Sports and entertainment agency giant Endeavor recorded a net loss of $303.4 million in the first quarter of 2024, with its owned sports properties division the only one of the group’s four segments to grow its revenue year-on-year (YoY).
That division secured income of $685 million during the three months ending March 31, as opposed to Q1 2023 revenue of $353.2 million (up 94%).
Endeavor has said the growth in revenue for this division came through live event ticket sales and partnerships at the TKO Group, which controls mixed martial arts’ Ultimate Fighting Championship (UFC) as well as the World Wrestling Entertainment (WWE) promotion, and at the Professional Bull Riders (PBR) organization.
The company took control of WWE in September, and during Q1 the promotion had revenue of $317 million (which was not present in Q1 2023).
Endeavor - which is set to be taken private by US investment group Silver Lake in a deal closing by the end of Q1 2025 - also said the growth in that division’s revenue came because of increased UFC income across “partnerships, live events, and consumer products licensing.”
Owned sports properties had adjusted EBITDA (earnings before interest, taxation, depreciation, and amortization) of $299 million, up 61% YoY.
In total, Endeavor’s revenue during Q1 amounted to $1.85 billion, with total operating expenses coming to $2.16 billion. The firm ended Q1 with adjusted EBITDA of $374.1 million.
In terms of other Endeavor segments, meanwhile, all three saw revenues drop.
Events, experiences, and rights’ income fell by 7% to $744.9 million, the agency’s representation division’s revenue amounted to $345.3 million (down 1.4%), and sports data and technology only brought in $90.7 million, a drop of 10.1%.
In the latter sector, the revenue was impacted “by the loss of certain data rights at IMG Arena [the sport data business of the Endeavour-owned agency].” However, the firm noted this was partially offset by growth at the OpenBet site, which Endeavor is now merging with IMG Arena.
For events, experiences, and rights, meanwhile, YoY income was impacted by the timing of media rights sales for several events that had taken place in Q1 2023 but did not in the same timeframe this year.
Endeavor did, however, note revenue increases from On Location, the premium hospitality and events business in which it has held a majority stake since early 2020.
On Location was appointed as the exclusive hospitality service provider for the Olympic program in June 2021, to work with future local organizing committees to deliver hospitality experiences for spectators and Olympic stakeholders covering Paris 2024, the 2026 Winter Olympics in Milan-Cortina, and the 2028 Olympics in Los Angeles.
Ari Emanuel, chief executive of Endeavor, said: “This quarter, Endeavor benefited from brisk demand for our sports and entertainment content, live events, and premium experiences. We remain focused on maintaining our momentum through the year while working toward the close of our take-private transaction with Silver Lake.”
The Silver Lake deal is the “largest” private equity sponsor privatization of any business in the media and entertainment sector, Endeavor has claimed, with the share acquisition transaction boasting an equity value of $13 billion and a total enterprise value of $25 billion.
Silver Lake is purchasing 100% of the shares in Endeavour (that it doesn’t already own) at $27.50 per share, a 55% premium on the close value of shares from October 25, 2023.
The private equity group initially invested in Endeavor in 2012, and the agency went public in 2021.
Silver Lake also has investments in Madison Square Garden Company, owner of basketball’s New York Knicks and ice hockey’s New York Rangers, New Zealand Rugby, and City Football Group, the collective of soccer clubs headed up by English Premier League powerhouse Manchester City.
