Q4 2022 Endeavor Group Holdings Inc Earnings Call
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Good afternoon. Thank you for attending today, and Danville full year and fourth quarter 'twenty 'twenty. Two result conference call. My name is Alicia and I'll be your moderator for today's call all lines will be.
During the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question. Please press star one on your telephone keypad I would now like to pass the conference over to your host James Marsh head of Investor Relations with endeavor you May now proceed.
Good afternoon, and welcome to Endeavour's fourth quarter and full year 2022 earnings call.
A short while ago, we issued a press release, which you can review on our Investor Relations website Investor Dot endeavor co dot com a recording of this call will also be available via that site for at least 30 days today, you'll hear from Endeavour's, CEO , Ari Emanuel and CFO , Jason Loveland and before we open for questions.
The purpose of this call is to provide you with information regarding our fourth quarter and full year 2022 performance. In addition to our financial outlook for 2023.
I do want to remind everyone that the information discussed will include forward looking statements or projections that involve risks uncertainties and assumptions as well as described in the risk factor section of our filings with the Securities and Exchange Commission, including our 10, Qs and 10-K, if these risks or uncertainties ever 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 were made and we undertake no obligation to update them publicly in light of new information or future events.
Sept 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.
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 our CEO Ari Emanuel. Thanks.
Thanks, James clause.
Closing out our first full year as a public company. We are encouraged by our performance in 2022, we saw strong growth across our segments. Our business has proven resilient. Despite ongoing macroeconomic headwinds we continue to execute on our long term strategy and as 2023 comes into focus the IP content talent experience.
And brands that tap into the endeavor flywheel are more valuable than ever at endeavor, we have built a global sports and entertainment company. Unlike any other.
We own valuable sports IP we.
We supply content to a robust group of media Tech and streaming platforms, all of which continue investing in premium sports and entertainment content to attract customers and keep them engaged we helped a leading talent and brands we represent commercialize their art expand their reach and tell their stories are diverse live events and.
<unk> portfolio continues to capitalize on consumer demand for unique dynamic ways to engage with the sports and cultural experiences they love.
And in 2022, we enhanced our bedding technology offering to better serve the global sports betting industry.
The strength and consistency of our financial performance is a direct result of our unique portfolio, which provides multiple lanes for growth and helps insulate us from volatility in any one area.
As just one example revenue from Wmc's three largest ethanol buyers in the aggregate represented only approximately 2% of overall company revenue in 2022, we remain well positioned even as distributor strategies evolve.
I'll spend a few minutes sharing how we have delivered shareholder value in line with our stated goals for the year, then I'll turn it over to Jason who will share more details on our results for the fourth quarter and full year 2022. He will also discuss our outlook for 2023.
<unk> on last year, we grew both revenue and profitability by double digits and our own sports property segment.
Years ago, we made the strategic decision to move further into ownership of events and premium IP that can benefit from the endeavor flywheel.
Our businesses, including UFC and PBR proving the model both organizations recorded record revenue last year, all 21, UFC events with live audiences sold out continuing at 29 events sellout streak since returning from the pandemic UFC posted its best sponsorship year ever in 2020 to unlocking new categories and.
Sorry to reach a fan base that grew double digits over 2021 in the U S.
It also continues to be an industry leader in digital engagement UFC social media accounts now have more than 220 million followers combined tictoc followers alone grew 55% year over year.
And professional Bull riders newly launched team series finished a strong first season, drawing nearly 200000 attendees and delivering record setting attendance in multiple markets. Given its early success. We are planning to expand from eight to 10 teams. This year, we anticipate selling those two additional teams at a starting price of 'twenty.
<unk> million dollars each in our representation segment WMA delivered solid financial results with growth from bookings across virtually all the mediums we touch.
We secured key talent deals for more than 310 scripted series on broadcast cable and streaming channels and our clients wrote <unk> directed five of the top 10 films at the domestic box office beyond television and film WMA closed deals for more than 200, New books, including 57, New York Times Bestsellers and signed deals for 300 books to be adapt.
Into movies and TV shows.
Our music team booked more than 40000 engagements in 2022 and our comedy touring segment also had a huge year with Bill Barrette Fenway Park, becoming the highest grossing solo standup comedy show of all time.
