Q2 2021 Endeavor Group Holdings Inc Earnings Call
These measures should not be considered in isolation from or.
Or as a substitute for financial information prepared in accordance with GAAP.
Considerations between GAAP and non-GAAP metrics for our reported results can be found in our press release issued today as well as on our IR site with that I'll hand, it over to Laurie.
Thanks, Sam continue.
Continuing last quarter's positive trends, we saw increased demand across our portfolio.
From premium content to sports betting and continued to execute across each of our growth vectors in our own sports properties.
NR and representation segments.
Due to the positive momentum and our continued positive outlook for the balance of the year. We have increased our annual guidance, Jason will discuss this in more detail when he walked you through our financial results for the quarter.
But first I want to spend a few minutes on how our role as owner operator, and representative of premium sports and entertainment IP and content and talent has enabled us to get in front of industry trends and lead new markets, creating new revenue opportunities across the company.
Let's start with the underlying trends in sports media and the incremental opportunities we have to drive growth.
Data shows that the U S remains the most valuable sports rights market in the world with an estimated $19.5 billion of annualized right value last year media companies looking to acquire large D to C. Audiences continue to aggressively compete for rights driving fees up to record levels with some.
<unk> also having to maintain or grow their linear presence.
In the second quarter, we renewed our Wimbledon U S media rights agreement with ESPN and the tennis channel until 2035 for a significant increase over the prior term in.
And internationally, we guided football Australia through a landmark domestic media rights deal with Viacom CBS and Paramount plus in Australia, marking the first time, the national team and the F. A cup rights were sold separately from the leaks.
We're also seeing record media rights deals for the USD in countries like China and France.
Our last five renewals have yielded on average over a 100% increases.
Our strength as a curator and distributor of premium sports media rights also allows us to capitalize on new enterprises, and consumer businesses, including sports betting and NFL.
Pandemic further accelerating online betting adoption, which has helped fuel IMG arenas growth beyond video and data streaming into online betting app for UFC and golf. Meanwhile, we continue to sign top tier operators like bet MGM, while adding mark key properties and events like the Ryder Cup to our offerings.
Sports Wagering is now Regal in 21 states and growing fast internationally, the Netherlands, and Germany have reregulate or are in the process of connecting new frameworks that we believe will pave the way for bedding market to open there as early as the fourth quarter of this year.
As it relates to <unk>, we've made a deal with Dassler left who we invested in three years ago. When we saw the NFC trend happening to create a UFC NSP platform.
We also closed a deal for UFC and Panini to create NFL trading cards, the first release of which sold out in less than 24 hours.
And now we are closing countless NFL deals on behalf of clients from Wimbledon to Wayne Gretzky.
Now turning to television and film content.
First half of 2021 from media and Telecom M&A Hills reached their highest level in years in the $3 billion.
Whether it is discovery and Warner Brothers media are Amazon and MGM, they become super competitors alongside the likes of Netflix and Disney all making big bets on a D to C strategy, they have deep pockets and need to differentiate their platforms to drive subscriber growth.
The competition for content and talent is at its highest level I have seen in 2006 years then.
Number of original series and movies Commission by stream of platform grew 48% for the past four quarters as compared to our prior fourth quarters net.
Netflix alone revealed it will spin $17 billion in content in 2021.
44% compared to 2020, and remember we remain platform agnostic and one of the largest representatives of talented independent suppliers of content to the biggest streamers.
These trends are visible in our representation segments, where our <unk> bookings for the second half of 2021 are up double digits over where they were at the same point in 2019. The most recent non COVID-19 impacted here.
We are seeing further evidence of premium being placed on talent and scale and value of individual deals. We've been a part of whether it's a multiyear deal for Peyton Manning for Monday night football on ESPN plus guidance here with the food network Miley Cyrus with NBC Peacock, Michael B, Jordan with Amazon.
Our multi project deal for sure these throw with Netflix and Ryan Reynolds with Paramount.
The recent Hello, Sunshine sale is yet another data point that spotlights the value of premium content.
It also demonstrates the potential of marquee talent to emerge as lifestyle brands building commercial ecosystems around communities of fans, we're seeing this more than ever and our equity deals were closing for our talent ventures group.
The unique value proposition of our company is that it's fueled by a representation segment, which is built on direct access to talent as brands.
