TKO released its second-quarter earnings report on Tuesday and was followed by the earnings call with TKO executive staff fielding questions.
The quarter generated over $1.5 billion across TKO’s properties, including WWE and UFC. The quarter was heightened by the production of WrestleMania 42 and UFC Freedom 250, although coming with the caveat of WrestleMania underperforming to its 2025 counterpart.
Both WWE and UFC saw significant year-over-year revenue growth, led by their respective media rights increases. For WWE, it reflected the addition of its ESPN agreement compared to last year’s second quarter, as well as year two of the Netflix streaming deal. UFC saw an upswing with the addition of its landmark Paramount+ deal, which kicked off in January.
Mark Shapiro and Andrew Schleimer handled most of the earnings call, going through highlights of the quarter and fielding questions from analysts.
Highlights from the earnings call:
- Mark Shapiro promoted the success of UFC Freedom 250, noting it affirmed their decision to remove the double paywall that existed on ESPN, although this event was still behind a paywall with the entirety of the card airing on Paramount+. Shapiro stated it achieved a billion dollars of “earned media”, which is nearly impossible to fact-check or break down how that figure was achieved. They also added 25 marketing partners and many signing either multi-year or multi-fight contracts. This is still the area of business where the UFC blows away WWE.
- Shapiro promoted UFC 328, grossing the largest live gate in the history of the Prudential Center in Newark, New Jersey, with $7.5 million, and Sean Strickland defeating Khamzat Chimaev in the main event. The June 27 event in Baku, Azerbaijan consisted of 40% of travelers from outside the country. UFC 329 was the highest-grossing event in the promotion’s history for Conor McGregor’s return.
- WrestleMania 42 drew over 106,000 fans (this was the publicly announced figure; the final WrestleTix estimate of tickets distributed was 102,000) and “one of the highest all-time gates in WWE history” but didn’t list the amount.
- He spoke of the decision to take SummerSlam to Minnesota with a “meaningful incentive package” and that providing a fan experience and achieving profitability are not always mutually exclusive. Their perspective appeared to be that they sacrificed revenue for a greater fan service by bringing this event to a smaller market than last year in the New York market.
- Next was the topic of WWE viewership and promoting the viewership numbers on Netflix, USA Network, and ESPN & ESPN2. He stated that the first night of WrestleMania 42 was the top program on ESPN 2, so far this year. It begged a question to be asked regarding the shift in strategy for SummerSlam to airing a three-hour pre-show on the network but without airing matches as they have done previously. Shapiro also emphasized the role social media plays in amplifying their programming and doesn’t take away from the event but promotes the next one.
- CFO Andrew Schleimer repeated the figure of $30 million as UFC’s recorded loss for Freedom 250 at the White House. While they didn’t have a gate compared to a regular numbered event, the show was still part of Paramount’s contracted number of events as part of its $7.7 billion deal over the seven years, and it would seem the rights fee is not applied as they brought in $325.2 million in media rights for the quarter.
- “With respect to the UFC, the Paramount era has allowed us to level set and benchmark our athlete pay without diluting our margins.” (Schleimer)
- Brandon Ross from LightShed asked about Most Valuable Promotions and PFL merging and how it affects the UFC. Shapiro said neither entity was sustainable on their own and together, “we’ll see what they can conjure up”. A follow-up about M&A activity for TKO, Shapiro said, “We are not hunting for M&A of any kind” and that anyone speculating about it “Is chasing ghosts”.
- Shapiro spoke about SummerSlam and that the company could have run on one night and charged more per ticket but instead chose for two nights for a “better fan experience” and a better viewing experience on ESPN. He felt they had not been doing enough premium live events in the Midwest, and that was a factor too.
- There was an acknowledgment of WrestleMania 42 performing below WrestleMania 41 in Las Vegas but defended, stating it was still among WWE’s largest revenue-generating events ever and receiving an incentive package from Nevada to return for a second consecutive year
- Regarding the creation of more “tentpole” UFC events like the ones at Sphere in Las Vegas, Freedom 250, and Conor McGregor’s return, Shapiro said they are hunting for these types of shows, but they take a lot of time and coordination.
