TKO Group Holdings Inc
For the period ended Sep 30, 2024. Filed Nov 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 6, 2024
TKO$191.00+1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001973266-24-000021
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0000950170-24-122364
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 122 previous paragraphs and 123 current paragraphs.
67 unchanged; 41 reworded; 14 added; 12 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Revenue increased by $232.1 million, or 52%, to $681.2 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Current report
Revenue increased by $1,101.1 million, or 104%, to $2,162.1 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Current report
Direct operating costs increased by $76.8 million or 59% to $207.1 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Current report
UFC direct operating costs decreased by $2.9 million, or 2%. This decrease was primarily due to lower expenses from marketing, athlete costs, and direct costs of revenue resulting from having one less numbered event and two fewer Fight Night events in the current year period offset by increased production costs primarily for UFC 306, which was a marquee event at the Sphere in Las Vegas.
Current report
Direct operating costs increased by $365.6 million or 121% to $667.9 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Current report
UFC direct operating costs increased by $27.0 million, or 9%. This increase was primarily due to higher costs of $26.8 million from higher athlete compensation, as well as increased production costs primarily for UFC 306, which was a marquee event at the Sphere in Las Vegas.
Current report
Selling, general and administrative expenses increased by $46.4 million, or 24%, to $239.6 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Current report
WWE contributed selling, general and administrative expenses of $73.4 million for the three months ended September 30, 2024 as compared to $45.5 million for the period from September 12, 2023 through September 30, 2023 following its acquisition. These incremental expenses were primarily driven by increased travel expenses of $14.7 million due to 33 additional live events in the current period. The current year period also includes $7.1 million of increased personnel costs and $6.1 million of increases in other operating expenses driven by the timing of the acquisition.
Current report
Selling, general and administrative expenses increased by $691.1 million, or 221%, to $1,004.1 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Current report
UFC selling, general and administrative expenses increased by $12.6 million, or 10%. This increase was primarily driven by higher costs of personnel compared to the prior year period.
Current report
Capital Return Programs
Current report
On October 24, 2024, the Company announced that its board of directors has authorized a share repurchase program of up to $2.0 billion of its Class A common stock and the approval of a quarterly cash dividend program pursuant to which holders of TKO’s Class A common stock will receive their pro rata share of $75.0 million expected quarterly distributions to be made by TKO OpCo.
Current report
TKO will determine at its discretion the timing and the amount of any repurchases based on its evaluation of market conditions, share price, and other factors. Repurchases under the share repurchase program may be made in the open market, in privately negotiated transactions or otherwise, and TKO is not obligated to acquire any particular amount under the share repurchase program. The share repurchase program has no expiration, is expected to be completed within approximately three to four years and may be modified, suspended, or discontinued at any time.
Current report
TKO’s dividend will be paid quarterly to holders of TKO’s Class A common stock. TKO intends to begin making quarterly cash dividend payments on March 31, 2025. Future declarations of quarterly dividends are subject to the determination and discretion of TKO based on its consideration of various factors, such as its results of operations, financial condition, market conditions, earnings, cash flow requirements, restrictions in its debt agreements and legal requirements and other factors that TKO deems relevant.
Removed paragraphs (12)
Previous report
Revenue increased by $546.0 million, or 179%, to $851.2 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
Previous report
Revenue increased by $869.0 million, or 142%, to $1,480.9 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Previous report
Direct operating costs increased by $177.0 million or 214% to $259.8 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
Previous report
UFC direct operating costs increased by $36.8 million, or 44%. This increase was primarily due to higher costs of $34.3 million from production, marketing and athlete costs associated with having one incremental numbered event as compared to the prior period. Additionally, this increase was driven by higher athlete compensation as well as an increase in direct costs of revenue due to expenses related to the increase in revenue described above.
Previous report
Direct operating costs increased by $288.9 million or 168% to $460.8 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Previous report
UFC direct operating costs increased by $30.0 million, or 17%. This increase was primarily due to higher costs of $29.2 million from production, marketing and athlete costs driven by having one incremental Fight Night event as compared to the prior period and higher athlete compensation during the current period.
Previous report
Selling, general and administrative expenses increased by $169.1 million, or 266%, to $232.6 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
Previous report
UFC selling, general and administrative expenses decreased by $1.8 million, or 4%. The decrease was primarily driven by lower professional fees and other overhead expenses.
Previous report
WWE contributed selling, general and administrative expenses of $110.2 million for the three months ended June 30, 2024. These expenses were primarily driven by the cost of personnel, including $1.8 million of charges associated with restructuring activities related to the Transactions, as well as travel and other operating expenses. These expenses also include an impairment charge of $24.3 million as a result of reducing the carrying value of WWE assets held for sale to their fair value less cost to sell, as described in Note 6, Supplementary Data, to our unaudited consolidated financial statements included in this Quarterly Report.
