Speaker 1: You guys are fresh off earnings. Tell me what stood out to you this quarter and sort of what's driving the growth of your

Speaker 2: company. It starts with the fact that we're roughly a year, just a year from the formation of TKO, WWE, and UFC coming together, and a lot of doubts about how that was going to work. But our strategic execution and the integration has allowed us to financially outperform our original forecast. And at the same time, with our announcement last week, we've now initiated a robust capital return program, including a quarterly dividend. And at the same time, been able to acquire three super strategic pure play sports assets. So we feel like we're in a good place. Our third quarter, keep in mind, this is the second time now in just a year that we've raised guidance on both top line revenue and adjusted EBITDA. And with the third quarter performance, we are guiding now to the upper end of that third quarter. So sports events are hot, sports experiences are hot, sports premium content is hot, and we're sitting dead center.

Speaker 1: All right. Definitely want to talk about the hotness element of that. We'll get to that in a second. Let's talk about the deal you referenced first. So like you said, three different businesses going from Endeavor to TKO, a hospitality business, PBR, a sports league, and then a media rights consultancy business in IMG. What does that say to you about the future of TKO? Because at least from a layman's perspective, TKO, oh, that's a fighting company, but clearly it's more than that.

Speaker 2: Yes. And it was always intended to be more than that. TKO just reflects the combat sports nature of UFC and of course, the scripted WWE. But look, we are building the moat. That's what we're doing here. We are piling up, if you will, assets that will fuel our growth. Very consistent with what we've been saying on earnings, which is we're looking for sports leagues out there. Few and far between. I wish I got in on NWSL or something in the women's space, and maybe that's to come one day. But we're looking for sports leagues and PBR provides that. That's analogous to what we do, right? It's the whole sports ecosystem, revenue generating areas from live events to media rights, to consumer products, to site fees that are right in our wheelhouse. It's what we do every day and PBR is a proven commodity and we know it well because of our days at Endeavor. The other two assets, I mean, IMG is a stalwart, I mean, it's a legendary asset. It's been around since Mark McCormick started it in 1960. When we're newsflash at 11, we're in the sports rights business. We will use IMG globally to help us get the kind of increases we expect to get for both UFC, WWE, and soon to be PBR. And then finally, on location, by far, by far, it's not even close, the market leader in sports experiences and hospitality. Everything from the Super Bowl to the Olympics to now FIFA's World Cup. So having that company come into the ecosystem, which by the way, already supports WWE and UFC in a big way, all that's going to do is accelerate, fuel, and strengthen the growth of TKO.

Speaker 1: Let's talk about the league ownership one because what is the art of the possible in terms of league ownership? In other words, do you think you could buy into the PGA? Do you think you could buy into tennis? Are those things you've started to look at?

Speaker 2: No, I'll tell you, look, we're not looking at tennis. And Liv's got enough problems trying to buy in the PGA Tour, so we're not going there. The fact is, there aren't a lot of sports leagues out there. So we won't be looking at acquiring anything because we don't see anything coming on the horizon. PBR was there. Most folks questioned why it wasn't in TKO at the start. That's another story related to Vince McMahon. But anything we do from an ownership perspective or a new league perspective going forward will probably be organic. I mean, boxing is something that Dana White has consistently brought up. We're not going to go buy or acquire any kind of boxing agencies or boxing federations, if you will. But could we organically start something and or bring on a partner that fuels that, that financially fuels that so we take no risk? That's something we're really attracted to. What is the Vince McMahon PBR story? Vince didn't want to start TKO with anything more than two sports. He saw these two as juggernauts. He's right about that. And he just didn't want to confuse the message. He was on board with PBR long term, but from the get go, he wanted just the two. And frankly, you know, it's a compromise. You're putting a deal together. You're bringing two assets together. We had to do some things that Vince wanted, and Vince had to take some things that Dana White, Ari Emanuel, and myself wanted.

Speaker 1: Since we're talking about Vince, one question about Vince. He's not a part of the company anymore. He's sold out. Do you still hear from him at all? I had breakfast with him a few weeks ago just to check in.

Speaker 2: Been a long time. Haven't heard from him at all. Obviously, the series on Netflix came out. I wanted to see kind of where he was. By the way, he couldn't have been more cooperative. He couldn't have been nicer. I mean, he was a total pro at breakfast, if you will. It's a one-on-one get together, but he's out of the business entirely. He doesn't make decisions. He's not on the board. He doesn't opine. We don't consult him. He's got some litigation that he's working through, and frankly, he wants the privacy and the time to work through it, which is great because in the meantime, we're going to keep building TKO and WWE and expanding the horizon, expanding the opportunities. And by the way, he's still a shareholder. Not the shareholder he once was, but he's still a shareholder. But he's supportive of the direction WWE is going in and has gone. Couldn't have been more positive, but I wasn't asking for his opinion.

