Q3 2023 TKO Group Holdings Inc Earnings Call

November 7, 2023

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Generally when we get back.

Ladies and gentlemen, please remain holding the conference call will begin in a couple of minutes.

Again, please remain holding your conference call will begin in just a couple of minutes.

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Operator: Hello, everyone. Thank you for attending today's TKO third quarter 2023 earnings call.

Thank you for attending today's Teekay <unk> third quarter 2023 earnings call.

My name is Sierra and I will be your moderator today.

All lines will be muted 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 press star one on your telephone keypad.

If you would like to ask a question press star one on your telephone keypad.

I would now like the pass the conference over to our host, Seth Zaslow, Head of Investor Relations with TKO. Please proceed.

Also head of Investor Relations with TKO.

Please proceed.

Seth Zaslow: Good afternoon, and welcome to TKO's third quarter 2023 earnings call. A short while ago, we issued a press release, which you can view on our investor relations website. A recording of this call will also be available via our website for at least 30 days.

A short while ago, we issued a press release, which you can view on our Investor Relations website.

A recording of this call will also be available via our website for at least 30 days.

Joining me on today's call are Ari Emanuel, TKO's Chief Executive Officer, Marc Shapiro, our President and COO, and Andrew Schleimer, our CFO.

Marc Shapiro, our president and COO and Andrew Schleimer, our CFO.

After prepared remarks from Ari and Andrew, we'll open the call for questions.

The purpose of this call is to provide you with information regarding our third quarter 2023 performance.

I do want to remind everyone that the information discussed will include forward-looking statements and or projections that involve risks, uncertainties, and assumptions. Please see our filings with the Securities and Exchange Commission for further detail.

Please see our filings with the Securities and Exchange Commission for further detail.

If these risks or uncertainties were to materialize or any assumptions prove incorrect, our results may differ materially from those expressed or implied on this call. Forward-looking statements speak only as of the date they are made and we undertake no obligation to update them in light of new information or future events except as legally required.

Forward looking statements speak only as of the date. They are made and we undertake no obligation to update them in light of new information or future events.

This 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. These measures should not be considered an isolation from or as a substitute for financial information prepared in accordance with GAAP.

These measures 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 can be found in our press release issued today as well as the information posted on our IR website.

With that I'll now turn the call over to Ari.

Ari Emanuel: Thanks Seth and good afternoon everyone. Welcome to TKO's first earnings call.

Welcome to <unk> first earnings call.

Since launching TKO on September 12th, our teams at WWE, UFC, and Endeavour have been focused on integration and executing our strategy. This includes identifying cost synergies at the high end of the range we guided, bringing events to new international markets, including Saudi Arabia and Australia, delivering media rights increases for WWE Smackdown, and NXT and closing the largest global partnership deal ever for UFC with AB Inbev.

This includes identifying cost synergies at the high end of the range we guided, bringing events to new international markets, including Saudi Arabia and Australia, delivering media rights increases for WWE Smackdown, and NXT and closing the largest global partnership deal ever for UFC with AB Inbev.

Before Andrew provides a financial update, I'd like to reiterate why we're so bullish about TKO and highlight the progress we're making to accelerate growth and unlock long term value for shareholders.

TKO brings together two leading pure play sports and entertainment companies that are uniquely positioned to capitalize on the ongoing demand for premium content and live events. While UFC and WWE's iconic brands remain distinct, we know we can capitalize on their similarities.

UFC and WWE is iconic brands remain distinct we know we can capitalize on their similarities.

As just a few examples.

As just a few examples, both UFC and WWE are in season year round with live events and premium content that reach more than a combined 1 billion fans globally. Our content is an antidote for churn.

Both UFC and WWE have large, young, and diverse fan bases, who are deeply engaged across linear, digital, and social channels, video games, and sports betting. Both properties are tailor made for all levers of the sports ecosystem.

In addition to our high margin US domestic media distribution deals, UFC and WWE have enormous upside for growth internationally, especially when powered by the scale and leverage of the media group at IMG inside Endeavour.

As we've articulated since April, the strategic and financial rationale of this transaction is underpinned by the vast array of potential revenue synergies. We expect as we bring these two businesses together and activate the endeavor flywheel. We anticipate this will result in accelerated revenue growth, increased margins, and an enhanced profitability profile for TKO.

Now turning to some highlights. At UFC, we had six sellouts in the quarter, including record breaking events in Sydney, Singapore, and Paris that all underscore the growth potential we see internationally and the reach and popularity of the brand. Notably, UFC is making significant progress in global expansion, particularly in the Middle East.

At USC, we had six sellouts in the quarter, including record breaking events in Sydney, Singapore, and Paris that all underscore the growth potential we see internationally and the reach and popularity of the brand, notably UFC is making significant progress in global expansion, particularly in the middle East.

In October, we announced the extension of UFC's long standing partnership with the Department of Culture and Tourism Abu Dhabi to continue hosting one numbered event there each year and up to three fight nights in the region.

Additionally, we will expand our presence in the region when UFC debuts a first ever fight night in Saudi Arabia next March as part of Riyadh season. This deal builds on WWE's long standing partnership with the Kingdom and reflects Saudi Arabia is commitment to bringing more premium mixed martial arts events to the country. It is also a clear indication that Saudi Arabia has every intention of growing its relationship with the UFC despite assumptions made about their recent investment in the professional fighters league. Both UFC and WWE have built a strong presence in the Middle East and we remain focused on growing our businesses and fan bases there over time.

This deal builds on WWE has long standing partnership with the Kingdom and reflects Saudi Arabia is commitment to bringing more premium mixed martial arts events to the country. It is also a clear indication that Saudi Arabia has every intention of growing its relationship with the UFC. Despite assumptions made about their recent investment in the profession.

fighters league. Both UFC and WWE have built a strong presence in the Middle East and we remain focused on growing our businesses and fan bases there over time.

Importantly, these new deals include significant site fees, which represent a high margin growth opportunity for both UFC and WWE. So far in 2023, we are on track to secure a close to mid eight figures in site fees anchored by our recent agreement with DCT Abu Dhabi and we anticipate meaningful growth over time as we sign new deals and expand our live events footprint.

Support meaningful growth over time, as we signed new deals and expand our live events footprint.

We are also leveraging the full Endeavor flywheel to bring new global partnership opportunities to TKO. AB Inbev just announced a significant multi year deal with UFC to become its official global beer partner beginning in 2024. The deal is UFC's biggest ever in aggregate, including cash and marketing assets will bring Bud Light into the Octagon in the US and integrate AB Inbev brands globally across live events, broadcast, and social media. The marketing commitment we've secured from AB Inbev for our international events will be a significant driver for D to C subscriptions, ticket sales, and viewership levels, particularly in Mexico, Brazil, and across South America.

Octagon in the U S and integrate a b inbev brands globally across live events broadcast and social media the.

The marketing commitment we've secured from AB inbev for our international events will be a significant driver for D to C subscriptions ticket sales and viewership levels, particularly in Mexico, Brazil and across South America.

Pivoting to WWE, on the event side, WWE set multiple records in the third quarter and unveiled two new international premium live events for 2024. WWE will return to Australia in February as part of a tourism Western Australia partnership that includes its largest ever site fee. WWE will also stage its first ever premium live event in Germany next August. We are also making solid progress on the media rights front.

On the event side WWE set multiple records in the third quarter and unveiled two new international premium live events for 2024. WWE will return to Australia in February as part of a tourism Western Australia partnership that includes its largest ever site fee.

WWE will return to Australia in February as part of a tourism Western Australia partnership that includes its largest ever site fee.

WWE will also stage its first ever premium live event in Germany next August. We are also making solid progress on the media rights front.

We are also making solid progress on the media rights front. Today, we are pleased to announce a new five year agreement for WWE NXT with the CW network. This deal marks the first time in NXT's 13-year history it will air on broadcast television. We secured a 70% AAV increase for this property, which highlights WWE's next generation of superstars.