Previous report
Selling, general and administrative expenses increased by $644.7 million, or 538%, to $764.5 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Previous report
Restrictions on Dividends
Reworded paragraphs (41)
Previous wording
em 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current wording
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous wording
The following is a discussion of our consolidated results of operations for the three and six months ended June 30, 2024 and 2023. This information is derived from our accompanying consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Current wording
The following is a discussion of our consolidated results of operations for the three and nine months ended September 30, 2024 and 2023. This information is derived from our accompanying consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Previous wording
UFC revenue increased by $89.2 million, or 29%. This increase was primarily driven by $38.9 million of higher media rights and content revenue from contractual escalations in domestic and international media rights agreements and an incremental numbered event as well as $36.7 million of higher live event revenue from greater site fees primarily from UFC 302 in Newark, New Jersey and a Fight Night event in Riyadh, Saudi Arabia and having one incremental numbered event in the current year period. Additionally, the increase in revenue was due to $15.5 million of higher sponsorship revenue from new sponsors and increases in fees from renewals compared to the prior year period.
Current wording
UFC revenue decreased by $42.6 million, or 11%. This decrease was primarily driven by $50.4 million of lower media rights and content revenue from holding one less numbered event and two fewer Fight Night events in the current year period. This decrease in revenue was partially offset by $10.2 million of higher sponsorship revenue primarily driven by providing title partner status to UFC 306, as well as new sponsors and increases in fees from renewals compared to the prior year period.
Previous wording
$144.1 million of live events revenue which was primarily driven by hosting 46 events with live ticketed audiences, including WrestleMania XLevents, as well as site fees associated with the Queen and King of the Ring premium live event in Saudi Arabia. The contribution of revenue was also driven by $27.3 million of consumer products licensing related to the sale of WWE-branded products and $24.7 million of sponsorship revenue from the sale of advertising.
Current wording
WWE contributed revenue of $326.3 million for the three months ended September 30, 2024 as compared to $51.6 million for the period from September 12, 2023 through September 30, 2023 following its acquisition. This incremental revenue was driven by $190.1 million of media rights and content primarily associated with domestic and international rights fees for WWE’s flagship programs, Raw, SmackDown and NXT, and premium live event programming, as well as $45.7 million of live events revenue which was primarily driven by hosting additional events with live ticketed audiences compared to the prior year period. The additional revenue was also due to $19.8 million of consumer products licensing related to the sale of WWE-branded products and $19.1 million of sponsorship revenue from the sale of advertising.
Previous wording
UFC revenue increased by $95.5 million, or 16%. This increase was primarily driven by $40.6 million of higher live event revenue due to an increase in gate revenue at our numbered events compared to the prior year period, as well as higher site fee revenues primarily from UFC 302 in Newark, New Jersey and a Fight Night event in Riyadh, Saudi Arabia. Media rights and content revenue increased by $29.3 million as a result of there being one incremental Fight Night event in the current year period as well as due to contractual increases in our domestic and international rights fees agreements. Additionally, sponsorship revenue increased by $26.1 million driven by revenue from new sponsors and increases in fees from renewals compared to the prior year period.
Current wording
UFC revenue increased by $52.9 million, or 5%. This increase was primarily driven by $40.2 million of higher live event revenue due to an increase in gate revenue at our numbered events compared to the prior year period, as well as higher site fee revenues primarily from UFC 302 in Newark, New Jersey and Fight Night events in Riyadh, Saudi Arabia, and Abu Dhabi. Additionally, sponsorship revenue increased by $36.3 million driven by providing title partner status to UFC 306, as well as revenue from new sponsors and increases in fees from renewals compared to the prior year period. Media rights and content revenue decreased by $21.1 million due to the net impact of there being one less numbered event and one less Fight Night event in the current period, partially offset by contractual increases in our domestic and international rights fees agreements.
Previous wording
WWE contributed revenue of $773.5 million for the six months ended June 30, 2024. This revenue was driven by $481.8 million of media rights and content primarily associated with domestic and international rights fees for WWE’s flagship programs, Raw, SmackDown and NXT, and premium live event programming, including WrestleMania XLevents, as well as $194.3 million of live events revenue which was primarily driven by hosting 93 events with live ticketed audiences, including WrestleMania XLevents, as well as site fees associated with certain international premium live events. The contribution of revenue was also driven by $58.9 million of consumer products licensing related to the sale of WWE-branded products and $38.5 million of sponsorship revenue from the sale of advertising.
