Q3 2022 Endeavor Group Holdings Inc Earnings Call
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Good afternoon, and thank you for attending today's Endeavour's third quarter 2022 earnings call. My name is Jason and I'll be the moderator for today's call.
All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end if you'd like to ask a question. Please press star one on your telephone keypad.
I'd now like to pass the conference over to our host James Marsh.
Good afternoon, and welcome to Endeavour's third quarter 2022 earnings call a short while ago, we issued a press release, which you can view on our Investor Relations website Investor endeavor co Dot com a recording of this call will also be available via that site for at least 30 days today, you will hear from Endeavour's CEO Ari.
Emmanuel and CFO , Jason Loveland before we open for questions. The purpose of this call is to provide you with information regarding our third quarter 2022 performance. In addition to our financial outlook for the balance of the year.
I do want to remind everyone that the information discussed will include forward looking statements and or projections that involve risks uncertainties and assumptions as well as described in the risk factors section of our filings with the Securities and Exchange Commission, including our 10-Qs and 10-K.
These risks or uncertainties materialize or any assumptions prove incorrect our results may differ materially from those expressed or implied by such forward looking statements and projections.
Forward looking statements speak only as of the date. They are made and we undertake no obligation to update them publicly in light of new information or future events, except as legally required. Our commentary today will also include non-GAAP financial measures, which we believe provide an additional tool for investors to use in evaluating ongoing operating results and trends.
This measure should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP reconciliations between GAAP and non-GAAP metrics for our reported results can be found in our press release issued today as well as in the non-GAAP financial information posted on our IR website.
With that I'll turn it over to Ari.
Thanks, James our business performed well in the quarter. Despite an increasingly turbulent macro environment. We've built in position endeavor relative to a broad set of secular industry trends that continue to demonstrate resilience and enable us to deliver on our long term growth strategy.
Today I want to hit on two of these trends the competition for premium sports and entertainment content and the demand for live events and experiences I'll, then turn it over to Jason who will share more segment level color as well as considerations for the remainder of the year.
First as it relates to premium sports and entertainment content.
The company's strength lies in its decision we made nearly a decade ago. It can become a premium content supplier to the diversified and an expanding list of tech and media companies, who have pivoted to D to C.
Alphabet, Amazon Apple and Microsoft are in a race to add offerings across multiple categories to attract customers to their ecosystems and convince them to stay.
These mega bundles are often packaged and priced as all in one subscriptions that deliver strong value.
And these leading tech companies go head to head with major streaming and media players, including Disney Netflix NBC Universal Warner Brothers Discovery impairment for the best video podcasts gaming and social content.
Every single one of them requires a steady flow of premium entertainment and sports content and we are the leader in these categories.
Undeniable that premium sports and entertainment content have become the most powerful.
<unk> means to acquire customers and keep them engaged.
Take Amazon and Thursday night football.
Viewership on Prime has exceeded most common expectations, especially when you consider the strength of schedule.
Both appointment viewing and a powerful promotional tool for the platform.
The NFL and Amazon are also partnering on a first ever Black Friday again, creating more opportunities to drive consumer product sales bottomline, Amazon and their competitors understand the network effect generated from premium content.
Our flywheel is uniquely positioned to deliver it and benefit from it.
Meanwhile, as linear players battle to keep viewers they are increasingly turn to live sports.
You are seeing this play out in new deals for the NFL Major League soccer Formula One college football across linear as well as <unk> and <unk> services.
Additionally, sports betting is quickly becoming the ultimate live sports viewing complement and yet another way to keep consumers engaged during the third quarter. We closed our acquisition of sports betting Tech leader open bet, helping round out our tech offering in this space.
Once again, we position ourselves on the supply side of this industry.
Working directly with rights holders and sports books to deliver everything from official data streaming feed to bedding.
In mobile apps.
In sports the demand for premium talent led content shows no sign of slowing in fact opportunities for talent or expanding into new formats as both big Tech and the incumbents flight toning top creators to their platforms.
We're closing more long term deals for our clients with studios as we did recently with HBO for the game of Thrones executive producer and show runner. Ryan Commvault. We've also moved more television personality into podcast evident in the launch of Steven a Smith, new podcast, no mercy and we're seeing strength.