Speaker 1: Let's talk about some of the WWE aspects, which are exciting. The big one being, you guys announced a little while ago, there's a Netflix media rights deal that's coming up, starts in the beginning of 2025. Do you feel like this is the start of something transformative in the industry? In other words, that the big tech companies, YouTube, Apple, Amazon, Netflix, will become the dominant players in owning sports rights.

Speaker 2: Look, content is strong. Everybody loves to write about the demise or the squeezing of the content spend. The fact of the matter is, between the six biggest spenders globally, $126 billion in content will have been spent in 2024, which is up 300 basis points from last year and expected to grow another 9% next year. Content spend from the Netflix and the Amazons and the Disneys and the Warner Brothers and the Googles, it's hot. It's meaningful. Sports rights is driving a lot of that right now. That's what's more amazing than anything, Alex. Sports used to be an, oh, by the way, oh, something on the weekend. Now it's leading the way. Sure there are a lot of scripted series. Sure there are a lot of docs and features and films that are out there. Sure the movie business is coming back and folks are investing in all kinds of different windows. But sports rights is leading the way, whether it's the NFL, the CFP, our WWE deal on Netflix. Content spend in sports is strong and healthy. And yes, I believe you will see more players, new players, looking to expand their content portfolio when it comes to sports.

Speaker 1: For like 30 years, people have talked about this idea of, are we in a sports bubble? That has not proven to be the case. As you said, if anything, we appear to be hotter now than ever before in terms of sports associated interest, media rights. But let me give you a scenario and I want to hear your thoughts on it. We also talked about peak TV maybe five years ago. And that has borne out that five years ago, when all the streaming services jumped in, a ton of shows were made. And now we're in the post peak TV era where you're seeing a pullback. Is it possible that the reason sports are so hot right now is you have new streaming players that want subscribers and an old legacy media industry that's dying and holding onto sports for dear life. And these two factors that have married to each other right now have led to a number of different bidders that absolutely want and need sports. And at five years from now, after we see consolidation within the media rights, the further death of cable TV, we have fewer buyers and this dynamic doesn't exist anymore. And the demand for sports rights actually comes down.

Speaker 2: I love it. How many different ways can we try to write the story that the sports bubble is going to burst? Here's the way I look at it. Sports rights are always hot. In some form, the temperature is up there. Let's just be clear about that. Sometimes it's really super hot. And if you catch it in that wave, in that moment, in that frame, you're going to fully capitalize on getting the kind of increases you're looking for as a content rights owner. Sometimes it's just warm. So you'll get an increase, but it may not be record breaking, but it's always going to be in demand because sports unify us. That's what it does. Sports is argument. There's history, there's equity, there's tradition, there's folklore, there's stars, there's personalities, there's rivalries, there's rooting interests. Name your sport. You've got it. I walked into the office today to two, I don't even know, 400 foot blow up dolls of Mike Tyson and Jake Paul.

Speaker 1: Right outside the windows.

Speaker 2: You got it. I mean, and by the way, hundreds of people standing in front of them taking pictures. I'm texting Bella Bajaria in Netflix, like, you nailed this activation. You got the weather, right? You got the big earned media moment. And there's going to be two sides of that fence, who's cheering for Paul and who's cheering for Tyson. And there's a curiosity factor. And that also plays in sports. That's going to continue globally. Look at soccer. Soccer didn't even exist when I was running ESPN. I mean, come on, it was MLS. And there was a World Cup every four years that we were interested if the U.S. did well. Now women's soccer has two leagues globally. MLS has grown so much under Don Garber and the fantastic job he's done. The World Cup, the Euro Cup has been a super communal event. And then, of course, NFL still going strong, college football going stronger than ever with a 12-team CFP. And then UFC's now become a mainstream. WWE's carved out its own niche. The World Series is coming off the best rating since 2017. This isn't slowing down. It's just a question of catching it as a content rights owner when it's peaking, because it will have some dips.

Speaker 1: You mentioned ESPN. That used to work there. They are about to launch a full-on direct-to-consumer product for the first time, likely in August of 2025. Is that the right strategy for them? And will it work?

Speaker 2: 100%. I'm so glad they got out of the venue business, whatever that was going to be.

Speaker 1: Are they out of it? I mean, they're at least temporarily out of it.