Work with talent to monetize their brands through our own channels and elsewhere, and that's really why representation as a wealth creation vehicle and the seed planting engine of our entire business.
The pandemic has also spurred the growth of new distribution models, while creating lasting shifts in consumer behavior, including a surge in demand performance like podcasts video games, social and marketplace apps, our flexible business model allows us to opportunistically expand into and capitalize on these burgeoning growth.
Articles.
For example, this past quarter alone we've closed new podcast deals for 40 clients, while four clients shows hit number one on the Apple charts.
And now I want a variety just a few business highlights.
First we announced during our last earnings call that we expected to pay down $600 million of debt in the third quarter part of our continued commitment to reduce leverage we actually paid that amount down in the second quarter.
We also shared news of two now closed the acquisition.
<unk> College student athletes or and CSA, a leading college recruiting business and flight scope, a European based data collection, AAV production and tracking technology specialists, both acquisitions bolstered our capabilities, while creating large moat around our IMT Academy and IMT Arena businesses.
Yeah.
In July we announced a series of acquisitions that will further expand our capabilities, while opening opportunities in new geographies. These were mailman group, a leading digital agency for sports brands and rights holders Mailman will integrate with our IMG media and 160 over 90 businesses while.
Bringing new top tier clients into the fold.
Ticket software company QQ to elevate our suite of offerings on our location our experiential business. The addition of the dynamic pricing capabilities will enable us to generate more ticketed revenue across our experiential events.
And finally 22, a boutique licensing agency in the Middle East a region that presents incredible growth opportunity for IMT licensing expanding our reach in this growing region opens the door for further expansion down the road with that I'll hand, it over to Jason.
Thanks, Lori and good afternoon, everyone.
I'll start by walking you through our financial results for the quarter and provide you. Some additional color around what we're seeing in each of our segments and then I'll briefly discuss our revised guidance for this year.
Please note that all comparisons are to the prior year period, which was impacted by Covid.
For the quarter ended June 32021, we generate approximately $1.1 billion in revenue up $648 million or 140% adjust.
Adjusted EBITDA for the quarter was approximately $168 million up $122 million or.
Our own sports property segment continue to perform very well with revenues of $258.9 million, an increase of $106.6 million or 70%. The increase was primarily driven by higher media right fees due in part to contractual escalators and our media rights agreements higher sponsorship for you from the renegotiations of existing deals.
Coupled with new deals and increased events output.
Adjusted EBITDA for the quarter was $132.3 million double that of the same period in 2020, primarily driven from the higher revenues I just mentioned.
You'll see it a huge second quarter, helping power suits biggest first half ever in terms of revenue and adjusted EBITDA.
The quarter benefited from three incremental live events inclusive of one pay per view all three pay per view events in the quarter. We're at full capacity and broke local gate records beginning with Europe, two <unk> one in Jacksonville, the first rolled out major sporting event with full funding capacity at an indoor arena in the U S. Since early 2020.
More recently, our July UFC 264 event in Las Vegas finish up the second highest gate and T Mobile arena in history, and the third highest gate among UFC events of all time.
<unk> had more than 20000 fans the highest attendance ever recorded at a sporting event and T mobile.
Beyond ticket sales for these events. We also saw increases in other event related revenue streams like international and commercial paper.
Yoshi continues to have one of the most international youngest and most engaged fan bases in all of those sports, making it highly attractive to partners year over year, we've seen nearly 30% growth in the 18 to 24 demographic and we're currently ranked third behind the NFL and NBA among millennials in addition to what our.
Sure on the partnership front, we recently closed new deals with crypto Dot com and Jose Clairvaux, while renewing and expanding our relationship with Monster partnership revenues is up over 25% versus 2020.
Lastly, as it relates to viewership UFC events, which are a simulcast across the ESPN family reached $18.3 million viewers on ESPN television networks alone in the first half of this year up 10% over last year.
Meanwhile, in this segment PBR is on track to have its best year ever across key categories, including media right fees sponsorship merchandize sales and licensing.
Now turning to our events experienced in <unk> segment.
This segment recorded revenue of $528.7 million, an increase of $408.8 million.
Media rates and production revenues increased in the quarter due to the return of a full schedule of European soccer matches in the resumption of other events like the Miami Open in addition to newly secured business.
Adjusted EBITDA for the quarter was $36.8 million up $79.5 million compared to Q2, 2020, where we recorded a loss.
