Mark Shapiro, President and Chief Operating Officer of TKO Group Holdings, has said more WWE premium live events could become two-day experiences.
Shapiro was attending the 2024 UBS Global Media and Communications Conference on Monday in New York City.
He spoke about a wide-ranging series of topics affecting WWE and the UFC in a sit-down interview with Ryan Gravett of UBS.
Outlook for 2025
Shapiro began by mentioning some of TKO’s priorities as the company looks to 2025, and affirmed the strength of the merger of WWE and UFC:
We closed the deal to merge UFC and WWE in September ‘23. And our conviction as it applies to the industrial logic of this merger has been affirmed. Record revenues, record EBITDA. We’ve raised guidance multiple times.
We’ve got a strong balance sheet. Significant free cashflow generation. Experience economy. Incredibly strong. Not just holding up, but robust in ways that, I don’t know, historically we’ve seen in the last couple of decades.
And that’s also evidenced by all of our KPIs, where we’re seeing attendance. We’re seeing ticket sales achieve record highs. We’re seeing pricing power. We’re seeing site fees, real demand for our properties around the world. And our sponsorship, you know, should be kicking about £375 million dollars next year between the two, including digital.
Netflix launch and UFC rights renewal
He highlighted the launch of WWE programming on Netflix in January and the prospect of the UFC rights renewal:
As you look to 2025, you’ve got obviously the UFC, the Netflix launch with WWE on January 6th, to your point, which will be gangbuster. You’ve got the UFC renewal and where that goes. You’ve got further integration with not just the merger of these two, where we’re not done.
There’s still there’s still more we’re going to get out of that and beat our our guided net savings of $100 million, but also integration of the Endeavor assets.
On the UFC media rights renewal, he spoke of his 25 years in the business and said he had never seen demand for premium content as high as it currently is. He said the number-one property was sports:
The streamers see sports as a real recipe for success as they look to acquire and retain subs. And then you kind of turn over to the UFC. And what do you have there? You have a year-round property. Year-round. There’s no breaks. It’s happening every single weekend. WWE, by the way, is the same thing. But just on the UFC side, you know, that’s what you have. That’s a real antidote for churn.
We’re also the owner and the commissioner. Throw the coach in there, too. There’s no bureaucracy. There’s no 32 teams we have to meet in a hotel once a quarter and have a meeting to determine something. It’s happening in one small office in Stanford or one small office in Vegas.
And then finally, which shouldn’t be overlooked, keep in mind, almost half of our audience, for WWE and UFC, it’s 18 to 34.
When asked about the possibility of splitting UFC rights across multiple buyers, Shapiro responded:
I mean, we’re going to maximize price for our shareholders. And we’re going to maximize brand and reach potential for our own properties. That means almost as much as price. I can’t say enough…We’ll be looking to also do what’s right for the health of our brand. And if that means, to your point, splitting up the packages or creating new packages or potentially adding fights and dates, we’re willing to do all the above.
As you know, our WWE deal with Netflix, it will be global. And as rights turn off internationally, those rights will fall into the deal. Different to your point on UFC, where internationally we sell territory by territory. And that’s been a great story for us.
The audience is significant. Engagement, just as strong. Demos equally strong in 18 to 34. And with the proliferation of folks moving from linear to digital or adding digital, I would say the marketplace is frothy.
Netflix a ‘transformative deal’
Shapiro then turned to the launch of WWE programming on Netflix:
I can’t say enough about Netflix. I mean, let’s take a step back. This is a transformative deal for us. And I would say for the industry, with all humility, because nobody ever thought Netflix was going to get into sports.
So it’s a transformative deal. It’s $5.2 billion over 10 years. It is visible, highly visible revenue, highly stable revenue, high-margin revenue. And with 285 million homes, they are a world-class marketer…
We are really excited about this partnership, the reach, what it’ll do for our brand, what we’re seeing in the marketing plans.
Look, we just had a media day with them that went extremely well. Nick Khan and Triple H, Paul Levesque, were on hand with Bela Bajaria, who, of course, oversees all programming. Going through all the creative, talking about a sustained plan over the course of the year. We’re excited about that.
‘Drive to Survive’ style reality show
He confirmed that a reality show is in the works in partnership with Netflix:
We’re working on a ‘Drive to Survive’ right now with them, our own version. So, you know, a lot happening on that front.