We are also making solid progress on the media rights front.

Today, we are pleased to announce a new five year agreement for WWE NXT with the CW network. This deal marks the first time in NXT's 13-year history it will air on broadcast television. We secured a 70% AAV increase for this property, which highlights WWE's next generation of superstars.

We secured a 70% AAV increase for this property, which highlights Wwe's next generation of superstars more.

More importantly, the process in demand were brisk, which should serve as an encouraging sign to our investor base vis a vis our raw discussions which are quite active at the moment with multiple linear and streaming partners.

Given we produce all WWE content in-house, we have until October of next year to find the right partner and we remain measured, strategic, and patient in our approach to maximizing value.

The NXT deal comes on the heels of a new five-year partnership with NBC Universal, which we announced in September that will bring WWE Smackdown back to USA Network next October. That agreement, which represents a 40% AAV increase over the existing Smackdown deal includes four annual primetime specials that will air on NBC, marking the first time WWE will air on the network in Prime time.

That agreement, which represents a 40% AAV increase over the existing Smackdown deal includes four annual primetime specials that will air on NBC, marking the first time WWE will air on the network in Prime time.

Just two months after bringing UFC and WWE under one roof, the playbook is working as designed. We've made great progress, but the work is truly just getting started.

We've made great progress, but the work is truly just getting started.

With that, I'll hand off to Andrew.

Andrew Schleimer: Thanks Ari and good afternoon everyone.

Before I discuss our results, I want to share a couple of updates on our integration and how we will report our financials.

As Ari highlighted, we are very excited about bringing the UFC and WWE businesses under one roof. These businesses are highly complementary, well positioned for success, and are both delivering strong financial results. Combining these two iconic brands and leveraging the capabilities of Endeavor will only make them stronger.

These businesses are highly complementary well positioned for success and are both delivering strong financial results.

Many of these two iconic brands and leveraging the capabilities of endeavor will only make them stronger recently.

Recently, we've been hard at work integrating the businesses and beginning to realize the revenue and cost synergies that we've been discussing with investors since we announced the deal back in April.

Further to Ari's remarks, on the revenue side, we realized a number of early meaningful wins in media rights with new host for Smackdown and NXP and sponsorship with AB Inbev.

A new host for Smackdown, and NXP and sponsorship with avian depth.

Our extension with DCT in Abu Dhabi, and first-ever live event deal for UFC with the Kingdom of Saudi Arabia demonstrate the ever-increasing global demand for our products.

With that, I want to further emphasize the importance of these IP deals to our business, which as previously articulated, is an area of major strategic focus and one of the levers that we'll continue to pull to drive growth.

In addition to the two Middle East examples, we will also realize the single highest IP in WWE's history with WWE Elimination Chamber in Perth, Australia in February 2024, a deal done in collaboration with UFC and Endeavors government relations teams.

I would also like to provide some additional detail on the cost side. We're performing a detailed review to identify cost savings opportunities across all of TKO. We're focused on areas, such as IT, marketing, finance, human resources and legal.

We're performing a detailed review to identify cost savings opportunities across all of <unk>. We're focused on areas, such as marketing finance human resources and legal.

We're focused on areas, such as marketing finance human resources and legal.

In addition, we're looking at overlapping personnel and revenue generating areas, such as sponsorships, media rights, and consumer products. We're also reviewing ways we can be more efficient in other areas of the business, including live events production and operation.

We're also reviewing ways, we can be more efficient in other areas of the business, including live events production and operation.

We've already identified and commenced actioning upon run rate savings that we fully realized will allow us to achieve the upper end of the previously communicated range of $50 million to $100 million in annualized savings. We anticipate realizing approximately 75% of these synergies in 2024. These are early days, and as our teams have done successfully in past integrations, including with UFC, we expect to identify and deliver efficiencies overtime.

We anticipate realizing approximately 75% of these synergies in 2024.

These are early days and as our team has done successfully in past integrations, including with UFC, we expect to identify and deliver additional efficiencies over time.

Pivoting to how we are reporting our results for TKO. In connection with the transaction, we performed a review of our business to determine the optimal reporting structure for the new public company. We considered various factors such as how the business will be managed, how financial results will be evaluated, and how key operating decisions will be made.

In connection with the transaction, we performed a review of our business to determine the optimal reporting structure for the new public company. We considered various factors such as how the business will be managed how financial results will be evaluated and how key operating decisions will be made.

We considered various factors such as how the business will be managed how financial results will be evaluated and how key operating decisions will be made.

Based on this review, we have decided to report two business segments, UFC and WWE as well as a corporate group, which captures unallocated general administrative and other corporate expenses.

Decided to report two business segments, UFC and WWE as well as a corporate group, which captures unallocated general administrative and other corporate expenses.

As I'm sure many of you saw, we issued historical financial information last week to provide you with detail around this new reporting structure, specifically a recast of the prior periods in the manner we will report them going forward.

Turning to our financial results, because of the timing of the transaction, our consolidated results this quarter will include a full quarter of activity for UFC and 19 days of activity for WWE.

For the quarter ended September 30th, TKO generated $449 million in consolidated revenue, an increase of 32%. Net income for the quarter was $22 million. Adjusted EBITDA on a consolidated basis was $240 million, an increase of 26%. Our adjusted EBITDA margin was 53%.

Net income for the quarter was $22 million adjusted. Adjusted EBITDA on a consolidated basis was $240 million an increase of 26%. Our adjusted EBITDA margin was 53%.

Adjusted EBITDA on a consolidated basis was $240 million an increase of 26%. Our adjusted EBITDA margin was 53%.

Our adjusted EBITDA margin was 53%.

To assist with comparability, we have also presented information that includes WWE activity and a portion of WWE related to the corporate group for the full quarter in both periods.

On this basis, combined revenue was $685 million and combined adjusted EBITDA for UFC, WWE, and their respective portions of corporate totaled $298 million. Our combined adjusted EBITDA margin was 43%.

Our combined adjusted EBITDA margin was 43%.

Including WWE activity for the prior year period, combined revenue was $645 million and combined adjusted EBITDA was $282 million. Our combined adjusted EBITDA margin was 44%. Based on these amounts, combined revenue and adjusted EBITDA both increased 6% year-over-year.

Our combined adjusted EBITDA margin was 44%. Based on these amounts combined revenue and adjusted EBITDA, both increased 6% year over year.

Based on these amounts combined revenue and adjusted EBITDA, both increased 6% year over year.

Now I'll walk you through each of our segments.

Our UFC segment generated revenue of $398 million in the quarter, an increase of 17% or $57 million. Adjusted EBITDA for the quarter was $238 million, an increase of 17% or $34 million. UFC's adjusted EBITDA margin was 16% in both periods. The results reflect continued strong performance across each category of the business.

Adjusted EBITDA for the quarter was $238 million, an increase of 17% or <unk> $34 million.

<unk> adjusted EBITDA margin was 60% in both periods.

The results reflect continued strong performance across each category of the business.

Media rights and content increased $31 million to $267 million. The increase was driven by two additional fight night events compared to the prior period, contractual annual step ups in media rights agreements and certain international [inaudible] which kicked in earlier this year.

The increase was driven by two additional fight night events compared to the prior period contractual annual step ups in media rights agreements and certain international noodles, which kicked in earlier this year.

As previously disclosed, we are seeing the positive impact of increases in international deal AAV in our numbers.

Live events revenue increased $13 million to $52 million. The increase was driven by one incremental event with a live audience compared to the same period last year and continued strong demand for tickets and VIP experiences at our event.

The increase was driven by one incremental event with a live audience compared to the same period last year and continued strong demand for tickets and VIP experiences at our events.

Results in the quarter also benefited from higher side fees due to our multiyear partnerships to bring live events to Salt Lake City, Utah and Sydney, Australia.

Sponsorship revenue increased $12 million to $64 million. The increase was driven by contractual annual step ups in existing agreements and new partnership secured year-to-date.