This was primarily due to the increased revenue, partially offset by direct operating costs to support increased business activity as well as costs associated with our continued investment in the business.
To give you a little color about what we're seeing in this segment.
College football and NFL ticket packages for the upcoming season are experiencing double digit retail price increases versus 2019.
<unk> Winter Wonderland, our month long Winter festival that starts in November in London at its highest grossing revenue week in its history. When tickets went on sale earlier this month.
Lastly, and IMG Academy, it's been a record summer in terms of number of campers and at this moment, we have more students enrolled for the fall semester than any prior school year.
Moving onto our representation segment revenue was $328.2 million, an increase of $135.4 million or just over 70%. This growth was primarily driven by an increase in client commissions and project deliveries that endeavor content, including episodes of season two of truth be told for Apple TV.
The wallet NBC and Netflix film Blue Miracle.
While we saw higher year over year deliveries from endeavor content. Some deliveries we had forecasted would occur in the second quarter have either now been delivered or will be in Q3.
That sort of timing delay predominantly from three shows negatively impacted our revenues in the quarter by approximately $90 million.
Adjusted EBITDA for the quarter was $61.7 million, an increase of $9.6 million or just over 18% as we realized a higher percentage of revenue growth from a different content versus clients in the quarter. We also had a higher operating expenses as we diligently manage the pace at which we brought back some costs to support increased business activity.
As already mentioned, we are pacing ahead as it relates to WMA bookings for the second half of the year and we're booking clients reduce much further into the future.
We're also seeing the beginning of a rebound analyze music and countries, leading the way with sold out towards for clients like Garth Brooks and Eric Church.
On the brand side, one six over 90 is gaining steam as companies are doubling down and getting back in front of consumers. We're significantly increased our scope of work with clients.
T mobile capital, one visa lows, Audi Amazon and AT&T, while continuing to sign new clients.
I mentioned endeavor content had a strong performance in the quarter I also want to note that we recently began the sale process for that business. Although we're in the early stages, we are already a business and retain the nonrestricted businesses.
When we have more to share we will let you know <unk>.
Meanwhile, the updated guidance I will share shortly assumes endeavor content is status quo.
Corporate adjusted EBITDA for the quarter.
Great.
Collecting and increasingly.
Cost brought on to support increased activity and investment in the business.
As well as those costs associated with being a new public company before.
Before I get to annual guidance.
We paid down 6%.
Which consisted of the repayments.
Of approximately $163 million under the <unk>, which now carries a zero balance.
Okay.
$257 million, representing the entirety of the WMA IMG term load is.
Should in May 2020, which was the highest cost paper in our capital structure.
$180 million of first lien term loan under the UFC facilities.
Because of these moves we will realized $35 million in annual interest savings going forward.
Onto our updated guidance.
And sort of the Delta <unk> bookings.
Ticket sales and other indicators.
Sure.
We are therefore.
Given our revenue guidance from a prior range of $4.76 to $4.83 billion to now between four eight and $4.85 billion.
And unadjusted EBITDA to 745 billion.
To between 765 and $775 million.
The increase in our annual guidance is based on the strength, we saw on our business in Q2, and our continued positive.
Sort of outlook for the business.
And some even though we recognize most activity levels are not yet at historical levels. We're very encouraged with business trends and look forward to what's to come for the balance of 'twenty.
2021, and a more normalized level of activity in 2022 with that I will turn it back over to Sam.
Actually operator will give instructions on how people can ask your question.
So as a reminder to ask a question you will need to press star one on your telephone.
All your question.
Again that is star one on your telephone please standby, while we compile the Q&A roster comes from the line of Brad Feldman from Goldman Sachs. Your line is now open.
Hey, Thanks. This is Steven on for Brad Thanks for taking the questions. A few on <unk>. If I could first if you could explain expand a little bit more on the dealership and then pay per view activities that you saw in some of the more recent UFC fights in late <unk> and early <unk> and sort of what the.
So it looks like maybe for the rest of the year and how do you expect that to compared to the first half, but good activity that we saw.
Now with Kana out for the next few months what ideas do you expect to step up and lead the league here.
Here.
For the next couple of quarters, and then lastly could you remind us where you are with some of the longer term growth initiatives that you outlined for the UFC, particularly around the timing of international lights contracts being renegotiated.
