NYSE:TKO TKO Group Q2 2025 Earnings Report $156.22 -7.24 (-4.43%) Closing price 08/6/2025 03:59 PM EasternExtended Trading$159.42 +3.21 (+2.05%) As of 08/6/2025 07:57 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast TKO Group EPS ResultsActual EPS$1.17Consensus EPS $1.23Beat/MissMissed by -$0.06One Year Ago EPS$0.72TKO Group Revenue ResultsActual Revenue$1.31 billionExpected Revenue$1.23 billionBeat/MissBeat by +$74.33 millionYoY Revenue Growth+53.70%TKO Group Announcement DetailsQuarterQ2 2025Date8/6/2025TimeAfter Market ClosesConference Call DateWednesday, August 6, 2025Conference Call Time5:00PM ETConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by TKO Group Q2 2025 Earnings Call TranscriptProvided by QuartrAugust 6, 2025 ShareLink copied to clipboard.Key Takeaways Positive Sentiment: TKO raised its full-year 2025 guidance for the second quarter in a row, now targeting $4.63–4.69 billion in revenue and $1.54–1.56 billion in adjusted EBITDA, driven by continued UFC and WWE momentum. Positive Sentiment: The company secured a five-year, $1.625 billion ESPN domestic media rights deal for WWE’s premium live events, adding high-margin recurring revenue and new ad-inventory opportunities. Positive Sentiment: UFC live events set arena records and expanded site-fee support in new markets like Baku and Doha, while WWE broke gross and attendance records at WrestleMania 41 and its first two-night SummerSlam. Positive Sentiment: Consolidated Q2 results beat expectations with 10% revenue growth to $1.308 billion and 75% EBITDA growth to $526 million, generating $375 million of free cash flow and kicking off a share repurchase program. Neutral Sentiment: IMG’s revenue fell 4% on the loss of FA Cup rights, but its EBITDA margin turned positive at 9% versus –29%, while corporate EBITDA improved due to lower Endeavor expense allocations. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallTKO Group Q2 202500:00 / 00:00Speed:1x1.25x1.5x2xThere are 13 speakers on the call. Operator00:00:00Good afternoon, all, and thank you for joining us for the Second Quarter twenty twenty five Teekay Earnings Call. My name is Carly, and I'll be coordinating the call today. I'd now like to hand the call over to our host, Seth Laszlo, Senior Vice President and Head of Investor Relations. The floor is yours. Speaker 100:00:22Good afternoon, and welcome to Teekay's second quarter twenty twenty five earnings call. A short while ago, we issued a press release, which you can view on our Investor Relations website. A recording of this call will also be available via our website for at least thirty days. After prepared remarks from Ari Emanuel, TKO's Executive Chair and Chief Executive Officer and Andrew Schweimer, TKO's Chief Financial Officer, we'll open the call for questions. Mark Shapiro, our President and Chief Operating Officer and Andrew will be handling the Q and A. Speaker 100:00:58The purpose of this call is to provide you with information regarding our second quarter twenty twenty five performance. I want to remind everyone that the information discussed will include forward looking statements and or projections that involve risks, uncertainties and assumptions. Please see our filings with the Securities and Exchange Commission for further detail. If these risks or uncertainties were to materialize or any assumptions prove incorrect, our results may differ materially from those expressed or implied on this call. Forward looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events, except as legally required. Speaker 100:01:43Our commentary today will also include non GAAP financial measures, which we believe provide an additional tool for investors to use in evaluating our ongoing operating results and trends. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. Reconciliations between GAAP and non GAAP metrics can be found in our press release issued today as well as the information posted on our IR website. With that, I'll now turn the call over to Ari. Speaker 200:02:19Thanks, Seth. TKO's momentum continued throughout the second quarter, reflecting strong execution of our strategy. The quarter included multiple live event milestones, enhanced event economics and meaningful new brand partnerships. These results highlight our ability to capitalize on sustained demand for premium content and live events to drive growth, profitability and margin expansion. As just one example, the ESPN domestic media rights deal for WWE's premium live events announced just this morning secures a pivotal recurring revenue stream for years to come. Speaker 200:02:55Our live sports and entertainment content has become a key differentiator for organizations, brands and platforms in search of audience. From Netflix live events to YouTube clips and highlights, our global partnership with AB InBev to our extraordinary consumer licensing partnership with Fanatics, our strategy and our assets at TKO are truly unique. Given the continued momentum across our portfolio and our overall business outlook, we are once again raising our guidance for the full year. I'll now share some highlights from the quarter that underscore our positive momentum. Turning first to our core UFC and WWE businesses, where live events and global partnerships continue to deliver solid performance and drive meaningful growth. Speaker 200:03:39At UFC, in addition to setting arena records, our live events are securing meaningful economic support from host cities. During the quarter, six out of eight live audience events were supported by incentives, including a first ever Fight Night in Baku, Azerbaijan. This event, along with our recently announced Visit Qatar partnership to host a fight in Doha, highlights continued traction in our site fee strategy, including generating greater support for our Fight Nights from new destinations. Meanwhile, our global brand partnerships team delivered robust double digit growth for UFC in the quarter, following recent major deals with Meta and Monster Energy. This progress continues with the recent expansion of UFC's Wingstop partnership that will include additional integrations across WWE Premium Live Events over a multiyear period. Speaker 200:04:30The properties are continuing to find meaningful ways to live side by side, leveraging the collective audience and fan avidity. At WWE, on the heels of a record WrestleMania forty one, which was the highest grossing event and most viewed WrestleMania in company history, Money in the Bank at Intuit Dome in Los Angeles became the highest grossing WWE Arena event of all time, a record we've now broken three times over the last year. The strength of our premium live events was further on display last weekend at MetLife Stadium in New Jersey, where WWE's first ever two night SummerSlam drew more than 113,000 fans. While premium live events remain a key driver, we're seeing enhanced economics across the entire event portfolio at WWE. In the quarter, we set 36 individual market records for ticket sales and sold out 16 events. Speaker 200:05:24On the programming side, WWE's partnership with Netflix is showing robust appeal and growth across overall viewership and the harder to reach younger demos. Since launching on the platform in January, Raw has appeared on Netflix's list of top 10 shows every single week, that's thirty straight weeks, totaling more than two eighty million view hours on the platform. Internationally, WWE's PLEs have been a consistent performer, making the top 10 list in 37 countries over the first six months of the partnership. Additionally, with last week's Netflix premiere of WWE Unreal, we are creating more opportunities for fans to engage with our ancillary content, in this Speaker 300:06:04instance taking them behind the scenes and into the writers' room for the very first time. Across global brand partnerships, WWE generated remarkable growth in the quarter driven in particular by record setting deals surrounding several of our premium live events. Speaker 200:06:19We also renewed long standing partners including Slim Jim and expanded our roster in the financial services category with digital banking platform Chime. Turning next to IMG on location and PBR. IMG's global production capabilities were on full display this quarter. A singular high impact weekend in May alone saw more than 1,000 IMG team members across three continents delivering thousands of hours of sports coverage for marquee events including the final days of both the English Premier League and Saudi Pro League seasons, the Euroleague Final Four in Abu Dhabi plus 15 MLS matches. Taken together, these achievements collectively showcase IMG's unmatched scale in delivering world class premium sports content to audiences worldwide from screens on phones to screens on planes with Sport24. Speaker 200:07:13IMG's unrivaled capabilities were again on display last month at the 150 at Royal Portrush, where IMG supported our long standing partner, the RNA, to deliver a record breaking championship across attendance, viewership, and engagement. From international media rights and brand partnerships to world's first innovations like Spidercam on the eighteenth hole, IMG helped elevate the fan experience on-site and worldwide. At on location, fans worldwide are already gearing up for next year's Milano Cortina Winter Olympic Games and FIFA World Cup. As of July, one year out from the FIFA World Cup's arrival in North America, hospitality sales and reservations have already surpassed the entirety of Qatar Twenty Twenty Two hospitality sales. And at PBR, the twenty twenty five Unleash the Beast and Pendleton Whiskey Velocity Tour successfully concluded in May with record regular season attendance across both tours. Speaker 200:08:09The focus now shifts to PBR's Camping World Team Series debuting with two additional media partners, Fox Nation and The CW Network, who joined CBS's coverage. In closing, positive trends continue across the business, and we are enthusiastic about key milestones ahead with the UFC rights renewal, TKO's promotion of the Canelo versus Crawford Super Fight next month and the planned commencement of our share repurchase program in the third quarter. We remain incredibly well positioned in today's sports ecosystem due to the strong demand for our premium content and high contractual visibility. As we move through the 2025, our focus is clear execute, integrate and deliver on our updated guidance. With that, I'll turn the call over to Andrew. Speaker 300:08:58Good afternoon. As Ari highlighted, we delivered strong operating and financial results in the quarter and for the second quarter in a row have raised our expectations for performance for the remainder of the year. UFC and WWE remain core drivers of TKO. Both delivered record quarterly revenue and adjusted EBITDA. We're seeing significant strength of these businesses, particularly with respect to live events and partnerships, and we continue to realize benefits to both the top and bottom line from the initiatives we've implemented since the formation of the company. Speaker 300:09:31Now turning to our consolidated financial results for the second quarter. We generated revenue of $1,308,000,000 an increase of 10%. Adjusted EBITDA was $526,000,000 an increase of 75%. Our adjusted EBITDA margin was 40%, an increase from 25 in the prior year period. Our UFC segment generated revenue of $416,000,000 an increase of 5%. Speaker 300:09:58Adjusted EBITDA was $245,000,000 an increase of 6%. UFC's adjusted EBITDA margin was 59% consistent with the prior year period. UFC had 11 total events including four numbered events and two international events in both the second quarter of this year and last year. The mix shifted slightly as eight events had live audiences in the second quarter as compared to seven last year. Partnerships and marketing revenue increased 39 to $86,000,000 The increase was driven by new partnerships and partnership renewals. Speaker 300:10:34We continue to make significant progress in this area, adding new categories and growing existing ones, including recently announced deals with Monster Energy and Meta. Increasingly, we're focused on partnerships across multiple TKO properties. This initiative is gaining momentum, most recently demonstrated by the Wingstop agreement we announced last week spanning UFC and WWE. The complementary power of our properties is highly appealing to brands and we expect to announce more cross TKO partnerships in the near future. Media rights production and content revenue increased 4% to $261,000,000 The increase was driven by the contractual escalation of media rights fees. Speaker 300:11:14Live Events and Hospitality revenue decreased 15% to $59,000,000 As we previewed on our last call, the decrease reflected lower site fee revenue driven by the timing and mix of international events. UFC held a fight night in Baku Azerbaijan in the quarter, while the 2024 included a site fee related to UFC's first event held in Saudi Arabia. Adjusted EBITDA reflected the increase in revenue partially offset by an increase in expenses. Direct operating expenses decreased primarily due to lower production, marketing, athlete and other event related costs due to the mix of event cards, venues and territories. SG and A increased primarily due to higher personnel and travel costs compared to the prior year period. Speaker 300:11:59Our WWE segment generated revenue of $556,000,000 an increase of 22%. Adjusted EBITDA was $330,000,000 an increase of 31%. Adjusted EBITDA margin was 59%, up from 55% in the prior year period. Live Events and Hospitality revenue increased 29% to $186,000,000 The increase was driven by higher ticket sales revenue, reflecting an increase in average ticket price. Total attendance declined as a result of our strategic decision to host fewer non televised events. Speaker 300:12:33Site fee revenue also increased as we received payments for both Night of Champions in Saudi Arabia and WrestleMania forty one in Las Vegas in the second quarter. Partnerships and marketing revenue increased 136% to $58,000,000 driven by new partnerships and renewals across multiple categories, including video games, travel, food