Current wording
WWE contributed revenue of $1,099.8 million for the nine months ended September 30, 2024 as compared to $51.6 million for the period from September 12, 2023 through September 30, 2023 following its acquisition. This incremental revenue was driven by $671.9 million of media rights and content primarily associated with domestic and international rights fees for WWE’s flagship programs, Raw, SmackDown and NXT, and premium live event programming, including WrestleMania XLevents, as well as $240.0 million of live events revenue which was primarily driven by hosting additional events with live ticketed audiences, including WrestleMania XLevents, as well as site fees associated with certain international premium live events compared to the prior year period. The additional revenue was also due to $78.7 million of consumer products licensing related to the sale of WWE-branded products and $57.6 million of sponsorship revenue from the sale of advertising.
Previous wording
WWE contributed direct operating costs of $135.4 million for the three months ended June 30, 2024. These costs were primarily driven by talent- and production-related costs associated with WWE’s premium live events, including WrestleMania XLevents, and weekly television programming, and event-related costs associated with 46 live events during the period. These costs also include $6.7 million of equity-based compensation expense associated with certain services provided by an independent contractor as well as $1.3 million of charges associated with restructuring activities related to the Transactions.
Current wording
WWE contributed direct operating costs of $87.4 million for the three months ended September 30, 2024 as compared to $12.6 million for the period from September 12, 2023 through September 30, 2023 following its acquisition. These incremental costs were primarily driven by talent- and production-related costs associated with WWE’s premium live events and weekly television programming, and event-related costs associated with additional live events during the period.
Previous wording
Corporate direct operating costs increased by $4.8 million. This increase was primarily related to service fees paid to Endeavor for various operational functions that support revenue generating activities pursuant to the Services Agreement.
Current wording
Corporate direct operating costs increased by $4.9 million. This increase was primarily related to service fees paid to Endeavor for various operational functions that support revenue generating activities pursuant to the Services Agreement. The costs associated with WWE's portion of the service fees did not commence until March 2024.
Previous wording
WWE contributed direct operating costs of $250.8 million for the six months ended June 30, 2024. These costs were primarily driven by talent- and production-related costs associated with WWE’s premium live events, including WrestleMania XL events, and weekly television programming, and event-related costs associated with 93 live events during the period. These costs also include $15.7 million of equity-based compensation expense associated with certain services provided by an independent contractor as well as $7.3 million of charges associated with restructuring activities related to the Transactions.
Current wording
WWE contributed direct operating costs of $338.2 million for the nine months ended September 30, 2024 as compared to $12.6 million for the period from September 12, 2023 through September 30, 2023 following its acquisition. These incremental costs were primarily driven by talent- and production-related costs associated with WWE’s premium live events, including WrestleMania XL events, and weekly television programming, and event-related costs associated with additional live events during the period. These costs also include $16.7 million of equity-based compensation expense associated with certain services provided by an independent contractor.
Previous wording
Corporate direct operating costs increased by $8.1 million. This increase was primarily related to service fees paid to Endeavor for various operational functions that support revenue generating activities pursuant to the Services Agreement.
Current wording
Corporate direct operating costs increased by $13.0 million. This increase was primarily related to service fees paid to Endeavor for various operational functions that support revenue generating activities pursuant to the Services Agreement. The costs associated with WWE's portion of the service fees did not commence until March 2024.
Previous wording
UFC selling, general and administrative expenses decreased by $4.4 million, or 5%. This decrease was primarily driven by lower costs of personnel compared to the prior year period.
Current wording
UFC selling, general and administrative expenses increased by $2.8 million, or 6%. This increase was primarily driven by higher costs of personnel compared to the prior year period.
Previous wording
Corporate selling, general and administrative expenses increased by $60.7 million. This increase was primarily due to $28.6 million of higher cost of personnel and other operating expenses, including TKO executive compensation and other public company expenses following the Transactions. The acquisition of WWE contributed $32.1 million of expenses to Corporate, which was primarily driven by personnel costs, including $2.3 million of charges associated with restructuring activities related to the Transactions, as well as other operating expenses, including $4.2 million related to service fees paid to Endeavor.
Current wording
Corporate selling, general and administrative expenses increased by $15.7 million. This increase was primarily due to higher legal costs of $41.2 million, including the legal settlement related to UFC antitrust lawsuits of $40.0 million, and $23.7 million of higher cost of personnel and other operating expenses, including TKO executive compensation and other public company expenses following the Transactions. These increases were partially offset by a decline of $56.6 million in merger and acquisition costs related primarily to the Transactions. The acquisition of WWE contributed $7.4 million of incremental expenses to Corporate primarily driven by $9.7 million of other operating expenses, including $4.2 million related to service fees paid to Endeavor, partially offset by a decline of $2.0 million in merger and acquisition costs related primarily to the Transactions.