Thank you.
Thanks Ari.
I guess one of the slides, there's a bunch there so I think I'm going to hit them all.
I just want to reiterate that the USD had its biggest first half in the company's history.
In terms of revenue and adjusted EBITDA.
Actually every P&L and cash flow metric you could containers at an all time high in the 2006 years of UFC.
<unk>.
So in 25 years.
Develop global stars at every level.
Conor Mcgregor income.
Again.
And I just want to remind everybody.
He is only three times in the last five years and going back all the way in the history. It was <unk> first if you didn't have keto nothing haven't lastly, the elastic starwood Ronda rousey and the same conversation.
We've got a great roster in a very deep bench I just want to reiterate we've got eight of the top.
Champions out of the 11 are international.
Pay per view front.
Over the last 12 months.
<unk> had a record total pay per view buys and the average pay per view by per event. It's been at a record level at the <unk> deal is we're three years into a seven year deal and there is growth built into our and escalators built into our fees.
Continue to draw most watched cable network.
And time periods strong.
But also they have now the contingency.
The ultimate buyer that started out on spike TV.
Topics of ratings, our social impressions in the three weeks, leading up to and including UFC $2.64.
Olympics.
And then on spot.
Sponsorship for growth factors.
Q2 was one of them.
25% from last year.
We continue to sign and renew large multiyear deals with draft Kings Crypto Dot com and monster and we're opening up new categories globally.
Internationally as I said to you before.
The mix is 90%.
Our fans are international.
10% or the United States.
International only represents 10% of the current Youll see revenue mix, demonstrating a huge addressable.
Market that we can hit there.
There is any indication there is meaningful upside in our international rights.
Mentioned before China, and France deals that were up and in our last five renewals.
The greater than 100% increases.
Lightpath is up over 25% in the last 12 months and we just went out with which I talked about my opening statement with Panini Naft's. We had three dropped a sold in 24 months.
The use of one four that bodes very very well from our perspective on our GAAP one last deal.
And I haven't even mentioned.
IMG arena in the gaming aspect of the UFC. So those are some of the I think I've hit all your whole question, but there you go.
Thanks, Sharon Thanks Niccolo.
Next question comes from the line of John Hodulik from UBS. Your line is now open.
Great. Thank you.
A quick question on the a couple of questions on the reputation business, obviously, a lot of growth in DTC and then the content going into those platforms.
How closely tied is that representation business to that spending.
Number two what kind of visibility do you have over the next several years and then can you talk a little bit about how you guys get paid maybe getting paid differently as much of it comes from the box office and more of it comes from.
ADC platforms. Thank you.
Hey, it's Marc I'll take that second half Amendment why don't we answer that and then we'll go back.
And it's the first part John because I'm not sure. We followed you there, but look I'll tell you.
With regard to our reputation representation in our talent.
Frankly, we're in a winner.
We're in a pretty damn good spot I mean, I would say one of the reasons why we're so cautiously optimistic for the rest of the year.
You kind of look at what's going on and you heard Bob <unk> earnings call last week with Disney and he pointed a lot to seeing production slowing down here and they're nervous about production slowing down frankly, we're not really seeing any of that has already pointed out in the opening comments.
Our bookings for film and television are up double digit in the teens over this exact point in 2019, so it's a pretty frenetic pace right now it's busy big pipeline lot of development and a lot of platforms actually are starting to stockpile content, so not knowing what's going out and whether delta.
<unk>, whatever they're going to order theyre going to shoot as much as they can and that's serving to our benefit as far as pay structure and compensation.
We're sort of hitting on all corners, there as well I mean as you know take.
Take your actor or actress recent news, obviously, you see what's going on with Scarlett Johansson and then you'd see on our side with Emma Stone and the deal we just kept with Disney.
It's sort of working on all of our favorite right now given this linear non linear Avon as spot world. We're living it we're getting the front end.
For our clients as they go into movies and TV series that we always get but increasingly we're getting the back and bought out the way you see kind of the Netflix model.
And now.
The studios are kind of coming to the table to discuss how we're going to get compensated for the lifetime value of subs and they know that conversation is going to come anyway. So theyre preemptively, having that conversation with us and those are just the beginning so take for example.
