UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
| Item 2.02 | Results of Operations and Financial Condition. |
Following the consummation of the combination of the Ultimate Fighting Championship (“UFC”) and World Wrestling Entertainment, Inc. (“WWE”) businesses on September 12, 2023, TKO Group Holdings, Inc. (the “Company”) intends to report under two business segments, UFC and WWE. In addition, the Company intends to report the results for the “Corporate” group.
On November 1, 2023, the Company provided financial information based on the historical information of WWE and UFC for the fiscal year ended December 31, 2022, the fiscal quarters therein ended March 31, June 30, September 30 and December 31, 2022, and the fiscal quarters ended March 31, 2023 and June 30, 2023 (collectively, the “Historical Financial Information”). The Historical Financial Information is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
The information in this Current Report on Form 8-K (including Exhibit 99.1 hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 9.01 | Financial Statements and Exhibits. |
| Exhibit |
Description | |
| 99.1 | Historical Financial Information. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TKO GROUP HOLDINGS, INC. | ||
| By: | /s/ Andrew Schleimer | |
| Name: | Andrew Schleimer | |
| Title: | Chief Financial Officer | |
Date: November 1, 2023
Exhibit 99.1
November 1, 2023
HISTORICAL FINANCIAL INFORMATION - BASIS OF PRESENTATION
TKO Transaction
On September 12, 2023, World Wrestling Entertainment, Inc. (“WWE”) and Endeavor Group Holdings, Inc. (“Endeavor”) consummated the combination of the Ultimate Fighting Championship (“UFC”) and WWE businesses (the “business combination”) under the newly formed company, TKO Group Holdings, Inc. (the “Company”).
Purpose of Historical Financial Information
The presentation of the historical information herein is for illustrative purposes only and is intended to facilitate an understanding of UFC’s and WWE’s historical operating results prior to the consummation of the business combination.
The financial information herein is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the business combination had occurred on January 1, 2022, nor is it indicative of future results of the combined Company. The financial information does not include any pro forma or other adjustments for costs related to integration activities, cost savings or synergies that have been or may be achieved by the business combination.
Reporting Segments
In conjunction with the combination of UFC and WWE, the Company evaluated its segment presentation and, beginning with the fiscal period as of and for the quarter ended September 30, 2023, the Company intends to report under two business segments (UFC and WWE). In addition, the Company intends to report the results for the “Corporate” group.
| • | UFC |
The UFC segment reflects the business operations of UFC, a premium global sports brand, media content company and the largest Pay-Per-View (PPV) event provider in the world. Revenue principally consists of media rights fees associated with the distribution of its programming content; ticket sales associated with the business’s global live events; sponsorships; and consumer product licensing agreements of UFC branded products.
| • | WWE |
The WWE segment reflects the business operations of WWE, an integrated media organization and the recognized global leader in sports entertainment. Revenue principally consists of media rights fees associated with the distribution of its programming content; ticket sales associated with the business’s global live events; sponsorships; and consumer product licensing agreements of WWE branded products.
| • | Corporate |
Corporate reflects operations not allocated to the UFC or WWE segments and primarily consists of general and administrative expenses. These expenses relate largely to corporate activities, including information technology, facilities, legal, human resources, finance, accounting, treasury, investor relations, corporate communications, community relations and compensation to TKO’s management and board of directors, which support both reportable segments. Corporate expenses also include management fees paid by the Company to Endeavor under a services agreement.
Rounding
Information presented herein may not sum down or across due to minor rounding differences.