and beverage, financial services, telecom and QSR among others. As we discussed on our last call and driving much of the quarterly increase, WrestleMania forty one set an all time record for partnerships revenue more than double the previous record. The event featured a record 28 total partners including a partner sponsor for each of the 14 matches over the course of two nights. Partnership revenue at WrestleMania and overall growth in Q2 showcases the execution on one of the core tenets of our investment thesis. Speaker 300:13:25We believe there's plenty of runway to continue growing this important part of the business. Media rights production and content revenue increased 7% to $279,000,000 As we discussed on our last call, results reflected the expansion of SmackDown to a three hour format for the first half of the year, resulting in a shift in quarterly revenue recognition. The increase was also driven by the contractual escalation of media rights fees, including our long term global agreement with Netflix. Adjusted EBITDA reflected the increase in revenue partially offset by an increase in expenses. Direct operating expenses increased primarily due to higher production and talent related costs. Speaker 300:14:04SG and A increased primarily due to higher personnel and travel costs compared to the prior year period. Our IMG segment generated revenue of $3.00 $7,000,000 in the quarter, a decrease of 4%. Adjusted EBITDA was $29,000,000 an increase of $120,000,000 Adjusted EBITDA margin was 9%, up from negative 29% in the prior year period. The decline in revenue primarily related to IMG no longer having rights to the FA Cup. This was partially offset by revenue from new production agreements, including a multiyear deal with the Saudi Pro League. Speaker 300:14:40Adjusted EBITDA largely reflected a decrease in expenses partially offset by the decrease in revenue. The decrease in direct operating expenses principally reflected the absence of the write down of unsold tickets at on location for the twenty twenty four Paris Olympics as well as lower media rights fees at IMG associated with the FA Cup. SG and A decreased primarily due to lower Olympics related costs at on location. Corporate and other generated revenue of 45,000,000 an increase of 9%. Adjusted EBITDA was negative $77,000,000 an improvement from negative $91,000,000 in the prior year period. Speaker 300:15:19The increase in revenue is driven by management fees from Zufa Boxing, the JV we announced earlier in the year. Adjusted EBITDA improvement was primarily due to a decrease of $24,000,000 of costs related to corporate allocations of Endeavor corporate expenses under their ownership of IMG On Location and PBR. As we discussed on our last call, from the close of the acquisition on February 28 forward, there are no endeavor corporate expense allocations. Now moving on to our capital structure. In the second quarter of the year, we generated $375,000,000 of free Speaker 400:15:51cash Speaker 300:15:52flow. Our free cash flow conversion of adjusted EBITDA was 71%. Free cash flow in the second quarter included the adverse impact of the third and final $125,000,000 payment related to the UFC antitrust settlement, as well as the favorable impact of approximately $165,000,000 of prepayments related to on location for the twenty twenty six FIFA World Cup. On June 30, we made our second quarterly cash dividend payment from TKO OpCo of approximately $75,000,000 We ended the quarter with $2,769,000,000 in debt and $535,000,000 in cash and cash equivalents in addition to $323,000,000 of restricted cash. Regarding our $2,000,000,000 share repurchase program, we continue to expect we will commence activity in the 2025 with our timing and quantum ultimately subject to market conditions and related factors. Speaker 300:16:47We remain committed to a robust and sustainable capital return program that balances return of capital to shareholders with organic investment and maintaining our strong balance sheet. As for Boxin, we continue to operationalize the JV we announced in March and intend to hold our first event in early twenty twenty six. Separately, in June, we announced that we will promote the Canelo Alvarez Terrence Crawford fight taking place on September 13 in Las Vegas. We'll provide further updates on our boxing activities as and when appropriate. Now turning to our outlook. Speaker 300:17:21As we've discussed in the past, we manage the business with a focus on full year performance. Therefore, we believe results are best evaluated on a full year basis given the quarterly fluctuations that are inherent in our operations. As noted in our press release, we are raising our full year 2025 guidance for revenue and adjusted EBITDA for the second quarter in a row. We are now targeting revenue of 4,630,000,000.00 to $4,690,000,000 and adjusted EBITDA of 1,540,000,000.00 to 1,560,000,000.00 an increase of $135,000,000 and $40,000,000 respectively at the midpoint of the ranges as compared to the prior guidance we issued in May. The increase is related primarily to strong operating performance at UFC and WWE through the first six months of the year and our anticipated performance for the remainder of the year. Speaker 300:18:10It also reflects continued progress on the integration of IMG On Location and PBR. To date, we've achieved our twenty twenty five target of $15,000,000 of in year savings, representing $25,000,000 on a run rate basis, and we remain on pace for a run rate of approximately $40,000,000 by year end 2026. In terms of free cash flow, while we have not given formal guidance, our view remains unchanged. We continue to target a full year 2025 free cash flow conversion rate in excess of 60%. As we've discussed on prior calls, this excludes the impact of approximately $300,000,000 of non recurring amounts as well as the benefit of any restricted cash related to the twenty twenty six FIFA World Cup. Speaker 300:18:55On our last call, we highlighted a few notable items that we expected to occur in the second quarter and our results were consistent with all of them. As with our prior calls, while we are not providing quarterly guidance, we want to highlight a few notable drivers of our expected performance as we look into the third quarter. At UFC, the third quarter is expected to include 10 events, which is comparable with the prior year period. However, within these 10, we expect two numbered events, our fewest in any quarter this year compared to three in the prior year period. Further, we intend to stage eight events with live audiences compared to six in the 2024. Speaker 300:19:35Despite strong underlying trends, the timing of the calendar is expected to meaningfully impact our largest revenue streams, media rights, live events and partnerships. As a reminder, UFC three zero six was held at Sphere in the 2024. This event was the highest grossing gate in UFC history and also included a title partner sponsor for the first time. With respect to expenses, as we've discussed, we incurred meaningfully higher than normal production costs for UFC three zero six. That said, an event of this magnitude is not expected to occur in the 2025. Speaker 300:20:11At WWE, the current calendar includes three main roster premium live events, which is comparable to the third quarter of last year. However, the expansion of SummerSlam to two nights is expected to favorably impact multiple revenue streams, including media rights, live events and partnerships. As we've previously discussed, SmackDown's format will revert to two hours beginning in the third quarter and while there is no impact on the full year, the change will adversely impact media rights revenue recorded in the quarter. At the IMG segment, we expect third quarter revenue and adjusted EBITDA to increase quarter over quarter in terms of absolute dollars as our results are expected to reflect the impact of a number of signature tennis and golf events, including Wimbledon, the U. S. Speaker 300:20:54Open, the British Open and the Ryder Cup. IMG and On Location will also be performing services in connection with the Canelo versus Crawford event, which is expected to favorably impact our performance. At Corporate and Other, adjusted EBITDA is expected to improve modestly quarter over quarter, primarily due to the benefit from the services fee related to Canela versus Crawford. With regard to our WWE deal with ESPN announced earlier today, the agreement is five years in duration and we expect to recognize revenue in line with Sports Media Rights industry standard annual escalators. As Ari touched on earlier, this deal is further evidence of the value of our core IP and we are excited about the potential impact of ancillary revenue streams we can generate from the halo effect created by the Disney ESPN ecosystem. Speaker 300:21:43In conclusion, we generated strong second quarter results that reflect continued momentum across our businesses, in particular UFC and WWE. While we still have a lot of work ahead of us, we are extremely excited about our prospects for Speaker 500:21:58the remainder of the year and beyond. With that, Speaker 300:22:00I'll turn it back to Seth. Speaker 100:22:03Thanks, Andrew. Operator, we're ready to open the call for questions. Operator00:22:07Thank you very much. We'd now like to open the lines for Q Our first question comes from Ben Swinburne from Morgan Stanley. Ben, your line is now open. Speaker 400:22:30Thanks. Good afternoon. Congratulations on the WWE deal. I wanted to pick up on the comment I think Andrew was just making about sort of the halo effect. I remember you guys went from the WWE Network to Peacock and now moving to ESPN. Speaker 400:22:45If you think about how the PLEs have performed on Peacock and how that's impacted the value of those rights and those assets And then think about what will happen with ESPN. Can you talk about what you think the big changes, opportunities, impact will be? And I know you can't answer for Netflix, but I guess I'm a little surprised to see them not pick up these rights given they have them everywhere else. I guess from a TKO point of view, what's your perspective on having multiple partners for these rights in different regions versus bringing them to one platform? Thanks a lot. Speaker 600:23:21Thanks, Ben. First off, I think we've been consistent in our messaging to you that we were always a little reticent about having all of our eggs in one basket. Don't get me wrong, when you're doing these deals, you're balancing monetization, right, of the asset and the opportunity with, of course, reach with regard to our brand and our audience. So that certainly played a factor. When we went into the market at roughly the same time we began talking to interested parties on the UFC, we had strong interest because more than anything else, these are monthly big events. Speaker 600:23:56Right? And and we're now, frankly, living in the big event era, you know, era, if you will. You've heard that Sarandos and Belo Vigeria in specific, in particular, talk about this big event, looking for big event, not volume, not necessarily weekly, certainly not daily, but big event. So I would just tell you when when all was said and done, we could have actually had a slightly higher rights fee by going with another partner. But we felt the strength of ESPN's brand, the reach, the platform, the makeup of their audience, and their b to c strategy, is launching soon here, was just as important as the dollars, and we've been consistent with our approach in that messaging to you. Speaker 600:24:40Ultimately, we're sitting here with a five year deal, annual escalators, high margin revenue stream with attractive visibility and stability. The slate of programming that are the PLEs and, you know, Nick Khan and Triple H has done such an amazing job taking the baton from Vince McMahon. These PLEs are purpose built for direct to consumer services. We will stream all 10 PLEs over the course of the year, powered at times by linear. And I wanna underscore that that that could get lost in the messaging. Speaker 600:25:12The idea of having a money in the bank, a SummerSlam, a WrestleMania, take your pick from our PLEs with the first hour or even two simulcast on ESPN linear and the d two c with a handoff to their direct to consumer, you you just can't beat that proposition. And, of course, that's driven by the fact that ESPN's linear platform is absolutely unmatched in the industry. On the ESPN side, you know, they saw this as big audience content that travels to any platform. It's a very loyal audience. They were firm in agreement that both WWE and the UFC content for that matter attract new subs, attracts cord nevers. Speaker 600:25:58Very important. Those folks that have never those young folks that have never signed up to cable or satellite. They are streamers from from birth, if you will. They saw that with our content, and they also knew we were the antidotes to churn. And, of course, that track record with UFC and what we built with ESPN plus played into our favor. Speaker 600:26:17In terms of what we are getting in return beyond the math that you've seen, which is a a clear step up from what we were getting 900,000,000 a a b in our last deal to now three excuse me, 1.625 overall for the deal in five years, you know, it's a 1.81 step up. And I wanna have Andrew walk through the math of that for a second and also hit your your last point, which is what are the what are you getting beyond that? Like, what are the ads that we should be looking for, which we see as further monetization opportunities? Andrew? Yeah. Speaker 600:26:52Thanks, Mark. Speaker 500:26:52I think there was a bit of confusion or at least a couple of different reports as to the baseline for which would be appropriate level to measure the deal and what was widely reported at 325,000,000 AAV or 1,625,000,000.000 over the five year term. So for the avoidance of doubt, our current Peacock deal commenced 03/18/2021. So that first sub calendar year, March through December, the right to be paid, and this again is not revenue recognition, but it's purely cash in and rights fee to service the the baseline calculation, is just under a 100,000,000. For each of the subsequent calendar years '22, '23, 2425, the rights fee has been just under 190,000,000. And for sub '26, given the fact that there's a short period of time through March '26, it's just under 50,000,000. Speaker 500:27:45So all of this aggregates, to Mark's point, of $900,000,000 of total rights fee over the five years or an AAV of a 180,000,000. What's included in the Peacock deal of 180,000,000 that actually is not included in the ESPN deal, I. E. What we've retained for further monetization, are all of the NXT PLEs, roughly six per year, two hundred and fifty hours of original programming that historically had been in w e WWE's cost and expense that we no longer have an obligation to produce contractually, five documentaries over the term, one per year at WWE's cost and expense, which we no longer have the obligation to produce contractually, as well as the content archive. So meaningful opportunity for additional monetization on top of the three twenty five. Speaker 500:28:37Five. Speaker 600:28:38And, Ben, just you repeat for one second. Know it a long answer, but we're trying to cover a lot of ground. I think another subset of your question, you know, what made us feel okay walking away from Netflix, and and by the way, I'm not suggesting they made any offer at any level, but, of course, they are a great partner. And to your point, they have all of our content for the most part. The rest of the world outside of SmackDown, why wouldn't they have it here? Speaker 600:29:03The ESPN proposition and whether our audience would travel was important to us. And I think Nick is best suited to talk about how our audience has traveled and why that gave us, I I would tell you, firm confidence that we were going to be able to build off what we currently have. Nick? Speaker 700:29:21Thanks, Mark. A number of different examples, the WWE audience, for example, during the last or two Winter Olympics ago, we were notified on short notice that we'd be moving Monday Night Raw at the time from USA Network to SciFi. Maybe it was one or two weeks of notice. 