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Ryan: Maybe just mention international. What does the road map here look like for both businesses internationally? It seems like there's an emphasis on having more events abroad.
Shapiro: The good news is we're, we're really seeing an uptick in the site fees that we're getting. So if you want us to bring one of these to town you're going to have to pay. And that's been going, extremely well on the UFC side and we're just getting going in WWE. In particular, we've just done a deal in Australia with the government there for $16 million to bring really a combination of events to Australia, as we did a deal for roughly $20 million to bring a fight card. Again, just a fight night, not a championship pay per view night, just a Fight Night for $20 million to Saudi Arabia. We get roughly $25 million every time we do an event in Abu Dhabi, just site fees. And WWE is getting over $100 million for the two in Saudi Arabia every year. So, I'm going to tell you there is a long line of bidders that want sports events in their countries. And this just doesn't go, I'm speaking here overall in sports right now, as Endeavor owns IMG and we sell 150 sports properties into 160 territories annually. We're seeing a wide canvas of demand, geography, region, platform, and live events are just in vogue. So if you can bring them to Taylor Swift concert, great. Second place would be anything in sports.
Ryan: Is there any way to quantify how many markets might be eligible for you securing site fees here in the Northeast?
Shapiro: Roughly 20, I would say, that are interested in various levels of paying just to bring the circus to town.
Ryan: Great. And then, maybe shifting over on the sponsorship side we saw a nice pickup in growth. The last quarter on the UFC side sponsorship revenues, would you say that was more driven by renewal increases you're seeing a renewal or, incremental verticals that you're tapping into and how much opportunity is left there?
Shapiro: Look it's the UFC is, until we get over a billion in sponsorship, I won't be happy. We should be playing where the NBA are playing. It's been an incredible journey. It's been a fast journey, but there's an enormous upside, both in inventory categories and to your point, renewal and pricing WWE, was, is, as my CFO likes to put it, it was religion for Vince. He just didn't want to commercialize the venue for the most part. The mat was clean. The ropes were clean. Just...there just wasn't a lot of signage or activation because it's advertisers don't just want to put their banner up there anymore. They want activation. We specialize in that at UFC and we're going to bring that same strategy to the WWE and there are no rules. Those gates or that manifesto has been thrown out and we're going to take the right opportunity to make sure. Brands from all walks, shapes, and sizes get the kind of exposure they're looking for when it comes to our audience, which is at the WWE specifically, very diverse, 40% percent female, and heavy family.
Ryan: On the activations for the WWE side, when does that start? Is that already in progress now?
Shapiro: What we've done is we've merged our two global partnerships teams. Which resulted in some layoffs. Obviously some headcount labor savings there, but, we come into this integration with no prejudice, we just want best in class. We don't have it? We're going to go get it, but most likely between the two, we have it. There might be someone in this division. That's the best that UFC and someone in this division is the best at WWE. And that's the, that's really the science in that. The method we've applied for this integration and our global partnerships is probably leading the pack, which is take the best WWE has to offer in terms of their people, sales, fulfillment, ideation, pricing, marketing, and put them together with the UFC side and hopefully you're selling two properties all at once. So we won't be walking into many advertisers or categories where we aren't pitching both properties.
Ryan: Maybe just on, on the synergy. Topic you laid out that you're planning to realize 75% of the high end of the 50 to a hundred million target next year. I guess now that you're, a couple months into the integration, are there more opportunities you're looking at? Could we see that?
Shapiro: Yeah, look we've guided the street to $50 to $100 million net savings on the on the cost side, we expect to be at the top end of that range and realize 75 percent of those savings by the end of '24. Frankly, I think there's a lot more. I know there's a lot more, just from a production standpoint. Just think of how many events we televise, we put on, we bring the show on the road, we bring trucks out to different cities, whether it's a cloud or it's cameras or it's tape machines, replay, graphics, operators, stuff we can do AI back at our headquarters. In either Vegas for UFC or our Stanford production facility for the WWE, there are a lot of production efficiencies. Even if our production chiefs want to tell me there's not, frankly, I worked at ESPN for 12 years, I oversaw all production, I've been through all the song and dance with every producer who, treats every tape machine and camera like it's a baby and doesn't want to give it up and we're here to improve our margins. So we are going to be we're going to scrutinize every dollar on the production end of every single one of these events and every single one of these telecasts. And we're going to we're going to realize substantial savings. What beyond the hundred? We haven't yet forecasted, but we'll share more of that as we get into '24.
