Endeavor Q3 Loss More Than Doubled to $420.4 Million

Endeavor Group Holdings reported a third-quarter net loss three and a half times what it reported a year ago; This was reduced by losses in the company’s Events, Experiences and Rights, and Sports, Data and Technology segments.

At the same time, the company grew revenues by 66%, with its Owned Sports and Agency segments delivering strong growth driven by continued consumer demand for live events and content.

Here are the company’s most important results:

Net Loss: $420.4 million, up 262.4% from a loss of $115.98 million a year ago

Revenues: It was $2.03 billion, up 66% year over year, compared to the $2.13 billion expected by analysts surveyed by Zacks Investment Research.

Earnings Per Share: The loss of 86 cents per share was worse than the forecast profit of 62 cents per share expected by analysts surveyed by Zacks Investment Research.

Adjusted EBITDA: $277.6 million compared to $286.14 million a year ago.

The latest quarterly results come as majority owner Silver Lake prepares to acquire Endeavor and take it private for an equity value of $13 billion. The private equity firm estimates the company’s total enterprise value at $25 billion when combining the value of TKO Group Holdings into Endeavour.

It is stated that the transaction, which is expected to be completed in the first quarter of 2025, is subject to the fulfillment of customary closing conditions and necessary regulatory approvals. No other shareholder approval is required. TKO is not a party to this transaction and will remain a publicly traded company.

Under the terms of the agreement, Silver Lake, which holds approximately 71% of Endeavor’s voting power, will acquire 100% of the outstanding shares it does not already own, excluding any transferred interest. Endeavor shareholders will receive $27.50 in cash per share; this represents a 55% premium over the unaffected share price of $17.72 per share at market close on October 25; This is the last full day before the procedure. Announces that strategic alternatives are being reviewed.

Endeavor is also required to declare and pay a dividend of 6 cents per share on each issued and outstanding share of Class A common stock in each calendar quarter prior to closing.

In October, TKO signed an agreement to acquire PBR, On Location and IMG in an equity transaction valued at $3.25 billion. Upon completion of the transaction, which is expected to occur in the first half of 2025 and is subject to customary closing conditions and regulatory approvals, Endeavor is expected to own approximately 59% of TKO. The IMG acquisition does not include businesses associated with the IMG brand in licensing, models and tennis representation, or IMG’s entire events portfolio.

Endeavor also announced that it is examining the possible sale of certain events in the IMG portfolio, including but not limited to the Miami Open and Madrid Open tennis tournaments and arts platform Frieze. A definitive timeline for completion of this review process has not been established and there is no assurance that the review will result in any specific action.

“As we work to complete our take-private transaction with Silver Lake, we remain focused on delivering for our customers, partners and shareholders, maintaining momentum across our business, and completing the sale of PBR, On Location and IMG to TKO. Endeavor CEO Ari Emanuel said in a statement.

The Owned Sports Real Estate segment saw revenue increase 53.2% to $735.2 million and adjusted EBITDA increase 32.9% to $315.5 million.

The segment’s results were driven by its acquisition of WWE, which contributed $275 million during the quarter; This was partially offset by declines in the UFC due to fewer events being held compared to the prior year period. They also benefited from growth in Professional Bull Riders due to an increase in media rights, ticket sales, and PBR team-related revenues resulting from the addition of two teams.

The representation segment saw revenues rise 11.3% to $429.2 million; this was driven primarily by growth in WME’s talent and music divisions, partially offset by declines in unscripted content production. The segment’s adjusted EBITDA increased by 29.7% to 124.9 million.

The Events, Experiences and Rights segment saw revenue rise 145.1% to $899.8 million, primarily from the Paris 2024 Olympic and Paralympic Games, for which On Location serves as the exclusive accommodation provider. But the segment’s adjusted EBITDA swung to a loss of $68 million in the quarter, compared with a profit of $29.85 million.

On Location and the NFL on November 5 reached a multi-year extension of their global hospitality partnership, which will run through 2036 to cover all major NFL events including the Super Bowl, NFL Draft, Pro Football Hall of Fame, Pro Bowl Games and Scouting . Combine. In addition, On Location’s rights to sell and market the International Games have been extended to all international markets.

Additionally, Endeavor said it is actively marketing its Sports, Data and Technology segment, which includes OpenBet and IMG Arena. As a result, businesses are treated as held for sale and shown as discontinued operations. For the quarter, the segment reported a loss of $442.28 million, compared to $10.15 million a year ago.

As of September 30, Endeavor had total cash and cash equivalents of $1 billion and total debt of $5.23 billion. This figure was $697.7 million and $5.07 billion, respectively, at the end of June. Endeavor did not release an earnings release in connection with the Silver Lake transaction.