96% of that all is traveled to SciFi, which with all respect to to USA and how great it is, SciFi not necessarily a destination network. If you look at WWE Network, which at its peak in The United States at 1,100,000 subscribers when we went to Peacock, each and every one of those travel plus the subscriber base for Peacock that was there exclusively for WWE grew massively. Speaker 700:30:10If you take a look at that and what we think we can do with ESPN and its d two c, it should grow even further. Our audience always travels. Speaker 600:30:19Thanks, David. Back to you, Ben. Speaker 400:30:22That's very helpful. Thanks, guys. Appreciate Speaker 600:30:24it. Thank you. Operator00:30:27Thank you very much. Our next question comes from Brandon Ross from LightShed. Brandon, your line is now open. Speaker 800:30:35Thanks for taking the questions. I guess, moving from the WWE PLE to UFC, we're surprised that you announced that PLE deal before UFC. Were you just waiting for Paramount Skydance to close or another external event? Or is the UFC deal proving to be more challenging than the PLE deal was? And I guess you suggested you were looking at your partners holistically or as a as a portfolio in your answer to Ben. Speaker 800:31:11Should we now assume ESPN with, WWE until is less likely to continue on with UFC? And on the flip side, as you, you know, suggested you walked away from Netflix, are they more likely as a UFC partner? Speaker 600:31:31Thank you, Brandon. I will try to hit all those parts there. If we leave anything out, you can come back around. The first that I that triggered me was the was the was it more challenging for the UFC? Have we found that to be more challenging than we initially thought? Speaker 600:31:51The answer is unequivocally no, and I'll leave it at that. As far as the timing goes, frankly, we've been in the market with essentially five properties at the same time. The UFC, which could be seen as one or two or three depending on on how you look at it, but you've got the number of events and you've got the fight nights. And that's what ESPN had. There were two deals. Speaker 600:32:20Then you've got the WWE PLEs. Then you've got Zupa Boxing, our new boxing promotion. And then you have PBR, which, as you know, doctor Phil went belly up and Merritt Street went belly up as part of that. And we were left holding the bag with a contract of approximately a $181,000,000 over four years that we've had to try to find a new home for PBR. So we were definitely disadvantaged. Speaker 600:32:48So we've been in the market really with all five. Where they come, how they swap, when they sequence, that just happens to be where we are in terms of, the state of each of the deals and each of the conversations. What I can tell you on UFC is we are in the home stretch. We will provide an update on UFC rights when we have something to announce. Our mission remains finding a balance between maximizing monetization and reach. Speaker 600:33:16And as evidenced by our WWE TLE's ESPN deal, the market for premium content, especially big event programming, remains strong, and it will remain strong with ESPN as well. Speaker 800:33:36Okay. And the other part of that was do the outcomes of each of these deals that you have in the marketplace influence each other such that WWE would now be I mean, sorry, UFC would be less likely to do a deal with ESPN or are they mutually exclusive? Speaker 600:33:57I mean, that's more of a question for, you know, Jimmy Vittaro and and and Bob on the Disney call. I do know that Jimmy was quoted yesterday when asked about this specifically in trades. You know, he he relishes the the relationship with TKO, specifically pointed to the success they've had with UFC and what that did for ESPN plus and what they believe that and WWE can do for their strategy going forward. And I don't think it rules them out, his words. Speaker 800:34:30Thank you. Operator00:34:33Thank you, Brandon. Thank you very much. Our next question comes from David Kanofsky from JPMorgan. David, your line is now open. Speaker 900:34:44Hi, thanks. Mark, sorry, just on the non PLE content, why hold that back? And maybe to the point Ben was trying to make, is thought there that maybe that belongs with one of your existing partners? Speaker 600:35:03Well, the answer there, David, is simply more monetization opportunities. Look, our goal here is to increase profitability, increase margins, get the industry grade, excuse me, investment grade, and we're we're marching to that beat. And you know, we're cutting a deal, and it's not just about the actual rights fees here. It's about all the bells and whistles in in between, and those bells and whistles add up from an ancillary perspective. So to Andrew's point, you know, if we can have Nikon go to the market and sell NXT PLEs for incremental price fee, fantastic. Speaker 600:35:44We no longer have to produce two hundred and fifty hours of original programming annually. That's a lot of bandwidth, and it's a lot of cost we can take out. Five documentaries over the term, contractually, we certainly wanna do films and documentaries in WWE. Our production arm there has proven to be very successful in delivering, docs that are critically acclaimed and and and highly viewed. But we wanna go out and sell those one by one and maximize the market and timing. Speaker 600:36:12And, of course, when it comes to our library and our archive, we're going to maximize that opportunity as well. So not every deal is created equal and not just because something was in the last deal will mean it's in the next deal and vice versa. David, the Speaker 500:36:27only thing I'd add, and and I did allude to this in my prepared remarks with regard to Speaker 600:36:32the halo effect, When you Speaker 500:36:33look at USC's ad sales and partnerships business and the benefit and step function change we saw in that business when we moved from Fox to ESPN and the current trajectory we are now on with WWE, the halo effect of Netflix, albeit internationally for the PLE, and Rossier domestically, we do believe that this deal will yield meaningful benefit for us on partnerships and then over time live events and site fees as well. Speaker 600:37:02And, David, just one of the Maybe I Speaker 900:37:03can get Go ahead, Mark. Yeah. Speaker 600:37:05Great. And then we'll give another another point there is that Andrew raised is the idea of getting ad inventory in our deals going forward is extremely important to us. We have a best in class global partnerships division that is on the cost of hitting $300,000,000 of you to see a loan on a global partnerships before you even get to WWE, and we've talked about that publicly. The idea of tying some of these partnership deals where we have in arena sponsorship, we have in telecast broadcast integration, and now going out and actually selling inventory ad inventory. We've done some of that with our UFC pay per views, but for the most part, that's not our business. Speaker 600:38:00To now open that door with these WWE PLEs and have the opportunity to sell, add inventory in these ESPN deals, that's a game changer for us. And that's also something that's important to us in any UFC deal going forward. Speaker 900:38:16Mark, maybe just a follow-up on the reach point regarding the ESPN platform. Just want to understand better your point of view because the linear subs are going to have a DTC entitlement and that will give you breach right away. But obviously the standalone price is a bit above Peacock's. I just want to understand also your considerations there for that kind of court never set up your fans. Thanks. Speaker 600:38:40Yes. Look, We thank you. We we've been down this road before. I mean, just as as a reminder to everybody on the call here, when we signed up with ESPN and ESPN plus for the numbered events, the pay per views, That proposition saw us launching in 3,000,000 homes. So ESPN plus was in 3,000,000, 4,000,000 homes early on. Speaker 600:39:05In fact, we had problems with some of our partnerships because they were coming back saying, we're not being seen by anybody. We thought we were gonna be have a big audience, now ESPN plus is so small. You know, should we be talking about a haircut on our our our right fees, if you will, what they were paying us. Of course, we didn't give them any of those. We figure out other inventory to make them good and make them happy. Speaker 600:39:29And by the way, ESPN plus grew fast. But that proposition was a double paywall. You have to sign up for ESPN plus, which is a monthly hit. Granted, wasn't $29.99, but still a monthly hit, which has gone up. And then the pay for the pay per view, which is substantially more than the $29.99 you're gonna have to be paying here on the PLEs to get the d two c offering. Speaker 600:39:52It started in the fifties and, you know, it was up closer to $80 by the time it was done, added with the monthly cost of ESPN plus. I mean, it it really that that was a that was a tough barrier to get across for our fans and, frankly, something that generally made them unhappy. Still, we succeeded. This has been a a monster success with UFC and ESPN plus. So as we looked at this opportunity, even though they'll be starting small and even though d two c is $29.99 to your point, their ability to authenticate and and have the platform immediately because they're a cable or satellite, player or, those core members getting those folks in for $29.99 is a big time discount price compared to what they were paying for UFC paper use. Speaker 600:40:46So we're not concerned about that whatsoever. Speaker 100:40:55Operator, let's take our next question. Operator00:40:57Thank you very much. Our next question comes from Steven Lezewski from Goldman Sachs. Steven, your line is now open. Speaker 1000:41:05Hey, guys. Thanks for taking the question. Maybe on the 25% guidance for Andrew, it sounds like you have seen WWE outperforming your internal expectations going into the first six months of the year. We're just curious if you could talk a little bit more about what areas, specifically are driving some of that outperformance versus your expectations? Then to what extent you expect some of that momentum to carry on into the back half of the year if you think there is other puts or takes we should be considering as we look into the the final six months as seen factoring into the the guide that you gave today, updated guide? Speaker 500:41:40Yeah. I think, and and thanks, Steven. As as I said in my prepared remarks, you know, both these powerhouses continue to outperform our internal expectations and external expectations vis a vis your market consensus. It's really bad events I see in partnerships other than, obviously, contractual increases in media rights and the benefits that you'll see you'll see at WWE over the course of the year from the Netflix partnership. Those are the three areas that are driving or driven our growth on a year to date basis. Speaker 500:42:11I gave some pretty specific color as to event calendar mix shift changes and other drivers from an event basis for q three. And with our full year numbers, you can, you know, very easily get a sense of what then q four could look like. So year to date is the story about live events and partnerships. We anticipate those tailwinds to continue over the course of the year. We gave you some color on sort of mix for q three, and obviously taking up top line a 135,000,000 at the midpoint and adjusted EBITDA 40,000,000 at the midpoint, maintaining a 33% aggregate margin. Speaker 500:42:48We feel very good about the status of our business. Two things I will note, and Mark and I spend a lot of time with the team talking about margin. Q two UFC 59% operating margins flat year over year, but very, very strong from performance perspective. We're all eyes on WWE here. 59% operating margin in WWE driven largely by WrestleMania and the success of that event. Speaker 500:43:15But when we set out on this journey to talk about operating margins in WWE close closing in to UFC and even