1
TKO Group Holdings, Inc. (1)
REVENUES - BUSINESS SEGMENT DETAIL
($ in millions; Unaudited)
| 2022 | 2023 | Full Year | ||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | 2022 | ||||||||||||||||||||||
| Revenues: |
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| UFC |
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| Media rights and content |
$ | 186.7 | $ | 199.3 | $ | 235.5 | $ | 172.9 | $ | 224.1 | $ | 211.7 | $ | 794.4 | ||||||||||||||
| Live events |
23.2 | 17.4 | 39.2 | 45.5 | 31.4 | 32.4 | 125.3 | |||||||||||||||||||||
| Sponsorship |
36.3 | 39.0 | 51.6 | 39.9 | 38.0 | 46.2 | 166.8 | |||||||||||||||||||||
| Consumer product licensing |
13.4 | 12.4 | 14.4 | 13.4 | 13.2 | 14.9 | 53.6 | |||||||||||||||||||||
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| Total UFC |
$ | 259.6 | $ | 268.1 | $ | 340.7 | $ | 271.7 | $ | 306.7 | $ | 305.2 | $ | 1,140.1 | ||||||||||||||
| Growth % (y/y) |
18 | % | 14 | % | ||||||||||||||||||||||||
| WWE (2) |
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| Media rights and content |
$ | 208.0 | $ | 225.2 | $ | 219.8 | $ | 219.1 | $ | 210.1 | $ | 249.8 | $ | 872.1 | ||||||||||||||
| Live events |
77.5 | 39.6 | 34.1 | 72.3 | 31.8 | 109.3 | 223.5 | |||||||||||||||||||||
| Sponsorship |
15.9 | 19.3 | 14.3 | 12.3 | 16.4 | 23.4 | 61.8 | |||||||||||||||||||||
| Consumer product licensing |
32.0 | 44.1 | 36.4 | 21.6 | 39.3 | 27.8 | 134.1 | |||||||||||||||||||||
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| Total WWE |
$ | 333.4 | $ | 328.2 | $ | 304.6 | $ | 325.3 | $ | 297.6 | $ | 410.3 | $ | 1,291.5 | ||||||||||||||
| Growth % (y/y) |
(11 | %) | 25 | % | ||||||||||||||||||||||||
Notes:
| (1) | The information herein is for illustrative purposes based on the historical financial information of UFC and WWE. |
| (2) | Under the legacy business segment financial reporting for WWE, revenue associated with certain large-scale international events was allocated principally to the Media segment. Within the Media segment, revenue was recorded within Other and, to a lesser extent, within Advertising and Sponsorship. The Company has reclassified this revenue to Live Events. This reclassification has no impact on total revenue for the WWE segment. |
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TKO Group Holdings, Inc. (1)
ADJUSTED EBITDA - SEGMENT DETAIL
($ in millions; Unaudited)
| 2022 | 2023 | Full Year | ||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | 2022 | ||||||||||||||||||||||
| Adjusted EBITDA(2): |
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| UFC |
$ | 161.7 | $ | 160.3 | $ | 204.5 | $ | 154.1 | $ | 186.3 | $ | 188.2 | $ | 680.6 | ||||||||||||||
| WWE |
142.9 | 121.0 | 122.5 | 126.1 | 117.0 | 173.1 | 512.5 | |||||||||||||||||||||
| Corporate |
(43.1 | ) | (42.1 | ) | (45.3 | ) | (49.3 | ) | (46.5 | ) | (47.0 | ) | (179.8 | ) | ||||||||||||||
Notes:
| (1) | The information herein is for illustrative purposes based on the historical financial information of UFC and WWE. |
| (2) | Following the business combination, the performance of our segments is evaluated primarily based on Adjusted EBITDA. The Company defines Adjusted EBITDA as net income, excluding income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger and acquisition costs, certain legal costs, restructuring, severance and impairment charges, and certain other items when applicable. Adjusted EBITDA includes depreciation and amortization expenses directly related to supporting the operations of the Company’s segments, including content production asset amortization, as well as amortization of right-to-use assets related to finance leases of equipment used to produce and broadcast the Company’s live events. |
3
Document and Entity Information |
Nov. 01, 2023 |
|---|---|
| Cover [Abstract] | |
| Amendment Flag | false |
| Entity Central Index Key | 0001973266 |
| Document Type | 8-K |
| Document Period End Date | Nov. 01, 2023 |
| Entity Registrant Name | TKO Group Holdings, Inc. |
| Entity Incorporation State Country Code | DE |
| Entity File Number | 001-41797 |
| Entity Tax Identification Number | 92-3569035 |
| Entity Address, Address Line One | 200 Fifth Avenue |
| Entity Address, Address Line Two | 7th Floor |
| Entity Address, City or Town | New York |
| Entity Address, State or Province | NY |
| Entity Address, Postal Zip Code | 10010 |
| City Area Code | (646) |
| Local Phone Number | 558-8333 |
| Written Communications | false |
| Soliciting Material | false |
| Pre Commencement Tender Offer | false |
| Pre Commencement Issuer Tender Offer | false |
| Security 12b Title | Class A Common Stock, par value $0.00001 per share |
| Trading Symbol | TKO |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |
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