TKO Reports $57.7M Net Income for Q3: WWE and UFC Financials

This post will be updated periodically as earnings are reported on Wednesday evening.

TKO had a profitable three months from July to September, reporting $57.7 million in net income, generated from $681.2 million in revenues.

TKO raised its adjusted EBITDA (a profit-like performance metric) and revenue guidance for the year. The combination of WWE and UFC expects revenues for the full year of 2024 in the upper range of $2.67 billion to $2.745 billion, and adjusted EBITDA in the upper range of $1.22 billion to $1.24 billion.

WWE generated $326.3 million in total revenue for the quarter, up 14% from last year. UFC generated $354.9 million, down 11%. As usual UFC is more profitable, with the MMA company reporting $195.6 million in adjusted EBITDA and WWE reporting $175.3 million.

UFC has higher margins because it runs fewer events. It generates similar revenues to WWE. In the case of sponsorships, UFC generates much higher revenues than WWE. Through the first nine months of the year, UFC sold $184.3 million in sponsorships, compared to WWE’s $60.2 million. Sponsorship is an area pro wrestling has long-struggled with. The company hopes the services of Endeavor will finally unlock sponsorship value for WWE. The quarter was up to $21.7 million, much better than last year’s $14.1 million, after two quarters when sponsorship revenue was flat or down.

In Q3 this year, I estimate WWE sold roughly 400,000 tickets. This estimate is based on an assumption that 90% of WrestleTix estimates of tickets distributed represent actual sales. From those ticket sales, WWE generated $51.1 million, so I estimate WWE had an average ticket sale price of about $127. Last year in the same three months, WWE sold around 413,000 tickets. They generated $39 million with an estimated average ticket of $95.

This estimate isn’t surprising given face value ticket prices visible on Ticketmaster and other vendor websites. And this conclusion expectedly informs the story we’re seeing in attendance plateauing in recent months. Average attendances have grown steadily since Vince McMahon left creative. However, comparisons have finally leveled off in September and October. This is likely because the increased demand is being met with higher prices.

TKO CEO Ari Emanuel in prepared remarks said WWE set new live event records in 42 markets. By my count, WWE ran 47 events in the quarter. This implies nearly every event set a new gate record.

TKO COO Mark Shapiro on the call praised UFC’s leading partner, Disney. He also hyped Paramount as a potential suitor for UFC rights, which are up for renewal. This was in response to a question about why pay-per-view remains the best model for UFC. Shapiro didn’t really address the issue, given the inherent lack of reach from the high-priced paywall.

Shapiro downplayed a comment from Dana White about getting into boxing. He said that “some off-the-cuff” comments by White shouldn’t be understood by Wall Street as a specific business strategy.

Shapiro was barely challenged by the analysts on why Endeavor is spinning off Professional Bull Riders and other assets On Location and IMG into TKO. On the prior call, Shapiro was asked if PBR would be brought into TKO. He said it would not and that they didn’t want to “pollute” the TKO story.

Shapiro insisted TKO will not bid on any other Endeavor assets but that Emanuel personally could be a bidder for other Endeavor assets and that TKO would only consist of sports-related properties as it is now. The Endeavor/TKO CEO himself wasn’t on the call. His prepared remarks continue to apparently be recorded in advance, with him not being present for Q&A.

WWE President Nick Khan spoke on a TKO call for the first time. Shapiro prompted him to deliver some comments about the move of Raw to Netflix. Khan said Netflix would give 600 million viewers access to WWE content. They expect growth thanks to the added reach. He seemed to factor Netflix’s 283 million global subscribers by some multiple per subscription.