TKO Group, the combined company of mixed martial arts promotion Ultimate Fighting Championship’s (UFC) owner Endeavour and professional wrestling promotion World Wresting Entertainment (WWE), has posted its financial results for the third quarter (Q3) of 2023, highlighting a substantial growth in revenue for the sports entertainment conglomerate.
The group, which closed its merger in September, posted revenue of $449.1 million, an increase of 32% on the UFC’s Q3 of 2022.
This 32% increase, amounting to a gain of $108.4 million, was powered by a revenue increase of $56.8 million from the UFC, as well as $51.6 million of revenue provided by the newly merged WWE that it had not had in years previous.
The company also issued a dividend to shareholders following the merger on September 29, amounting to $3.86 per common share.
Despite the gain in revenue, year-on-year (YoY) net income for the group fell by a greater amount.
In Q3 2022, the UFC drew a net income of $129.7 million, but in Q3 2023 that figure has fallen to just $22 million. The group attributes this to the increase in revenue being offset by higher operating expenses.
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The costs of the TKO Group merger, namely restructuring, professional fees, and bonuses, have also adversely affected net income in the period, potentially alluding to a recovery in Q4 or early 2024.
The realignment of objectives in the wake of the merger has led TKO Group majority owner private equity firm Silver Lake to consider taking the Endeavour branch of its company private.
Endeavor’s chief executive Ari Emanuel said, when announcing that review: “Given the continued dislocation between Endeavor's public market value and the intrinsic value of Endeavor's underlying assets, we believe an evaluation of strategic alternatives is a prudent approach to ensure we are maximizing value for our shareholders.”
The company added that despite considering strategic options, there would be no sale – full or partial – of its majority interest in TKO Group Holdings. Endeavor holds a 51% controlling stake in the company.
The announcement of TKO Group’s results comes on the same day as WWE announced that US cable TV network The CW will be the home of its NXT weekly show.
The weekly show will debut on The CW in October 2024, marking the first time since its first broadcast in 2012 that it will be situated on a broadcast TV network.
WWE had previously broadcast on The CW in 2012 with its now-discontinued Saturday Morning Slam show.
The CW’s acquisition of the rights to WWE NXT is the latest step in the network’s strategy of expanding its sports offering to entice viewership and moving away from scripted shows.
In July 2023, the network secured the rights to the ACC collegiate sports conference’s American football and basketball games in a four-year tie-up.