Previous wording
WWE contributed selling, general and administrative expenses of $198.4 million for the six months ended June 30, 2024. These expenses were primarily driven by the cost of personnel, including $6.7 million of charges associated with restructuring activities related to the Transactions, as well as travel and other operating expenses. These expenses also include an impairment charge of $24.3 million as a result of reducing the carrying value of WWE assets held for sale to their fair value less cost to sell.
Current wording
WWE contributed selling, general and administrative expenses of $271.8 million for the nine months ended September 30, 2024 as compared to $45.5 million for the period from September 12, 2023 through September 30, 2023 following its acquisition. These incremental expenses were primarily driven by $111.0 million of increased personnel costs driven by the timing of the acquisition, including $6.7 million of charges associated with restructuring activities related to the Transactions, as well as $57.6 million of increased travel expenses due to 126 additional live events in the current period. The current year period also includes $31.9 million of other operating expenses driven by the timing of the acquisition and impairment charges of $25.8 million as a result of reducing the carrying value of WWE assets held for sale to their fair value less cost to sell.
Previous wording
Corporate selling, general and administrative expenses increased by $450.7 million. This increase was primarily due to higher legal costs of $340.1 million, including a legal settlement related to UFC antitrust lawsuits of $335.0 million, as well as $53.9 million of higher cost of personnel and other operating expenses, including TKO executive compensation and other public company expenses following the Transactions. The acquisition of WWE contributed $56.7 million of expenses to Corporate, which was primarily driven by personnel costs, including $3.0 million of charges associated with restructuring activities related to the Transactions, as well as other operating expenses, including $5.3 million related to service fees paid to Endeavor.
Current wording
Corporate selling, general and administrative expenses increased by $452.2 million. This increase was primarily due to higher legal costs of $394.4 million, including the legal settlement related to UFC antitrust lawsuits of $375.0 million, as well as $62.9 million of higher cost of personnel and other operating expenses, including TKO executive compensation and other public company expenses following the Transactions. These increases were partially offset by a decrease in merger and acquisition costs of $69.3 million related primarily to the Transactions. The acquisition of WWE contributed $64.1 million of incremental expenses to Corporate, which was primarily driven by $22.0 million of increased personnel costs, including $3.0 million of charges associated with restructuring activities related to the Transactions, as well as $42.1 million of other operating expenses, including $9.5 million related to service fees paid to Endeavor.
Previous wording
Depreciation and amortization increased $88.9 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was primarily due to $88.5 million of expenses associated with the acquisition of WWE.
Current wording
Depreciation and amortization increased $66.4 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily due to $66.5 million of expenses associated with the acquisition of WWE.
Previous wording
Depreciation and amortization increased $180.8 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily due to $180.2 million of expenses associated with the acquisition of WWE.
Current wording
Depreciation and amortization increased $247.2 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily due to $246.8 million of incremental expenses associated with the acquisition of WWE.
Previous wording
Interest expense, net increased $7.8 million, or 13%, to $65.7 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was primarily driven by higher interest rates on variable rate debt slightly offset by lower indebtedness.
Current wording
Interest expense, net increased $2.1 million, or 3%, to $62.7 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily driven by higher interest rates on variable rate debt slightly offset by lower indebtedness.
Previous wording
Interest expense, net increased $18.4 million, or 16%, to $130.2 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily driven by higher interest rates on variable rate debt slightly offset by lower indebtedness.
Current wording
Interest expense, net increased $20.5 million, or 12%, to $192.9 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily driven by higher interest rates on variable rate debt slightly offset by lower indebtedness.
Previous wording
For the three months ended June 30, 2024, TKO recorded a provision for income taxes of $39.6 million compared to $2.9 million for the three months ended June 30, 2023. This increase was primarily due to the new corporate structure as a result of the Transactions.
Current wording
For the three months ended September 30, 2024, TKO recorded a provision for income taxes of $17.8 million compared to $11.2 million for the three months ended September 30, 2023. This increase was primarily due to the new corporate structure as a result of the Transactions.
Previous wording
For the six months ended June 30, 2024, TKO recorded a provision for income taxes of $14.1 million compared to a provision of $6.5 million for the six months ended June 30, 2023. This change was primarily related to the legal settlement for UFC antitrust lawsuits of $335.0 million that resulted in a $39.2 million discrete tax benefit that was recognized in the current year period.
Current wording
For the nine months ended September 30, 2024, TKO recorded a provision for income taxes of $31.8 million compared to $17.7 million for the nine months ended September 30, 2023. This increase was primarily related to the new corporate structure as a result of the Transactions and the legal settlement for UFC antitrust lawsuits of $375.0 million that resulted in a $44.0 million discrete tax benefit that was recognized in the current year period.