Speaker 2: Yeah, the judge has put them on the sideline. But I think it's going to be tough for that to be resurrected. And I didn't agree with the strategy in the first place. Having said that, this is absolutely the way to go. And I love the way Jimmy Pataro has been positioning it. All kinds of bells and whistles, and sports betting will be integrated, and e-commerce will be integrated. Keep in mind, they have to do a mirror of what the linear ESPN is. If they didn't have to do a mirror, I think they'd be off to the races. If it was just direct-to-consumer in a different way than ESPN Plus was, meaning they could program it differently than ESPN, I think they'd be off to the races. Really, what you have here is a mirror. So they've got to find bells and whistles, extra feeds, extra camera looks, the sports betting as we talked about, more personalization, more customization, more fantasy. So you feel like, I am really getting something different here, even if the programming mirrors ESPN. I'm getting a personalized experience, and that's why I'm going to pay for it. And I'll tell you, as someone that delivers content to their pipe in the name of the UFC, that's something that's attractive to us.

Speaker 1: And they have to do a mirror because of the existing contracts they have with TV distributors. Last year, I reported that the WWE was interested, potentially, in sports betting, in having people bet on matches, which are scripted. Haven't heard much about it. Not happening.

Speaker 2: Not happening. It's not happening. We're not doing that. We're scripted. Look, years ago, I ran Dick Clark Productions. We had enough time, enough challenge, keeping the American Music Awards and the Golden Globe winners under wraps, exactly, with an auditor that was there. We're not going to be asking Triple H, Paul Levesque, who runs our creative, to keep his scripts so under wrap that we can start sports betting. It just doesn't jive. We'll do it with the UFC. We are doing it with the UFC. And it's really growing. And keep in mind, it really lends itself to sports betting. Think about UFC. Long card, multiple fights, multiple rounds, submissions, grappling, the way someone's taken down, the way somebody's knocked out. So many props you can bet on. And the youth, young men specifically, love it.

Speaker 1: You have a UFC media rights deal that expires next year. Can you update us on sort of the state of talks there?

Speaker 2: I think it's going to be a busy first quarter, to your point earlier. We've got the PLEs, the premium live events for WWE. And of course, our UFC deal with Disney and ESPN ends at the end of next year. So we'll be negotiating on all fronts, if you will. Ari and I will have a pretty big first quarter as we go around the merry-go-round, if you will, to talk to the different players who are interested, potentially splitting the packages. We've got linear. We've got digital. We've got pay-per-view. I mean, there's a lot of options here. We're going to explore all of them. But let's be clear. We have an exclusive window with Comcast on the PLEs for WWE, and we have an exclusive window with Disney, ESPN, and UFC, and we intend to honor that. And frankly, they're two fantastic partners who are very passionate about these two sports, their sports and entertainment leagues, and committed to growing them.

Speaker 1: You mentioned the hotness factor. We talked about it briefly there, about how this sort of idea of a sports bubble is continuous and never really pans out. Is there a particular aspect of investing in sports business, this goes beyond even media, because you're not just investing in media properties, that is maybe specifically undervalued today that you're looking at?

Speaker 2: Nothing specifically. Look, we keep our eyes out on what's hot, what's next. What's trending, right? Our eyes are always on the rearview mirror, right? Who's close to us? Who's catching up to us? What can we do to separate ourselves? So innovation, extremely important to us. What I can tell you from an acquisition standpoint, we have our portfolio. We're committed to what we have. We have a lot of work in front of us. Remember, we still have to finish up on the integration of TKO itself, right? We messaged to the street that we would do 100 million in net cost synergies. I'm proud to say we're ahead of that curve. We're continuing to find ways on the top and bottom line to save money and generate new revenue. That's a good story for us, but we're not done. And now all of a sudden, you're bringing in three new assets, IMG, PBR, on location. We need to focus on reaping the rewards with these three assets, educating the street on the promise and the story, delivering on the returns, increasing our margins. We're laser focused as a company. At the same time, we'll look for new areas, whether it's cricket or it's boxing or it's women's sports or what might be hot or next that might be able to have some kind of association with TKO.

Speaker 1: As you think internationally, look, we've seen WWE matches in China, UFC is all over the globe at this point. How important is geopolitics when it comes to your international strategy? Well, significantly important.