being above that 50% mark, we feel real good about it. We believe that's sustainable over time, particularly in light of this deal that we did this morning. So this is as much about margin accretion as it is anything else. Speaker 600:43:38Our our our SummerSlam, Steven, was the most viewed we've ever had in history. So quickly, that is turning into another WrestleMania for us. And the more that that Nick and and Paul can drive these events to be of that ilk and that level and deliver the kind of results on on live events and site fee that we get for WrestleMania, that that's what that's what's gonna get us the rest of the way there on the margin accretion. Speaker 1000:44:07That's all helpful. Maybe if I could just follow-up and dig in on the WWE side sponsorship. It's been a massive opportunity. You guys have executed well on the PIPLE side. Nick, I'm curious if you're still on Just curious on the opportunity going forward to keep executing against that. Speaker 1000:44:23Maybe as you look further down past the PLEs, how should we think about the pace of execution on on the sponsorship opportunity? Speaker 600:44:31It is Speaker 700:44:33one of the highest priorities at WWE and at TKO. Mark had mentioned earlier the strength of our global partnerships group, the number of global partnership dollars that UFC is now generating with WWE, being family friendly programming with 50% of our live audience bringing a child with almost 40% of our audience live watching being women. We think there are significant rooms for significant room, pardon me, to continue to increase in those sponsorship dollars. Again, it's a priority. We think in shifting over to ESPN's b two c, it will help that further and the sky's the limit. Speaker 600:45:17Remember that any ad inventory that we get in these deals would go towards our partnership goals. And I will tell you, you know, Nick and Andrew can accept this. It it's almost fun selling to WWE. I mean, this is this was a blank canvas when we walked into this. It's not you know, we've said publicly that we were putting $3.75 as our goal for the two the two entities for the year. Speaker 600:45:47And going out and selling, whether it's the mat in Arena, in the concourses, integration, some of our hospitality packages have sponsorship in it. I mean, this is all, like, fertile ground for us. So we're, extremely encouraged and optimistic at what we can do with WWE, given the strength of what Grant Norris Jones team has built and succeeded in doing at the UFC. Speaker 1000:46:15Thank you, guys. Speaker 600:46:16Thank you. Operator00:46:18Thank you very much. Our next question comes from Peter Supina from Wolfe Research. Peter, your line is now open. Speaker 1100:46:26Hello. A question for Andrew and one for Mark. Andrew, on profitability, which is generally a good subject at Teekay, your guidance implies about a 30% incremental margin. While we're hearing in your commentary that the upside to revenue guidance is coming from site fees and live events and sponsorships, which we think have near 100% flow through to EBITDA. So I wonder if you could help us with those, just thinking about the incremental margins in the guidance. Speaker 1100:46:53And then Mark, thinking beyond this UFC renewal, a question we frequently hear from investors, and I thought I'd be asking you to put your strength by answering it in this format, is really what is the growth algorithm of this company? What is there to be excited about beyond the UFC media rights renewal? And so I just wonder, obviously, you're not going to give us multiyear revenue guidance here, but if you could talk about the attributes of this company beyond the media rights in 2026 that you think are worth focusing on? Thank you. Speaker 600:47:23Let's start by handing out the multiyear EBITDA. Andrew, go ahead. Speaker 500:47:29Thanks for the question, Peter. I think clearly a strong story through the first half of the year. I did again, I'll refer back to my prepared remarks in terms of mix, in terms of balance of year number of events, in terms of headwinds vis a vis a two hour format change for SmackDown in the back half of the year. And on a comparable basis, you know, the lack of events such as DOC three zero six at the sphere, which occurred on a prior year basis. So while we still anticipate growth from these high margin contributors, when you think about the full year, which is how we've articulated the best way to look at our business, very strong h one. Speaker 500:48:11We articulated event shift and mix shift from a calendar perspective for q three. And then, you know, some of the tailwinds that we had in '24 vis a vis, you know, event type, event quality are not necessarily recurring. I will tell you that when we set out, we did guide that we would only be doing one Saudi PLE for this year. That shift into 2026, which does you know, clearly, its contribution, I'll reiterate when we gave our initial guide, is roughly 200 basis points of contribution to overall annual margin. That obviously will be a '26 benefit but adversely impacts 2025. Speaker 500:48:49So when we think about the year holistically, we're we're we're very comfortable and confident with the with the pace. And when I talk about tailwinds, we talk about long term tailwinds. We're not seeing things slowing down in the conversations on-site fees. We're not seeing global partnerships conversations slow down. At some point, you start thinking about contracting revenue for going into '26, and Grant and his team are squarely focused on setting up '26 for as big a year as we're having in 2025. Speaker 600:49:17Great. And then, Peter, just on the m and a or other investment opportunities, you know, obviously, I don't wanna get ahead of myself. I mean, we're the ink is barely dry in this WWE PLE deal with ESPN, and and we're still out in the marketplace on a host of other renewals as I aforementioned. I would say that first and foremost, our primary focus is continuing to drive value at UFC and WWE across our multitude of revenue streams that are sitting front and center. Two is we need to remain laser focused on the integration of IMG on location and PBR, both extracting costs and creating new revenue opportunities. Speaker 600:50:08As you know, we're ahead of our guidance on those synergy opportunities, but we still have a lot of work to do. Number three, further capitalizing on the Netflix momentum with raw is front and center for us. You heard Ari rattle off some of those stats in his prepared remarks. I mean, we don't we don't take it lightly, but we're proud of the success we have. And it's very clear we are now a top tier property for the Netflix platform. Speaker 600:50:35The launch of the WWE PLDs on ESPN, that first event has to be the field of a Super Bowl. And that works well since ESPN is getting ready for their first Super Bowl. So we we expect to have that kind of treatment when you see WrestleMania on ESPN, let alone the very first launch event, which, of course, Netflix did an amazing job of when we first launched Raw and had our first event there. To your point, CKO has a strong balance sheet and an attractive financial profile. We at the midpoint of our outlook project the margin as Andrew said of roughly 33% for 25%. Speaker 600:51:15UFC margin is 59% for Q2, WWE as Andrew mentioned. And you look back to 2023, WWE had a 40% margin. And you look 24, 50%. Now here we are in q two, although benefiting from WrestleMania having 59%. I mean, we are we are making progress. Speaker 600:51:37We are delivering for our shareholders. And our goal is to continue to expand those margins over time. I'll remind you, in 2016, we have two major rights renewals, which we've spent a lot of time talking about here, that will impact us to the positive. And then we, of course, have significant impact through three WWE PLEs in Saudi Arabia, and we expect those to be accretive to our margins. Beyond that, we haven't talked about boxing, but that's going to be a fourth major sports asset for TKO and shareholders. Speaker 600:52:12And then, of course, RE Manual. I have to say, UFC doesn't happen without RE Manual, and WWE, for that matter, doesn't happen without RE Manual driving that. He's a significant value creator, and he spends a lot of time out there leveraging his relationships on what's around the corner that might fit. Of course, it has to be accretive, and we have to be prudent on any purchase, but might fit squarely into our sports pure play model. Operator00:52:47You very much. Speaker 600:52:50Thank you. Operator00:52:50Operator, we'll take Speaker 100:52:51one last question. Operator00:52:53Of course. Thank you so much. Our next question comes from Ryan Gravett from UBS. Ryan, your line is now open. Speaker 1200:53:00Great. Thanks. Mark, you just touched on this briefly, but I was wondering if you could provide more of an update on how the boxing initiative is progressing, especially with some of the new legislation being proposed. And then Andrew, gave some color on the financial impact this year, but how should we think about that financial contribution as we go into 2026? Speaker 600:53:25Great. Thank you, Ryan. I'll touch on the businesses. There's some salient updates here. And I'll get into those, and then I will turn it over to Lawrence Epstein, who is working on the Muhammad Ali American Boxing Reform Act Revival Act. Speaker 600:53:44And, he's rolling up his sleeves getting ready right now. So, first off, I you know, look, we think boxing is an attractive growth opportunity for TKO. We believe we will deliver significant long term value for our shareholders. And as I mentioned, this this unequivocally will be a fourth 10 pole sports asset for DKL. I mean, we are going all in here. Speaker 600:54:07Nothing like two gladiators going toe to toe since the beginning of time. It never gets old. That's why boxing has the same power that it has. The interest is multigenerational, both in The U. S. Speaker 600:54:19And internationally. We're excited about our new JV, formerly titled Zufa Boxing, which we launched with Saudi based Sella and announced in early March. This is low risk and TeekayO receives a roughly $10,000,000 fee for serving as the managing partner and providing day to day operational management oversight. And that's all margin for us. Teekay has no funding obligation. Speaker 600:54:45Additionally, outside of the JV, wholly separate, we will look to deliver two to three super fights per year, similar to the Canelo Crawford fight that the Saudis, of course, Nik Khan and Dana White have helped us put together for September in Las Vegas. Again, no risk to us on that deal. We get a fee to promote it, each one of these super fights. We get a fee to negotiate the media rights for each fight, which IMG does. So we're another reason we're strong and proud that we brought IMG into the fold of our flywheel. Speaker 600:55:24We get a fee for on location to sell hospitality packages, and we will put Zupa boxing fighters on the undercard of each of these super fights. We expect to net on average another $10,000,000 for every super fight we manage and promote. And I would just say one last note, we've had significant interest from several domestic linear and D2C platforms with regard to the media rights for our Zufa boxing promotion that will launch in the first quarter of next year. And we are in the home stretch of those negotiations and believe we will have something to announce soon. Now with regard to the Muhammad Ali Act and the reform that's going on there, I know there's been a lot of press and attention to your point, and I'd like Lawrence to Speaker 500:56:17walk you through our efforts and our progress there. Lawrence? Yeah. Thanks thanks, Mark. So as as Mark alluded to, the Muhammad Ali American Boxing Revival Act was recently introduced in congress. Speaker 500:56:28It's got bipartisan support via our co sponsors, Brian Jack of Georgia and congressman Charice Davids of Kansas. Charice actually is a former MMA athlete. I wanna be very clear that this new legislation does not intend to change anything in the existing Muhammad Ali boxing act. Every single word will remain exactly the same. We are proposing and adding some additional language to this legislation that will allow for what I'll call Speaker 800:57:02a UFC style or Speaker 500:57:03unified organization for the promotion of boxing events. This is gonna provide more choice for athletes in the boxing space, and we are very optimistic that this legislation will move relatively quickly through first house representatives and then, of course, the senate and, and become law. We're hopeful in the relatively near future. Speaker 900:57:29And then on just Speaker 500:57:30you know, Mark alluded to some financial aspects of boxing. I will say that over time, as and when we're successful, we will have an interest in a venture that we anticipate, you know, with our blood, sweat, and tears will create meaningful firm value that will ignore to the benefit of our shareholders as well. So not only will we be flipping cash management fees for our services at the JV, for our participation as promoter and, you know, supervised, we're also gonna accrete value by virtue of an ownership position in the right sector. Speaker 600:57:59And we'll close Ryan by just telling you, you know, we're competitors, partners, suitors, see what we're doing every day. They see the traction. They see the way the WWE and UFC are growing. And, frankly, PBR is on a great run right now too. And we get all kinds of incoming calls. Speaker 600:58:19I mean, we had nice pitch this week to a to a JV in Highlight. They're trying to bring in Highlight back in Miami. We have passed on that opportunity, but it just shows you the kind of opportunities that are knocking on our door. Thank you, everyone. Speaker 100:58:32All right. On that note, thanks, everyone, for joining us on today's call. Operator, you can conclude the call. Operator00:58:39As we conclude today's call, we'd like to thank everyone for joining. You may now disconnect your lines.Read morePowered by Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) TKO Group Earnings HeadlinesTKO Punches Up Earnings After Announcing ESPN Megadeal, Driven By Live Events16 minutes ago | msn.com‘We are in the home stretch’: UFC owners expect new broadcast deal to close soon, ESPN still in playAugust 6 at 8:42 PM | sports.yahoo.comA new rule goes live in July — and the banks are quietly crushing itA little-known regulation quietly goes into effect this July. And it's already being exploited by Wall Street and the Big Banks… It gives them the green light to treat a certain tangible asset as equivalent to cold, hard cash. Not stocks. Not real estate. And definitely not the U.S. dollar. We're talking about something they don't want you to notice — because the fewer people who act on this, the better it is for them. | American Alternative (Ad)TKO Reports Second Quarter 2025 ResultsAugust 6 at 5:13 PM | gurufocus.comTKO Reports Second Quarter 2025 ResultsAugust 6 at 4:05 PM | businesswire.comExamining the Future: Liberty Formula One Group's Earnings OutlookAugust 6 at 3:40 PM | benzinga.comSee More TKO Group Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like TKO Group? Sign up for Earnings360's daily newsletter to receive timely earnings updates on TKO Group and other key companies, straight to your email. Email Address About TKO GroupTKO Group (NYSE:TKO) operates as a sports and entertainment company. The company produces and licenses live events, television programs, and long-form and short-form content, reality series, and other filmed entertainment on digital and linear channels and via pay-per-view. It is involved in the merchandising of video games, apparel, equipment, trading cards, memorabilia, digital goods, and toys, as well as sale of travel packages and tickets. In addition, the company engages in the corporate sponsorships and advertising business, which offers sale of in-venue and in-broadcast advertising assets, content product integration, and digital impressions. The company was incorporated in 2023 and is based in New York, New York. 