Previous wording
Net income (loss) attributable to non-controlling interests was income of $91.6 million and $0.5 million for the three months ended June 30, 2024 and 2023, respectively. The change was primarily due to the change in the amount of reported net income for the three months ended June 30, 2024 as compared to the reported net income for the three months ended June 30, 2023 as well as the effect of the Transactions.
Current wording
Net income (loss) attributable to non-controlling interests was income of $34.6 million and a loss of $22.5 million for the three months ended September 30, 2024 and 2023, respectively. The change was primarily due to the change in the amount of reported net income for the three months ended September 30, 2024 as compared to the reported net income for the three months ended September 30, 2023 as well as the effect of the Transactions.
Previous wording
Net income (loss) attributable to non-controlling interests was a loss of $54.1 million and income of $0.8 million for the six months ended June 30, 2024 and 2023, respectively. The change was primarily due to the change in the amount of reported net loss for the six months ended June 30, 2024 as compared to the reported net income for the six months ended June 30, 2023 as well as the effect of the Transactions.
Current wording
Net income (loss) attributable to non-controlling interests was a loss of $19.5 million and a loss of $21.7 million for the nine months ended September 30, 2024 and 2023, respectively. The change was primarily due to the change in the amount of reported net loss for the nine months ended September 30, 2024 as compared to the reported net income for the nine months ended September 30, 2023 as well as the effect of the Transactions.
Previous wording
The following tables set forth Revenue and Adjusted EBITDA for each of our segments for the three and six months ended June 30, 2024 and 2023:
Current wording
The following tables set forth Revenue and Adjusted EBITDA for each of our segments for the three and nine months ended September 30, 2024 and 2023:
Previous wording
The following table sets forth our UFC segment results for the three and six months ended June 30, 2024 and 2023:
Current wording
The following table sets forth our UFC segment results for the three and nine months ended September 30, 2024 and 2023:
Previous wording
The following table sets forth our WWE segment results for the three and six months ended June 30, 2024:
Current wording
The following table sets forth our WWE segment results for the three and nine months ended September 30, 2024 and 2023:
Previous wording
The following table displays results for Corporate for the three and six months ended June 30, 2024 and 2023:
Current wording
The following table displays results for Corporate for the three and nine months ended September 30, 2024 and 2023:
Previous wording
Adjusted EBITDA for the three months ended June 30, 2024 decreased by $47.7 million, or 327%, compared to the three months ended June 30, 2023. The acquisition of WWE contributed corporate expenses of $21.5 million, primarily driven by the cost of personnel and other general and administrative expenses, and $17.5 million was the result of increases in cost of personnel, including TKO executive compensation, and other public company expenses following the Transactions. The remaining decrease was due to $8.7 million of higher services fees paid to Endeavor.
Current wording
Adjusted EBITDA for the three months ended September 30, 2024 decreased by $40.3 million, or 196%, compared to the three months ended September 30, 2023. The acquisition of WWE contributed incremental corporate expenses of $11.9 million, primarily driven by the cost of personnel and other general and administrative expenses. The remaining decrease was attributable to $20.2 million resulting from increases in cost of personnel, including TKO executive compensation, and other public company expenses following the Transactions, as well as $8.2 million of higher services fees paid to Endeavor. The costs associated with WWE's portion of the service fees did not commence until March 2024.
Previous wording
Adjusted EBITDA for the six months ended June 30, 2024 decreased by $87.1 million, or 308%, compared to the six months ended June 30, 2023. The acquisition of WWE contributed corporate expenses of $40.4 million, primarily driven by the cost of personnel and other general and administrative expenses, and $34.0 million was the result of increases in cost of personnel, including TKO executive compensation, and other public company expenses following the Transactions. The remaining decrease was due to $12.7 million of higher service fees paid to Endeavor.
Current wording
Adjusted EBITDA for the nine months ended September 30, 2024 decreased by $127.4 million, or 261%, compared to the nine months ended September 30, 2023. The acquisition of WWE contributed incremental corporate expenses of $52.3 million, primarily driven by the cost of personnel and other general and administrative expenses. The remaining decrease was attributable to $54.2 million resulting from increases in cost of personnel, including TKO executive compensation, and other public company expenses following the Transactions, as well as $20.9 million of higher service fees paid to Endeavor. The costs associated with WWE's portion of the service fees did not commence until March 2024.