The increase was driven by contractual annual step ups in existing agreements and new partnership secured year to date.

Expenses increased $23 million to $159 million. The increase was primarily due to a $16 million increase in athlete costs due to the timing of [inaudible] and additional production costs from incremental events within the quarter.

The increase was primarily due to a $16 million increase in athlete costs due to the timing of nachos and additional production costs from incremental events within the quarter.

Venue, marketing, and other operational costs also increased due to two additional fight nights and two additional international events versus the prior year period.

Now turning to WWE, as I mentioned, reported results for WWE only include 19 days in the third quarter from September 12 through September 30th.

As I mentioned reported results for WWE only include 19 days in the third quarter from September 12 through September 30th.

For this period, WWE revenue was $52 million and adjusted EBITDA was $22 million. Including WWE activity for the full 90 days in the third quarter, combined revenue was $287 million, combined adjusted EBITDA was $102 million, and combined adjusted EBITDA margin was 36%. This compares to WWE revenue of $305 million, adjusted EBITDA of $123 million and a margin of 40% in the prior period.

Excluding WWE activity for the full 90 days in the third quarter.

<unk> revenue was $287 million combined adjusted EBITDA was $102 million and combined adjusted EBITDA margin was 36%.

This compares to WWE revenue of $305 million, adjusted EBITDA of $123 million and a margin of 40% in the prior period.

The following commentary on the WWE segment includes activity for the full quarter in both '22 and '23.

23.

As anticipated, timing impact the comparability of results in the quarter causing declines in media rights and content revenue as well as consumer product licensing revenues, partially offset by an increase in live events revenue.

Media rights and content declined $9 million to $211 million. The decrease was primarily due to the timing of third party original programming and the airing of one less episode of Smackdown in the current year period. These items more than offset the contractual escalation of rights fees from the distribution of WWE's weekly flagship shows and premium live events.

Decrease was primarily due to the timing of third party original programming and the airing of one less episode of smack down in the current year period. These.

These items more than offset the contractual escalation of rights fees from the distribution of Wwe's weekly flagship shows can premium live events.

Live events revenue increased 14% to $39 million despite 10 fewer non-televised events reflecting continued strong demand.

Consumer products licensing revenue declined $13 million to $23 million. The decrease primarily reflected the absence of revenue recognized in the prior year period related to certain licensing agreements with minimum guarantees.

The decrease primarily reflected the absence of revenue recognized in the prior year period related to certain licensing agreements with minimum guarantees.

As previously disclosed, the accounting related to the transition of our venue merchandise business to fanatics also impacted revenue in the period.

So impacted revenue in the period.

Expenses were essentially flat as an increase in content creation costs were substantially offset by lower expenses related to third party original programming and the transition of the venue merchandise business.

Turning to corporate. Corporate reflects operations not allocated to the UFC or WWE segments and primarily consists of general and administrative expenses. Corporate also includes the management fees paid by TKO to Endeavor under our services agreement. On a consolidated basis, corporate expense was $21 million for the third quarter.

Corporate reflects operations not allocated to the USD year WWE segments, and primarily consists of general and administrative expenses.

Corporate also include the management fees paid by Teekay out to endeavor under our services agreement.

On a consolidated basis corporate expense was $21 million for the third quarter.

Including WWE activity for the full 90-day period, combined corporate expense was $42 million in the third quarter of 2023, compared to $45 million in the prior year, a decrease of $3 million. The decrease was primarily the result of cost savings from actions we implemented subsequent to the closing of the transaction in September.

The decrease was primarily the result of cost savings from actions, we implemented subsequent to the closing of the transaction September.

Moving onto our capital structure, we define free cash flow as net cash provided by operating activities less capital expenditures. In the third quarter, TKO generated $64 million in free cash flow as compared to $136 million in the prior year period. The decrease was primarily due to $68 million in payments associated with the TKO transaction.

In the third quarter, GTO generated $64 million in free cash flow as compared to $136 million in the prior year period. The decrease was primarily due to $68 million in payments associated with the <unk> transaction.

The decrease was primarily due to $68 million in payments associated with the <unk> transaction.

In September, pursuant to the transaction agreement, we returned $321 million of capital to Class A shareholders in the form of a special onetime cash dividend of $3.86 per share. We ended the quarter with approximately $2.8 billion in debt and $189 million in cash and cash equivalents.

We ended the quarter with approximately $2 8 billion in debt and $189 million in cash cash equivalents.

Given the strong financial profile of TKO and the high free cash flow generative nature of the business, we expect there to be a wide spectrum of alternatives for the deployment of capital, including organic investment at positive ROI as well as the return of capital to shareholders in the form of dividends and/or share repurchases when the process of formulating a more specific plan around the appropriate long term range of net leverage for the combined business as well as uses of capital.

organic investment at positive ROI as well as the return of capital to shareholders in the form of dividends and/or share repurchases when the process of formulating a more specific plan around the appropriate long term range of net leverage for the combined business as well as uses of capital.

As we've previously discussed, TKO is structured as an [inaudible]. As is common with [inaudible] structures, TKO [inaudible] will be making periodic distributions of cash to its owners, Endeavor and TKO [inaudible] to cover tax obligations on a quarterly basis.

As is common with FC structures, <unk>, <unk> will be making periodic distributions of cash to its owners endeavor and CTO pup to cover tax obligations on a quarterly basis.

Now related to our outlook, we plan to provide full year guidance targets for consolidated TKO as we believe our company's results are best evaluated on a full year basis, given the quarterly fluctuations related to the timing of events and content deliveries among other things.

We are laser focused on integration, finding further synergy opportunities, as well as budgeting the respective businesses for 2024. We intend to issue our 2024 full year outlook and when we report our fourth quarter results in February.

We intend to issue our 2020 for full year outlook. Our fourth quarter results in February.

Our fourth quarter results in February.

We are excited about the ongoing performance of both UFC and WWE, which remains firmly on track to deliver record revenue and adjusted EBITDA for full year '23 and are both in line with our expectations when we consummated the transaction.

In conclusion, while it's been less than two months since we closed this deal, we've been hard at work integrating the businesses and identifying opportunities to accelerate the growth profile of the combined company. Based on what we've seen so far, our conviction has only increased. and we are extremely excited about the future for TKO. With that, I'll turn it back to Seth.

and we are extremely excited about the future for TKO. With that, I'll turn it back to [inaudible].

Seth Zaslow: Thanks Andrew. Operator, we're ready to open the call for questions.

Operator: Absolutely. If you'd like to ask a question, please press star followed by one on your telephone keypad. To remove your question, press star followed by two. And if you are using a speakerphone, please pick up your handset before asking your question.

If you'd like to ask a question, please press star followed by one on your telephone keypad. To remove your question, press star followed by two.

To remove your question, press star followed by two.

And if you are using a speakerphone, please pick up your handset before asking your question.

Our first question today comes from Ben Swinburne with Morgan Stanley. Please proceed.

Ben Swinburne: Thanks, good afternoon guys. I want to come back to why you put these two companies together and some of the comments you made about free cash flow conversion and sort of the unique properties of this company, which is contracted revenues and high free cash flow generation. So with all of that, one thing you guys obviously need to think about and are thinking about is the right leverage level for this new company. So could you just spend a minute just talking about what you think makes sense for TKO? And even if you don't want to put a number on it, can you talk about the relative attractiveness of dividends, buybacks, and M&A as you look at running this company over the next couple of years? Thanks a lot.

I want to come back to why you put these two companies together. And some of the comments you made about free cash flow conversion and sort of the unique properties of this company, which is contracted revenues. And high free cash flow generation, so with all of that one one thing you guys. Obviously you need to think about and are thinking about is the right leverage level for this new company. So could you just spend a minute just talking about what you think makes sense for TKO and even if you don't want to put a number on it can you talk about the relative attractiveness of dividends and buyback. <unk> and M&A. You look at running this company over the next couple of years. Thanks a lot.