Ryan: Gotcha. I guess just on the production efficiencies, do you have any plans here in the near future around bringing, maybe not together on the same day, throughout a weekend having events at UFC, WWE, and is that an also an opportunity for savings?
Shapiro: Huge opportunity. And not, yes, savings, there is an opportunity if we have two events from both properties on the same weekend, but just think of the revenue upside. That's the real opportunity. Brands, sponsorship, if it's an incremental event, the media rights around it. The international media rights around it. The premium experiences we can sell. The two tickets for one deal we can sell. It's, you're selling out every UFC event and setting records at the gate and with per caps and meanwhile, WrestleMania and Survivor Series are just two of our recent PLEs that we just see no slowing down. It makes a lot of sense to find the right weekend. Maybe it starts with two a year, maybe we can do one a quarter, but we're absolutely looking to capitalize on that, on having two on the same weekend. It's just really a calendar scheduling. And also we want to make sure we get the right site fee to do that. If you, we're getting sizable offers to bring a UFC fight to your town on a Saturday night. If we're going to do a combo, it's one plus one equals four.
Ryan: I guess related to that, but in thinking beyond the initial synergy uplift, how are you thinking about margin expansion opportunities from here?
Shapiro: Just driving, incremental operating leverage in the business. We'll get it a number of different ways. We'll get it from pruning the WWE live event portfolio, which I talked about, you got it, the non televised portfolio. And then you'll get it from obviously the cost synergies we're going to see and it's, gonna be a great story when we see the kind of revenue uplift, top line uplift on our sponsorship the way we've seen at the UFC. I think there's a real opportunity across the board to drive that. And we know that's something that's clearly not just important to the growth of the brands in the future of the business, but obviously the streets and our investors and we're that's a priority for us. We're gonna be above 40 percent out of the gate with these two sports. And I'd like to see that, over time we can drive that back to that. Low fifties, which is what we've been getting for the UFC, over the last number of years under Endeavor stewardship. So I think maximizing and really leveraging the Endeavor flywheel, let's not forget that what we've got WME and we've got IMG and all these live events that we do and on location on the premium experiences and this huge infrastructure. To to, help out the margins by not having to hire the labor at TKL because Endeavor can do it with the current staff they have on board. Now that formula that's a key part of this equation, it's having, it's not just integrating these two properties, it's integrating Endeavor into the mix, where for there's international rights, it's the domestic deal, for the meetings we're having now on Raw, Endeavor is doing all the analytics for those meetings. Presentations, videos, sizzles, all the psychographics and data these platforms are, asking for. In terms of where they can or how they can ultimately monetize our property. We're doing that side of Endeavor and it's allowed us, frankly, to wipe away the entire analytics group at WWE. There is none. They get it from Endeavor and that's what UFC's been doing for a number of years. That's just a small example but when you have the infrastructure in Endeavor that plays across sports and music and fashion and culture and content and IP and celebrity stars, there's a lot you can tap into.
Ryan: Yeah, so you're benefiting from that infrastructure and it, it seems like both companies and putting them together is pretty substantial cash generation opportunity. There we go. You're planning to provide an update on capital allocation plans at the next earnings call, but maybe if you could just talk to the cash generation profile and opportunities.
Shapiro: We'll we'll get into specifics as you said on our February call where we provide some guidance and we articulate our plans on capital return, but I just want to be clear, like that's the priority here. We're not looking to do acquisitions. We're not looking to bring on other sport properties. Having said that, calls come in and we're open for business. We'll take every call. I don't want to be on the outside looking in and I don't want anybody to think we're not. Willing to explore something so that they stop calling. I never want to be in that position, but to be very clear. We are not looking to acquire a new sports property at the moment or for the foreseeable future. We are focused on the integration and integration works both ways. It's the Endeavor flywheel, it's the cost efficiencies, and obviously it's the revenue synergies. That's our focus. Period. And if we do that The way we're going to do it, we will have significant pre cash flow, as you mentioned. And terrific conversion. What we do with that will be are we buying back debt and, lowering ourselves to two times? Or are we shareholder buyback plan and share buyback plan or a specific a dividend increase? That's what we're exploring. But I would tell you, we lean towards returning capital to our shareholders in a very long, sustained, pronounced way.
Ryan: Gotcha. All right. I think that's a great place to end it. Thank you, Marc:
Marc: Thank you Ryan, for the time.
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