Learn more of our clients from the big screen to the small screen.
Rather it is Kiana Hughes landing his first television deal with Hulu or Tyler Perry's new deal with Amazon.
We're also beginning to understand the impact of AD supported streaming with new tiers being introduced from companies like Disney and Netflix and the launch of new free AD supported streaming services. We expect this shift towards an AD model to lead to greater streaming adoption further supporting the need for more premium content.
Tori.
This is all to our continued benefit, especially when factoring in the incumbent broadcast and cable networks ongoing content needs.
The second broad theme I want to hit is it continued consumer demand for experiences and live entertainment.
The UFC has achieved 26 consecutive sellout since restarting event during COVID-19.
<unk> 276 set a new record for single event VIP experienced revenue VR on location business and our first ever event in France, and a VIP revenue record for a non pay per view event.
In the third quarter, we serviced three times as many UFC VIP guests.
In the prior year.
Looking at the rest of our portfolio, our UK based Big Festival music and culinary events sold the greatest number of tickets in its history. Meanwhile, the NFL international gains produced strong demand for our location packages and Super Bowl 57 sales are pacing incredibly.
Well in fact interest in Super Bowl 58 slated for Las Vegas in 2024 is already outpacing last year's Super Bowl.
And that's an event that 16 months away.
As for new launches, we recently debuted free soul the fifth installment of our freeze art fairs with more than 100 galleries and 70000 attendees over the four days, making it our strongest inaugural freeze event ever.
As it relates to music and comedy tours, we continue to see strong demand booking shows for our talent well into 2024.
Comedy in particular is surging, Kevin Hart and Bill Burke sold out the only tool arena shows at the just for last festival and Bill Burke at Fenway Park became the highest grossing comedy show of all time.
So whether it's across premium sports and entertainment content landscape or in all forms of live events and experiences our business continues to perform well despite the macro headwinds and while we cannot yet predict those headwinds full impact we remain confident in our position and the strategy, we laid out to <unk>.
Capitalized on the most resilient and secular trends long term.
I'll now turn it over to Jason to walk you through our financials and update you on where we're headed as we look to close out the year.
Thanks, Lori and good afternoon, everyone.
I'll start by walking you through our financial results for the third quarter I will also provide you some color around what we're seeing in each of our operating segments.
As a reminder, all comparisons will be to the Covid impacted third quarter of 2021 for.
For the quarter ended September 32022, we generated one point to two 1 billion in consolidated revenue down $170 million or 12%.
The prior year included $334 million of revenue from the restricted endeavor content business, which we sold in January of this year.
Excluding revenues related to this business consolidated revenues would have been up 15%.
Net loss for the quarter was $12 5 million as compared to net income of $63 6 million a year ago.
This quarter's results included $85 million of losses from affiliates predominantly from our minority investment in <unk> field.
Compared to $18 million of losses last year.
Before equity losses of affiliates was $72 million in the current quarter compared to $81 5 million last year.
Adjusted EBITDA for the quarter was $303 1 million up $19 8 million or 7%.
Youre included $26 5 million of adjusted EBITDA from the restricted endeavor content business.
Free cash flow was $153 2 million in the quarter, representing 55% conversion of adjusted EBITDA to free cash flow.
Defined as cash flow from operating activities less capex.
Our own sports properties segment generated revenue of $402 3 million in the third quarter up $113 8 million or 39%, while the segment's adjusted EBITDA was $195 7 million up 16, 1 million or <unk> 45 per cent.
Growth in this segment was driven by an increase in media rights fees sponsorships licensing commercial pay per view and event related revenue at USC.
In addition, you obviously had one more pay per view event in this quarter versus the same quarter last year.
As well as more events with live audiences.
Results were also driven by the new team series format of PBR and the inclusion of Diamond Baseball Holdings.
You will see with the return of live audiences at our finite events.
The highest grossing sporting event records hosted arenas and San Diego, Dallas, Salt Lake City, London and Paris.
Paris event was the first in France's history. After having worked with the local government there for 12 years to lift their broadcast man on the sport.
The event had the largest gain in merchandise records in the arenas history.
Overall UFC has had 26 consecutive sellout since restarting full capacity events.
In connection with the launch of <unk> in Brazil, We announced a new partnership with band one of the largest TV broadcasters in Brazil for free to air distribution of select events and original content you.
