Based on the comments made during their investors’ call on Tuesday afternoon, the head honchos of Endeavour Group Holdings Inc. have no regrets in their decision to buy WWE and merge it with UFC to form TKO Holdings Group Inc. (aka “TKO). Indeed, in the words of Chief Financial Officer Andrew Schleimer, they are “extremely excited” about the future of the company and how the integration of the two brands will further unfold.
Boosting their enthusiasm in part was the announcement earlier today that WWE has finalized negotiations for their TV broadcasting rights for NXT, which will see the developmental brand’s weekly programming move to the CW Network starting next October. This will be the first time the gold brand has ever aired on broadcast TV in the United States, and company CEO Ari Emanuel noted that the move will mean an unprecedented number of potential viewers for the show, as it is available across 100% of the US market.
This announcement followed the recent news that Smackdown will be moving from the FOX network to the USA Network, leaving TV rights for RAW as the only deal still to be made. Of that deal, Emanuel noted that the company has a lot of time to make a deal and a lot of options as well.
“As it relates to RAW,” Emanuel said, “we’ve been having really productive conversations with multiple parties. We feel really good about the position we’re in,” noting that the current deal runs until October of next year, so finalizing a new partner isn’t an urgent need.
“Because we produce everything in-house, we can literally move to a new party overnight. We’re going to take our time with this,” he said.
The TV rights developments aren’t the only matters that the new owners are bullish over. They also cited WWE’s other financial successes over the past quarter (though, because of the timing of the finalization of the deal, only 19 days of WWE’s financial activity were reflected in TKO’s quarterly financial statements).
In that short period, WWE’s revenues were approximately $52 Million USD with profits of approximately $22 Million. As a result of the merger, that considers expenses that are directly related to WWE operations. Other costs, which are incurred for and shared by both WWE and UFC are not included in those figures. Those expenses include general corporate and administrative costs such as legal, HR, accounting and finance, and corporate communications.
The merging of the two companies has led to other benefits for both companies, including being able to leverage each other’s existing relationships to create new business opportunities. The prime example given was UFC recently holding a live event in Saudi Arabia, using WWE’s existing relationship with the Saudis to open the door for UFC going in. On the flip side, UFC’s recent success in Australia was credited with facilitating WWE to sign a deal to host Elimination Chamber 2024 in Perth next February – a deal, it was noted, that will see WWE earn its highest site-fees ever.
On that note, an interesting potential development could also see WWE adopt some of the marketing and sponsorship strategies employed by UFC – notably, the placement of sponsors’ logos on the mat, as they currently are printed on the UFC octagon. Emanuel noted that this has not been something done by WWE in the past, but could change in the future.
“In the past, Vince (McMahon) has (preferred the mats be) very ‘clean’. But he has been very open about increasing the inventory (of space) we can work with (for advertising).
Whether or not that ever comes to pass, it was clear on the call that TKO is looking at various ways to increase revenues, lower expenses, and create long-term shareholder value. And that they are comfortable and confident that they are well on the right path.
“The playbook is working as designed,” said Emanuel about the strategy. “We’re making great progress.”