And some of the comments you made about free cash flow conversion and sort of the unique properties of this company, which is contracted revenues. And high free cash flow generation, so with all of that one one thing you guys. Obviously you need to think about and are thinking about is the right leverage level for this new company. So could you just spend a minute just talking about what you think makes sense for TKO and even if you don't want to put a number on it can you talk about the relative attractiveness of dividends and buyback. <unk> and M&A. You look at running this company over the next couple of years. Thanks a lot.

And high free cash flow generation, so with all of that one one thing you guys. Obviously you need to think about and are thinking about is the right leverage level for this new company. So could you just spend a minute just talking about what you think makes sense for TKO and even if you don't want to put a number on it can you talk about the relative attractiveness of dividends and buyback. <unk> and M&A. You look at running this company over the next couple of years. Thanks a lot.

<unk> and M&A. You look at running this company over the next couple of years. Thanks a lot.

You look at running this company over the next couple of years. Thanks a lot.

Ari Emanuel: Thanks Ben. As we mentioned in our prepared remarks, its too early to discuss specific plans with regard to TKO's capital allocation philosophy right now. TKO has a strong financial profile, growing revenues, healthy margins, and strong free cash flow generation, manageable net debt position, which will present us with various opportunities on the allocation of our capital into the future. And as you can hear from Andrew and myself, we are really focused on TKO's integration. Maybe Andrew can kind of follow up with some of the other questions you had.

As we mentioned in our prepared remarks, its too early to discuss specific plans with regard to <unk> capital allocation philosophy right now. <unk> has a strong financial profile growing revenues healthy margins and strong free cash flow generation manageable net debt position, which will present us with various opportunities. The allocation of our capital into the future. And as you can hear from Andrew and myself, we are really focused on <unk> integration with Alka. Andrew can kind of follow up with some of the other questions you had.

<unk> has a strong financial profile growing revenues healthy margins and strong free cash flow generation manageable net debt position, which will present us with various opportunities. The allocation of our capital into the future. And as you can hear from Andrew and myself, we are really focused on <unk> integration with Alka. Andrew can kind of follow up with some of the other questions you had.

The allocation of our capital into the future. And as you can hear from Andrew and myself, we are really focused on <unk> integration with Alka. Andrew can kind of follow up with some of the other questions you had.

And as you can hear from Andrew and myself, we are really focused on <unk> integration with Alka. Andrew can kind of follow up with some of the other questions you had.

Andrew can kind of follow up with some of the other questions you had.

Andrew Schleimer: Yeah, look I think we can we can talk about the industrial logic and strategic rationale for the transaction, obviously that is down and we did put some statistics out there Ben when we first announced the deal. But look, further to Ari's remarks and in line with my prepared remarks, we expect to provide an update on our plans with more specificity on our next earnings call in February tethered to our full year outlook first time giving guidance for full year 2024. That being said, that does not preclude us from being opportunistic between now and then, particularly given the relatively undervalued nature of our stock right now.

In line with my prepared remarks. We expect to provide an update on our plans with more.

We expect to provide an update on our plans with more.

Deficit excuse me on our next earnings call in February tethered to our full year outlook first time, giving guidance for full year 2024 that being said that does not preclude us from being opportunistic between now and then particularly given the relatively undervalued nature of our stock right now.

And obviously, as Ari articulated, as I articulated, as Mark articulated when we meet with folks sell side and buy side, this is a meaningfully high cash flow generative business. And we remain committed to evaluating all those alternatives that are available to us, share repurchases, repayment of debt and are laser focused on the return of capital to shareholders all through a lens of maximizing shareholder value. Ben, it's Mark, I would just say as you can imagine, I mean, that's why it's the first question here, this is the most popular question the three of us are asked frankly on a daily basis. We have to remind folks sometimes we are in the quiet period.

And obviously, as Ari articulated, as I articulated, as Marc articulated when we meet with folks sell side and buy side, this is a meaningfully high cash flow generative business. And we remain committed to evaluating all those alternatives that are available to us, share repurchases, repayment of debt and are laser focused on the return of capital to shareholders all through a lens of maximizing shareholder value.

And we remain. <unk> to evaluating all those alternatives that are available to us Jerry share repurchases. Payment of debt and are laser focused on the return of capital to shareholders all through a lens of maximizing shareholder value and its mark I would just say as you can imagine I mean, that's why it's the first question here. This is the most popular question. The three of US are as frankly on a daily basis, we have to remind folks sometimes we are in the <unk>.

<unk> to evaluating all those alternatives that are available to us Jerry share repurchases. Payment of debt and are laser focused on the return of capital to shareholders all through a lens of maximizing shareholder value and its mark I would just say as you can imagine I mean, that's why it's the first question here. This is the most popular question. The three of US are as frankly on a daily basis, we have to remind folks sometimes we are in the <unk>.

Payment of debt and are laser focused on the return of capital to shareholders all through a lens of maximizing shareholder value and its mark I would just say as you can imagine I mean, that's why it's the first question here. This is the most popular question. The three of US are as frankly on a daily basis, we have to remind folks sometimes we are in the <unk>.

Marc Shapiro: Ben, it's Marc, I would just say as you can imagine, I mean, that's why it's the first question here, this is the most popular question the three of us are asked frankly on a daily basis. We have to remind folks sometimes we are in the quiet period. But as Andrew and Ari have articulated, I mean, we are uniquely and keenly aware of the strong free cash flow conversion we're going to have with these two properties. UFC is up there near 60% these days. Obviously that won't be where it sits forever. It'll be around 50% where we've been historically. And WWE is going to quickly get into the 40% to 50% once we get done with our cost synergies and some of the revenue synergies that we will talk about. Obviously, our Budweiser deal on the UFC side was big and high and a lot of conversion there and we're going to have similar deals on the WWE side. So we're just early innings here. We don't have a plan to articulate today and lay out, but as Andrew said, you can expect we're focused on it, we're in conversations with the board, and we'll be back to you in February with a specific plan. In the meantime, we will be opportunistic along the way.

But as Andrew and Ari have articulated, I mean, we are uniquely and keenly aware of the strong free cash flow conversion we're going to have with these two properties. UFC is up there near 60% these days. Obviously that won't be where it sits forever. It'll be around 50% where we've been historically. And WWE is going to quickly get into the 40% to 50% once we get done with our cost synergies and some of the revenue synergies that we will talk about. Obviously, our Budweiser deal on the UFC side

I've articulated I mean, we are uniquely a keenly aware of the strong free cash flow conversion, we're going to have with these two properties UFC. <unk> up there near 60%. These days, obviously that won't be where it's forever it'll be around 50%, where we've been historically and WWE is going to quickly get into the 40% to 50% once we get done with our our cost synergies and some of the revenue synergies that we will talk about obviously, our Budweiser deal on the USG side.

<unk> up there near 60%. These days, obviously that won't be where it's forever it'll be around 50%, where we've been historically and WWE is going to quickly get into the 40% to 50% once we get done with our our cost synergies and some of the revenue synergies that we will talk about obviously, our Budweiser deal on the USG side.

was big and high and a lot of conversion there and we're going to have similar deals on the WWE side. So we're just early innings here. We don't have a plan to articulate today and lay out, but as Andrew said, you can expect we're focused on it, we're in conversations with the board, and we'll be back to you in February with a specific plan. In the meantime, we will be opportunistic along the way.

Articulate today and lay out but as Andrew said you can expect we're focused on it we're in conversations with the board and we'll be back to you in February with a specific plant in the meantime, we will be opportunistic along the way.

Ben Swinburne: Thanks guys. I appreciate the comments.

Operator: Our next question comes from Brandon Ross with Light Shed Partners. Please proceed.

Our next question comes from Brandon Ross with light shed partners.

Please proceed.

Brandon Ross: Hi, good afternoon. Thanks for taking my questions. So you've got a really nice increase on the NXT deal but there's still a lot of investor concern about the state of sports rights licensing. What gives you guys confidence that the rights environment is going to improve in the coming year? And then how does this impact your strategy around RAW? And then anything of course that you could tell us on the latest on the RAW negotiations that you highlighted in the prepared is welcome.

