Strong Fourth Quarter and Yearly Performance for TKO Group Holdings
In a noteworthy financial disclosure, TKO Group Holdings, the combined company that owns both UFC and WWE, reported another robust quarter to close out 2024, along with a highly successful year overall. Despite agreeing to pay a substantial $375 million to settle one of the two antitrust lawsuits filed against UFC, the company’s financial performance remained strong. For the fourth quarter of 2024, TKO reported revenue of $642.2 million, with a net income of $47.5 million. The full-year revenue for TKO was an impressive $2.804 billion, marking a 67 percent increase from the previous year.
Revenue and Growth Highlights
The fourth quarter’s revenue increase of five percent year over year was primarily driven by continued growth at UFC, which saw an additional $61.1 million in revenue, bringing its total to $343.8 million. This growth helped offset a $32.9 million decrease at WWE, largely attributed to the transition of the company’s flagship show, Monday Night Raw, from USA Network to Netflix. The full-year revenue at TKO increased by 67 percent, with WWE contributing $1.015 billion and UFC adding $114 million. However, the net income for the year was $6.4 million, a decrease of $169.3 million from the previous year, significantly impacted by the $375 million antitrust lawsuit settlement.
Financial Impact of the Antitrust Lawsuit Settlement
The financial disclosure revealed that TKO made an initial $125 million payment towards the settlement in the fourth quarter, with a second $125 million payment made in February. The final $125 million is expected to be paid in the second quarter of 2025. Despite the significant financial outlay, TKO has maintained a strong financial position, underscoring the company’s resilience and the robust performance of its assets.
Looking Ahead: Strategic Initiatives and Future Deals
With 2024 behind them, TKO is gearing up for a potentially transformative year in 2025, marked by several key strategic initiatives. At UFC, the current deal with ESPN is set to expire, and the company is currently in an exclusive negotiating window to potentially extend the agreement. If the exclusive window closes in April without a deal, it will open the bidding to other networks and streaming services. UFC is reportedly seeking more than $1 billion per year for a new broadcast deal, a figure that reflects the promotion’s growing popularity and market value.
WWE is also facing significant changes, with the rights to its premium live events, such as WrestleMania and the Royal Rumble, coming up for bidding. The existing deal with Peacock is nearing its end, and WWE is expected to explore various options to maximize its media rights value. TKO has set revenue targets for 2025 at $2.930 billion to $3 billion, a clear indication of the company’s ambitious and optimistic outlook.
Leadership and Vision
TKO CEO and executive chairman Ari Emanuel expressed confidence in the company’s future in a press release, stating, "TKO delivered record financial performance in 2024 at both UFC and WWE, reflecting the strength of our intellectual property, the dynamic audiences we serve, and the industry-best team of people we’ve assembled. In the year ahead, we will be focused on securing long-term U.S. domestic media rights agreements for UFC as well as WWE’s Premium Live Events; integrating IMG, On Location, and Professional Bull Riders into our portfolio; creating even more compelling live events; and executing our robust capital return program for shareholders."
Market Performance and Shareholder Value
Despite the challenges, TKO’s stock has shown continued growth, trading up 2.26 percent on Wednesday, with shares at $159.55. The company’s strong financial performance and strategic plans have bolstered investor confidence, positioning TKO for a promising future. As TKO continues to navigate the complex landscape of media rights and content distribution, the integration of new properties and the creation of compelling live events will be crucial in maintaining and expanding its leadership in the entertainment and sports industries.