WMA sports continues to make its mark representing the world's leading tennis players and delivering some of 2020 twos biggest sports broadcasting deals.
The rise of WMA sports is clear to the market. The agency jumped up 10 spots in Forbes as most valuable sports agency list or.
Our events experiences and REIT segment also saw a strong revenue and profitability growth in 2022, one of our Premier events Hyde Park Winter Wonderland celebrated its 15th anniversary by breaking its consumer revenue record up double digits over 2021 2022 also marked on location single largest hospitality.
Event of all time with Super Bowl 56, and the Madrid opened hosted a record 300000 attendees in its first year as part of our portfolio. We also continue to benefit from continued competition for domestic and international Sports media rights on pairs latest data shows the global market for streaming sports rights will rise 64% in 2000.
<unk> 23 to $8 5 billion.
In 2022, IMG media advise the Big 10 conference on deals worth more than $8 billion over seven years and closed new Euro league deals with significant increases in key markets, including France and Germany.
We also helped deliver a record breaking set of deals for cricket South Africa, as well as multiple new sizable deals for UFC Wimbledon and the Big 12 conference among others.
22 was also a standout year for our IMG Academy business, where we had record enrollment across the boarding school summer camps and online college recruiting services further establishing its position as a leading sports and education brand. We also strengthened our sports betting and data offering closing our acquisition of open bet, a leading business to business sports.
Betting technology company paired with our IMG Arena business, we're now able to offer a true end to end solution for sports books and rights holders, creating complementary offerings that enhanced demand and engagement with this business built out we've created a fourth segment sports data and technology.
On the balance sheet, we continue to execute with financial Prudence.
We promised last year, we would get our net leverage below four <unk> by year end, we delivered on that promise closing out 22, having paid down $5 billion of debt and we will continue to pay down debt in 2023.
Looking ahead, we believe in the strength of our portfolio and the durability of our long term strategy.
We are focused on owning managing and operating the best sports and entertainment assets in this experience economy.
Our unique flywheel capabilities and insights position us as a first mover in identifying trends, making connections across our ecosystem of talent brands and assets and generating growth opportunities, while diligently managing our capital. This puts us in a great position to continue delivering on our strategy in 2023.
With that I'll hand, it over to Jason to talk more about the fourth quarter and the full year 2022, as well as our outlook for 2023.
Thanks, Lori and good afternoon, everyone.
I'll start by walking you through our financial results for the fourth quarter and full year.
I'll also provide you with some color on what we're seeing in each of our operating segments and the comparisons to be an annual or quarterly will be in reference to the COVID-19 impacted prior year of 2021.
For the quarter ended December 31, 2022, we generated $1 6 billion and consolidated revenue down $245 1 million or 16%.
The fourth quarter of the prior year included $332 8 million of revenue from the restricted endeavor content business, which we sold in January of 2022.
Excluding revenues related to this business consolidated revenues would have been up $87 7 million or 7%.
Adjusted EBITDA for the fourth quarter was $239 6 million up $10 2 million or 4%.
The fourth quarter of the prior year included $4 3 million of adjusted EBITDA from the restricted endeavor content business as well as the benefit of $26 $1 million of insurance recoveries related to events from earlier in the year as well as 2020.
For the full year revenue was $5 six 8 billion up $194 million year over year, or 4% and adjusted EBITA was $1 4 billion up $283 2 million year over year or 32%.
The prior year included 737 $4 million of revenue and $13 3 million of adjusted EBITDA from the restricted endeavor content business, excluding revenues related to that business consolidated revenues would have been up $927 8 million or 21%.
Before I get to our net results for the quarter and full year I want to spend a moment on our tax receivable agreement.
As you May recall deteriorate has previously been disclosed in our SEC filings and generally requires us to pay CRA holders, who are primarily pre IPO investors for certain tax benefits they transfer to the company.
Prior to the fourth quarter, we have not met the required accounting criteria to report certain deferred tax benefits or the associated TRA liability and maintain a valuation allowance against these benefits.
As of year end, we met the required criteria to release this allowance and in the fourth quarter, we recorded deferred tax benefits of $746 million associated with our TRA and a TRA expense of $812 million.