Hi, good afternoon, thanks for taking my questions. So you've got a really nice increase on the NXT deal. There's still a lot of investor concern about the state of sports rights licensing. What gives you guys confidence that the rates environment is going to improve in the coming year and then how does this impact your strategy. Around raw and then anything of course that you could tell us on the latest on the broad negotiations that you highlighted in the prepared as. Welcome.

So you've got a really nice increase on the NXT deal. There's still a lot of investor concern about the state of sports rights licensing. What gives you guys confidence that the rates environment is going to improve in the coming year and then how does this impact your strategy. Around raw and then anything of course that you could tell us on the latest on the broad negotiations that you highlighted in the prepared as. Welcome.

There's still a lot of investor concern about the state of sports rights licensing. What gives you guys confidence that the rates environment is going to improve in the coming year and then how does this impact your strategy. Around raw and then anything of course that you could tell us on the latest on the broad negotiations that you highlighted in the prepared as. Welcome.

What gives you guys confidence that the rates environment is going to improve in the coming year and then how does this impact your strategy. Around raw and then anything of course that you could tell us on the latest on the broad negotiations that you highlighted in the prepared as. Welcome.

Around raw and then anything of course that you could tell us on the latest on the broad negotiations that you highlighted in the prepared as. Welcome.

Welcome.

Ari Emanuel: So let me just first start with the ratings update which I think is the first thing you have to think about when you do this. Viewership in ratings for WWE content is very strong and there's a lot of momentum. Smackdown up 19% in the key demo compared to broadcast down 11, RAW up 2% compared to cable down 11, NXP up 39% compared to cable down 11. TKO and WWE's content [inaudible] there is no churn in the content we have and it's one of the big issues for all of the [inaudible] and the cable companies et cetera. Year round content of both UFC and WWE and we have scheduling flexibility regarding day and time and urgency and consistency of our content is appealing and it's an attractive viewership. And as I said, there is no real churn in our content.

The first thing you have to think about when you do this.

Viewership in ratings for WWE content is very strong and Theres a lot of momentum Smackdown up 19% in the key demo compared to broadcast down.

Even law up 2% compared to cable down 11, NXP up 39% compared to cable is down 11, <unk> and WWE content.

Sure.

And there is no churn in the content, we have and it's one of the big issues for all of the <unk> and the cable companies et cetera.

Year round.

Content of UFC and WWE <unk>.

We are scheduling flexibility regarding day and time. And urgency and consistency of our content is appealing. And it's an attractive viewership. And as I said, there is no real churn in our content on Smackdown renewal.

And urgency and consistency of our content is appealing. And it's an attractive viewership. And as I said, there is no real churn in our content on Smackdown renewal.

And it's an attractive viewership. And as I said, there is no real churn in our content on Smackdown renewal.

And as I said, there is no real churn in our content on Smackdown renewal.

On Smackdown renewal, we're very pleased with the agreement. We delivered healthy 40% increase. WWE will produce four primetime specials per year that will air on NBC. First time WWE will air on the network Primetime. It's a strong deal we feel good about the continued relationship with NBC who is also owner of the WWE network current deal probably expires I think it's March 26. And in fact, as you may or may not remember, 40% of the market was not live now will be all live. On the NXT renewal, very pleased with that agreement, strong deal, 70% healthy increase. CW will become a new home. It's the first time NXP will air on a broadcast network. CW is a major network reaches 100% of US households. And as you may or may not know, NXT plays an important role in developing talent for WWE. Nearly 90% of the participant in last year's Wrestlemania were developed under the NXT banner.

That will air on NBC first time, Ww will air on the network Primetime it's a strong deal we feel good about the continued relationship with NBC.

Who is also owner of the WWE network current deal probably expires I think it's March.

Six.

And in fact, as you may or may not remember 40%. <unk> of the market was not lives now will be all lives on the NXP renewal very pleased with that agreement strong deal.

<unk> of the market was not lives now will be all lives on the NXP renewal very pleased with that agreement strong deal.

70% healthy increase. CW will become a new home. It's the first time NXP will air on a broadcast network. CW is a major network reaches 100% of US households. And as you may or may not know, NXT plays an important role in developing talent for WWE.

We will become a new all. It's the first time NXP will air on a broadcast network CW as a major network reaches 100% of U S households.

It's the first time NXP will air on a broadcast network CW as a major network reaches 100% of U S households.

And as you may or May not know NXT plays an important role in developing talent for WWE.

Nearly 90% of the participant in last year's Wrestlemania were developed under the NXT banner. And as it relates to RAW renewal, we're having really productive conversations with multiple parties regarding RAW. We expect a robust process to with RAW.

Nearly 90% of the participant in last year's Wrestlemania were developed under the NXT banner.

And as it relates to RAW renewal, we're having really productive conversations with multiple parties regarding RAW. We expect a robust process to with RAW. We're very comfortable with RAW's position. We're going to be patient, measured, calculated in our approach. No specific timeline regarding to announce, exactly what we did with the UFC. So we feel really good about the situation that we're in and so [inaudible].

Having really productive conversations with multiple parties regarding raw, we expect a robust process to withdraw.

We're very comfortable with RAW's position. We're going to be patient, measured, calculated in our approach. No specific timeline regarding to announce, exactly what we did with the UFC. So we feel really good about the situation that we're in and so [inaudible].

Position. We're going to be patient measured calculated in our approach no specific timeline regarding to announce exactly what we did with the USD. So we feel really good about the about the situation that we're in.

We're going to be patient measured calculated in our approach no specific timeline regarding to announce exactly what we did with the USD. So we feel really good about the about the situation that we're in.

And so that is correct yes.

Andrew Schleimer: Yes, so on the second part of your question Brandon on just the overall state of sports rights, I really love when you bring this up as if there is an issue going on out there. Let's just kind of underscore what's been happening in the last few months. Last time I checked, the Xfinity series went for a monster number on CW, good for them, good programming they're adding to their portfolio of sports rights properties like the ACC, LIV, et cetera, and now of course, they've got the late great NXP. The NBA is having a robust process. They have an exclusive negotiating period till April with their current partners, but everybody's lined up to get a piece of the NBA so Adam is in a good position there. Netflix is about to launch the Netflix Cup, so anybody who had questions about is Netflix going live and sports rights et cetera, they are just dipping their toe in the water and you can expect that's going to open up down the road. And as you know, there was an extra NFL playoff game, if you will, that Peacock took off the table for a massive number.

Just overall state of sports rights. I am really loved when you bring this up is if there is a issue going on out there, let's just kind of underscore what's been happening in the last few months and last time I checked the Xfinity series went for a monster number on CW. Good for them good programming theyre, adding to their portfolio of sports rights properties like the ACC limit.

I am really loved when you bring this up is if there is a issue going on out there, let's just kind of underscore what's been happening in the last few months and last time I checked the Xfinity series went for a monster number on CW. Good for them good programming theyre, adding to their portfolio of sports rights properties like the ACC limit.

Et cetera, and now of course, they've got the late great NXP. The NBA is having a robust process. They have an exclusive negotiating period till April withdrew their current partners, but everybody's lined up to get a piece of the NBA. So Adams in a good position there Netflix is about to launch the Netflix cups, so anybody who had questions about is Netflix.

going live and sports rights et cetera, they are just dipping their toe in the water and you can expect that's going to open up down the road. And as you know, there was an extra NFL playoff game, if you will, that Peacock took off the table for a massive number. So the state of sports rights and the dollars being spent on sports rights remain in a very strong robust position. So to Ari's point, we're in the middle of this.

Extra NFL playoff game, if you will the Peacock took off the table for a massive number so the state of sports rights and the dollars being spent on sports rights remained very strong robust position into <unk> point, we're in the middle of this.