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There are 13 speakers on the call. Operator00:00:00Good afternoon, all, and thank you for joining us for the Second Quarter twenty twenty five Teekay Earnings Call. My name is Carly, and I'll be coordinating the call today. I'd now like to hand the call over to our host, Seth Laszlo, Senior Vice President and Head of Investor Relations. The floor is yours. Speaker 100:00:22Good afternoon, and welcome to Teekay's second quarter twenty twenty five earnings call. A short while ago, we issued a press release, which you can view on our Investor Relations website. A recording of this call will also be available via our website for at least thirty days. After prepared remarks from Ari Emanuel, TKO's Executive Chair and Chief Executive Officer and Andrew Schweimer, TKO's Chief Financial Officer, we'll open the call for questions. Mark Shapiro, our President and Chief Operating Officer and Andrew will be handling the Q and A. Speaker 100:00:58The purpose of this call is to provide you with information regarding our second quarter twenty twenty five performance. I want to remind everyone that the information discussed will include forward looking statements and or projections that involve risks, uncertainties and assumptions. Please see our filings with the Securities and Exchange Commission for further detail. If these risks or uncertainties were to materialize or any assumptions prove incorrect, our results may differ materially from those expressed or implied on this call. Forward looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events, except as legally required. Speaker 100:01:43Our commentary today will also include non GAAP financial measures, which we believe provide an additional tool for investors to use in evaluating our ongoing operating results and trends. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. Reconciliations between GAAP and non GAAP metrics can be found in our press release issued today as well as the information posted on our IR website. With that, I'll now turn the call over to Ari. Speaker 200:02:19Thanks, Seth. TKO's momentum continued throughout the second quarter, reflecting strong execution of our strategy. The quarter included multiple live event milestones, enhanced event economics and meaningful new brand partnerships. These results highlight our ability to capitalize on sustained demand for premium content and live events to drive growth, profitability and margin expansion. As just one example, the ESPN domestic media rights deal for WWE's premium live events announced just this morning secures a pivotal recurring revenue stream for years to come. Speaker 200:02:55Our live sports and entertainment content has become a key differentiator for organizations, brands and platforms in search of audience. From Netflix live events to YouTube clips and highlights, our global partnership with AB InBev to our extraordinary consumer licensing partnership with Fanatics, our strategy and our assets at TKO are truly unique. Given the continued momentum across our portfolio and our overall business outlook, we are once again raising our guidance for the full year. I'll now share some highlights from the quarter that underscore our positive momentum. Turning first to our core UFC and WWE businesses, where live events and global partnerships continue to deliver solid performance and drive meaningful growth. Speaker 200:03:39At UFC, in addition to setting arena records, our live events are securing meaningful economic support from host cities. During the quarter, six out of eight live audience events were supported by incentives, including a first ever Fight Night in Baku, Azerbaijan. This event, along with our recently announced Visit Qatar partnership to host a fight in Doha, highlights continued traction in our site fee strategy, including generating greater support for our Fight Nights from new destinations. Meanwhile, our global brand partnerships team delivered robust double digit growth for UFC in the quarter, following recent major deals with Meta and Monster Energy. This progress continues with the recent expansion of UFC's Wingstop partnership that will include additional integrations across WWE Premium Live Events over a multiyear period. Speaker 200:04:30The properties are continuing to find meaningful ways to live side by side, leveraging the collective audience and fan avidity. At WWE, on the heels of a record WrestleMania forty one, which was the highest grossing event and most viewed WrestleMania in company history, Money in the Bank at Intuit Dome in Los Angeles became the highest grossing WWE Arena event of all time, a record we've now broken three times over the last year. The strength of our premium live events was further on display last weekend at MetLife Stadium in New Jersey, where WWE's first ever two night SummerSlam drew more than 113,000 fans. While premium live events remain a key driver, we're seeing enhanced economics across the entire event portfolio at WWE. In the quarter, we set 36 individual market records for ticket sales and sold out 16 events. Speaker 200:05:24On the programming side, WWE's partnership with Netflix is showing robust appeal and growth across overall viewership and the harder to reach younger demos. Since launching on the platform in January, Raw has appeared on Netflix's list of top 10 shows every single week, that's thirty straight weeks, totaling more than two eighty million view hours on the platform. Internationally, WWE's PLEs have been a consistent performer, making the top 10 list in 37 countries over the first six months of the partnership. Additionally, with last week's Netflix premiere of WWE Unreal, we are creating more opportunities for fans to engage with our ancillary content, in this Speaker 300:06:04instance taking them behind the scenes and into the writers' room for the very first time. Across global brand partnerships, WWE generated remarkable growth in the quarter driven in particular by record setting deals surrounding several of our premium live events. Speaker 200:06:19We also renewed long standing partners including Slim Jim and expanded our roster in the financial services category with digital banking platform Chime. Turning next to IMG on location and PBR. IMG's global production capabilities were on full display this quarter. A singular high impact weekend in May alone saw more than 1,000 IMG team members across three continents delivering thousands of hours of sports coverage for marquee events including the final days of both the English Premier League and Saudi Pro League seasons, the Euroleague Final Four in Abu Dhabi plus 15 MLS matches. Taken together, these achievements collectively showcase IMG's unmatched scale in delivering world class premium sports content to audiences worldwide from screens on phones to screens on planes with Sport24. Speaker 200:07:13IMG's unrivaled capabilities were again on display last month at the 150 at Royal Portrush, where IMG supported our long standing partner, the RNA, to deliver a record breaking championship across attendance, viewership, and engagement. From international media rights and brand partnerships to world's first innovations like Spidercam on the eighteenth hole, IMG helped elevate the fan experience on-site and worldwide. At on location, fans worldwide are already gearing up for next year's Milano Cortina Winter Olympic Games and FIFA World Cup. As of July, one year out from the FIFA World Cup's arrival in North America, hospitality sales and reservations have already surpassed the entirety of Qatar Twenty Twenty Two hospitality sales. And at PBR, the twenty twenty five Unleash the Beast and Pendleton Whiskey Velocity Tour successfully concluded in May with record regular season attendance across both tours. Speaker 200:08:09The focus now shifts to PBR's Camping World Team Series debuting with two additional media partners, Fox Nation and The CW Network, who joined CBS's coverage. In closing, positive trends continue across the business, and we are enthusiastic about key milestones ahead with the UFC rights renewal, TKO's promotion of the Canelo versus Crawford Super Fight next month and the planned commencement of our share repurchase program in the third quarter. We remain incredibly well positioned in today's sports ecosystem due to the strong demand for our premium content and high contractual visibility. As we move through the 2025, our focus is clear execute, integrate and deliver on our updated guidance. With that, I'll turn the call over to Andrew. Speaker 300:08:58Good afternoon. As Ari highlighted, we delivered strong operating and financial results in the quarter and for the second quarter in a row have raised our expectations for performance for the remainder of the year. UFC and WWE remain core drivers of TKO. Both delivered record quarterly revenue and adjusted EBITDA. We're seeing significant strength of these businesses, particularly with respect to live events and partnerships, and we continue to realize benefits to both the top and bottom line from the initiatives we've implemented since the formation of the company. Speaker 300:09:31Now turning to our consolidated financial results for the second quarter. We generated revenue of $1,308,000,000 an increase of 10%. Adjusted EBITDA was $526,000,000 an increase of 75%. Our adjusted EBITDA margin was 40%, an increase from 25 in the prior year period. Our UFC segment generated revenue of $416,000,000 an increase of 5%. Speaker 300:09:58Adjusted EBITDA was $245,000,000 an increase of 6%. UFC's adjusted EBITDA margin was 59% consistent with the prior year period. UFC had 11 total events including four numbered events and two international events in both the second quarter of this year and last year. The mix shifted slightly as eight events had live audiences in the second quarter as compared to seven last year. Partnerships and marketing revenue increased 39 to $86,000,000 The increase was driven by new partnerships and partnership renewals. Speaker 300:10:34We continue to make significant progress in this area, adding new categories and growing existing ones, including recently announced deals with Monster Energy and Meta. Increasingly, we're focused on partnerships across multiple TKO properties. This initiative is gaining momentum, most recently demonstrated by the Wingstop agreement we announced last week spanning UFC and WWE. The complementary power of our properties is highly appealing to brands and we expect to announce more cross TKO partnerships in the near future. Media rights production and content revenue increased 4% to $261,000,000 The increase was driven by the contractual escalation of media rights fees. Speaker 300:11:14Live Events and Hospitality revenue decreased 15% to $59,000,000 As we previewed on our last call, the decrease reflected lower site fee revenue driven by the timing and mix of international events. UFC held a fight night in Baku Azerbaijan in the quarter, while the 2024 included a site fee related to UFC's first event held in Saudi Arabia. Adjusted EBITDA reflected the increase in revenue partially offset by an increase in expenses. Direct operating expenses decreased primarily due to lower production, marketing, athlete and other event related costs due to the mix of event cards, venues and territories. SG and A increased primarily due to higher personnel and travel costs compared to the prior year period. Speaker 300:11:59Our WWE segment generated revenue of $556,000,000 an increase of 22%. Adjusted EBITDA was $330,000,000 an increase of 31%. Adjusted EBITDA margin was 59%, up from 55% in the prior year period. Live Events and Hospitality revenue increased 29% to $186,000,000 The increase was driven by higher ticket sales revenue, reflecting an increase in average ticket price. Total attendance declined as a result of our strategic decision to host fewer non televised events. Speaker 300:12:33Site fee revenue also increased as we received payments for both Night of Champions in Saudi Arabia and WrestleMania forty one in Las Vegas in the second quarter. Partnerships and marketing revenue increased 136% to $58,000,000 driven by new partnerships