We expect future TRA exchanges to primarily be recorded through equity now that the valuation allowance has been released.
In addition, as indicated in our 10-K, we expect TRA payments to be made primarily to over 15 years.
Now moving to our net results the fourth quarter had a net loss of $225 7 million compared to a net loss of $16 7 million a year ago.
Our net loss for the quarter is driven by the net impact of the tax benefits and associated TRA expense, just discussed as well as losses from affiliates.
For the year net income was $321 7 million compared to a net loss of $467 5 million a year ago.
This change in net income was largely driven by the improvements in operating income and the gain from the sale of our restricted endeavor content business, which was partially offset by the net impact of the tax benefits and associated CRA expenses.
This year's results also include greater losses from affiliates as compared to the prior year.
For the full year, we generated free cash flow of $355 million defined as cash from operating activities less capex. The difference between our reported free cash flow and our forecast was primarily driven by the timing of cash payments and collections related to our locations IOC business, our Iot initiatives.
Remains on track.
Now I'll walk you through each of our segments.
Our own towards property segment generated revenue of 301 4 million in the fourth quarter up $24 1 million or 9%, while the segment's adjusted EBITDA for the quarter was $142 4 million up $17 3 million or 14%.
On the year the segment generated $1 3 billion in revenue up $224 1 million or 20% and $648 2 million of adjusted EBITDA up $110 5 million or 21%.
Looking back on 2022, UFC set of 11 arena record for highest grossing events, including for the highest grossing fight nights in the U S and the two highest grossing fight nights and UFC history, both at London's O two arena.
Over the course of the year, we renewed international media rights deals.
Our aggregate AAV remains in excess of 100% over prior deals since we began tracking in Q2 of 2021.
You will see also had its highest sponsorship sales in the company's history. We added several new sponsors to our roster of what could be chain, New Amsterdam Barker and project rock.
We also introduced new categories like the official electric commercial trucks, the official law firm and the official ready to drink partners of the UFC.
Beyond new sponsors, we're leveraging the technology of 40 sites digitally create more inventory in and around the octagon.
<unk> tried to do was also the Eog's best year for consumer product sales, most notably within the videogame trading card and mfg categories.
Moving to PBR, we successfully launched the team series so all eight of our team sanctions.
<unk> also signed still have soccer Zip recruiter MGM in the Las Vegas Convention and visitors authority as team series sponsors.
Over the course of the year, we saw over 1 million combined fanned agenda unleash the Beast Pendleton whiskey velocity Tau and <unk> series of events.
Now turning to events experiences and rates.
The segment recorded revenue of $557 7 million in the quarter up $41 million or 8% and adjusted EBITDA of $52 4 million down $2 4 million or 4%.
On the year segment revenue was $2 5 billion up $427 million or 21% and adjusted EBIDTA was $342 6 million up $127 1 million or 59%.
Segment revenue and adjusted EBITDA growth in the year was driven by heightened consumer demand and lifted restriction for live events and premium experiences such as Miami Open Super Bowl 56, and the MPW March Madness games as well as the inclusion of the Madrid open and open that is.
Additionally, we saw increased 43, one summer camp enrollments at <unk> Academy, and a full year contribution from our TSA collegiate athlete recruiting network growth.
Growth was partially offset by the expiration of certain previously disclosed media contracts that were not renewed.
Moving onto our representation segment revenue in the quarter was $408 5 million, a decrease of $390 4 million or 43%.
Fourth quarter 2021, and included $332 8 million of revenue from the restricted endeavor content business. Excluding that segment revenue would have been up $23 4 million or 6%.
Segment adjusted EBITDA in the quarter was $123 9 million up $5 5 million or 5%.
Fourth quarter 2021 included $4 3 million of adjusted EBITDA from the restricted endeavor content business.
Looting that adjusted EBITDA would have increased $9 8 million or four 9%.
For the full year representation segment revenue was $1 5 billion down $447 6 million or 23% and adjusted EBITDA was $469 8 million up $86 4 million or 23%.
The prior year included $737 4 million of revenue and $13 3 million of adjusted EBITDA from the restricted endeavor content business. Excluding that segment revenues would have been up $289 8 million or 24% and segment adjusted EBITDA would have been up $99 7 million or nearly 27%.