So the state of sports rights and the dollars being spent on sports rights remain in a very strong robust position. So to Ari's point, we're in the middle of this. It is strong and robust for us too. RAW is a very healthy property. Not only are ratings up, it's got a lot of equity to it, it's got longevity, it's got brand affinity, it's got super fandom, and we're going to take our time with this. We have until next October. We can flip the switch just to remind you because we do all the production. So we can literally move from one network to a new partner overnight.

It is strong and robust for us too. RAW is a very healthy property. Not only are ratings up, it's got a lot of equity to it, it's got longevity, it's got brand affinity, it's got super fandom, and we're going to take our time with this. We have until next October. We can flip the switch just to remind you because we do all the production. So we can literally move from one

network to a new partner overnight. And the last thing I would say just on Ari's point, which Ari often talks about the antidote to churn and he points to these two properties I think objectively frankly because we are year round and we are premium. But keep in mind, we have a lot of urgency to our sports properties. When there is a PLE going on at WWE or Wrestlemania, it's just a trigger to get folks to sign up for subs and the same can be said for UFC. When we have a number of events every month, it's a trigger of when folks want to see those prelims on ESPN Plus to sign up for ESPN Plus. That's driving subscriber count for all of those partners and as they move to go direct-to-consumer like ESPN is going to do in the next two years, they reported it themselves, they're going to want year-round premium and urgency and we're standing in a good position and we're going to be patient to maximize our right to be and our marketing partner for the next deal.

network to a new partner overnight.

And the last thing I would say just on Ari's point, which Ari often talks about the antidote to churn and he points to these two properties I think objectively frankly because we are year round and we are premium. But keep in mind, we have a lot of urgency to our sports properties. When there is a PLE going on at WWE or Wrestlemania, it's just a trigger to get folks to sign up for subs and the same can be said for UFC. When we have a number of events every month, it's a trigger of when folks want to see those prelims on ESPN Plus to sign up for ESPN Plus. That's driving subscriber count for all of those partners and as they move to go direct-to-consumer like ESPN is going to do in the next two years, they reported it themselves, they're going to want year-round premium and urgency and we're standing in a good position and we're going to be patient to maximize our right to be and our marketing partner for the next deal.

Which are often talks about the antidote to churn in any points to these two properties I think objectively frankly, because we are year round and we are premium but keep in mind. We have a lot of urgency to our sports properties. When there is a <unk> going on. At WWE or Wrestlemania it just the trigger to get folks to sign up for subs and the same can be said for UFC. When we have a number of events every month, it's a trigger of when folks want to see those prelims on ESPN plus to sign up for ESPN, plus that's driving subscriber count. For all of those partners and as they move to go direct to consumer like ESPN is going to do in the next two years. They reported it themselves, they're going to want year round premium and urgency and we're standing in a good position and we're going to be patient to maximize our right to be and our marketing partner for the next deal.

We have a lot of urgency to our sports properties. When there is a <unk> going on. At WWE or Wrestlemania it just the trigger to get folks to sign up for subs and the same can be said for UFC. When we have a number of events every month, it's a trigger of when folks want to see those prelims on ESPN plus to sign up for ESPN, plus that's driving subscriber count. For all of those partners and as they move to go direct to consumer like ESPN is going to do in the next two years. They reported it themselves, they're going to want year round premium and urgency and we're standing in a good position and we're going to be patient to maximize our right to be and our marketing partner for the next deal.

At WWE or Wrestlemania it just the trigger to get folks to sign up for subs and the same can be said for UFC. When we have a number of events every month, it's a trigger of when folks want to see those prelims on ESPN plus to sign up for ESPN, plus that's driving subscriber count. For all of those partners and as they move to go direct to consumer like ESPN is going to do in the next two years. They reported it themselves, they're going to want year round premium and urgency and we're standing in a good position and we're going to be patient to maximize our right to be and our marketing partner for the next deal.

For all of those partners and as they move to go direct to consumer like ESPN is going to do in the next two years. They reported it themselves, they're going to want year round premium and urgency and we're standing in a good position and we're going to be patient to maximize our right to be and our marketing partner for the next deal.

Brandon Ross: Got it. Thanks. And then maybe just--

Jim.

Andrew Schleimer: Cut him off.

Ari Emanuel: Brandon, are you there?

Operator: Apologies. It appears Mr. Brandon's line got dropped from the call for some reason so we will move to the next question.

Next question comes from Curry Baker with Guggenheim. Please proceed.

Curry Baker: Thanks for the question. Could you update us on how the integration is going so far and maybe more specifically on the revenue synergy front, could you drill down on the largest areas of opportunity that you see? Maybe help us frame in aggregate where you think the revenue synergies could ultimately go and any initial thoughts on timing. It seems like you're off to a nice start with the UFC Saudi announcement.

Thanks for the question. Could you update us on how the integration is going so far and maybe more specifically on the revenue synergy front could you drill down on the largest areas of opportunity.

Could you update us on how the integration is going so far and maybe more specifically on the revenue synergy front could you drill down on the largest areas of opportunity.

Or that you see maybe help us frame an aggregate where you think the <unk>.

Revenue synergies could ultimately go and any initial thoughts on timing it seems like you're off to a nice start with the UFC Saudi announcement.

Ari Emanuel: Here's what I would say, integration is going well. It's early days but we're really pleased with how the teams are coming together and the opportunities that we're identifying to enhance the growth profile and the profitability of both companies both on the cost side and on the revenue side.

Here's what I would say integration is going well, it's early days, but we're really pleased with how the teams are coming together and the opportunities that were identified to enhance the growth profile and the profit profitability of both companies both on the <unk>. Cost side and on the revenue side.

Cost side and on the revenue side.

Andrew Schleimer: Curry let me hit the cost side first and then we'll pivot to the revenue side. As we discussed and to reiterate in both Ari and my prepared remarks, we expect to achieve the upper end of the previously announced range of $50 million to $100 million in cost synergies. We got started over the summer, we got deeper into this after we closed in September. Really no stone left unturned here and we feel good guiding to the upper end of that range. We're looking at all areas and that's prior to really combining these businesses and seeing efficiencies from the operation of these businesses going forward so we're going to quickly pivot on the cost side to see if we can get some more.

We expect to achieve the upper end of the previously announced range of $50 million to $100 million in cost synergies. We got started over the summer we got deeper into this after we closed in September really no stone left unturned here.

And we feel good guiding to the upper end of that range. If we're looking at all areas.

And that's prior to really combining these businesses see efficiencies from the operation. These business going forward that we're going to quickly pivot on the cost side to see if we can get some more.

These business going forward that we're going to quickly pivot on the cost side to see if we can get some more.

That being said, of that range, we expect to realize roughly 75% excuse of those standards synergies in 2024, those will be reflected in our full year guide when we are back in front of you in February and the balance 25% of those will impact 2025.

On the revenue side, look, we think as we've stated time and time again, there are many attractive revenue synergies in connection with this transaction, many of which you've gotten a taste of, some deals that we've announced to date, whether it be Anheuser Busch on the sponsorship side [inaudible] extension as well as the Saudi deal on the live event side. We discussed NXP Smackdown and how we are well positioned for RAW. And then a lot of this doesn't happen candidly without us leveraging and having tentacles into the Endeavor flywheel, which we're spending a lot of time with our parent company and partner to extract as much value as possible.

Many of which you've gotten a taste of some deals that we've announced to date, whether it be anheuser Busch on the sponsorship side.

<unk> extension as well as the Saudi deal on the lives of banking site side.

Discuss NXP Smackdown, and how we are well positioned for raw and then a lot of this doesn't happen candidly without us leveraging and having tentacles into the endeavor flywheel, which we're spending a lot of time with our parent company and partner extract as much value.