You will see Brazil remains slated to debut on January one 2023.
Now turning to events experiences and rates the segment recorded revenue of $446 million in the quarter down $5 7 million or roughly 1% and adjusted EBITDA of $49 7 million down $35 3 million or nearly 42%.
Segment revenue was impacted by certain biennial and quadrennial events like the Ryder Cup.
The Euro Championships and Cocker Caf World Cup qualifying games, which all occurred in 2021, but not in 2022.
Revenue was also impacted by the timing of certain events that occurred in the second quarter of 2022 compared to the third quarter of last year.
These factors were somewhat offset by growth in our academy business. The introduction of our free Sullivan and events. Returning in 2022 that were canceled in 2021, including the Irwin is classic College football game as well as a number of music events.
We also saw a record attendance at the big FIFA in London the.
<unk> Silicon Valley Classic tennis tournament and our on location business saw continued demand across properties such as Wimbledon. The U S. Open tennis tournament, the NFL and Wwe's biggest events.
Adjusted EBITDA was impacted by the timing of events.
<unk> recoveries recognized in the prior year as well as increased costs for personnel, including the Olympics business with on location and the addition of Barrett Jackson, which we acquired in the quarter.
Additionally, our acquisition of open that closed at the end of the quarter as we previously announced open Baton IMG Arena will form a fourth reportable segment called sports data and technology beginning January 2023.
Finally representation.
A representation of segment revenue was $388 3 million a decrease of $276 4 million or nearly 42% third quarter 2021 included $334 million of revenue from the restricted endeavor content business. Excluding that segment revenues would have been up $57 3 million.
Or 17%.
Segment, adjusted EBITDA was $132 9 million down $8 9 million or nearly 6%.
The prior year included $26 5 million of adjusted EBITDA from the restricted endeavor content business excluding.
Excluding that adjusted EBITDA would have increased $17 6 million or 15%.
Performance in this segment was driven by continued strength in our core talent agency business and the continued recovery of live entertainment predominantly.
Predominantly music as well as our $1 six over 90 marketing business.
We saw increased spending from our corporate clients.
Moving to the capital structure.
We ended the quarter with $5 5 billion of debt and $978 million in cash.
In the quarter, we made a voluntary paydown of $250 million of debt at.
At quarter end, our aggregate fixed rate debt is now approximately 43% of our outstanding total debt we.
We intend to pay down an additional $250 million of debt before the end of the year.
Together, we expect the combined pay down to reduce our annual cash interest cost by approximately $30 million. We also expect our net leverage to be approximately 385 times by year end.
We continue to anticipate free cash flow conversion of approximately 40% for the full year 2022.
We also anticipate achieving roughly 50% free cash flow conversion for the full year 2023 with.
With the strength of our free cash flow profile, we see more opportunities to continue to de lever moving onto our updated 2022 outlook.
We are tightening our revenue guidance range to be between $5 two to $3 5 billion and $5 $3 million to $5 million, which is $5 $2 8 billion at the midpoint representing year over year revenue growth of 21%, excluding the restricted endeavor content business. In addition, we are raising our adjusted EBITDA guidance.
<unk> from 115 billion and $1 175 billion, which is one $1 6 billion at the midpoint up $10 million from the midpoint of our prior range representing expected year over year adjusted EBITDA growth of 32%.
Our updated guidance incorporates the following considerations.
Our high degree of visibility into revenues for the balance of the year.
The continued adverse impact of FX.
The delayed timing of content deliveries within our non scripted business.
Earlier than anticipated sale of the Michigan risk organization.
And our ongoing cost discipline.
Even in the face of an uncertain macro environment, we remain confident in our ability to execute on our strategy and the resilience of our business against challenges ahead.
With that I'll turn it back over to James.
Great. Thank you, Jason and I will now take questions.
Yeah.
Okay.
If you would like to ask a question. Please press star followed by one of your telephone keypad. If for any reason you'd like to move that question. Please press star followed by two again to ask a question. It is star one.
Our first question is from John Hodulik with UBS. Your line is now open.
Great. Thanks, guys.
So obviously a lot going on in the traditional media space right now with the weakening AD market and.
Stronger cord cutting.