Growth in this segment was driven by our core agency business, primarily from the demand for premium content and the continued recovery of live entertainment, such as music and comedy Tori.
Additionally, our <unk> server 90 marketing business saw increased spend from corporate clients, specifically from experiential partnership and advertising services.
Before I share our outlook for 2023, I want to give an update on our capital structure.
We ended the year with $5 2 billion in debt and $767 $8 million in cash, resulting a $4 4 billion and net debt at.
At year end, our net leverage was approximately $3 eight three times.
Our aggregate fixed rate debt is now approximately 43% of our outstanding total debt.
As a result of our operating performance and voluntary debt paydown of roughly $500 million S&P global ratings recently raised our issuer credit rating should be plus.
We plan to continue de levering through growth in adjusted EBITDA free cash flow generation, and we will make additional voluntary debt repayments in the year.
And finally I'd like to share our current outlook for 2023.
I'll first discuss our guidance on a consolidated basis, and then provide some additional detail by segment.
As we've said previously we believe our company's results are best evaluated on a full year basis, given quarterly fluctuations related to the timing of events.
Content deliveries sales cycles within our immediate and gaming businesses as well as business transactions on behalf of our clients and brands.
We expect consolidated revenue for the year to be between $5 85 billion and $5 975 billion or 12% growth at the midpoint of the range on adjusted EBITDA, We're expecting a range of one 5 billion to $1 three O 5 billion or 10% growth at the midpoint of the range, implying approximately 20.
2% margin on the year.
We expect free cash flow of between $545 to $605 million or a midpoint of $575 million.
Representing 62% growth over last year.
Now let me provide you with some color on our 2023 guidance by segment.
With our own sports property segment, we expect continued growth of UFC and PBR offset by the sale of a Diamond Baseball holdings.
UFC, we anticipate the same total number of events, but with more U S events outside of our apex arena more international events and overall more marquee events, all of which carry a higher cost structure.
This in turn impacts margin, but bringing UFC Costar global fan base remains a major strategic priority for our growth.
We also expect to have high margin side fees for three to four of our live events and accelerating light on with strong growth potential.
We're excited to be returned to one of the <unk> March we're headed to Miami in April and we've announced our new season of the ultimate fighter concluding with an expected matchup between economy, Gregor and micro Chandler.
Additionally, we're continuing to invest in the sports growth with our new performance Institute in Mexico.
At CVR, we expect continued momentum with a full year sort of events from our unleash the beast in Pendleton, Witzke velocity tours as well as the second year of our team series. We also expect growth in all aspects of the business, most notably live event revenue.
For events experienced in Rice, we expect continued segment revenue growth driven by live events and experiences sports production. The return of the biannual Ryder Cup and a full year with Barrett Jackson.
Segment profit growth will continue to be impacted by our ongoing investments and on location to Iot initiative.
We are continuing to build our sales marketing and ticketing technology functions to ensure we deliver a premium experience for our customers.
We anticipate a multiple nine figure profit opportunity across the three upcoming Olympic games.
And our representation segment, we expect growth across all our businesses led by WMA as we expect continued demand for premium content, including sports music and fashion.
We also expect strong revenue growth from our non scripted business driven by increased demand and timing of project deliveries.
In connection with our first quarter 2023 earnings we will be reporting our newest sports data and technology segment, which will include our IMG arena business and the recently acquired open back.
At the time of the announced acquisition, we provided full year 2022 revenue projections of $340 million for the combined businesses.
For 2023, we expect double digit topline growth off of those initial projections.
We also expect revenue and adjusted EBITDA to be backend loaded and to build largely sequentially as the year progresses.
We expect Q1 to be the smallest due to seasonality and cadence of the sports foodservice and timing of client renewals.
We continue to show resiliency in the face of an uncertain macro environment. As we look ahead, we remain confident in our ability to continue executing on our strategy with that I will hand, it back to James for Q&A.
Thanks, Jason Alicia we opened it up for questions. Please.
Absolutely if you will.
I'd like to ask a question. Please press star followed by one on your telephone keypad. If for any reason you would like to remove that question. Please press star followed by two again to ask a question press Star one.