Marc Shapiro: Yeah Curry, I would just say that obviously our AB deal is a best-in-class deal and we're right out of the gate with that and we expect to mimic that in several categories on both sides of the fence with WWE and UFC. We've already between Lawrence Epstein who runs the day-to-day of the UFC and [inaudible] runs the day-to-day of the WWE, already integrated our partnerships team. So we're already out on the street, in some cases selling both properties together and where we have an unsold category on one end, but not the other, of course selling those individually to the two brands where it makes sense. I think from a live event perspective as well Andrew touched on, but beyond the site, we're kind of setting the table. So you see Nick building a point a date to Perth, which is a place that Lawrence and Dana [inaudible] UFC have been going for such a long time. So we come in and we laid the foundation, we laid local sponsorship opportunities, we festivalize it with WWE and the Endeavour Network and then WWE comes right behind in the pipeline with their own events, so we already have the blueprint working. And you can expect to see that in other cities. You have the UFC, obviously now doing it in Saudi which would be a great story, but also in China will be later on in Shanghai for UFC and we're already looking at what's going to be our next China date, which we haven't been to in a long time on the WWE.

I would just say that obviously our deals are best in class deal and we're right out of the gate with that and we expect to mimic that mimic that in several categories on both sides of defense with Ww and TK, Oh, excuse me and UFC, we've already between Lawrence.

<unk> runs a day to day of the UFC and it kind of runs in the day to day of the Ww they've already integrated our partnerships team. So we're already out on the street and some cases selling both properties together and where we are.

unsold category on one end, but not the other, of course selling those individually to the two brands where it makes sense. I think from a live event perspective as well Andrew touched on, but beyond the site, we're kind of setting the table. So you see Nick

building a point a date to Perth, which is a place that Lawrence and Dana [inaudible] UFC have been going for such a long time. So we come in and we laid the foundation, we laid local sponsorship opportunities, we festivalize it with WWE and the Endeavour Network and then WWE comes right behind in the pipeline with their own events, so we already have the blueprint working. And you can expect to see that in other cities. You have the UFC, obviously now doing it in Saudi which would be a great story, but also in China will be later on in Shanghai for UFC and we're already looking at what's going to be our next China date, which we haven't been to in a long time on the WWE.

have the blueprint working. And you can expect to see that in other cities. You have the UFC, obviously now doing it in Saudi which would be a great story, but also in China will be later on in Shanghai for UFC and we're already looking at what's going to be our next China date, which we haven't been to in a long time on the WWE. Beyond that, we've got dynamic ticket pricing happening across the board, which is a

Beyond that, we've got dynamic ticket pricing happening across the board, which is a capability we have at our location at Endeavour and now WWE is tapping into that the way the UFC has and of course rounded out with hospitality. On location sales hospitality and experiential ticketing for both properties and frankly, we're seeing record numbers out of the gate, especially for Wrestlemania 40. So for revenue synergies, no surprise to anybody. We're pretty bullish. I mean, that ultimately was the recipe for the merging of these two properties.

Pricing happening across the board, which is.

capability we have at our location at Endeavour and now WWE is tapping into that the way the UFC has and of course rounded out with hospitality. On location sales hospitality and experiential ticketing for both properties and frankly, we're seeing record numbers out of the gate, especially for Wrestlemania 40. So for revenue synergies, no surprise to anybody. We're pretty bullish. I mean, that ultimately was the recipe for the merging of these two properties. And the only other thing I would add to that, all the things that Marc just stated are very high margin businesses, which will increase the numbers as it relates to the WWE and UFC free cash flow conversion.

For revenue synergies no surprise to anybody we're pretty bullish on that. Ultimately the recipe for the merging of these two properties and the only other thing I would add to that all the things that Mark just stated are very high margin businesses, which will increase. The numbers as it relates to the WWE. And UFC. Free cash flow conversion.

Ultimately the recipe for the merging of these two properties and the only other thing I would add to that all the things that Mark just stated are very high margin businesses, which will increase. The numbers as it relates to the WWE. And UFC. Free cash flow conversion.

Ari Emanuel: And the only other thing I would add to that, all the things that Marc just stated are very high margin businesses, which will increase the numbers as it relates to the WWE and UFC free cash flow conversion.

The numbers as it relates to the WWE. And UFC. Free cash flow conversion.

And UFC. Free cash flow conversion.

Free cash flow conversion.

Curry Baker: Great, thanks for the answers guys.

Yes.

Operator: Our next question comes from Ryan [inaudible] with UBS. Please proceed.

Unknown: Great, thank you. You touched on this a bit in your prepared remarks, but just curious, how are you seeing the competitive landscape evolving in the M&A space in the next few years following the minority investments that the PFS received. I guess, just more broadly how you're thinking about balancing margin expansion and reinvestments at the UFC from here. Thanks.

You touched on this a bit in your prepared remarks, but just curious. Are you seeing the competitive landscape evolving in the M&A space. Next few years following the. The minority investments that the PFS received. I guess, just more broadly how you're thinking about balancing margin expansion and reinvestments at the UFC from here. Thanks.

Are you seeing the competitive landscape evolving in the M&A space. Next few years following the. The minority investments that the PFS received. I guess, just more broadly how you're thinking about balancing margin expansion and reinvestments at the UFC from here. Thanks.

Next few years following the. The minority investments that the PFS received. I guess, just more broadly how you're thinking about balancing margin expansion and reinvestments at the UFC from here. Thanks.

The minority investments that the PFS received. I guess, just more broadly how you're thinking about balancing margin expansion and reinvestments at the UFC from here. Thanks.

I guess, just more broadly how you're thinking about balancing margin expansion and reinvestments at the UFC from here. Thanks.

Ari Emanuel: Well, I would just say the following. Competition is not new for the UFC or the WWE. MMA is probably the fastest growing sport and we're encouraged by the increase in interest. And rising tide lifts all boats in my opinion, so we don't see this as a zero sum game. It's not only competition. Not only do we have competition with other MMA or wrestling organization, football, college football, there's a lot of competition out there. We have a strong [inaudible] we have strong and stable fighters over 600 in total. I think UFCs we have fighters who want to come and want to be. And as I discussed in my prepared remarks, we feel good about the future of our relationship with Saudi as one example. We recently announced and we bring UFC's Fight Night to Riyadh in March 2024. Clear indication that Saudi has very high intention to grow in its relationship with UFC, so that's kind of our feeling about it.

Competition is not new for the USD or the WWE. Mmm, probably the fastest growing sport and we're encouraged by the increase in interest. And. Rising tide lifts all boats in my opinion.

Mmm, probably the fastest growing sport and we're encouraged by the increase in interest. And. Rising tide lifts all boats in my opinion.

And. Rising tide lifts all boats in my opinion.

Rising tide lifts all boats in my opinion.

We don't see this as a zero sum game, it's not only competition. We don't have any not only do we have competition with other MMA R. R. Wrestling organization. Football College football this theres a lot of competition out there. We have a strong it youll see we have a strong and stable fighters over 600 total. I think you have skus. Fighters want a comment I want to be. And as I discussed in my career. Mark we feel good about the future of our relationship with Saudi. As one example, we recently announced and we bring UFC fight night to Riyadh in March 2024 clear indication that Saudi is very high our intention to grow in its relationship with UFC. So. That's kind of our feeling about it.

Wrestling organization. Football College football this theres a lot of competition out there. We have a strong it youll see we have a strong and stable fighters over 600 total. I think you have skus. Fighters want a comment I want to be. And as I discussed in my career. Mark we feel good about the future of our relationship with Saudi. As one example, we recently announced and we bring UFC fight night to Riyadh in March 2024 clear indication that Saudi is very high our intention to grow in its relationship with UFC. So. That's kind of our feeling about it.

Football College football this theres a lot of competition out there. We have a strong it youll see we have a strong and stable fighters over 600 total. I think you have skus. Fighters want a comment I want to be. And as I discussed in my career. Mark we feel good about the future of our relationship with Saudi. As one example, we recently announced and we bring UFC fight night to Riyadh in March 2024 clear indication that Saudi is very high our intention to grow in its relationship with UFC. So. That's kind of our feeling about it.

