Endeavor sales dipped 16% to $1.26 billion last quarter from the year before due mostly to the absence of its divested Endeavor Content business as it posted an upbeat fourth quarter. A diversified biz and focus on sports and live events limit the ad hit faced by other media companies, and it has yet to feel much of a pinch from any slowdown in content spending by the majors.
“We are encouraged by our performance in our first full year as a public company,” said CEO Ariel Emanuel, referring to Endeavor’s IPO in 2021. “Our business has proven resilient despite ongoing macroeconomic headwinds. As 2023 comes into focus, we remain confident in Endeavor’s ability to deliver long-term value.”
That’s from the press release. Later, on a call slated for 5 pm ET, Endeavor noted that Emanuel’s opening remarks, which he wrote and scripted, won’t be the CEO himself speaking but generated by Speechify, a startup specializing in AI voice synthesis. Endeavor has a small minority stake in the company, which learns voices uses AI to create recordings. He will be responding in person during the Q&A.
“For the first time, the audio used for Emanuel’s opening remarks on Endeavor’s Fourth
Quarter and Full Year 2022 results call were generated by Endeavor partner Speechify, a company
specializing in generative AI for voice synthesis,” the company said.
AI is becoming such a pervasive presence that the WGA’s new Pattern of Demands released yesterday seeks for the first time to “Regulate use of material produced using artificial intelligence or similar technologies.”
This is the the first quarterly report since a few things went down. There’s was furor early this year over UFC CEO Dana White, who was caught on video smacking his wife at a New Year’s Eve party. Neither Endeavor nor Emanuel have commented on that yet and aren’t likely to even if they are asked about it by financial analysts, which is also unlikely. White, himself, had weighed in.
A more likely topic may be the WWE, which is currently up for sale by majority owner Vince McMahon.
Endeavor’s got a hefty debt load but some Wall Street analysts have speculated on ways a deal could be done, merging the two rivals. The potential of a transaction hanging out there may be weighing on Endeavor’s stock.
By the way, Emanuel’s opening remarks on the webcast, which he wrote and scripted, won’t be the CEO himself speaking but generated by Speechify, a startup specializing in AI voice synthesis. Endeavor has a small minority stake in the company, which learns voices uses AI to create recordings. He will be responding in person during the Q&A.
Revenue was hair lower than Wall Street forecasts as delivery of some non-scripted content was pushed from Dec. to Jan.
The company’s adjusted ebitda (earnings before interest, taxes, depreciation and amortization) of $239.6 million was up 4% and ahead of the Street.
Net losses widened sharply to $226 million from $16.7 million largely on a hefty one-time tax hit.
The company gave full-year 2023 guidance for revenue in a $5.825 billion to $5.975 billion range with adjusted ebitda of $1.25 billion to $1.305 billion.
Sports Properties: revenue led by UFC rose 8% to $301 million on higher rights fees, sponsorship, licensing, commercial PPV and live event-related revenue. Adjusted ebitda of $142 million was up 14%. For the year, UFC saw 21 consecutive sellouts, record sponsorship sales volume and renewed 10 international media rights deals with aggregate annual average volume increases exceeding 100%, Endeavor said.
Events, Experiences & Rights: revenue of $558 million rose 8% driven by higher consumer demand and lifting of Covid restrictions for live events like the Miami Open, Super Bowl LVI and NCAA March Madness games, as well as the inclusion of the Madrid Open and the OpenBet sports betting platform.
The company noted increased boarding school and summer camp enrollments at IMG Academy and its NCSA college athletic recruiting network. Revenue was dinged by the expiration of some media rights deals, the cyclical nature of some sports events and the sale of the Miss Universe Organization ahead of its marquee event in Jan.
The business saw adjusted EBITDA of $52.4 million down 4% for the quarter.
Representation revenue of $408 million fell 43% as a big chunk of sales ($333 million) disappeared with the sale of Endeavor’s content business last Jan. That should see normalized comps going forward. The core agency biz was buoyed by demand for premium content and the ongoing recovery of live events.
Endeavor’s 160over90 marketing subsidiary saw ebitda of $124 million for the quarter, up 5%. Total debt, a major issue for the company, stood at about $5.17 billion at year end, down from $5.4 billion at the Sept. quarter.