A reminder, if you are using a speaker phone. Please remember to pick up your handset before asking your question well pause here briefly ask question our register.
The first question comes from the line of Ben Swinburne with Morgan Stanley You May now proceed.
Thanks, Good afternoon guys.
Alright, maybe.
Love to get your thoughts on the representation outlook in a little more detail.
<unk> for 'twenty three double digit top line certainly suggests you expect another year of growth at WMA in particular and I wanted to get you to talk a little about the drivers of that growth the visibility to that growth and your confidence in that growth just given.
We've been through another earning season, where all we hear about is sort of content spending coming down across the big streamers.
Tell us a bit more about why your business continues to do as well as stealing in that backdrop.
And then I had a quick follow up for Jason on the balance sheet.
Okay, I think there's two questions there.
What do you see for the industry and how do you see the impact on our business.
Endeavour.
<unk>.
We continue to see steady demand for premium sports and entertainment content.
Some spending more some spending less strategies change.
But we're well positioned.
If you look at the resurgence of theatrical and I know youre not going to believe the spend but actually did read your early report.
You talk about the rebound in the theatrical segment.
You are talking about the 2025%.
Outpace outpacing 'twenty three 'twenty three outpacing 'twenty two.
The <unk>.
Services are expected to increase their spend on sports rights by 64% and 23 compared to last year and.
Jason will go into the diversity diversification of the company and the platform.
We see no slowdown in his kind of moving around everybody has a different strategy.
And their spend.
Yes, Matt I would just add that over 50% of the agency revenue come from non with call it TV and film business.
We see continued strength Q4, 'twenty two with a bigger than Q4 'twenty one for our motion picture business.
We continue to fine rep.
Represent increasing a wider breadth of increasing types of talent into the types of content as well as you know every year, we continue to increase our backend and Thats our backend through books, that's our backend theater television and film as well so we feel we're well diversified.
Right now.
That's great Jason.
Our leverage came down faster than at least we were expecting in Q4 was a strong cash flow quarter and thank you for the free cash flow guidance for 'twenty three.
What do you think it for interest expense, just given where rates are and why not pay down more debt you're carrying a lot of cash I don't know if you need to carry a 700 million of cash I know you are getting ready for the Olympics and everything which is a lot of working capital that's still a ways out just any thoughts on paying down debt more quickly. Thanks.
Yes, no problem.
Right.
Already said in his prepared remarks, and I did too we are committed to paying down more debt.
We do have $767 million plus of cash on the balance sheet and as you pointed out we're expecting really good free cash flow generation by $175 million at the midpoint. So it's certainly on our agenda and it's something we're going to get through it in 2023 as.
As far as interest expense goes we are budgeting interest if it makes sense to be.
Up over 2222 based on rate.
That will be impacted.
To some degree when and how much debt, we paid down as well.
Okay. Thank you guys.
Thank you Mr Swinburne.
The next question comes from the line of Jeff.
Jessica Reif with Bank of America.
You May now proceed.
Thank you I have two questions. The first one is on on location.
Could you just talk about where you see this business.
Going over time, obviously this year is a year of investment and then next year is the Olympics, which it should be a good year for you.
Is this looked like at maturity what do you think your margins.
Revenue growth can you have and then I have a separate question.
And I'll do I'll do the front end of that and maybe Jason can go into the margins et cetera.
We acquired the allocation business in 2020, given the pandemic 'twenty two is really our first year.
Right.
And to realize our growth ambition.
Yes.
Okay feedback.
<unk>.
I think we developed a unique product.
For the consumer.
High end demand for.
Tailored experiences Mccann and that and the experienced economy is pretty high right now that we've added several different <unk>.
<unk>. The WWE is one March madness games is another.
We've also incorporated a bunch of our own assets, which is UFC.
UFC Barrett Jackson the property, we just bought the Madrid open which is our tenants, Germany, and Spain, Miami opened and read.
And if you just kind of think about it our superbowl packages for.
Super Bowl packages in California.
Upwards some of the patents were going for $100000 each.
You will see two leading one packages, we're going we're upwards of $50000.
And we will we intend to replicate that model for some of our other marquee events.
With that.
As Jason stated.
