO at a $10 billion valuation. A private placement of shares — that included New England Patriots owner Robert Kraft and AC Milan owner Paul Singer as investors — raised $1.8 billion.
• March: Endeavor said in a filing with the SEC that it plans to use proceeds from the IPO to raise “at least $1.75 billion” to purchase the chunk of UFC it doesn’t already own. Also, Elon Musk joined the board.

Endeavor is still facing one of its long-standing issues: debt. It’s $50 million less than it was at the end of 2020, but still at $5.87 billion as of March 31. The company expects to reduce debt by $600 million in Q3.

The stock closed at $29.39 on Wednesday, down just under 1% for the day, but still above the IPO price of $24.