We have a strong it youll see we have a strong and stable fighters over 600 total. I think you have skus. Fighters want a comment I want to be. And as I discussed in my career. Mark we feel good about the future of our relationship with Saudi. As one example, we recently announced and we bring UFC fight night to Riyadh in March 2024 clear indication that Saudi is very high our intention to grow in its relationship with UFC. So. That's kind of our feeling about it.

I think you have skus. Fighters want a comment I want to be. And as I discussed in my career. Mark we feel good about the future of our relationship with Saudi. As one example, we recently announced and we bring UFC fight night to Riyadh in March 2024 clear indication that Saudi is very high our intention to grow in its relationship with UFC. So. That's kind of our feeling about it.

Fighters want a comment I want to be. And as I discussed in my career. Mark we feel good about the future of our relationship with Saudi. As one example, we recently announced and we bring UFC fight night to Riyadh in March 2024 clear indication that Saudi is very high our intention to grow in its relationship with UFC. So. That's kind of our feeling about it.

And as I discussed in my career. Mark we feel good about the future of our relationship with Saudi. As one example, we recently announced and we bring UFC fight night to Riyadh in March 2024 clear indication that Saudi is very high our intention to grow in its relationship with UFC. So. That's kind of our feeling about it.

Mark we feel good about the future of our relationship with Saudi. As one example, we recently announced and we bring UFC fight night to Riyadh in March 2024 clear indication that Saudi is very high our intention to grow in its relationship with UFC. So. That's kind of our feeling about it.

As one example, we recently announced and we bring UFC fight night to Riyadh in March 2024 clear indication that Saudi is very high our intention to grow in its relationship with UFC. So. That's kind of our feeling about it.

So. That's kind of our feeling about it.

That's kind of our feeling about it.

Marc Shapiro: Yeah, look, the investment that SRJ made in TFL, we look it to our advantage. We have no issue with Bellator, DFL, name your league. To Ari's point, competition is good. Not only do we have over 600 fighters, we have the premier fighters. I mean, ultimately you're trying to get to the UFC which is akin to the XFL trying to ultimately get their players into the NFL. We are, those are pipeline and feeder properties. In fact, we're supportive of them being on ESPN. PFS has been on ESPN, we were totally supportive of that deal and and the Saudi experience should prove out well for us and I think prove something to every investor on this call because when it first came out, it was a lot of what's going on, they're coming after us, they're going to take fighters, they're going to increase fighter pay, UFC is in trouble. And then quickly on the heels of that, we announced our deal. So good for them. Saudi Arabia is being very aggressive in bringing events to the kingdom. They are in discussions on the WTA finals for tenants. They're looking obviously at Motorsports. There are rumors about their potential investment in F1, all kinds of stuff that are out there right now. All we know is they want more MMA, which is great for us and the more they have the more it's really just going to serve as an appetizer to what will be the meal, which is UFC.

Which is akin to the XFL trying to ultimately get their players into the NFL I mean thats. What we are those are those are pipeline and feeder prop. Properties in fact, we're supportive of them being on ESPN PFS has been on ESPN, we were totally supportive of that deal.

Properties in fact, we're supportive of them being on ESPN PFS has been on ESPN, we were totally supportive of that deal.

and the Saudi experience should prove out well for us and I think prove something to every investor on this call because when it first came out, it was a lot of what's going on, they're coming after us, they're going to take fighters, they're going to increase fighter pay, UFC is in trouble. And then quickly on the heels of that, we announced our deal. So good for them. Saudi Arabia is being very aggressive in bringing events to the kingdom. They are in discussions on the WTA finals for tenants. They're looking obviously at Motorsports. There are rumors about their potential investment in F1, all kinds of stuff that are out there right now. All we know is they want more MMA, which is great for us and the more they have the more it's really just going to serve as an appetizer to what will be the meal, which is UFC.

Quickly on the heels of that we announced our deal. So good for that Saudi Arabia is being very aggressive in bringing events to the kingdom. They are in discussions on the WTO finals for tenants they're. We're looking obviously at Motorsports, there is rumors about their potential investment in F. One all kinds of stuff that are out there right. Now all we know is they want more MMA, which is great for us and the more they have the more its really just going to serve as an appetizer to what will be the meal, which is UFC.

We're looking obviously at Motorsports, there is rumors about their potential investment in F. One all kinds of stuff that are out there right. Now all we know is they want more MMA, which is great for us and the more they have the more its really just going to serve as an appetizer to what will be the meal, which is UFC.

Ari Emanuel: Operator, let's take one last question please.

One last question.

Operator: Absolutely. Our last question today will come from David Carvonausky with JP Morgan. Please proceed.

Operator: Our last question today will come from David carbon Hausky with JP Morgan. Please proceed.

Please proceed.

David Carvonausky: Hey, thank you for the question. Curious to know how you think about incremental sponsorship opportunities at WWE. Are there inventory or assets you think have been under utilized [inaudible] for instance. And then since coming public you've discussed the idea of super days or super weekends, you'll see plus WWE, I'm interested how many of the events do you think are realistic given the calendar and then how do they factor into your overall strategy for growing [inaudible]?

<unk> been under utilized what the ring for instance.

And then since coming public you've discussed the idea of Super dividends are separate weekends, youll see plus WWE.

You said, how many of the events do you think a realistic given the calendar and. Then how do they factor into your overall strategy for growing cities.

Then how do they factor into your overall strategy for growing cities.

Ari Emanuel: Here's what I would say to you, Vince has been very open to--before he was clean in the ring and around, he is now very open into increasing the inventory that we can work with like we increased the inventory at the UFC, very happy about that. We think there's huge opportunity around the stadium so that's a good sign. And we are starting in some territories looking at a Friday night, Saturday night, and a Monday night for both WWE UFC and WWE again. That will give us an indication of our ability to kind of put that on. Once we can prove that model I think we can take it globally and really move it domestically pretty easily.

Before he was cleaning in the in the in the ring and around he is now very open into increasing the inventory that we can work with like we increased the inventory at the UFC very happy about that we think there's huge opportunity around the stadium. So that's a good sign.

And we are starting.

In some territories looking at a Friday night Saturday night in a Monday night for both WWE UFC.

And and WWE again that will give us an indication of our ability to kind of put that once we can prove that model I think we can take it globally and really move it domestically pretty easily.

Just going forward just as an alert for everybody, we're never going to come out specifically and talk about open categories, who we're negotiating with, who is opened. Frankly, we've got too many competitors out there now not just in our space, but overall as Ari mentioned and this is just a sports marketplace. So it's robust, we're being aggressive, we've got a best-in-class team and we'll talk about each of the deals as they ultimately come to fruition, but we're not going to give anybody our playbook at this time. But I'll just reemphasize, there's a ton of inventory now that Vince and team are opening up at the WWE for us.

Marc Shapiro: Just going forward just as an alert for everybody, we're never going to come out specifically and talk about open categories, who we're negotiating with, who is opened. Frankly, we've got too many competitors out there now not just in our space, but overall as Ari mentioned and this is just a sports marketplace. So it's robust, we're being aggressive, we've got a best-in-class team and we'll talk about each of the deals as they ultimately come to fruition, but we're not going to give anybody our playbook at this time.

We've got a best in class team and we'll talk about each of the deals as they ultimately come to fruition, but we're not going to give anybody our playbook at this time, but I'll just reemphasize, there's a ton of inventory now. Vince and team are opening up at. At the WWE for us.

Ari Emanuel: But I'll just reemphasize, there's a ton of inventory now that Vince and team are opening up at the WWE for us.

Vince and team are opening up at. At the WWE for us.

At the WWE for us.

David Carvonausky: Helpful. Thanks.

Thank you thank.

Ari Emanuel: Thank you everyone for joining us on today's call. Operator, you can now conclude the call.

Operator: That will now conclude today's conference call. Thank you all for your participation, you may now disconnect your lines.

Thank you all for your participation you may now disconnect your line. Your line.

Your line.

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