Nine figure deal for our opportunity in the three Olympic games. So we feel very good about that and we're constantly on the lookout for other major property that we can add to the portfolio and with that I'll get Jason to talk about the kind of the.
The other thing I would add from a margin perspective, certainly we see this business in line with the margin for the overall segment.
Normalized basis.
Okay. Thank you and then.
Could you comment on your views on potential work stoppage.
Why did you put like what was the benefit of using Speechify.
Your opening comments.
So that you said youre going to ask one question that was two questions, but I'll start with Q2.
I know it wasn't sneaking.
Here's what I would tell you.
There is there is just on the.
Strike level Theres important initiatives on both sides here.
We support our clients as they work through the issues with the studios.
<unk>.
There is a date I think on March 20th that the studios and the writers Guild our meeting.
So when it resolved their issues.
I've been through many strikes.
Before.
Compared to last time.
And this one is very different in our company is very different.
So I think we're pretty well positioned as it relates to the strike.
I don't.
If the strike is going to happen, it's probably going to be somewhere.
Somewhere later in the year have no idea how long it's going to last.
But we have a lot of as Jason said.
A great deal of our percentage of our economics outside of.
The writing directing business.
Whether that be lectures book sports theatrical fashion et cetera. So I think we are differently positioned from others.
<unk>.
If there is going to be a strike.
And <unk>, we've been in business with them.
We thought with all the conversation around AI was a pretty interesting they werent business with them. We think they are really good company.
Proper time to kind of put this into our into our quarter and for you guys to hear what it's like.
Right.
Okay.
Thank you Ms Amit.
The next question comes from the line of John Hodulik with UBS you May now proceed.
Yes, thanks, guys.
Quick question on the M&A environment, especially now that you guys are down below four times I mean does it make you guys.
Think more aggressively about potential acquisitions, and then obviously the big one out there seems to be WWE, just any initial thoughts or how you got some commentary on how you look at that.
Entity and any comment on it looks like Vince It's worth 9 billion, just any any thoughts or color you can provide there would be great. Thanks.
Well.
One is we don't unless you want me to go to jail, we don't comment on our M&A practices, but.
Here's what I would say to you is truly focused as Jason said on de levering, we're not going to do anything that would increase our leverage at this point in time I would just say as it relates.
We constantly are looking at everything out there, but we're not going to leverage ourselves up as we've done a good job of deleveraging and we're going to continue to deleverage as it relates to the WWE.
It's an unbelievable product Vince is an unbelievable.
Created a great business.
We've had a longstanding relationship with them over two decades.
We're doing.
Indicated on location business with him endeavor streaming business with them.
So.
Yes.
His business is really valuable.
And but we're not going to do anything as it relates to kind of changing our leverage condition right now.
I don't know if you have any other color.
I would just add given we have over $750 million of cash on the balance sheet in <unk>.
Projecting really good cash flow generation this year that we certainly.
Until we have the ability to keep executing on M&A, we are an acquisitive company.
Using our cash and our public equity deal closing currency in order to execute on our strategies and still remains sub four times and as already said and I said, we're committed to continuing to deleverage and we'll do all of those opportunities.
Capital allocation and the best use of capital for the company to create the most shareholder value.
Yeah.
Great. Thank you guys.
Thank you Mr Horowitz.
The next question comes from the line of coupon morale with RBC capital you May now proceed.
Great.
For taking my questions I wanted to ask about your views on the Endeavour portfolio and also had a question on representation. So first big believers on the endeavor story continue to see a significant gap between the stock price and the intrinsic value of the company and each of its businesses clearly, it's a challenged backdrop because of investor concerns around the macro environment.
But how would you characterize your patience level and waiting to have the market better appreciate the story and flywheel and is there any appetite to perhaps consider separating some of the businesses to crystallize value quicker like the UFC and then I had a follow up question on that presentation.
So.
Yes.
I was I was on the board of live nation with $200.
I am really patient.
And.
We're now just created a fourth segment.
Breaking out in <unk> kind of about 15 big.
Event of the year.
Thank you guys are just understanding all of our different segments. We're trying to get you more clarity, where really patient or long term I believe that you guys are going to realize the value of each of our segments.
As as time goes on it's only been one year. So we feel good about our businesses.
