Brandon Ross

Brandon Ross asked for clarification on the UFC's distribution model with Paramount Global, particularly the future of the pay-per-view model internationally. He also sought more detail on the incremental margin flow-through from the UFC domestic deal and the new framework for fighter compensation, given the shift away from pay-per-view points.

Answer

Andrew Schleimer, CFO of TKO Group Holdings Inc, clarified that transactional pay-per-view was rare internationally, with Australia and Canada being the main markets. The Paramount Global deal excluded pay-per-view main cards in Australia, which remain with DAZN and Foxtel. He noted that the UFC domestic deal would be 'meaningfully margin accretive' but did not provide specific guidance. Lawrence Epstein, SEVP and COO of UFC, addressed fighter pay, stating there would be structural changes for premium athletes whose compensation was based on pay-per-view sales. He confirmed that fighter pay would increase, consistent with the margins maintained over the last several years.

Brandon Ross asked for clarification on UFC's distribution model with Paramount, particularly how it impacts the pay-per-view model internationally. He also sought a better understanding of the incremental margin flow-through from the UFC domestic deal and the new framework for fighter compensation, including potential pay increases, given the shift from pay-per-view points.

Answer

CFO Andrew Schleimer clarified that transactional pay-per-view for UFC was limited to a few markets like Australia and Canada, with Paramount's deal excluding numbered event main cards in Australia. He stated that the domestic deal would be meaningfully margin accretive to the UFC business. SEVP and COO Lawrence Epstein confirmed that fighter pay would increase, with changes to compensation structures for premium athletes previously tied to pay-per-view sales, aligning with historical margin maintenance.

Brandon Ross questioned the timing of the UFC rights renewal, asking if it was proving more challenging than the WWE PLE deal and whether the WWE-ESPN partnership impacts the likelihood of ESPN or Netflix securing the UFC rights.

Answer

Mark Shapiro, COO, President & Director, stated the UFC renewal was not more challenging and its timing was a function of negotiating five properties simultaneously. He confirmed they are in the 'home stretch' for the UFC deal and noted that ESPN has not been ruled out as a potential partner, citing recent comments from ESPN's leadership.

Brandon Ross inquired about the economics and distribution strategy for the new boxing promotion, particularly for "super fights" like Canelo vs. Crawford, and followed up on the UFC media rights, asking how the approach might differ for numbered events versus Fight Nights.

Answer

Mark Shapiro, President and COO, explained that the boxing venture involves two separate business lines: "super fights" funded by Saudi partners, where TKO will handle media rights, partnerships, and production; and a separate JV for a regular series of cards (approx. 12 per year). For UFC rights, he reiterated that the company remains flexible, balancing monetization with reach and brand growth, and expressed confidence in the strength of the content in the current market.

Brandon Ross of LightShed Partners asked about the status of the UFC domestic media rights negotiations, including the likelihood of a deal within the exclusive window with Disney and the strategy regarding single versus multiple partners. He also inquired about TKO's plans for boxing and the potential impact of a repeal of the Ali Act.

Answer

Mark Shapiro, President and COO, confirmed TKO is in its exclusive negotiating window with Disney/ESPN, highlighting the strong market for premium, year-round content like UFC. He stated the company is focused on a long-term strategy that balances maximizing reach and monetization. Regarding boxing, Shapiro detailed a low-risk, value-accretive strategy, noting TKO is close to a deal with Saudi Arabia to produce and promote a boxing league for a significant fee plus potential equity, without committing TKO's own capital.

Brandon Ross questioned the differing content distribution strategies between UFC's pay-per-view model and WWE's broad-reach streaming model. He also asked for details on Dana White's comments about entering the boxing business.

Answer

President and COO Mark Shapiro explained the UFC's renewal strategy is based on what 'the market will bear,' highlighting the company's flexibility. Regarding boxing, he clarified that it is an 'interesting growth opportunity' but any entry would be done organically and with a partner to fund it, posing no financial risk to TKO.

Brandon Ross asked about the underperformance of amphitheaters and arenas in 2025 compared to stadiums, seeking an explanation for the trend and confidence for a strong rebound in 2026. He also inquired about Ticketmaster's actions against scalpers post-FTC suit, their expected financial and industry impact, and the focus on concerts over sports.

Answer

CEO and President Michael Rapino highlighted Live Nation's overall strong performance, emphasizing its global and diversified nature, where different venue types and geographies cyclically over- or under-deliver. He noted that 2026 looks promising for all venue types, with no structural issues. President and CFO Joe Berchtold explained that the secondary market is a low single-digit revenue contributor. He detailed actions against scalpers, including shutting down Trade Desk and deploying identity verification tools, which led to canceling over a million accounts. He clarified the difference between sports (liquidity market) and concerts (price arbitrage) in secondary ticketing, expecting a low-to-mid single-digit impact on Ticketmaster's AOI next year, but no fundamental impact on the company's growth strategy.

Brandon Ross inquired about the perceived underperformance of amphitheaters and arenas in 2025 despite a strong stadium year, seeking an explanation for this trend and confidence for a rebound in 2026. He also asked about Ticketmaster's actions against ticket scalpers post-FTC suit, their financial and industry impact, and why these changes primarily target concerts over sports.

