Endeavor, the international entertainment and sports giant, has posted revenue of $1.6 billion for the first quarter of the year largely due to a strong performance within its sports division.
Revenue for the company’s sports segment was $353.3 million for the quarter, up $56.6 million, or 19.1%, compared to the same period in 2022.
This was attributed to an increase in media rights fees, sponsorships, commercial pay-per-view (PPV), and event-related revenue at Endeavor’s mixed martial arts promotion UFC, which resulted in an additional PPV event in the quarter, as well as more events with live audiences.
The firm also achieved increased ticket sales for Professional Bull Riders (PBR), the US-based international bull riding circuit, and increased revenue from PBR's new team series.
Endeavor's events, experiences, and rights division posted revenue of $800.8 million for the quarter, up $19.9 million, or 2.5%, from the first quarter of 2022.
The rise was driven by record attendance and sponsorship sales at the Miami Open tennis event and growth at IMG Academy, as well as the addition this quarter of entertainment company Barrett-Jackson, which was acquired in August 2022.
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Income from Endeavor’s representation business came in at $350.2 million for the quarter, down $7.1 million, or 2%, from last year. The decrease was primarily attributable to $14 million of revenue recorded in the prior year quarter from the restricted Endeavor Content business, which was sold in January 2022.
Revenue was also impacted by a decrease at the company’s 160over90 business due to the disposition of certain contracts in the quarter, partially offset by revenue increases at WME.
The firm’s sports data and technology division posted $100.9 million in revenue, up $55.8 million, or 123.9%. The increase was driven by the addition of sports betting technology platform OpenBet, which was acquired in September 2022, as well as growth at IMG Arena, the betting arm of the international sports and entertainment giant.
Endeavor announced two significant transactions in the quarter, acquiring the World Wrestling Entertainment (WWE) promotion and agreeing to sell IMG Academy for $1.25 billion.
The acquisition of WWE will see Endeavor form a new publicly listed company and merge the promotion with UFC, creating a sports entertainment heavyweight with a value of $21.4 billion.
Meanwhile, IMG Academy is being sold to private equity group EQT and is expected to close in the third quarter of this year.
For Q1, Endeavor’s net income came in at $36.3 million while adjusted earnings before interest, taxation, depreciation, and amortization (EBITDA) was $306.4 million.
For the full 2023 financial year, the company expects to post between $5.7 billion and $5.8 billion in revenue and adjusted EBITDA between $1.22 billion to $1.28 billion.
In connection with the IMG Academy sale, Endeavor will commence an event-driven share repurchase of up to $300 million and pay down $50 million extra in debt. It also plans to begin making quarterly cash dividend payments.
Endeavor chief executive Ariel Emanuel said: “This quarter, we continued to deliver solid results and set a number of financial and attendance records across our owned sports properties and marquee events.
“Our agreement to sell IMG Academy, together with the planned share repurchase and quarterly dividend announced today, are strong examples of our commitment to maximizing return for our shareholders.
“We are excited about the unique opportunity the proposed combination of UFC and WWE presents, and remain focused on durable growth as we continue to execute our successful strategy in content and experiences.”