I’m not worried about January 6th. I tell this to Nick Khan and Paul and Andrew Schleimer, our CFO, all the time. We’re going to be big on January 6th. Let’s be clear.
I’m worried about June. I’m worried about July. When we’re not the shiny toy, when we’re not the newborn, how is Netflix going to treat us? And I’m getting all the right answers and commitments. And so I have no reason to be worried. But I like to kind of go about my business as if we’re prepared for all events.
Sponsorship growth
He was also very bullish on sponsorship opportunities:
When we bought the UFC, they were doing about $30, $40 million in sponsorship annually. And very similar to what WWE was doing. And now, as we look to next year, as I said, you’re in the range of about $375 million that we think we can do.
I think that as you look ahead, you know, another five years or so to 2030, this is a business that, combined, can grow to a billion dollars. And we are putting plans in place to do just that.
Partnership with Comcast
The conversation then turned to Peacock’s current deal to carry WWE premium live events.
We talk probably too often about what a great partner ESPN and Disney are on the UFC fronts. I would tell you that Peacock, NBC, and Comcast are equally great on the PLE fronts.
I mean, obviously, they have SmackDown now. And we’ve brought back the Saturday Night Main Event series on NBC, which is getting a lot of buzz and sure to be a crowd-pleaser.
But the PLEs, they’re seeing significant audiences. The marketing around the events have been terrific. And I think that in particular lends itself to even more suitors than the UFC, dare I say, because of the nature of the PLEs, which are once a month.
The PLEs really are attractive in the sense that you’re getting high quality, very high premium, but just once a month. So I think, obviously, we’ll start those conversations at some point in the first half of next year with Peacock exclusively. But we’re anxious to talk to some other suitors. And they know that, by the way.
Two-day PLEs
When asked whether more WWE PLEs could become two-day events, Shapiro replied:
There’s definitely an opportunity for that. You know, it’s all a progression, a natural evolution. WrestleMania was a big hit for us to expand. I think as you look at all these PLEs, again, depending on the partner, I think there’s absolutely an opportunity to advance some of them to two days.
Remember, the way it kind of weaves through is WrestleMania is the culmination of everything. And then kind of the new season begins and you use Raw and you use SmackDown and you use Saturday Night’s Main Events and then you use the PLEs all to really weave a long-form story around multiple storylines and characters.
It’s very sticky. Paul Levesque just does such a phenomenal job creatively, working with Lee Fitting as well. And their teams that draft these scripts where all these superstars want to come back. I mean, WWE is the ultimate. It’s the Tiffany product in the space.
Live events
On live events business, Shapiro said:
When we look at live events, it’s really twofold: It’s ticket sales, and it’s site fees. And on the ticket sales front, the Sphere was the highest-grossing UFC event ever. And by the way, the highest grossing event ever at the Sphere.
Our Madison Square Garden bout this year, our card there, was the second highest-grossing event in Madison Square Garden history. And for WWE, put aside WrestleMania, which was obviously so successful in Philadelphia, and it’ll be through the roof in Vegas. Our SummerSlam last summer was the highest-grossing non-WrestleMania event ever.
So ticket sales are really strong. And I would tell you that when you look at our live event revenue on the WWE side, while there’s some site fees in there, it was predominantly driven by ticket sales. And in the second and third quarter, year over year, we were up 30-plus percent in that live event revenue, driven by ticket sales.
Site fees
Expanding on site fees, he added:
This is a real growth opportunity for us. So we have 24 marquee or premium events a year: 12 UFC, 12 WWE with the PLEs, one per month, and four of those are in the Middle East. And four, just for UFC, are in Vegas. That’s really our home. Our anchor hub is the T-Mobile arena there.
A third of those 24 events, we’re getting site fees on, roughly a third. So that leaves another two-thirds to sell.
In fact, we’ve got a MetLife event we’ve just sold next summer in Jersey, where we’re getting a pretty strong site fee that we didn’t expect. So all kinds of opportunities to get this high-margin revenue.
And once you finish those 24, when we actually sell out of those, by the way, and then you’re selling title sponsors in terms of advertising, like we did with Riyadh Season and the Saudis for the Sphere event, then you get to SmackDown, Raw and our Saturday night fight nights for UFC. Then we can start selling those.
Now, those are not going to sell for multi-million the way the premier events do. But whether it’s cash or non-cash incentives, those will sell.