and renewals across multiple categories, including video games, travel, food and beverage, financial services, telecom and QSR among others. As we discussed on our last call and driving much of the quarterly increase, WrestleMania forty one set an all time record for partnerships revenue more than double the previous record. The event featured a record 28 total partners including a partner sponsor for each of the 14 matches over the course of two nights. Partnership revenue at WrestleMania and overall growth in Q2 showcases the execution on one of the core tenets of our investment thesis. Speaker 300:13:25We believe there's plenty of runway to continue growing this important part of the business. Media rights production and content revenue increased 7% to $279,000,000 As we discussed on our last call, results reflected the expansion of SmackDown to a three hour format for the first half of the year, resulting in a shift in quarterly revenue recognition. The increase was also driven by the contractual escalation of media rights fees, including our long term global agreement with Netflix. Adjusted EBITDA reflected the increase in revenue partially offset by an increase in expenses. Direct operating expenses increased primarily due to higher production and talent related costs. Speaker 300:14:04SG and A increased primarily due to higher personnel and travel costs compared to the prior year period. Our IMG segment generated revenue of $3.00 $7,000,000 in the quarter, a decrease of 4%. Adjusted EBITDA was $29,000,000 an increase of $120,000,000 Adjusted EBITDA margin was 9%, up from negative 29% in the prior year period. The decline in revenue primarily related to IMG no longer having rights to the FA Cup. This was partially offset by revenue from new production agreements, including a multiyear deal with the Saudi Pro League. Speaker 300:14:40Adjusted EBITDA largely reflected a decrease in expenses partially offset by the decrease in revenue. The decrease in direct operating expenses principally reflected the absence of the write down of unsold tickets at on location for the twenty twenty four Paris Olympics as well as lower media rights fees at IMG associated with the FA Cup. SG and A decreased primarily due to lower Olympics related costs at on location. Corporate and other generated revenue of 45,000,000 an increase of 9%. Adjusted EBITDA was negative $77,000,000 an improvement from negative $91,000,000 in the prior year period. Speaker 300:15:19The increase in revenue is driven by management fees from Zufa Boxing, the JV we announced earlier in the year. Adjusted EBITDA improvement was primarily due to a decrease of $24,000,000 of costs related to corporate allocations of Endeavor corporate expenses under their ownership of IMG On Location and PBR. As we discussed on our last call, from the close of the acquisition on February 28 forward, there are no endeavor corporate expense allocations. Now moving on to our capital structure. In the second quarter of the year, we generated $375,000,000 of free Speaker 400:15:51cash Speaker 300:15:52flow. Our free cash flow conversion of adjusted EBITDA was 71%. Free cash flow in the second quarter included the adverse impact of the third and final $125,000,000 payment related to the UFC antitrust settlement, as well as the favorable impact of approximately $165,000,000 of prepayments related to on location for the twenty twenty six FIFA World Cup. On June 30, we made our second quarterly cash dividend payment from TKO OpCo of approximately $75,000,000 We ended the quarter with $2,769,000,000 in debt and $535,000,000 in cash and cash equivalents in addition to $323,000,000 of restricted cash. Regarding our $2,000,000,000 share repurchase program, we continue to expect we will commence activity in the 2025 with our timing and quantum ultimately subject to market conditions and related factors. Speaker 300:16:47We remain committed to a robust and sustainable capital return program that balances return of capital to shareholders with organic investment and maintaining our strong balance sheet. As for Boxin, we continue to operationalize the JV we announced in March and intend to hold our first event in early twenty twenty six. Separately, in June, we announced that we will promote the Canelo Alvarez Terrence Crawford fight taking place on September 13 in Las Vegas. We'll provide further updates on our boxing activities as and when appropriate. Now turning to our outlook. Speaker 300:17:21As we've discussed in the past, we manage the business with a focus on full year performance. Therefore, we believe results are best evaluated on a full year basis given the quarterly fluctuations that are inherent in our operations. As noted in our press release, we are raising our full year 2025 guidance for revenue and adjusted EBITDA for the second quarter in a row. We are now targeting revenue of 4,630,000,000.00 to $4,690,000,000 and adjusted EBITDA of 1,540,000,000.00 to 1,560,000,000.00 an increase of $135,000,000 and $40,000,000 respectively at the midpoint of the ranges as compared to the prior guidance we issued in May. The increase is related primarily to strong operating performance at UFC and WWE through the first six months of the year and our anticipated performance for the remainder of the year. Speaker 300:18:10It also reflects continued progress on the integration of IMG On Location and PBR. To date, we've achieved our twenty twenty five target of $15,000,000 of in year savings, representing $25,000,000 on a run rate basis, and we remain on pace for a run rate of approximately $40,000,000 by year end 2026. In terms of free cash flow, while we have not given formal guidance, our view remains unchanged. We continue to target a full year 2025 free cash flow conversion rate in excess of 60%. As we've discussed on prior calls, this excludes the impact of approximately $300,000,000 of non recurring amounts as well as the benefit of any restricted cash related to the twenty twenty six FIFA World Cup. Speaker 300:18:55On our last call, we highlighted a few notable items that we expected to occur in the second quarter and our results were consistent with all of them. As with our prior calls, while we are not providing quarterly guidance, we want to highlight a few notable drivers of our expected performance as we look into the third quarter. At UFC, the third quarter is expected to include 10 events, which is comparable with the prior year period. However, within these 10, we expect two numbered events, our fewest in any quarter this year compared to three in the prior year period. Further, we intend to stage eight events with live audiences compared to six in the 2024. Speaker 300:19:35Despite strong underlying trends, the timing of the calendar is expected to meaningfully impact our largest revenue streams, media rights, live events and partnerships. As a reminder, UFC three zero six was held at Sphere in the 2024. This event was the highest grossing gate in UFC history and also included a title partner sponsor for the first time. With respect to expenses, as we've discussed, we incurred meaningfully higher than normal production costs for UFC three zero six. That said, an event of this magnitude is not expected to occur in the 2025. Speaker 300:20:11At WWE, the current calendar includes three main roster premium live events, which is comparable to the third quarter of last year. However, the expansion of SummerSlam to two nights is expected to favorably impact multiple revenue streams, including media rights, live events and partnerships. As we've previously discussed, SmackDown's format will revert to two hours beginning in the third quarter and while there is no impact on the full year, the change will adversely impact media rights revenue recorded in the quarter. At the IMG segment, we expect third quarter revenue and adjusted EBITDA to increase quarter over quarter in terms of absolute dollars as our results are expected to reflect the impact of a number of signature tennis and golf events, including Wimbledon, the U. S. Speaker 300:20:54Open, the British Open and the Ryder Cup. IMG and On Location will also be performing services in connection with the Canelo versus Crawford event, which is expected to favorably impact our performance. At Corporate and Other, adjusted EBITDA is expected to improve modestly quarter over quarter, primarily due to the benefit from the services fee related to Canela versus Crawford. With regard to our WWE deal with ESPN announced earlier today, the agreement is five years in duration and we expect to recognize revenue in line with Sports Media Rights industry standard annual escalators. As Ari touched on earlier, this deal is further evidence of the value of our core IP and we are excited about the potential impact of ancillary revenue streams we can generate from the halo effect created by the Disney ESPN ecosystem. Speaker 300:21:43In conclusion, we generated strong second quarter results that reflect continued momentum across our businesses, in particular UFC and WWE. While we still have a lot of work ahead of us, we are extremely excited about our prospects for Speaker 500:21:58the remainder of the year and beyond. With that, Speaker 300:22:00I'll turn it back to Seth. Speaker 100:22:03Thanks, Andrew. Operator, we're ready to open the call for questions. Operator00:22:07Thank you very much. We'd now like to open the lines for Q Our first question comes from Ben Swinburne from Morgan Stanley. Ben, your line is now open. Speaker 400:22:30Thanks. Good afternoon. Congratulations on the WWE deal. I wanted to pick up on the comment I think Andrew was just making about sort of the halo effect. I remember you guys went from the WWE Network to Peacock and now moving to ESPN. Speaker 400:22:45If you think about how the PLEs have performed on Peacock and how that's impacted the value of those rights and those assets And then think about what will happen with ESPN. Can you talk about what you think the big changes, opportunities, impact will be? And I know you can't answer for Netflix, but I guess I'm a little surprised to see them not pick up these rights given they have them everywhere else. I guess from a TKO point of view, what's your perspective on having multiple partners for these rights in different regions versus bringing them to one platform? Thanks a lot. Speaker 600:23:21Thanks, Ben. First off, I think we've been consistent in our messaging to you that we were always a little reticent about having all of our eggs in one basket. Don't get me wrong, when you're doing these deals, you're balancing monetization, right, of the asset and the opportunity with, of course, reach with regard to our brand and our audience. So that certainly played a factor. When we went into the market at roughly the same time we began talking to interested parties on the UFC, we had strong interest because more than anything else, these are monthly big events. Speaker 600:23:56Right? And and we're now, frankly, living in the big event era, you know, era, if you will. You've heard that Sarandos and Belo Vigeria in specific, in particular, talk about this big event, looking for big event, not volume, not necessarily weekly, certainly not daily, but big event. So I would just tell you when when all was said and done, we could have actually had a slightly higher rights fee by going with another partner. But we felt the strength of ESPN's brand, the reach, the platform, the makeup of their audience, and their b to c strategy, is launching soon here, was just as important as the dollars, and we've been consistent with our approach in that messaging to you. Speaker 600:24:40Ultimately, we're sitting here with a five year deal, annual escalators, high margin revenue stream with attractive visibility and stability. The slate of programming that are the PLEs and, you know, Nick Khan and Triple H has done such an amazing job taking the baton from Vince McMahon. These PLEs are purpose built for direct to consumer services. We will stream all 10 PLEs over the course of the year, powered at times by linear. And I wanna underscore that that that could get lost in the messaging. Speaker 600:25:12The idea of having a money in the bank, a SummerSlam, a WrestleMania, take your pick from our PLEs with the first hour or even two simulcast on ESPN linear and the d two c with a handoff to their direct to consumer, you you just can't beat that proposition. And, of course, that's driven by the fact that ESPN's linear platform is absolutely unmatched in the industry. On the ESPN side, you know, they saw this as big audience content that travels to any platform. It's a very loyal audience. They were firm in agreement that both WWE and the UFC content for that matter attract new subs, attracts cord nevers. Speaker 600:25:58Very important. Those folks that have never those young folks that have never signed up to cable or satellite. They are streamers from from birth, if you will. They saw that with our content, and they also knew we were the antidotes to churn. And, of course, that track record with UFC and what we built with ESPN plus played into our favor. Speaker 600:26:17In terms of what we are getting in return beyond the math that you've seen, which is a a clear step up from what we were getting 900,000,000 a a b in our last deal to now three excuse me, 1.625 overall for the deal in five years, you know, it's a 1.81 step up. And I wanna have Andrew walk through the math of that for a second and also hit your your last point, which is what are the what are you getting beyond that? Like, what are the ads that we should be looking for, which we see as further monetization opportunities? Andrew? Yeah. Speaker 600:26:52Thanks, Mark. Speaker 500:26:52I think there was a bit of confusion or at least a couple of different reports as to the baseline for which would be appropriate level to measure the deal and what was widely reported at 325,000,000 AAV or 1,625,000,000.000 over the five year term. So for the avoidance of doubt, our current Peacock deal commenced 03/18/2021. So that first sub calendar year, March through December, the right to be paid, and this again is not revenue