Last month, Netflix inked a 10-year, $5 billion deal with World Wrestling Entertainment (WWE) to become the exclusive home for its Raw series in a deal that will commence in 2025. In a separate transaction that took place last September, NBCUniversal renewed the Smackdown property on USA Network in a five-year media rights deal reportedly worth $1.4 billion. With these media rights alterations, combined with growing interest and gate revenue, the wrestling promotion has sought to position itself for long-term success. Furthermore, it is now part of a publicly listed company, TKO Group Holdings, that was created out of a merger with the Ultimate Fighting Championship (UFC).
“TKO is off to a strong start following record financial performance in 2023 at both UFC and WWE,” Ariel Emanuel, chief executive officer of TKO Group Holdings and Endeavor, said in a statement. “We secured Anheuser-Busch as the official beer partner of UFC, delivered a transformative deal to bring WWE’s ‘Raw’ to Netflix beginning in 2025, and expanded our international footprint in important growth markets. We have more conviction than ever in the combination of these businesses and TKO’s ability to drive topline growth and margin expansion, generate meaningful free cash flow, and deliver sustainable long-term value for shareholders.”
The company recently reported its fourth quarter results, divulging record financial flourishes for UFC with data for the entirety of 2023, its 30th anniversary. Revenue for UFC increased by 13% to $1.3 billion while adjusted EBITDA augmented 11% to $756 million. WWE also had strong fiscal results for the three-month span for which data was reported, accruing $331.2 million in revenue and $141 million in adjusted EBITDA.
Media revenue for UFC declined to $168.1 million, down 2.7% compared to last quarter, but on the year, the figure is up by more than 9.5% to $870.6 million overall. The company attributed the gain to the $76.2 million increase in fees for both media rights and content because of more contractual revenue and an additional pay-per-view event in the last calendar year. The UFC’s existing media rights deal with ESPN expires in 2025, but both sides are reportedly expected to discuss a new contract.
For the WWE – which did not report its earnings previously since it was a privately-owned company – the promotion earned $212.2 million in media revenue last quarter. In the full year, which includes the first three quarters before the TKO merger, the company compiled $1.3 billion in revenue and an adjusted EBITDA of $553.1 million, both of which are gains over the previous year.
TKO as a whole amassed $614 million in revenue last quarter and $1.68 billion on the year as a whole. Adjusted EBITDA for the four quarters in 2023 was $809.1 million, representing continued growth across its two properties.