Previous wording
(1)Equity-based compensation represents non-cash compensation expense for awards issued under Endeavor’s 2021 Plan subsequent to its April 28, 2021 IPO, for the Replacement Awards (as defined in Note 4, Acquisition of WWE, to our unaudited consolidated financial statements included in this Quarterly Report) and for awards issued under the 2023 Incentive Award Plan. For the three and six months ended June 30, 2024, equity-based compensation includes $6.7 million and $15.7 million of expense, respectively, associated with certain services provided by an independent contractor in the WWE segment and $0.9 million and $3.3 million of expense, respectively, associated with accelerated vesting of the Replacement Awards related to the workforce reduction of certain employees in the WWE segment and Corporate.
Current wording
Equity-based compensation represents non-cash compensation expense for awards issued under Endeavor’s 2021 Plan subsequent to its April 28, 2021 IPO, for the Replacement Awards (as defined in Note 4, Acquisition of WWE, to our unaudited consolidated financial statements included in this Quarterly Report) and for awards issued under the 2023 Incentive Award Plan. For the three and nine months ended September 30, 2024, equity-based compensation includes $1.0 million and $16.7 million of expense, respectively, associated with certain services provided by an independent contractor in the WWE segment. Equity-based compensation also includes $3.3 million of expense during the nine months ended September 30, 2024 and $16.5 million of expense during the three and nine months ended September 30, 2023 associated with accelerated vesting of the Replacement Awards related to the workforce reduction of certain employees in the WWE segment and Corporate.
Previous wording
(2)Includes (i) certain costs of professional fees and bonuses related to the Transactions and payable contingent on the closing of the Transactions and (ii) certain costs of professional advisors related to potential mergers and acquisitions.
Current wording
Includes (i) certain costs of professional fees and bonuses related to the Transactions and payable contingent on the closing of the Transactions and (ii) certain costs of professional advisors related to other strategic transactions, primarily the Endeavor Asset Acquisition.
Previous wording
(3)Includes costs related to certain litigation matters including antitrust lawsuits for UFC and WWE and matters where Mr. McMahon has agreed to make future payments to certain counterparties personally. For the six months ended June 30, 2024, these costs include the settlement amount of $335.0 million regarding the UFC antitrust lawsuits, as described in Note 17, Commitments and Contingencies, to our unaudited consolidated financial statements included in this Quarterly Report.
Current wording
Includes costs related to certain litigation matters including antitrust lawsuits for UFC and WWE and matters where Mr. McMahon has agreed to make future payments to certain counterparties personally. For the three and nine months ended September 30, 2024, these costs include settlement charges of $40.0 million and $375.0 million, respectively, regarding the UFC antitrust lawsuits, as described in Note 18, Commitments and Contingencies, to our unaudited consolidated financial statements included in this Quarterly Report.
Previous wording
(4)Includes costs resulting from the Company’s cost reduction program during the three and six months ended June 30, 2024, as described in Note 16, Restructuring Charges, to our unaudited consolidated financial statements in this Quarterly Report. Additionally, during the three and six months ended June 30, 2024, the Company recorded an impairment charge of $24.3 million as a result of reducing the carrying value of WWE assets held for sale to their fair value less cost to sell, as described in Note 6, Supplementary Data, to our unaudited consolidated financial statements included in this Quarterly Report.
Current wording
Includes costs resulting from the Company’s cost reduction program during the three and nine months ended September 30, 2024, as described in Note 16, Restructuring Charges, to our unaudited consolidated financial statements in this Quarterly Report. Additionally, during the three and nine months ended September 30, 2024, the Company recorded impairment charges of $1.5 million and $25.8 million as a result of reducing the carrying value of WWE assets held for sale to their fair value less cost to sell, as described in Note 6, Supplementary Data, to our unaudited consolidated financial statements included in this Quarterly Report.
Previous wording
Cash flows from operations are used to fund TKO’s day-to-day operations, revenue-generating activities, and routine capital expenditures, as well as service its long-term debt.
Current wording
Cash flows from operations are used to fund TKO’s day-to-day operations, revenue-generating activities, and routine capital expenditures, as well as to service its long-term debt, and are expected to be used to fund our capital return programs.
Previous wording
As of June 30, 2024, there is currently outstanding an aggregate of $2.7 billion of first lien term loans under a credit agreement dated August 18, 2016 (as amended and/or restated, the “Credit Agreement”), by and among Zuffa Guarantor, LLC, UFC Holdings, LLC, as borrower, the lenders party hereto and Goldman Sachs Bank USA, as Administrative Agent, which was entered into in connection with the acquisition of Zuffa by EGH in 2016. The facilities under the Credit Agreement consist of (i) a first lien secured term loan (the “First Lien Term Loan”) and (ii) a secured revolving credit facility in an aggregate principal amount of $205.0 million, letters of credit in an aggregate face amount not in excess of $40.0 million and swingline loans in an aggregate principal amount not in excess of $15.0 million (collectively, the “Revolving Credit Facility”, and, together with the First Lien Term Loan, the “Credit Facilities”). The Credit Facilities are secured by liens on substantially all of the assets of Zuffa Guarantor, LLC, UFC Holdings, LLC and certain subsidiaries thereof.