You guys think it changes the calculus companies are making when it comes to sports rights.
Is there any sense that.
Especially traditional companies are sort of becoming more reticent to spend or.
Spend on sports at this point does it.
Does it accelerate the shift of sports from traditional platforms digital platforms. That's number one and then maybe for Jason.
Margins in the representation business were really strong this quarter.
Is this 34% sort of a good level as we start to look out into 'twenty three.
So I'll take the front end of that question. So premium content continues to be in huge demand whether that be sports rights or a movie or TV or podcasts.
The tech players like Amazon and alphabet, and Apple are in a race to add offerings across multiple categories to attract customers into their ecosystems and convince them to stay.
As the owner of premium sports like the UFC as.
As well as the guy that represents premium leagues and federations.
More interest in bidders in live sports is a win win for us.
And more opportunity strike broadcast deals.
For our talent.
Apple as we now kind of moved in on MLS.
And MLB Amazon now has exclusive Thursday night football and they added the Friday night gains of Black Friday net.
Netflix bid on F. One.
<unk> is rolling out their <unk> service.
They are going to add sports.
They're going to follow what we believe was Amazon's process going after international rights for sports testing at their testing their system, there and then moving that to the domestic front there.
Theyre going to go day and date and live I think it was just announced with Chris rock.
Youtube announced 15 MLB regular season games.
<unk>.
And also ESPN and ESI.
Hearing international games during this year's NFL.
It shows the value of sports.
There's going to be couple of sports coming up the NDA ours and some others.
There is going to be multiple players in competition, whether it'd be from Paramount plus Comcast.
Apple Amazon.
SPN.
And time Warner Discovery, So I think the value of sports rights as we have seen even with the <unk>.
One deal go into $75 million.
Is only going up so I do not think it is going down even in this environment.
As far as the EBITDA margins go.
Part of the 34% was the mix shift in the quarter between WMA 160 over 90 in licensing, but we should be 30 plus margin for this segment on a go forward basis.
Alright, great. Thanks, guys. Thanks question. Please.
Yeah.
Our next question comes from Stephen <unk> with Goldman Sachs. Your line is now open.
Hey, great. Thanks, guys.
Other than that maybe for you or Mark now that the deal is closed could you maybe talk a little bit more about the game plan for integrating open that and AMG arena over the next few quarters. What are the next steps are there any revenue or cost synergies that you think you cannot quickly against.
And that we should keep in mind as we think about modeling the new segment in 'twenty three and then for Jason on FX, we saw some reprieve today, but FX continues to be a headwind could you remind us what your specific ex FX exposure is and how much of a headwind it was or has it been on revenue and EBITDA. This year and maybe how that relates to some of the guidance revisions.
That we saw come through thank you.
Just to remind you.
We're in the <unk> side, the bedding business.
We're not competing like the other players in the.
Space for players and consumers on the supply side all of them.
Sure.
We have multiple touch points in the company.
Across sports and sports betting equal season IMD Arena.
<unk> data and content on behalf of rights holders to sports books.
Opened that office sports.
Betting platform and a content offering ranging from player wallet.
Account management trading an odd certainty on creating excuse me as a result.
In this space.
Nice secular tailwind.
In the bedding space, both internationally and domestically as it rolls out more.
More state.
On the synergies I would just say both AMG and opened that are profitable businesses right now.
It's going to be a new segment for us.
Going into 'twenty, three and the combination we expect to achieve meaningful revenue synergy.
When IMG has arena has the.
Data in the in that and the content.
<unk> opened that has plenty of rods and et cetera, so on the revenue side and cost side.
We feel very positive about the business.
Profitable business for us.
On the FX on the FX side, roughly 85% of our revenue is denominated in USD. So we do have some top topline revenue exposure, mostly in our <unk> segment.
Roughly let's call it.
750 million ish of exposure, but we expect the impact this year to be on a full year basis, roughly $120 million or 2% revenue for us though.
Revenue exposure is offset as the cost of those contracts and servicing them are also in that.
Currency. So it has a limited impact on our bottom line.
As evidenced by us continuing to raise and forecast up our EBITDA guidance.
Great. Thank you.
Next question operator.
Our next question comes from Ben Swinburne with Morgan Stanley . Your line is now open.
Yes.
Hey, everybody.