Youre jungle crews you want to watch it on Disney plus well you can't watch it of course, unless you're a Disney plus subscriber. So yes. It goes into the box office math in terms of how many pay per views are bought for jungle crews, but what about the folks that are paying whatever it is these days $79.90, 911.99, depending your platform to become a subscriber.
You heard <unk> say at the same time.
Churn is very low of your Disney plus subscriber so if we're if.
We are actors and actresses that are driving you to get the platform in the first place where is there a piece of that and that part of the competition has now come into the equation. So it's a very warm market. If you will in and of course, there's a lot of competition a lot of streamers, a lot of people buying and we're going to play each of them against each other.
Right in the center of that ecosystem. So we're feeling good about that what was your first part John.
The first part I was just saying how tight are you to the growth in DTC, which I think you guys answered.
And you answered the last part about.
How do you guys get the backend.
So the backlog is a more peaceful.
With the smart job.
I guess the middle bar was.
Could you guys go faster than the content spend because you're taking market share and there is and there is inflation.
In product care or production values are or she can go slower what's the relation how should we think about that relationship.
You have to realize.
We're platform agnostic okay. So.
If it's a linear play on USA for a fifth Netflix Apple Amazon Pluto.
Disney Peacock et cetera, we're agnostic.
So we sit wait in the perfect spot here and are capturing that value and right now we as Mark just said on <unk>, we have all three categories, whether it goes direct to consumer whether it goes day and date and whether it goes theatrical Warner brothers as you heard.
They made all their deals with.
They said their direct to consumer with all their movies they paid out $200 million in the back end. So we're capturing that value and Mark just told you. The fourth iteration. That's coming so we think we are in the best spot for for that situation. We're going to go we're going to go to the speed of the marketplace. I mean, that's the bottom line and there's a lot of demand there is folks looking for a lot of supply.
And we're going to we're going to serve it up so.
It's definitely something to watch.
But at the same time, we feel good about the position given the music industry leader, whether its revenue volume scale.
There and will serve the pipeline.
Thank you.
Next question comes from the line of Scott <unk> from RBC capital markets. Your line is now open.
Great. Thanks for taking the question I wanted to ask about the sports betting you spoke about it a bit in the prepared remarks, but I was hoping you could expand on that commentary and help us.
I don't understand your exposure to sports betting through your IMG Arena business. It seems like a big market, that's only going to get bigger and whether it's in the U S or abroad. So we would just be great to hear what you're seeing as the trajectory ahead in the overall potential for that business. Thanks.
Disclose the following in the Marvel to tick off the second half the value global sports betting market is estimated right now to exceed $80 million at the end of the year and the addressable market.
Estimate by $2000.25 million to $120 million. So it's a huge market for us to kind of walk into a mark we can pick up.
Look I'll tell you cut guidance.
Sure.
This is about a bigger growth drivers you can get when it comes to endeavor. I mean, we've got 21 states that are online and approved to start taking sports wagering. We've got another 10 that are essentially approved through regulation will come online very soon everywhere you turn from Wrigley field.
Fenway Park somebody's going to build a.
Sports book next to the arena or the field to capture all these folks that are sports fans and looking to place to place a backfill IMG arena. So it's been a really good place we by rights from leagues and federations, we sell those to the sports books, the territories and the rights are expanding.
Pi in our participation of that pie is growing and right now we sit there is the exclusive data and video provider for majors like PGA ACP tour UFC and at the same time, we serve up a whole host of soccer Federation snooker cricket across the board so big business for us.
Our exposure is relatively low to answer your question and here's why when you see us do a deal for sports betting can get rights you can just assume that's going to be a profitable deal for us on paper, meaning we are going to sign up and lock up media rights partners or sports books, ensuring our.
Profitability before we make a bid for the deal.
And we have line of sight into that because of course, we're serving up media content, we're selling media rights.
150 different regions with a 160 different sports properties. So our visibility is like no other and when we go in to sell media rights or even bid on media rights I should say.
We're buying the media rights for distribution the games themselves.
Looking into that video and data stream. So we're going in with a bundled proposition and we can throw one off or the other in order to ensure we don't have exposure some of our competitors don't do that they are only in the bedding business or other competitors are outlined in front are only in the immediate distribution business, where it is both.
That reduces and really limits our exposure to risk.
That's perfect. Thank you both.
Next question comes from the line of Ben Swinburne from Morgan Stanley. Your line is now open.
