In the first quarter of 2022, Endeavor surpassed Wall Street’s expectations, outperforming earnings per share as the company’s segments continue to grow in a world where COVID-19 restrictions are significantly eased.
The company reported earnings of $1.47 billion, net income of $517.7 million, adjusted EBITDA of $314.4 million and earnings per share of $1.16. The Wall Street consensus was $1.33 billion in revenue and $0.30 billion in EPS.
The company also increased its guidance to $5.235 billion – $5.475 billion for the year from $5.2 billion – $5.45 billion.
The company took in more than $500 million in small profits from a small loss of $16.7 million in the last quarter, although the sale of Endeavor Content in the quarter accounted for some of that profit. Endeavor reported a profit of $464 million related to the sale of 80% of the production studio.
Endeavor sold its stake in Endeavor Content in a South Korean CJ ENM deal worth $850 million.
Among Endeavor’s operating segments, its core business, led by WME, continued to show strong earnings as music and comedy tours return to power and with continued strong growth in content and brand spend. Endeavor’s representative commercial revenue was $357.3 million, an increase of 44% over the prior-year quarter.
Likewise, the company’s direct events and experiences segment grew 53% year-over-year to $825.8 million, driven by more full-capacity events the company had exposure to or ownership to, including Super Bowl LVI, the Miami Open, the NCAA Finals. Four and Frieze LA.
Endeavor-owned sports ownership, led by UFC and PBR, increased 5% to $296.7 million, largely due to improved sponsorship, licensing and UFC participation fees (UFC had a minor event in last quarter than a year ago, and there was no “subscription.”), as well as additional PBR events.
Endeavor CEO Ari Emanuel, in a call to the company’s earnings, threw cold water on concerns that the industry’s overall content costs would decline in the near future.
““There is no reference to any platform,” Emmanuel said, adding that “wI believe to spend up and not down, Why apples and amazon They are shooting, just like the sport.”
Emmanuel noted that spending on TV content and movies is often blocked a year before the show or movie is actually available.
“They are closed until 2023 and in some cases until 2024,” he said.
After Netflix suggested a more cautious approach to content spending, analysts feared the entertainment market was starting to cool off. However, Emmanuel argued that new players, the need to protect content and advertising from cable streaming services and cable and broadcast TV networks, could keep the market abuzz.
“Everyone participates, makes these bets to be on SVOD services, but they also have to protect their legacy business,” he said. “Your value proposition is determined by the content. They To bet in Their Services.”
But if content consumption slows, Endeavor appears to be a canary in the coal mine.
“You can think of it as the epitome of content growth,” said Emanuel.
Source: Hollywood Reporter
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