I don't think you guys realize the value of endeavor content and we sold it for $1 billion. I think you guys want to do some more work and we help you in that way you can realize the value of all of our different segments.
We're really patient about it we're going to continue to pay down debt.
We need to grow those businesses as we have been growing those businesses and I think we're uniquely positioned on the supply side of the business for where the business is going and we're very diversified.
I would just add as already said, that's very real and euro.
Our first full year operating as a public company.
The backdrop of a tough macroeconomic environment.
We're putting a guide out double digit revenue growth double digit EBITDA growth for 2023, and we're really just focused on continuing to operate the business and operating a business and making the right decisions for the business over the long term.
You had a follow up question.
Yes, yes, that's great. Thank you both.
I had another question on the representation business and was hoping you could help unpack that segment had net I assumed the core agency business is about maybe two thirds of the segment followed by marketing and licensing Jason If I heard you correctly earlier, you mentioned that 50% of the agency business revenue comes from non television.
I assume thats, perhaps across fashion sports comedy and music, but I'm not sure. We on the outside might have a view on the industry content spend environment overall, but maybe we're a little bit less clear on what the growth trajectory on the rest of the 60 business, 50% of the business looks like so any color there would be appreciated. Thank you.
Yeah.
But we're not going to give some segment information as far as what the breakout of the revenue, but we have stated before that it is the biggest.
Part of the representation business.
And the agency is very diversified.
Television and film.
Torrent music books theater lectures.
Et cetera et cetera, So we're getting we're seeing growth in all segments of our representation business.
Quite frankly.
Accelerated growth in some segments outside of TV and film as well. So we feel really good where we sit in the space and the diversity.
The diversification of the platform.
Thanks again.
Thank you Mr. Morale. The next question comes from the line of.
Tom Champion with Piper Sandler you May now proceed.
Yeah.
Hi, Good afternoon I appreciate all the color on UFC into next year. It sounds like maybe there is a margin headwind, but just curious if there's a way to think about top line growth over the next year or two up until the renewal period.
The key drivers of that growth whether that be events sponsorships.
The key drivers there.
Maybe a second question if I can.
Two quarters removed from the close of open bats acquisition just curious any.
Early learnings there or.
Other synergies youre finding the business. Thank you.
So on the UFC.
We went from I will just give you some headlines.
We went from eight.
To nine figures are still more on the sponsorship side, we can do international sales I think as Jason mentioned in his opening remarks.
We're up over 100%.
Well I'm not commenting on the domestic deal we've had 29 sellouts.
In a row.
Great yield management on our ticket sales, we just added on location.
Our licensing business is going.
<unk> well, we sold flight path and Ultimate Fighter also remember we have the commercial pay per view rights in the United States and we have the pay per view internationally quite path.
There's a lot of drivers there that.
Continued upside.
For the business without even discussing the domestic deal.
And what was the second question.
Yeah.
As far as far as it was a very helpful. Just curious any questions.
Open bets early learnings just any comments there.
New.
<unk>, perhaps we could close in Q4, so still in very early in the integration phase, but have very happy with what we've seen so far.
Previously you gave revenue guidance for 'twenty, two roughly $340 million, we're expecting double digit growth on that in the combined entity.
The new sector going forward so.
It's early but from what we see we're very happy with.
What's going on in that.
Entity.
And where we're going to go on revenue synergies and margin expansion over time.
Okay, great. Thank you.
Yeah.
Thank you Mr Champion. The next question comes from the line of Stephen <unk> with Goldman Sachs sacks, you May now proceed.
Great. Thank you and good afternoon can you talk a little bit more about some of the recent trends youre seeing on the event side of the business as we start to think that maybe the minimum back part for the 2023 slate Alice ticket sales have been trending how has pricing trended for for some repeat events that you're comping last year and have you seen any pockets of moderation from the consumer thus far that.
Noticeable.
Yes, I would say.
To date, we see limited impact of what we're all seeing and we're all reading about inflation et cetera et cetera.
See solid performance across the board.
Whether that be in my opening remarks, I think 300000 people attending the Madrid open.
Three South Korea.
Very well done Super Bowl and the law.
Hi Park Winter Wonderland.