Good afternoon.
Two questions one just thinking about more in the back half of the year I mean, Jason you talked a little bit about it in your guidance, but can you give us a sense for your expectations around the full reopening.
Vince we should be focused on as it relates to delta or other swing factors that are important.
And then I felt.
The <unk> acquisition was really interesting I know this is for our earmark whoever wants to take it.
What are you thinking about the opportunity in ticketing, because I can see how that technology would help on location, but it would seem like it could help a lot of rather than businesses I don't know if thats a business you think you've licensed out to other partners over time are you thinking, but a bigger play in ticketing just anything you want to talk about on the QQ on location front would be interesting and helpful.
Great questions Mark in a second one.
We're not going to go too deep there otherwise we would have to bring you into our strategic planning team.
I'm ready.
We think theres, a real opportunity as it relates to ticketing for all the reasons you've mentioned, let me think of all of our media partners. We're in business with think of the 800 events that we represent stage license sell think of what we do with our location to your point I mean.
Clearly this is an avenue that is exploitative, let's put it that way for us.
Got to be careful I mean <unk>.
On the board of live Nation Ticketmaster, we can tell you that sometimes these margins are extremely low but they lead to a whole ecosystem of business that is frankly, something we're exploring right now and of course the <unk>.
Extra Bang for the Buck you get is the data that comes with that the CRM the consumer front to back end relationship. So we'll leave it there for now but as you can see where we.
We clearly have an affinity towards that let's put it that way I think secondly.
It's just it's just the pent up demand really we're looking around and we're seeing a lot of reports and.
And of course, we have to stay cautiously optimistic because who knows where this delta goes in epsilon et cetera, but.
Again, a couple of cancellations here and there you saw the jazz Festival in New Orleans was cancelled we don't own. It we have a lot of our artists in it you saw.
<unk> had a marathon here or there cancelled we haven't golf tournament or beat Golf tournament, China coming up it's actually been cancelled and we may have an LPGA event that gets cancelled, but by and large stuff is going on right.
Competitions are going on the sports events are going on our Q4, a lot of our stuff like winter Wonderland is on sale and frankly.
Would be numbers on EBITDA here, even with the Delta and we're raising guidance on both revenue and EBITDA with the rest of the year still knowing that that uncertainty exists.
And I think one of the reasons why why we're bullish and optimistic.
Frankly, our business is diversified let's remember last year in <unk>.
Nine months of the heart of Covid, we still did two thirds of our budgeted revenue for the year. So as much as in Denver was hurting because we were that we were the target for this pandemic in terms of our business, we still did 70% of our own budgeted revenue and now going forward remember no matter how hard.
Delta comes back as long as the events take place fans are no fans. We're in good shape. This isn't our first rodeo if not the first rodeo for the pandemic for our sports rights partners, they're going to put on the soccer games, they're going to put on these port Ballgames and as long as they do we're going to get paid and the different revenue streams that we have.
And then really on the cost side.
When you look at that even though our costs are climbing up because the business is coming back.
And in such a big way, we're still operating in a few areas with a very skeleton staff. In fact, we haven't seen view of our businesses, where we still have a hiring freeze that remains so we can toggle that cost structure to make it reflective of the marketplace business slows down business is canceled we stopped hiring and vice versa.
Warms up and we get going I would.
Actually say, that's the bigger challenge hiring folks in this marketplace. We have 400 open positions right now in our 6000 employees that we have.
It's tough to get folks to take a job. These days just given that they're kind of reflecting on their place in life. So bottom line is we've got some good EBITDA beat.
Revenue and EBITDA guidance going up and that's really just an indication of events that are taking place production. That's hot right now a distribution business is strong and you've heard us talk about representation and then finally IMG Academy I mean, Jason mentioned in the opening comments Hot camp business, I mean biggest summer camp business week.
Ever added in Chi Academy, and our bookings for boarding school next year are at a record high.
All systems go right now for endeavor I would just say one thing just to kind of if you want to think about the whole picture. When you look at the other companies that trade in our space, whether it be WWE formula One live nation.
There are one trick ponies.
We have.
We have multiple facets, which you've heard whether it be.
Sponsorship.
All sports properties representation and location representation of sports.
There are multifaceted aspects of our business and we have gone through the pandemic and we're raising EBITDA, we're raising guidance. So we have actually understand our business and I think you guys are going to learn and we're and multifaceted business that we get to pivot back and forth.