Good afternoon.
Alright, I had a question for you around capital allocation and then I had a question for Jason.
Sports rights and how those roll through the business.
Guys have built this company as I know you know through lots of opportunistic and successful M&A, but we are certainly in a new rate environment.
Cost of capital is higher public company can you just talk about your sort of philosophy as you look out over the next year plus around continuing to be opportunistic to make sure you don't Miss big opportunities, but also recognizing sort of what's happened to the cost of capital and sort of where investors are focused from a leverage point of view.
And then Jason IMG and W E sports.
Wrap a lot of these big conferences I noticed you guys won the bid 12 deal.
Which I think at a 70% increase we typically don't think about that business that much but can you just remind us how you guys get paid for businesses for deals like that as it flows in over the course of those deals and sort of what segment that shows up because obviously, that's a decent part of the IMT business, which as well. Thank you.
Well as you saw.
Jason talked about we're going to pay down another 250, so on the allocation side as we said to you.
We're going to be sub four we're now up for going into next year.
The conversion rate of 50%, which I think Jason talked about which we also indicated that we're going to get to.
We're always opportunistic as it relates to M&A.
We have a different formula for everybody.
Kind of create moats around our businesses and see kind of where the opportunity cost of capital more expensive. However.
We're long term players, we evaluate everything about where we think it's best for the shareholder value.
And we continue to be very.
Inquisitive, but with the understanding of where interest rates are going up so right now.
We're looking at the marketplace haven't seen anything that we want we closed a bunch of deals that we wanted to do.
And Thats, where we stand right now.
I would just add on the capital allocation.
As already said, we are going to be $3 85 times a year roughly at year end, we paid down through that independent under $2 50, this quarter and based on our free cash flow expectation next year will be generating a lot of cash for the company and we're going to we're going to look at all things how to maximize shareholder return with our capital whether thats continued debt repayment.
Stock buyback dividends as well as M&A. So we're constantly looking at the best way to maximize shareholder value with our capital over the long term.
As far as your second question on media rights typically what would happen is we would charge a commission percentage on the media rights deal. It can take a variety of different forms sometimes it might just be on the total value of the deal sometimes it might just be on the increased value of the deal or there could also be hurdles that you add additional your additional commissions based on.
Certain thresholds. So it's traditionally just a commission rep agreement on those deals.
Right.
Jason.
Simply.
Our next question comes from Jessica Ehrlich with Bank of America. Your line is now open.
Thank you.
So I think to your question.
Yes.
Lots of them.
Reported some weakness in pay per view revenue.
And I think I alluded to a number of matches.
Could you just talk about what's going on.
And what do you think in terms of engagement and then.
Can you give us some color on like.
What happened with the equity loss of affiliate line you said.
Okay.
Thank you.
But.
Why why did the loss widened and then guidance why did you bring that revenue guidance why did you break it down a little bit.
So I'll take the first one of that Jason will jump in on the Alaska. Thanks, Jessica So listen.
Disney Slashing ESPN they are great partners to us.
Handful of our events.
NIM was broadcast on ABC kind of a huge amplifier for us <unk>.
<unk> continue to be very strong.
We look at our business specifically.
And the ecosystem.
On annual basis, not on a quarter to quarter basis.
So marquee event shift.
<unk>.
<unk> on year over year.
Actually it was mentioned on the Disney call.
Our robust performance on ESPN, plus largely attributed to the UFC content.
The third quarter of last year feature to match up the result of an oversized pay per view.
So.
Like every sport.
We will have match ups that drive increased demand based on various factors like rankings and hype.
And the good thing is we're fortunate with USD one of the most exciting SaaS based sports.
And it is reflected in continued record breaking achievements.
Sellouts.
<unk> six over the last.
Less.
That we've had and a big one is coming up Saturday another shell out and in the quarter I think record breaking sellouts eight six out of the last eight in this quarter.
I'm not really it's just kind of.
Matchup happened that was bigger in that quarter.
Yeah.
On the Washington from affiliates the majority the vast majority of that is.
Chart chart from Deerfield, where field took an impairment charge and that flows through our earnings so that's where that's coming from.
And then on the revenue guidance.
