Tuesday December 5, 2023

Endeavor’s Sports Revenue Spikes

Troy Taormina-USA TODAY Sports/Design: Alex Brooks
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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.

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