recognition, but it's purely cash in and rights fee to service the the baseline calculation, is just under a 100,000,000. For each of the subsequent calendar years '22, '23, 2425, the rights fee has been just under 190,000,000. And for sub '26, given the fact that there's a short period of time through March '26, it's just under 50,000,000. Speaker 500:27:45So all of this aggregates, to Mark's point, of $900,000,000 of total rights fee over the five years or an AAV of a 180,000,000. What's included in the Peacock deal of 180,000,000 that actually is not included in the ESPN deal, I. E. What we've retained for further monetization, are all of the NXT PLEs, roughly six per year, two hundred and fifty hours of original programming that historically had been in w e WWE's cost and expense that we no longer have an obligation to produce contractually, five documentaries over the term, one per year at WWE's cost and expense, which we no longer have the obligation to produce contractually, as well as the content archive. So meaningful opportunity for additional monetization on top of the three twenty five. Speaker 500:28:37Five. Speaker 600:28:38And, Ben, just you repeat for one second. Know it a long answer, but we're trying to cover a lot of ground. I think another subset of your question, you know, what made us feel okay walking away from Netflix, and and by the way, I'm not suggesting they made any offer at any level, but, of course, they are a great partner. And to your point, they have all of our content for the most part. The rest of the world outside of SmackDown, why wouldn't they have it here? Speaker 600:29:03The ESPN proposition and whether our audience would travel was important to us. And I think Nick is best suited to talk about how our audience has traveled and why that gave us, I I would tell you, firm confidence that we were going to be able to build off what we currently have. Nick? Speaker 700:29:21Thanks, Mark. A number of different examples, the WWE audience, for example, during the last or two Winter Olympics ago, we were notified on short notice that we'd be moving Monday Night Raw at the time from USA Network to SciFi. Maybe it was one or two weeks of notice. 96% of that all is traveled to SciFi, which with all respect to to USA and how great it is, SciFi not necessarily a destination network. If you look at WWE Network, which at its peak in The United States at 1,100,000 subscribers when we went to Peacock, each and every one of those travel plus the subscriber base for Peacock that was there exclusively for WWE grew massively. Speaker 700:30:10If you take a look at that and what we think we can do with ESPN and its d two c, it should grow even further. Our audience always travels. Speaker 600:30:19Thanks, David. Back to you, Ben. Speaker 400:30:22That's very helpful. Thanks, guys. Appreciate Speaker 600:30:24it. Thank you. Operator00:30:27Thank you very much. Our next question comes from Brandon Ross from LightShed. Brandon, your line is now open. Speaker 800:30:35Thanks for taking the questions. I guess, moving from the WWE PLE to UFC, we're surprised that you announced that PLE deal before UFC. Were you just waiting for Paramount Skydance to close or another external event? Or is the UFC deal proving to be more challenging than the PLE deal was? And I guess you suggested you were looking at your partners holistically or as a as a portfolio in your answer to Ben. Speaker 800:31:11Should we now assume ESPN with, WWE until is less likely to continue on with UFC? And on the flip side, as you, you know, suggested you walked away from Netflix, are they more likely as a UFC partner? Speaker 600:31:31Thank you, Brandon. I will try to hit all those parts there. If we leave anything out, you can come back around. The first that I that triggered me was the was the was it more challenging for the UFC? Have we found that to be more challenging than we initially thought? Speaker 600:31:51The answer is unequivocally no, and I'll leave it at that. As far as the timing goes, frankly, we've been in the market with essentially five properties at the same time. The UFC, which could be seen as one or two or three depending on on how you look at it, but you've got the number of events and you've got the fight nights. And that's what ESPN had. There were two deals. Speaker 600:32:20Then you've got the WWE PLEs. Then you've got Zupa Boxing, our new boxing promotion. And then you have PBR, which, as you know, doctor Phil went belly up and Merritt Street went belly up as part of that. And we were left holding the bag with a contract of approximately a $181,000,000 over four years that we've had to try to find a new home for PBR. So we were definitely disadvantaged. Speaker 600:32:48So we've been in the market really with all five. Where they come, how they swap, when they sequence, that just happens to be where we are in terms of, the state of each of the deals and each of the conversations. What I can tell you on UFC is we are in the home stretch. We will provide an update on UFC rights when we have something to announce. Our mission remains finding a balance between maximizing monetization and reach. Speaker 600:33:16And as evidenced by our WWE TLE's ESPN deal, the market for premium content, especially big event programming, remains strong, and it will remain strong with ESPN as well. Speaker 800:33:36Okay. And the other part of that was do the outcomes of each of these deals that you have in the marketplace influence each other such that WWE would now be I mean, sorry, UFC would be less likely to do a deal with ESPN or are they mutually exclusive? Speaker 600:33:57I mean, that's more of a question for, you know, Jimmy Vittaro and and and Bob on the Disney call. I do know that Jimmy was quoted yesterday when asked about this specifically in trades. You know, he he relishes the the relationship with TKO, specifically pointed to the success they've had with UFC and what that did for ESPN plus and what they believe that and WWE can do for their strategy going forward. And I don't think it rules them out, his words. Speaker 800:34:30Thank you. Operator00:34:33Thank you, Brandon. Thank you very much. Our next question comes from David Kanofsky from JPMorgan. David, your line is now open. Speaker 900:34:44Hi, thanks. Mark, sorry, just on the non PLE content, why hold that back? And maybe to the point Ben was trying to make, is thought there that maybe that belongs with one of your existing partners? Speaker 600:35:03Well, the answer there, David, is simply more monetization opportunities. Look, our goal here is to increase profitability, increase margins, get the industry grade, excuse me, investment grade, and we're we're marching to that beat. And you know, we're cutting a deal, and it's not just about the actual rights fees here. It's about all the bells and whistles in in between, and those bells and whistles add up from an ancillary perspective. So to Andrew's point, you know, if we can have Nikon go to the market and sell NXT PLEs for incremental price fee, fantastic. Speaker 600:35:44We no longer have to produce two hundred and fifty hours of original programming annually. That's a lot of bandwidth, and it's a lot of cost we can take out. Five documentaries over the term, contractually, we certainly wanna do films and documentaries in WWE. Our production arm there has proven to be very successful in delivering, docs that are critically acclaimed and and and highly viewed. But we wanna go out and sell those one by one and maximize the market and timing. Speaker 600:36:12And, of course, when it comes to our library and our archive, we're going to maximize that opportunity as well. So not every deal is created equal and not just because something was in the last deal will mean it's in the next deal and vice versa. David, the Speaker 500:36:27only thing I'd add, and and I did allude to this in my prepared remarks with regard to Speaker 600:36:32the halo effect, When you Speaker 500:36:33look at USC's ad sales and partnerships business and the benefit and step function change we saw in that business when we moved from Fox to ESPN and the current trajectory we are now on with WWE, the halo effect of Netflix, albeit internationally for the PLE, and Rossier domestically, we do believe that this deal will yield meaningful benefit for us on partnerships and then over time live events and site fees as well. Speaker 600:37:02And, David, just one of the Maybe I Speaker 900:37:03can get Go ahead, Mark. Yeah. Speaker 600:37:05Great. And then we'll give another another point there is that Andrew raised is the idea of getting ad inventory in our deals going forward is extremely important to us. We have a best in class global partnerships division that is on the cost of hitting $300,000,000 of you to see a loan on a global partnerships before you even get to WWE, and we've talked about that publicly. The idea of tying some of these partnership deals where we have in arena sponsorship, we have in telecast broadcast integration, and now going out and actually selling inventory ad inventory. We've done some of that with our UFC pay per views, but for the most part, that's not our business. Speaker 600:38:00To now open that door with these WWE PLEs and have the opportunity to sell, add inventory in these ESPN deals, that's a game changer for us. And that's also something that's important to us in any UFC deal going forward. Speaker 900:38:16Mark, maybe just a follow-up on the reach point regarding the ESPN platform. Just want to understand better your point of view because the linear subs are going to have a DTC entitlement and that will give you breach right away. But obviously the standalone price is a bit above Peacock's. I just want to understand also your considerations there for that kind of court never set up your fans. Thanks. Speaker 600:38:40Yes. Look, We thank you. We we've been down this road before. I mean, just as as a reminder to everybody on the call here, when we signed up with ESPN and ESPN plus for the numbered events, the pay per views, That proposition saw us launching in 3,000,000 homes. So ESPN plus was in 3,000,000, 4,000,000 homes early on. Speaker 600:39:05In fact, we had problems with some of our partnerships because they were coming back saying, we're not being seen by anybody. We thought we were gonna be have a big audience, now ESPN plus is so small. You know, should we be talking about a haircut on our our our right fees, if you will, what they were paying us. Of course, we didn't give them any of those. We figure out other inventory to make them good and make them happy. Speaker 600:39:29And by the way, ESPN plus grew fast. But that proposition was a double paywall. You have to sign up for ESPN plus, which is a monthly hit. Granted, wasn't $29.99, but still a monthly hit, which has gone up. And then the pay for the pay per view, which is substantially more than the $29.99 you're gonna have to be paying here on the PLEs to get the d two c offering. Speaker 600:39:52It started in the fifties and, you know, it was up closer to $80 by the time it was done, added with the monthly cost of ESPN plus. I mean, it it really that that was a that was a tough barrier to get across for our fans and, frankly, something that generally made them unhappy. Still, we succeeded. This has been a a monster success with UFC and ESPN plus. So as we looked at this opportunity, even though they'll be starting small and even though d two c is $29.99 to your point, their ability to authenticate and and have the platform immediately because they're a cable or satellite, player or, those core members getting those folks in for $29.99 is a big time discount price compared to what they were paying for UFC paper use. Speaker 600:40:46So we're not concerned about that whatsoever. Speaker 100:40:55Operator, let's take our next question. Operator00:40:57Thank you very much. Our next question comes from Steven Lezewski from Goldman Sachs. Steven, your line is now open. Speaker 1000:41:05Hey, guys. Thanks for taking the question. Maybe on the 25% guidance for Andrew, it sounds like you have seen WWE outperforming your internal expectations going into the first six months of the year. We're just curious if you could talk a little bit more about what areas, specifically are driving some of that outperformance versus your expectations? Then to what extent you expect some of that momentum to carry on into the back half of the year if you think there is other puts or takes we should be considering as we look into the the final six months as seen factoring into the the guide that you gave today, updated guide? Speaker 500:41:40Yeah. I think, and and thanks, Steven. As as I said in my prepared remarks, you know, both these powerhouses continue to outperform our internal expectations and external expectations vis a vis your market consensus. It's really bad events I see in partnerships other than, obviously, contractual increases in media rights and the benefits that you'll see you'll see at WWE over the course of the year from the Netflix partnership. Those are the three areas that are driving or driven our growth on a year to date basis. Speaker 500:42:11I gave some pretty specific color as to event calendar mix shift changes and other drivers from an event basis for q three. And with our full year numbers, you can, you know, very easily get a sense of what then q four could look like. So year to date is the story about live events and partnerships. We anticipate those tailwinds to continue over the course of the year. We gave you some color on sort of mix for q three, and obviously taking up top line a 135,000,000 at the midpoint and adjusted EBITDA 40,000,000 at the midpoint, maintaining a 33% aggregate margin. Speaker 500:42:48We feel very good about the status of our business. Two things I will note, and Mark and I spend a lot of time with the team talking about margin. Q two UFC 59% operating margins flat year over year, but very, very strong from performance perspective. We're all eyes on WWE here. 59% operating margin in WWE driven largely by WrestleMania and the success of that event. Speaker 500:43:15But when we set out on this