Speaker 2: I mean, look, we're out there. IMG, for example, sells the UFC rights around the globe, I mean, everywhere from Australia to Vietnam. I mean, door to door, country to country. We have, fortunately, IMG is in 35 different countries and they manage or sell the rights to almost 160 different sports properties. So it gives us a great view and we have personal relationships in these regions. We're able to really see around the corner, right? See in front of where things are going, how they're trending, what's maybe fading a little bit, what seems to be on the rise. That's huge when you're negotiating sports rights. That's huge when you're negotiating with different players who financially are all in different states, right? Streamers kind of on the way up, big investment, linear being challenged, trying to figure out how to pivot their business model. So I would tell you that whatever happens, whether it's the Mideast or it's Ukraine or it's China, Taiwan, our eyes are on this all the time. And frankly, when Russia first invaded Ukraine, that posed problems for the UFC. What were we going to do with our sports betting partners? What were we going to do with our media feed? What were we going to do with our athletes who were having a tough time getting out of wherever they were in the corner of the earth to be able to get into the octagon or travel on a plane? So we get impacted all the way around.

Speaker 1: Comcast just announced it's contemplating spinning off its cable networks. Yeah. A, what do you think of that? And B, what does that tell you about where we're headed from a media standpoint?

Speaker 2: Look, I think everybody's being pretty candid and articulate about the good and bad assets that they have, right? Now, remember, these are all still, even some of these cable networks that you and I may not watch every day, they're still cash flow cows, similar, by the way, to TKO, which is a gutter. Which is the reason why these media companies have held on to them, I would say, for this long. Exactly. Tough to let them go. But remember, Disney went down this road as well. And decided to pull back. Exactly. Or temporarily pull back. We'll see how that plays out. And I think that's what you're finding across the board. I like the fact that Kavanaugh, Mike Kavanaugh, introduced it at Comcast as a potential path. And now they're going to sit back. Fortunately, they can. They're in the driver's seat. There's no gun to their head. They're doing well. Still on audience. They're doing well with their video providers. And they're doing well with cash flow. They're not forced to make a sale. But if there's something that makes sense, or there's some kind of aggregation that could happen that they could feed into, it's another platform. It's another tier. It's another option for viewers. And it cleans up their story.

Speaker 1: OK. Do me a favor. Prediction time. Five years from now, who's still around among the big media guys?

Speaker 2: I think the big guys are all around. They're all still hanging around the hoop. What do you mean? When you say big guys, what do you mean? Or leading the way. Disney. Amazon. Netflix. Google. Warner Brothers. Comcast. Paramount CBS is there too. And maybe there's a Warner Brothers play. Who knows what happens, right? There's all kinds of different scenarios out there. And I would never bet against John Malone. Let's say that. But, I mean, YouTube's earnings. Insane. Quarter to quarter. These guys are doing $12.5 billion of advertising every quarter. That's a head-spinner. Netflix, spending $17 billion in content. Not afraid to spend more for the right thing. Tip-toeing in sports with the NFL Christmas games. Viewership, engagement, off the charts. Amazon, hey, one-stop shop. I'm going to the marketplace. I'm going to shop. And I'm also going to take in some content. And a real player now in sports. And by the way, doing it very, very well. And you can never bet against Disney. I mean, for me, the best, most prolific brand in all of content. So I think they'll all be around, but they'll definitely look for ways to shed some archaic assets.

Speaker 1: You probably have more insight into Netflix in terms of their future sports plans than most, considering you guys struck this sort of landmark deal with them. What did they tell you? What is their grand plan? Are they using you as a guinea pig for a broader world takeover?

Speaker 2: I think they've already taken the world over. I mean, they're almost at 300. In sports. Yes. They're almost at 300 million subscribers. They make very few mistakes across the board, from rom-coms to games to scripted fare, dramatic scripted fare to docs. They are just a great place to go sample. And they have the greatest, broadest, fullest offering. And their play to us was, we want something that's episodic. It's sports, but it's quasi-sports. And it's going to be every week. And we're going to bring in the marketing powerhouse that we are to the table to back this up. And we're going to use you as an avod player for us. Think about that. Advertising is so important to the growth of Netflix. And we're going to see how they do with live events. The Tyson-Paul fight will tell us a lot. How many folks come to the table to watch that? How many folks sign up for Netflix or claim that they stayed with Netflix because of that? The NFL games will also tell us something on Christmas Day. And then right following that will be the January 6 premiere of Raw on Netflix. And then week to week, they're going to drive that. Now in the first year, they're not going to be ready to personalize their advertising. So no dynamic advertising, if you will. They don't have that tool in effect. And we knew that when we signed up. They'll have it for year two. But they will have advertising that they'll kind of manually put in as the old days. And it's filled up. I can tell you that. Is it possible that they're a UFC partner? I think absolutely they'll be at the table on UFC. I mean, they get the UFC. They're fans of the UFC. They've been to the UFC. Their kids watch UFC. And they're looking for those leagues, those brands, those kind of power sports content factories that can go global. And UFC is very much a global brand.