So I mean, if you just look at our own.
Our own sports properties year to date.
70% year to date.
In revenue, we have not even talked about how great PBR stool right another thing inside that space.
We're bigger in 'twenty, one than ever before so the company has multiple different aspects of our business that protect us against anything in the future.
Thank you both.
Thank you.
Next question comes from the line of Megan <unk> from Credit Suisse. Your line is now open.
Hi, guys I didn't hear you mentioned it but have you signed any college athletes and the NCAA approved the name and then license deals and how do you expect these types of deals impact the college sports landscape over time, maybe as a way to quantify the GAAP profit pool for the NFL.
And I L deals.
And then can you talk about how the UFC pay per view revenue is recovering I think commercial and residential mix has been probably changing but how is that going with the reopening.
Hey, Megan it's Marc I'll start with that and then <unk> will talk about the.
The mix on the pay per view look you just hit spot on a real growth.
Future growth driver for this company and that is NIH al.
Imaging might get that's going to hit us in a bunch different places 160 over 90 with all the brands that they represent to we're looking to get behind some of these emerging athletes is going to hit us in our sponsorship division and the deals we can bring in there it's going to hit US and you have a great impact of Alere field IMG College as as these <unk>.
<unk> deals for athletes lead to.
Bigger deals for oncology. So for example, I'm sitting with one of the.
Big Big 10 Athletic Directors last week and he tells me about out they just closed their first big <unk> deal for the University and it came on the heels of this Q ISR I will not name it.
Wanting to do a deal with the quarterback of their division one football program and that then led to a big <unk> deal with school. So we're going to benefit in that way as well. This is a real growth opportunity for us because we haven't been able to target College athletes, we haven't been able to target High school athlete.
Theres a senior quarterback in Texas, one of the top <unk> in the nation, who is going to be going to Ohio state skipping. His senior year. So these folks are very these kids frankly are very attractive to so many advertisers out there it will allow us to sell them, but at the same time it will allow us to develop a relationship.
And when they go throw they end up signing with WMA sports first and foremost so we'll start to lay out financially what that means as we go forward, but we think it's a it's a <unk>.
Real is a real growth engine for us and look no further than the Olympics, we had 60 athletes.
<unk> and the Olympics that brought in 30 metals, who are very hot to trot right now and quickly hot to trot with advertisers that advertisers want to get in with them want to get aligned with them. While the Halo is still there and it's something we intend to capitalize on it and big way and also a growth area because.
We haven't really been big when it comes to on field contracts, meaning Doug sports and IMG have sold a lot of marketing deals for athletes, but other than golf and tennis, we haven't represented them on field with their on field contracts. So we're moving into that space now and NHL logistics celebrate the growth.
Unity.
And as I said.
It's our <unk>.
Second half is the biggest half in the company's history as it relates to UFC were up.
We're up in our commercial residential from 'twenty to 'twenty. So.
And that's just going to continue to grow and I just want to say we're up in the second half largely in the company's history without with only three live events.
And our commercial and <unk>.
Residential not being where it was in the past so we're in pretty good shape, there and I think we will be growing significantly.
Okay. Thanks.
<unk> from Citi. Your line is now open.
I guess three quick easy ones.
I think you said.
Content might be up for review.
As you can remember that was a reasonably large top line contributor.
In your model.
Is that something that you think can changes upon your top line trajectory if you end up selling.
Second.
Can you just spend one second maybe this is for Jason just talking about.
<unk> shares.
I think we don't have your model and then third I noticed your deferred revenue balance was really strong.
On the balance sheet can you just remind us.
What divisions that deferred revenue.
Thanks.
Okay great.
We will let me hit the EC and then Jason will comment on your final two questions.
As far as endeavor content goes where.
Just actually beginning our sales process. So what's going on there is we have to sell down 80% of EC now remember this isn't all of endeavor content. It's just the project to fall under the jurisdiction of the Wpa. So just those restricted.
Projects. If you will so we just we just embarked on the sale process. We've actually had a couple of presentations last week.
And we're getting the books out to qualified buyers.
Look it's kind of.
A give and take if you will push the push pull it's a little bitter sweet frankly, we don't want to sell this business. This is a strong growth business for us and if you see what Hello Sunshine got if you believe some of the fuzzy math $900 million.