Current wording
As of September 30, 2024, there is currently outstanding an aggregate of $2.7 billion of first lien term loans under a credit agreement dated August 18, 2016 (as amended and/or restated, the “Credit Agreement”), by and among Zuffa Guarantor, LLC, UFC Holdings, LLC, as borrower, the lenders party hereto and Goldman Sachs Bank USA, as Administrative Agent, which was entered into in connection with the acquisition of Zuffa by EGH in 2016. The facilities under the Credit Agreement consist of (i) a first lien secured term loan (the “First Lien Term Loan”) and (ii) a secured revolving credit facility in an aggregate principal amount of $205.0 million, letters of credit in an aggregate face amount not in excess of $40.0 million and swingline loans in an aggregate principal amount not in excess of $15.0 million (collectively, the “Revolving Credit Facility”, and, together with the First Lien Term Loan, the “Credit
Previous wording
Following a repricing under the Credit Facilities in January 2021, term loan borrowings under the Credit Facilities bore interest at a variable interest rate equal to either, at its option, adjusted LIBOR or the ABR plus, in each case, an applicable margin. LIBOR term loans accrue interest at a rate equal to an adjusted LIBOR plus 2.75%-3.00%, depending on the First Lien Leverage Ratio (as defined in the Credit Agreement), in each case with a LIBOR floor of 0.75%. ABR term loans accrue interest at a rate equal to (i) the highest of
Current wording
Following a repricing under the Credit Facilities in January 2021, term loan borrowings under the Credit Facilities bore interest at a variable interest rate equal to either, at its option, adjusted LIBOR or the ABR plus, in each case, an applicable margin. LIBOR term loans accrue interest at a rate equal to an adjusted LIBOR plus 2.75%-3.00%, depending on the First Lien Leverage Ratio (as defined in the Credit Agreement), in each case with a LIBOR floor of 0.75%. ABR term loans accrue interest at a rate equal to (i) the highest of (a) the Federal Funds Effective Rate plus 0.5%, (b) the prime rate, (c) adjusted LIBOR for a one-month interest period plus 1.00% and (d) 1.75%, plus (ii) 1.75%-2.00%. In June 2023, the parties amended the terms of the First Lien Term Loan to replace the adjusted LIBOR reference rate with Term Secured Overnight Financing Rate (“SOFR”) plus a credit spread adjustment (as defined in the Credit Agreement). The term loans under the Credit Facilities include 1% principal amortization payable in equal quarterly installments and mature on April 29, 2026.
Previous wording
The Credit Agreement contains restrictions on TKO’s ability to make distributions and other payments from the respective credit groups. These restrictions on dividends include exceptions for, among other things, (1) amounts necessary to make tax payments, (2) a limited annual amount for employee equity repurchases, (3) distributions required to fund certain parent entities, (4) other specific allowable situations and (5) a general restricted payment basket, which generally provides for no restrictions as long as the Total Leverage Ratio (as defined in the Credit Agreement) is less than 5.0x.
Current wording
The Credit Agreement contains specified restrictions on the ability to make distributions and other payments. These restrictions on dividends include exceptions for, among other things, (1) amounts necessary to make tax payments, (2) a limited annual amount for employee equity repurchases, (3) distributions required to fund certain parent entities, (4) other specific allowable situations and (5) a general restricted payment basket, which generally provides for no restrictions as long as the Total Leverage Ratio (as defined in the Credit Agreement) is less than 5.0x.
Previous wording
Operating activities increased from $180.7 million of cash provided in the six months ended June 30, 2023 to $290.0 million of cash provided in the six months ended June 30, 2024. Cash provided in the six months ended June 30, 2024 was primarily due to an increase in accounts payable and accrued liabilities of $331.3 million driven by the $335.0 million charge under the settlement agreement in the UFC antitrust lawsuits and the timing of bonus payments, partially offset by a decrease in net income for the period of $268.6 million, which included certain non-cash items, including depreciation and amortization of $180.8 million and equity-based compensation of $43.0 million.
Current wording
Operating activities increased from $247.7 million of cash provided in the nine months ended September 30, 2023 to $526.6 million of cash provided in the nine months ended September 30, 2024. Cash provided in the nine months ended September 30, 2024 was primarily due to an increase in accounts payable and accrued liabilities of $344.3 million driven by the $375.0 million charge under the settlement agreement in the UFC antitrust lawsuits and the timing of bonus payments, partially offset by a decrease in net income for the period of $232.9 million, which included certain non-cash items, including depreciation and amortization of $247.2 million and equity-based compensation of $38.5 million.
