TKO Raises 2025 Guidance Following Big Bucks UFC and WWE Licensing Pacts

TKO has raised its full-year guidance on the momentum generated by its big-bucks new deals with Paramount and ESPN for rights to UFC and WWE events.

The parent company of the MMA league and wrestling franchise had a mixed third quarter with revenue down on tough year-over-year comps from last year’s Summer Olympic Games in Paris. UFC also held one less pay-per-view event and no presence at Las Vegas’ Sphere, compared to the year-ago frame. At the same time, costs were down significantly so that improved the adjusted earnings before interest, taxes, depreciation and amortization and net income were both up, powered by gains for WWE and IMG.

“TKO delivered solid third quarter financial results, and with UFC and WWE’s sustained momentum, we are once again raising our full-year guidance,” said Ariel Emanuel, TKO’s executive chair and CEO. “Having secured landmark multiyear media rights deals for UFC, WWE and Zuffa Boxing, our conviction in TKO has never been stronger. We remain focused on operational execution, including preparing for UFC’s launch with Paramount, further integrating and unlocking synergies with IMG, On Location, and PBR, and maximizing shareholder value.”

Total revenue was down 27% to $1.120 billion. Net income hit $106.8 million, a big swing from $3.4 million in Q3 2024. Free cash flow was a healthy $398.9 million, an increase of $247.9 million from $151.0 million, due to the increase in cash flows generated by operating activities and a decrease in capital expenditures.

For the third consecutive quarter, TKO increased its full-year target for revenue and adjusted EBITDA. Revenue is now projected at $4.69 billion to $4.72 billion and adjusted EBITDA was lifted to $1.57 billion to $1.58 billion. For the year to date ended Sept. 30, TKO total revenue stood at $3.69 billion and adjusted EBITDA came in at $1.3 billion.

Emanuel and Mark Shapiro, TKO president and chief operating officer, were pressed by analysts during the company’s conference call for details on how the $7.7 billion, seven-year UFC rights deal came together with Paramount+ and CBS. Shapiro emphasized that UFC still has runway to strike lucrative rights deals outside the U.S.

“Overall [Paramount] ended up having the best equation, which is best for our brand, best marketing plan, a holistic effort, given what they’re doing on the domestic side with that investment,” Shapiro said. And, of course, the best rights fee. So for us, it’s always going to be brand, reach, dollars.”

Despite the momentum behind UFC and WWE, Shapiro kept the chest-beating to a minimum.

“We knew we were going to have a nice bidding war because it was attractive and it has strong fan bases and and we capitalized on it,” Shapiro said. “Nobody here has taken a victory lap, not on those specific territories in that deal, or really even on the quarterly earnings here. We’re proud of where we are. We’re proud of the road ahead. We’re cautiously optimistic.”

source: variety.com