A few things that we are incorporating our guidance over the balance of the year that brought the revenue down slightly one was the continued impact that FX is happening on the business to we've had some we have some non scripted content deliveries that are new that are pushed from Q4 to Q1 and lastly, we sold the Miss Universe organization earlier than we had expected originally that.
We expect the revenue from that in the fourth quarter.
Thanks, Jeff.
Yeah.
Okay.
Okay.
Yeah.
Next question please Jason.
Our next question comes from cut gun morale with RBC capital markets. Your line is now open.
Great.
Thanks for taking my questions.
I know you spent some time on this in the opening remarks, but can you talk a bit more on what youre seeing across the health of the consumer.
Your events and experiences I think we on the outside are just all trying to reconcile what's going on between the strong results that you and most of your peers have reported compared to what I think a lot of us are viewing is being increasingly challenging macro backdrop and so.
And that's kind of a tough one to really answer that.
Do you think about what's going on and how does that inform your near term outlook.
That would be helpful. In just second sorry, Jason to follow up on the FX question.
Can you characterize or size of the FX hit as being about $120 million.
And I think last quarter you had.
Size of that is close to $60 million. So I'm, just trying to better understand.
Was the FX impact.
<unk>, an incremental $60 million in the back half relative to what you were expecting because if so kind of seems like your topline guidance tweak.
Wasn't that punitive.
In fact ex FX it sounds like everything has been in line to maybe slightly better but.
Yeah.
I just wanted to get a better sense there.
So.
On the consumer side I'll take the first part of the question and Jason will take the second part on the FX issue. So limited impact on our business to date.
Solid performances across the broad platform.
On the sports side.
As I said in the last answer Youll see sold out all events in the quarter 26 consecutive sellout since we came back from Covid.
Five more ticketed events versus last year.
UFC, 276%, a new record for a single event VIP.
Experiences of allocation, we sold four.
For allocation VIP experiences going into management grant for $40000 and there was some at 24 $24000.
Okay.
281 of the highest premium experience saw sellout.
And I talked about that.
Six out of the eight events.
Third quarter broke records.
On the event from experience I travel claims and strong performance at Wimbledon and U S. Open.
MLB all star game, WWE <unk>, our biggest event.
And so when I look at.
Interest in the Super Bowl 58 is outpacing Super Bowl 56.
And we're 16 months away.
And the IMG Academy Si.
I'm, just giving you a flavor because how we look at it in a broad way.
We had a record at the boarding school and a record at our summer camps.
<unk>.
And.
So from our perspective, that's going well I would I would.
Also if you just look as you talked about.
Some people in the same space live nation reported.
I think it was $44 million band.
11000 events.
They are up double digits Disney saw strong demand at the parks.
And I would just say I think the.
The way, we're looking at it in test for a monitor this.
Spending habits have shifted.
But our company has a presence that at every point on the purchase of change whether it be premium experiences.
The supply of content for the streamers.
And.
And I would just say during COVID-19 people were buying stuff and post COVID-19 and more more focused on experiences.
And we're the beneficiary on that side of the equation and with that I'll turn it over to Jason for FX.
So the $60 million. When we gave you last time look for the balance of the year and that number as rates continue to move has grown to 120 I gave was from the original budget for the balance of the year for the original budget was the full year impact of FX was $120 million.
Yeah.
Got it thank you so much.
Next question operator.
Our next question is from Bryan Kraft with Deutsche Bank. Your line is now open.
Hi, Good afternoon, I know that you've expressed a great deal of confidence in the growth outlook for representation segment.
But I wanted to ask you in light of some of the larger media company is talking about more spending discipline and slowing down the growth in their content budgets from your perspective.
How are they changing what they're doing to kind of optimize the returns on content investment I know theres still growing their budgets, but where are they getting more disciplined.
Where are they pulling back on spending.
Any color on that that you could share would be super helpful. Thank you.
I think it's in their best interest to be to say that.
Amazon austerity that being said from where I sit.
<unk>.
We believe our buyers are staying at their content spend levels, even in the Netflix said theyre going to be at 17%.
Actually increasing.
Revenues based on sub growth Paramount went from 2 billion to $6 billion. We know Roku is in there right now I think Disney Center at 30 going at 33, depending on some sports rights.
<unk>.
And.
On the podcast side.
We have made.
The very high end deals right now across all the different players.