Exceedingly well and we can continue to kind of go over all of those look very very good for us.
So.
Going into the beginning of the year our events.
No indication that there was any slowdown in consumer demand for experiences and to be out there. So we feel.
On the representation side, we booked over 40000 music engagements.
So.
And as I said in my remarks, Theres 29 sellouts.
From from.
From the UFC in a row and some of the high end experiences with non location with $50000. So.
Right now and we're cautiously optimistic on the on.
On the consumer side.
Still very positive.
Great. Thanks, and then maybe just one on the regional sports and sports media rights more broadly I was curious to hear your latest thoughts on some of the <unk> and the extent to which some of the pressures that have been highlighted over the last year have changed your view.
On the value of sports media rights.
Largely in.
Or the way you approach be guaranteed sports media rights deals in your business. Thank you.
Here's what I would say to you is it not.
One thing on the regional aspects of it there was multiple bidders.
It can be 12 with multiple bidders.
And Wimbledon.
Lot of our UFC rights internationally so.
You now have a bunch of the EB five players getting into that space people doing shoulder programming like Netflix.
That's just on the domestic side internationally one of our last deals we did for the UFC and UK with six bidders for our rights.
So when we're up over 100%.
<unk>.
Our IMT media business is doing very very well so.
The demand for live sports and those rights broadcast.
Is.
In high demand.
Yes.
Okay. Thank you.
Thank you Mr Lascar, Inc.
Our next question comes from the line of David Karnofsky with Jpmorgan you May now proceed.
Hi, Thanks, just two and you'll see.
See if you could update on bypass in Brazil, and the reception to the launch there.
<unk> hundred three in Rio and then noted staging more events internationally, but I think with the negative impact to margins. So I don't know Im wondering if you see a path to potentially getting paid by local promoters of governments and some of these regions kind of similar to like the F. One model. Thank you.
Well, whether it be Singapore Hurst.
Darby, Utah.
Jersey, we're seeing and.
And our Miss Universe side, we got a lot of site fees also we've gotten we've sold that business. So people are realizing the economic impact for their cities for their for their countries.
We're seeing an increased volume in that and in states. So we feel very good about that.
So in Brazil, We're 60 days in technology is working and starting to do well, we'll give you an update later in the year.
I would just add that.
As already said, we expect probably three to five.
That's this year to have say fees. As you mentioned then we always anticipated taking these events back on the road. They were an apex during COVID-19 and would've been post COVID-19 as we transition, but that is that as the traditional USB model to take these events on the Rosewood road, both domestically internationally and we certainly believe that over time that that will pay off in another way through.
Increased consumer products licensing media rights values and sponsorship.
Okay.
Thank you Mr Karnofsky.
The next question comes from the line of Jason Bazinet with Citi. You May now proceed.
You guys have done so well.
With acquisitions over the years I just have a very simple question have you guys ever done a transaction, where it didn't work and then transactions.
Transactions that you did and they did work.
How would you just roughly allocate the success between you bought an asset with <unk>.
Good secular growth versus synergies across all of your divisions versus just managerial acumen, just running the business better than the previous owner.
I didn't really understand the second part of the question but.
Listen we're working through kind of the new line M&A transaction, we did wasn't perfect and.
Streaming is doing a lot better now.
Built a team back up.
Endeavor streaming is doing is doing well right now that wasn't perfect.
But we.
We've done well and our M&A most of it as I've said to you is.
People, who have been in business through the representation side or haven't look see so we have a pretty good insight into where.
And how we think we can increase the business save costs and revenue model. So from that end, we stay to our knitting, there and I think when we do that we are very successful and that the only thing I would add to that Mike.
We do we do are able to get revenue and cost synergies, which.
Not everyone cannabis on both sides so.
It has really helped us execute and be successful on our on our M&A strategy. Both on the road be able to get revenue synergies cost synergies.
Great. Thanks, Jason.
Yes.
Thank you.
Next question operator.
Thank you Mr. Smith, there are no further questions registered so I will pass the conference back to management team.
Right I want to thank everyone for joining US Tonight, if you have any.
Questions feel free to reach out thank you very much.
That concludes today's conference call. Thank you for your participation you may now disconnect your line.