Endeavor Q3 Revenue Slides 12%, Hurt by Timing of Sports Events, Sale of Scripted Content Unit

Endeavor Group reported third-quarter revenue slid 12%, on Thursday, thanks to a shift in the timing of some live sports events and the sale late last year of its scripted content division. It offered a full-year forecast that fell below Wall Street expectations.

The sports and entertainment conglomerate run by Hollywood mogul Ari Emanuel reported revenue of $1.22 billion, compared with $1.39 billion last year and just shy of the $1.23 billion forecast by Wall Street. The year-ago results included $334 million in revenue from Endeavor Content, the division it sold in January.

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The company also warned that it’s likely to miss Wall Street’s revenue targets for the year, forecasting $5.24 billion to $5.33 billion for 2022, below the average of $5.36 billion predicted by analysts.

Endeavor, however, prefers to focus on its forecast for earnings before interest, taxes, and amortization, or EBITA, which it raised to between $1.15 billion and $1.18 billion for the year, up from $1.13 billion to $1.17 billion predicted at the end of June. The $1.16 billion midpoint of the new guidance represents a $10 million jump from the second quarter forecast.

“Our business performed well in the quarter despite a turbulent macroeconomic environment,” CEO Emanuel said in a prepared statement. “Given our unique positioning relative to a set of highly resilient secular industry trends across premium sports and entertainment content and live events, we remain confident in our ability to continue delivering on our long-term growth strategy while also being good stewards of capital.”

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The Beverly Hills-based company posted a net loss attributable to shareholders of $10 million, or 4 cents per share, reversing a year-ago profit of $42.5 million, or 16 cents per share.

It did not provide adjusted per-share results. Wall Street analysts, on average, predicted adjusted profit of 29 cents per share.

It repaid $250 million of debt in the quarter, bringing long term debt to $5.34 billion, down from $5.63 billion in the year-ago period. The company said it plans to pay down an additional $250 million of debt by year’s end.

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By segment, Endeavor’s sports business saw revenue jump 39% to $402.3 million, driven by an increase in media rights fees and live events such as UFC matches, along with licensing revenue.

The events, experiences and rights segment revenue saw revenue decline 1% to $440.6 millio, mainly due to shifts in timing for some sports events in both 2021 and 2022.

Its representation segment revenue plunged 42% to $388.3 million, thanks mostly to the elimination of $334 million of revenue from its Endeavor Content business, partially offset by the recovery of music and comedy touring as the pandemic recedes. Excluding revenue attributable to Endeavor Content, revenue increased 17%.

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