So.
Yeah, the only thing.
Endeavour Edr is a proxy for content growth.
And our barometer for overall content.
Not only in movies and television.
And it's going up across the board, we are not feeling any decrease in the spend.
<unk>.
I just give you this in the quarter. The total number of scripted and non scripted shows sold has increased.
Compared to the third quarter of 2021.
<unk>.
And global subscriptions have increase when you look at all the different players and the only way to keep people engaged in their platforms is through movies TV and if it's.
The streamers pot.
Podcast or sports rights and now Theyre moving to <unk>, where they then they have to going to have to add more content.
And Netflix is going to have to go into sports.
Or.
So we feel very good about what and I understand what they have to say, but we're seeing no decrease.
In our representation segment actually as I've stated before on these calls.
We've increased double digits, if you take 2020 out.
And we don't see that any of.
That decreasing at any point.
Excellent if I could ask just.
One follow up.
Okay. Thanks, sorry, just one quick follow up you mentioned the Ava odd launches.
Does.
Did those Avon launches trigger new layers of <unk>.
Payment to you and your clients because of the way the deals are structured.
Yeah.
We're not there yet.
I suspect that at.
Every turn of a new content platform there might be negotiations for different economic revenue models, yes, I don't have what those fundamentals are right now.
But.
Hello of them only have the rights for <unk>, so that theyre not going to have to come back to us if they want to have an <unk> layer for different economics for our clients, but we're not there yet once that happens we will report it.
Alright, Thank you Brian .
Next question Jason.
Our next question is from Doug Mitchelson with Credit Suisse. Your line is now open.
Oh, thanks, so much.
A couple of quick ones already I was just curious on podcast renewals some of the podcast platforms talk about dramatic improvements for margins in their businesses and increases in profitability as they grow AD revenue do you think.
The talent is going to maintain share of revenue.
Our gas business sort of some of these platforms deserve greater share of revenue and they were just overspending to start up the business and.
On the second one I'm just curious on location just how much more runway there is to add events have you already captured the vast majority of the major events like the Olympics and Super bowls and or is there a lot more events that you can sort of plug into that business. Thanks.
So.
Big part the podcast and Si.
Over the last two quarters and I cant finalize the number for this quarter, but.
They're making significant overall deals across all those.
Three players.
And.
There is a revenue mix with regard to advertising et cetera.
Will they change those deals I'm not really sure not really my issue we have some of them have.
They are complicated like in the <unk> and the Eva complicated deals and who gets the revenue mix on advertising et cetera, and how youre structuring those deals. So it's all over the place to give you one broad answer doesn't work.
And on the allocation side.
We added the WWE, we've now added we're adding Barrett Jackson.
We had the Super Bowl, we have the Olympics.
A lot more out there.
In the space I think we are unique company as it relates to that.
In our offering.
And I mean, you can just see what I mean, what we've done at the UFC and what the revenue increase that we've had there over the year has been pretty substantial so when people are realizing that high end experiences the consumer definitely want.
Alright, thank you.
Operator next question please.
Our next question is from David <unk> with Jpmorgan. Your line is now open.
Alright, thank you.
Small asset, but you did so much universe recently, so if you look at your businesses or there are other places where you would want a carrier portfolio or is this more of a one off.
And then Jason can you just walk through the factors driving the higher expected free cash flow conversion to 223, okay.
Let me take a bow Street.
Sure.
Sure.
Look on the free cash flow.
Some of the factors are.
Obviously, if we're paying we paid down debt, we're going to continue to pay down debt to generate roughly $30 million of incremental cash flow and really also working on our networking capital on our change in net working capital and getting that more stabilized we've had some ramp up over the network capital, giving pre Olympics spending and some other things.
That's primarily how we're expecting to get additional free cash flow.
And there's been questions about optimizing the portfolio with the sale of <unk>, yes.
We're always looking across the portfolio. If we have an asset that doesn't necessarily fit in the portfolio anymore and we can get a good return on it we're always evaluating those opportunities.
Thanks Terry.
Next question please.
There are no more questions at this time, so I'll pass the call back over to the management team for closing remarks.
Great. Thanks, everyone for joining us today look forward to the next quarter.
That concludes the conference call. Thank you for your participation you may now disconnect your lines.