journey to talk about operating margins in WWE close closing in to UFC and even being above that 50% mark, we feel real good about it. We believe that's sustainable over time, particularly in light of this deal that we did this morning. So this is as much about margin accretion as it is anything else. Speaker 600:43:38Our our our SummerSlam, Steven, was the most viewed we've ever had in history. So quickly, that is turning into another WrestleMania for us. And the more that that Nick and and Paul can drive these events to be of that ilk and that level and deliver the kind of results on on live events and site fee that we get for WrestleMania, that that's what that's what's gonna get us the rest of the way there on the margin accretion. Speaker 1000:44:07That's all helpful. Maybe if I could just follow-up and dig in on the WWE side sponsorship. It's been a massive opportunity. You guys have executed well on the PIPLE side. Nick, I'm curious if you're still on Just curious on the opportunity going forward to keep executing against that. Speaker 1000:44:23Maybe as you look further down past the PLEs, how should we think about the pace of execution on on the sponsorship opportunity? Speaker 600:44:31It is Speaker 700:44:33one of the highest priorities at WWE and at TKO. Mark had mentioned earlier the strength of our global partnerships group, the number of global partnership dollars that UFC is now generating with WWE, being family friendly programming with 50% of our live audience bringing a child with almost 40% of our audience live watching being women. We think there are significant rooms for significant room, pardon me, to continue to increase in those sponsorship dollars. Again, it's a priority. We think in shifting over to ESPN's b two c, it will help that further and the sky's the limit. Speaker 600:45:17Remember that any ad inventory that we get in these deals would go towards our partnership goals. And I will tell you, you know, Nick and Andrew can accept this. It it's almost fun selling to WWE. I mean, this is this was a blank canvas when we walked into this. It's not you know, we've said publicly that we were putting $3.75 as our goal for the two the two entities for the year. Speaker 600:45:47And going out and selling, whether it's the mat in Arena, in the concourses, integration, some of our hospitality packages have sponsorship in it. I mean, this is all, like, fertile ground for us. So we're, extremely encouraged and optimistic at what we can do with WWE, given the strength of what Grant Norris Jones team has built and succeeded in doing at the UFC. Speaker 1000:46:15Thank you, guys. Speaker 600:46:16Thank you. Operator00:46:18Thank you very much. Our next question comes from Peter Supina from Wolfe Research. Peter, your line is now open. Speaker 1100:46:26Hello. A question for Andrew and one for Mark. Andrew, on profitability, which is generally a good subject at Teekay, your guidance implies about a 30% incremental margin. While we're hearing in your commentary that the upside to revenue guidance is coming from site fees and live events and sponsorships, which we think have near 100% flow through to EBITDA. So I wonder if you could help us with those, just thinking about the incremental margins in the guidance. Speaker 1100:46:53And then Mark, thinking beyond this UFC renewal, a question we frequently hear from investors, and I thought I'd be asking you to put your strength by answering it in this format, is really what is the growth algorithm of this company? What is there to be excited about beyond the UFC media rights renewal? And so I just wonder, obviously, you're not going to give us multiyear revenue guidance here, but if you could talk about the attributes of this company beyond the media rights in 2026 that you think are worth focusing on? Thank you. Speaker 600:47:23Let's start by handing out the multiyear EBITDA. Andrew, go ahead. Speaker 500:47:29Thanks for the question, Peter. I think clearly a strong story through the first half of the year. I did again, I'll refer back to my prepared remarks in terms of mix, in terms of balance of year number of events, in terms of headwinds vis a vis a two hour format change for SmackDown in the back half of the year. And on a comparable basis, you know, the lack of events such as DOC three zero six at the sphere, which occurred on a prior year basis. So while we still anticipate growth from these high margin contributors, when you think about the full year, which is how we've articulated the best way to look at our business, very strong h one. Speaker 500:48:11We articulated event shift and mix shift from a calendar perspective for q three. And then, you know, some of the tailwinds that we had in '24 vis a vis, you know, event type, event quality are not necessarily recurring. I will tell you that when we set out, we did guide that we would only be doing one Saudi PLE for this year. That shift into 2026, which does you know, clearly, its contribution, I'll reiterate when we gave our initial guide, is roughly 200 basis points of contribution to overall annual margin. That obviously will be a '26 benefit but adversely impacts 2025. Speaker 500:48:49So when we think about the year holistically, we're we're we're very comfortable and confident with the with the pace. And when I talk about tailwinds, we talk about long term tailwinds. We're not seeing things slowing down in the conversations on-site fees. We're not seeing global partnerships conversations slow down. At some point, you start thinking about contracting revenue for going into '26, and Grant and his team are squarely focused on setting up '26 for as big a year as we're having in 2025. Speaker 600:49:17Great. And then, Peter, just on the m and a or other investment opportunities, you know, obviously, I don't wanna get ahead of myself. I mean, we're the ink is barely dry in this WWE PLE deal with ESPN, and and we're still out in the marketplace on a host of other renewals as I aforementioned. I would say that first and foremost, our primary focus is continuing to drive value at UFC and WWE across our multitude of revenue streams that are sitting front and center. Two is we need to remain laser focused on the integration of IMG on location and PBR, both extracting costs and creating new revenue opportunities. Speaker 600:50:08As you know, we're ahead of our guidance on those synergy opportunities, but we still have a lot of work to do. Number three, further capitalizing on the Netflix momentum with raw is front and center for us. You heard Ari rattle off some of those stats in his prepared remarks. I mean, we don't we don't take it lightly, but we're proud of the success we have. And it's very clear we are now a top tier property for the Netflix platform. Speaker 600:50:35The launch of the WWE PLDs on ESPN, that first event has to be the field of a Super Bowl. And that works well since ESPN is getting ready for their first Super Bowl. So we we expect to have that kind of treatment when you see WrestleMania on ESPN, let alone the very first launch event, which, of course, Netflix did an amazing job of when we first launched Raw and had our first event there. To your point, CKO has a strong balance sheet and an attractive financial profile. We at the midpoint of our outlook project the margin as Andrew said of roughly 33% for 25%. Speaker 600:51:15UFC margin is 59% for Q2, WWE as Andrew mentioned. And you look back to 2023, WWE had a 40% margin. And you look 24, 50%. Now here we are in q two, although benefiting from WrestleMania having 59%. I mean, we are we are making progress. Speaker 600:51:37We are delivering for our shareholders. And our goal is to continue to expand those margins over time. I'll remind you, in 2016, we have two major rights renewals, which we've spent a lot of time talking about here, that will impact us to the positive. And then we, of course, have significant impact through three WWE PLEs in Saudi Arabia, and we expect those to be accretive to our margins. Beyond that, we haven't talked about boxing, but that's going to be a fourth major sports asset for TKO and shareholders. Speaker 600:52:12And then, of course, RE Manual. I have to say, UFC doesn't happen without RE Manual, and WWE, for that matter, doesn't happen without RE Manual driving that. He's a significant value creator, and he spends a lot of time out there leveraging his relationships on what's around the corner that might fit. Of course, it has to be accretive, and we have to be prudent on any purchase, but might fit squarely into our sports pure play model. Operator00:52:47You very much. Speaker 600:52:50Thank you. Operator00:52:50Operator, we'll take Speaker 100:52:51one last question. Operator00:52:53Of course. Thank you so much. Our next question comes from Ryan Gravett from UBS. Ryan, your line is now open. Speaker 1200:53:00Great. Thanks. Mark, you just touched on this briefly, but I was wondering if you could provide more of an update on how the boxing initiative is progressing, especially with some of the new legislation being proposed. And then Andrew, gave some color on the financial impact this year, but how should we think about that financial contribution as we go into 2026? Speaker 600:53:25Great. Thank you, Ryan. I'll touch on the businesses. There's some salient updates here. And I'll get into those, and then I will turn it over to Lawrence Epstein, who is working on the Muhammad Ali American Boxing Reform Act Revival Act. Speaker 600:53:44And, he's rolling up his sleeves getting ready right now. So, first off, I you know, look, we think boxing is an attractive growth opportunity for TKO. We believe we will deliver significant long term value for our shareholders. And as I mentioned, this this unequivocally will be a fourth 10 pole sports asset for DKL. I mean, we are going all in here. Speaker 600:54:07Nothing like two gladiators going toe to toe since the beginning of time. It never gets old. That's why boxing has the same power that it has. The interest is multigenerational, both in The U. S. Speaker 600:54:19And internationally. We're excited about our new JV, formerly titled Zufa Boxing, which we launched with Saudi based Sella and announced in early March. This is low risk and TeekayO receives a roughly $10,000,000 fee for serving as the managing partner and providing day to day operational management oversight. And that's all margin for us. Teekay has no funding obligation. Speaker 600:54:45Additionally, outside of the JV, wholly separate, we will look to deliver two to three super fights per year, similar to the Canelo Crawford fight that the Saudis, of course, Nik Khan and Dana White have helped us put together for September in Las Vegas. Again, no risk to us on that deal. We get a fee to promote it, each one of these super fights. We get a fee to negotiate the media rights for each fight, which IMG does. So we're another reason we're strong and proud that we brought IMG into the fold of our flywheel. Speaker 600:55:24We get a fee for on location to sell hospitality packages, and we will put Zupa boxing fighters on the undercard of each of these super fights. We expect to net on average another $10,000,000 for every super fight we manage and promote. And I would just say one last note, we've had significant interest from several domestic linear and D2C platforms with regard to the media rights for our Zufa boxing promotion that will launch in the first quarter of next year. And we are in the home stretch of those negotiations and believe we will have something to announce soon. Now with regard to the Muhammad Ali Act and the reform that's going on there, I know there's been a lot of press and attention to your point, and I'd like Lawrence to Speaker 500:56:17walk you through our efforts and our progress there. Lawrence? Yeah. Thanks thanks, Mark. So as as Mark alluded to, the Muhammad Ali American Boxing Revival Act was recently introduced in congress. Speaker 500:56:28It's got bipartisan support via our co sponsors, Brian Jack of Georgia and congressman Charice Davids of Kansas. Charice actually is a former MMA athlete. I wanna be very clear that this new legislation does not intend to change anything in the existing Muhammad Ali boxing act. Every single word will remain exactly the same. We are proposing and adding some additional language to this legislation that will allow for what I'll call Speaker 800:57:02a UFC style or Speaker 500:57:03unified organization for the promotion of boxing events. This is gonna provide more choice for athletes in the boxing space, and we are very optimistic that this legislation will move relatively quickly through first house representatives and then, of course, the senate and, and become law. We're hopeful in the relatively near future. Speaker 900:57:29And then on just Speaker 500:57:30you know, Mark alluded to some financial aspects of boxing. I will say that over time, as and when we're successful, we will have an interest in a venture that we anticipate, you know, with our blood, sweat, and tears will create meaningful firm value that will ignore to the benefit of our shareholders as well. So not only will we be flipping cash management fees for our services at the JV, for our participation as promoter and, you know, supervised, we're also gonna accrete value by virtue of an ownership position in the right sector. Speaker 600:57:59And we'll close Ryan by just telling you, you know, we're competitors, partners, suitors, see what we're doing every day. They see the traction. They see the way the WWE and UFC are growing. And, frankly, PBR is on a great run right now too. And we get all kinds of incoming calls. Speaker 600:58:19I mean, we had nice pitch this week to a to a JV in Highlight. They're trying to bring in Highlight back in Miami. We have passed on that opportunity, but it just shows you the kind of opportunities that are knocking on our door. Thank you, everyone. Speaker 100:58:32All right. On that note, thanks, everyone, for joining us on today's call. Operator, you can conclude the call. Operator00:58:39As we conclude today's call, we'd like to thank everyone for joining. You may now disconnect your lines.Read morePowered by