We primarily sold that right on the backs of six shows three hits six total shows and three more in the pipeline will endeavor content has 15 hit shows and hundreds of projects development green lit or actually in casting our production right now so we're bullish about the price we can command.
The management team, we have the residual value we are connected to with these projects. The ownership of these projects moving forward, which is why we seriously don't want to see it go.
But at the same time, we will stay on board, we'll have 20%, we will retain that it'll be a great option for our clients and will ultimately pro forma financials for next year. So that there won't be any change for this year. What you see for this year and the guidance will include endeavor content all the way through the end of the year it will be next year.
What we ultimately pro forma it out but.
We will see what happens with the process, but clearly we are bullish about the asset on.
On the deferred revenue piece.
Balances associated with what Mark <unk>, Mark just talked about about our endeavor content business and building up before.
Before we make deliveries and also on the event side of our business and on location side any pre sales for events that have not taken not taken place yet.
Thank you.
On shares.
Just finished checking on that.
Whats the question on the shares.
Oh It was just the fully diluted share count was I don't know a couple hundred million dollars lower than what you can look at consensus.
Model and I think it has something to do with our cautionary equivalents not being converted I just wanted to confirm.
Yes, let me let me follow up with you and then I don't have the model in front of me and we'll get that we'll get back we'll get back to you on that.
Very good.
$440 million outstanding based on our market.
Thank you.
Next question comes from the line of David Joyce from Barclays. Your line is now open.
Thank you a couple of questions on U S C.
Warner representation, if I can see how is the second half.
Lineup pace when compared to the second half of 2019.
And as part of that.
Is there sort of.
Maximum optimal number of pay per view events that you would plan to put on.
To avoid potential dilution.
Attention where engagement.
And then secondly related to U S C.
And your comments about how strong your international.
Young demographic is.
Are you seeing competition from other LTV.
<unk>.
Sports.
Babies seeking new.
Capital sources or joint ventures to trying to bulk up there.
Our presence in the M&A World just wondering how that was it. Thank you. Thanks, Hey, David It's Mark.
Trying to hit all of these I appreciate the questions.
First of all let's start with the competition no. The answer is no. We're not looking to bandwidth anybody we're not looking at JV, we don't need any more dry powder.
We're in a very strong cash position and frankly, our cash will be spent on MMA acquisitions. The UFC as is paramount.
It's the trophy asset is going to stay that way, we love the competition frankly.
It drives is athene and white needed anymore.
Any more octane in his bloodstream it fuels this man.
In a rising tide lifts all boats, whether the USA Usfl and the XFL at the NFL The Continental Basketball Association with the NBA Major League soccer and what's that done which is none not no impact whatsoever in terms of European soccer RPF out remember the Tfl Profilers Lee is.
On ESPN in fact, they use the UFC so for most of the PFM. So come one come all anything that grows the MAA MMA sport. The combat sports area serves to our benefits. So we look forward to more of that to come I think.
In terms of the pay per views, we would just mentioned generally we do one a month, we do one pay per view a month. So you can expect an annual calendar basis, we're going to do 12. This year, we have 13 pay per views scheduled.
We're going to do and it was in our numbers of 14th event. This year, which we have decided to move that event just in order to keep our quality. It's a level we want to keep it at and also 50 dates and also ride out this pandemic a little we're going to move that 14th pay per view to next year to give US 13 for next year. So we're re.
<unk> guidance on revenue and EBITDA.
Obviously in the face of this pandemic and where it's going but also with one less UFC pay per view than we had planned.
And if I could on the representation side given their difference.
Product types of revenue streams, there how does the timing and revenue mix impact the ultimate margins, but margins were stronger than expected this quarter.
Even with.
So some delays in deliveries that you had mentioned.
Yes, so we're going to have margin variability from within segments and from quarter to quarter, depending on revenue shift revenue mix in revenue shift so.
That's why we really focus on looking at the business annually, we focus on our annual guidance were at the midpoint.
We're pushing 15, 9% margin so.
It will shift quarter to quarter between segments based on the May.
The makeup of the revenue for each business line.
Alright, thank you.
Yes.
Alright with that thank you everyone only it looks like some of your network.
Thank you operator.
This concludes today's conference call. Thank you for participating you may now disconnect.
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Okay.
Yes.
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