Previous wording
Investing activities decreased from $9.2 million of cash used in the six months ended June 30, 2023 to $48.3 million of cash used in the six months ended June 30, 2024. Cash used in the six months ended June 30, 2024 primarily reflects payments for property, buildings and equipment and investments in affiliates. Cash used in the six months ended June 30, 2023 primarily reflects payments for property, buildings and equipment.
Current wording
Investing activities decreased from $47.6 million of cash provided in the nine months ended September 30, 2023 to $65.1 million of cash used in the nine months ended September 30, 2024. Cash used in the nine months ended September 30, 2024 primarily reflects payments for property, buildings and equipment of $54.6 million and investments in affiliates of $21.5 million, partially offset by infrastructure improvement incentives received of $11.0 million. Cash used in the nine months ended September 30, 2023 primarily reflects $381.2 million of cash acquired from WWE as part of the Transactions, partially offset by the payment of $321.0 million of deferred compensation in the form of a divided to former WWE shareholders and payments for property, buildings and equipment of $12.6 million.
Previous wording
Financing activities decreased from $178.1 million of cash used in the six months ended June 30, 2023 to $199.3 million of cash used in the six months ended June 30, 2024. Cash used in the six months ended June 30, 2024 primarily reflects share repurchases of $165.0 million, net payments on debt of $22.0 million and distributions to Endeavor and its subsidiaries of $12.3 million. Cash used in the six months ended June 30, 2023 primarily reflects distributions to Endeavor and subsidiaries of $161.5 million and net payments on debt of $16.3 million.
Current wording
Financing activities increased from $285.3 million of cash used in the nine months ended September 30, 2023 to $239.6 million of cash used in the nine months ended September 30, 2024. Cash used in the nine months ended September 30, 2024 primarily reflects share repurchases of $165.0 million, distributions to Endeavor and its subsidiaries of $41.8 million and net payments on debt of $33.5 million. Cash used in the nine months ended September 30, 2023 primarily reflects distributions to Endeavor and subsidiaries of $260.5 million and net payments on debt of $24.5 million.
Previous wording
TKO expects that its primary liquidity needs will be cash to (1) provide capital to facilitate organic growth of its business, (2) pay operating expenses, including cash compensation to its employees, athletes and talent, (3) fund capital expenditures and investments, (4) pay interest and principal when due on the Credit Facilities, (5) pay income taxes, (6) reduce its outstanding indebtedness under the Credit Facilities, (7) fund the legal settlements described in Note 17, Commitments and Contingencies, to our unaudited consolidated financial statements included in this Quarterly Report, and (8) make distributions to members and, in accordance with the Company’s cash management policy, to TKO stockholders.
Current wording
TKO expects that its primary liquidity needs will be cash to (1) provide capital to facilitate organic growth of its business, (2) pay operating expenses, including cash compensation to its employees, athletes and talent, (3) fund capital expenditures and investments, (4) pay interest and principal when due on the Credit Facilities, (5) pay income taxes, (6) reduce its outstanding indebtedness under the Credit Facilities, (7) fund the legal settlements described in Note 18, Commitments and Contingencies, to our unaudited consolidated financial statements included in this Quarterly Report, (8) fund share repurchases as authorized by the Board and (9) make distributions to members and, in accordance with the Company’s cash management policy, to TKO stockholders, including the planned quarterly dividend when declared by the Board.
Showing the first 40 of 41 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Facilities”). The Credit Facilities are secured by liens on substantially all of the assets of Zuffa Guarantor, LLC, UFC Holdings, LLC and certain subsidiaries thereof.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
WWE contributed revenue of $456.8 million for the three months ended June 30, 2024. This revenue was driven by $260.7 million of media rights and content primarily associated with domestic and international rights fees for WWE’s flagship programs, Raw, SmackDown and NXT, and premium live event programming, including WrestleMania XLevents, as well as
Previous report — wording carried elsewhere
(a) the Federal Funds Effective Rate plus 0.5%, (b) the prime rate, (c) adjusted LIBOR for a one-month interest period plus 1.00% and (d) 1.75%, plus (ii) 1.75%-2.00%. In June 2023, the parties amended the terms of the First Lien Term Loan to replace the adjusted LIBOR reference rate with Term Secured Overnight Financing Rate (“SOFR”) plus a credit spread adjustment (as defined in the Credit Agreement). The term loans under the Credit Facilities include 1% principal amortization payable in equal quarterly installments and mature on April 29, 2026.