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Welcome to PWInsider.com's coverage of the first-ever TKO Group Holdings earnings call, covering the third quarter for 2023.
Seth Zaslow welcomed everyone.
Ari Emanuel spoke about this being the first call. He noted Smackdown and NXT each had media rights fees raises. They are working to unlock long-term value for shareholders. They have two unique properties that run all year round. They have huge potential international growth for revenue. They are working on how to assimilate and save costs.
Emanuel talked up UFC's sellout streak and their plan to expand in the Middle East in the Kingdom of Saudi Arabia, stating it builds on WWE's relationship there. This proves SA's interest in building a relationship with UFC despite investing in other MMA companies. They are looking at eight-figure site fees coming in from that region.
Emanual talked up their Anheuser Bush and that their relationship will be a driver internationally.
WWE unveiled two new international PPV events and will return to Australia for Elimination Chamber, which will be their largest ever site fee.
Ari Emanuel announced the WWE NXT TV deal, which PWInsider.com exclusively broke a few hours ago. It will be a 70% increase in media rights fees. PWInsider.com had heard it was in the $35 million range yesterday, but were not able to lock that down with multiple sourcing.
There are multiple conversations with potential broadcast and streamers for Raw and they are in no such to lock it in.
Ari stated that as part of the new Smackdown deal, there will be WWE specials on NBC in primetime for the first time ever. Someone should tell someone that they aired the WWF Main Event on NBC live in February 1988 and THAT was pro wrestling's return to primetime...on NBC!
They ran down the moves they are making to save $50-$100 million in costs, meaning the firings and merging different aspects of UFC and WWE that can assist each other. They are still working on this and there will be additional moves made in that regard next year.
They reviewed all the numbers in the UFC and WWE segments of the earnings report.
They then began taking calls.
The first question was about putting UFC and WWE together. They said the positioning of the companies will leave them in a good position once they are done with the cost-savings. They expect to provide an update on their plans on the next earnings call as well as giving guidance for the entirety of 2024. They feel the stock is undervalued right now. It is a unique, high cash-flow business. They are laser focused on the return of capital to shareholders. They will be back with their plan in February but will be opportunistic going forward.
Brandon Ross noted there is investor concern on the states on sports-rights buying. He asked about how that impacts their Raw strategies as well as in general going forward. They voted viewership is up in the key demos while broadcast and cable are down. They have no churn in their content. They are year-round content creators. They have flexiblity regarding day and time and have an attractive viewership. They are pleased with a 40% increase on Smackdown rights plus the four specials. They will be live across the board n ow where 40% of the country they were not on FOX. CW is a major network reaching 100% of the country and will have WWE NXT. They put over how important NXT is to the health of WWE in the future.
On Raw, they are going to be patient, measured and calculated and take their time. They are having robust conversations and they are handling it the way they handled UFC rights.
On Sports rights, they noted the Xfinity series went for a "monster number" on the CW Network and now they have NXT. The NBA has an exclusive negotiating window with their current partners until April but everyone else is lining up. Netflix is just dipping their toe in the water. Peacock just grabbed another NFL game for a massive number. They are in the middle of this. Raw has a lot of equity, super fandom (like Vladimir!) and all sorts of brand awareness. They can move to a new partner overnight if they need. They have urgency in their sports properties. Wrestlemania and UFC are triggers for people to sign up for Peacock or ESPN+. They drive subs for partners. Those partners are going to want year-round urgency and subs driven, but they are going to be patient.
They are happy with how the WWE and UFC teams are coming together, on the cost side and the revenue side. They expect to achieve the upper end of the cost-saving synergies and that's before they really combined the businesses. They expect they can partner with UFC and WWE events in international markets, noting China as a potential destination. They will have a lot of crossover, especially when you add in the concierge side.
They were asked about the landscape of MMA. Competition isn't unknown to WWE or UFC. Rising tides lift all boats. There's a lot of competition with other sports. They have a strong, stable UFC roster. UFC is where fighters want to come and want to be. They feel good about their relationship with Saudi Arabia. They have no problem with any other league, naming PFL and BELLATOR. UFC is where people want to be. They are supportive of other companies being pipeline and feeders to UFC. They were supportive of UFC on ESPN. They put over how strong the relationship with Saudi will be.
They were asked about more sponsorships on WWE programming. They said Vince McMahon is open having more inventory of sponsorships where before they kept the ring mat and the arena relatively clean. They cautioned they are not going to tip their hands on deals as they aren't going to give their potential partnerships away.
They were asked about potential super weekends. They are looking at potential Saturday-Monday event weekends with WWE and UFC.
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