Answer

Michael Rapino, CEO and President of Live Nation Entertainment, clarified that the company had an overall incredible year, attributing venue type performance to the business's global and diversified nature, with strong international and stadium growth offsetting other venue types. He expressed confidence in a strong 2026 across all venue types. Joe Berchtold, President and CFO, explained that secondary ticketing is a low single-digit revenue percentage, differentiating sports (liquidity market) from concerts (price arbitrage). He detailed actions like shutting down Trade Desk and deploying identity verification tools, which have canceled over a million accounts, expecting a low-to-mid single-digit impact on Ticketmaster's AOI next year without affecting the primary-focused growth strategy.

Brandon Ross questioned the performance divergence between the Ticketing and Concerts segments and asked for the long-term growth outlook for Ticketmaster. He also inquired about the expected impact of AI on Ticketmaster's growth.

Answer

President and CFO Joe Berchtold reaffirmed Ticketmaster's long-term growth prospects, citing international expansion, pricing power, B2B services, and its advertising platform. Regarding AI, Berchtold stated it will be a 'massive change,' driving efficiency in customer service and coding, enhancing B2B pricing tools, and creating opportunities through 'Agentic AI' given Ticketmaster's unique primary ticket inventory.

Brandon Ross questioned the divergence in performance between the Ticketing and Concerts segments and asked for the long-term growth outlook for Ticketmaster beyond 2025, as well as the potential impact of AI on the business.

Answer

President & CFO Joe Berchtold affirmed confidence in Ticketmaster's long-term growth, citing international expansion, increased volume from Live Nation's own growth, mid-single-digit pricing increases, and B2B services. He also detailed AI's role in driving efficiency in customer service and coding, enhancing B2B pricing tools, and creating a unique "agent" for primary tickets, which differentiates it from commodity-based platforms.

Brandon Ross asked for details on Ticketmaster's Q1 revenue and AOI decline, questioning the impact of timing and other factors, and inquired about the potential disruption from a consumer slowdown.

Answer

President and CFO Joe Berchtold attributed the Ticketmaster results to a shift in event mix, the timing of on-sales, and foreign exchange headwinds, while noting deferred revenue was strong. President and CEO Michael Rapino stated the company has not yet seen any consumer pullback in ticket demand, sponsorship, or on-site spending, highlighting strong April on-sales.

Brandon Ross questioned the apparent disconnect between the modest 3% growth in Ticketmaster's transacted ticket volume and the strong concert pipeline, and also asked if high ticket prices for major shows indicate pricing is getting ahead of demand.

Answer

President and CFO Joe Berchtold explained the ticket volume discrepancy was due to timing, with strong Live Nation on-sales offset by less activity from other promoters early in the year. President and CEO Michael Rapino addressed pricing by stating that artists are strategically pricing premium tickets closer to market value to capture revenue that would otherwise go to scalpers. He described this as a 'perfect on-sale' model, where most tickets sell quickly while some high-end inventory remains available closer to the show date.

Brandon Ross asked for clarity on how positive forward-looking indicators would translate to the P&L for Ticketmaster and Concerts, the timing of this impact, the sustainability of concert margins, and the company's outlook on potential antitrust approaches under a new administration.

Answer

President and CFO Joe Berchtold projected a strong Q4 and subsequent year for Ticketmaster, driven by stadium and arena on-sales, mirroring 2023's volume. For Concerts, he expects robust revenue and AOI growth. On antitrust, Berchtold expressed hope for a shift to more traditional, targeted remedies and aims to re-engage with the DOJ early next year.

Brandon Ross of LightShed Partners inquired about the impact of the amended MSG Networks media rights deal on future capital returns and whether the company would consider selling a minority stake in the Knicks or Rangers, given recent high valuations in the sports franchise market.

Answer

EVP, CFO & Treasurer Victoria Mink addressed capital returns, stating that while the company's liquidity is strong and they have greater clarity post-media deal, their priorities remain unchanged, though a capital return program isn't ruled out for the future. COO Jamaal Lesane responded to the minority stake question, acknowledging high market valuations and the belief that MSGS stock is undervalued, stating that while they would never rule out a sale, they have nothing to report at this time.

Brandon Ross from LightShed Partners inquired about the potential for capital returns following the MSG Networks media rights renegotiation and whether the company would consider selling a minority stake in its teams.

Answer

EVP, CFO & Treasurer Victoria Mink stated that while the company has greater clarity on capital allocation, a return of capital program is not ruled out for the future. COO Jamaal Lesane added that while they see their teams as undervalued, they have nothing to report on a potential minority stake sale at this time.

Brandon Ross asked for details on MSG Sports' liquidity position and its ability to fund team operations in the event of a pause or significant reduction in local rights payments from a potential MSG Networks bankruptcy.

Answer

Victoria Mink, EVP, Chief Financial Officer and Treasurer, explained that a reduction in rights fees does not have a one-to-one impact on cash flow due to offsetting factors like lower revenue sharing and taxes. She affirmed the company's strong liquidity position, citing over $100 million in cash and $250 million in available borrowing capacity on the Rangers revolver, and expressed confidence in their ability to access other funds if necessary.

Brandon Ross asked for an overview of MSG Sports' liquidity position and its ability to fund team operations in the event of a significant reduction or pause in local rights payments from MSG Networks.

Answer

EVP, Chief Financial Officer and Treasurer Victoria Mink stated that the company's liquidity position is strong, with over $100 million in cash and $250 million in available borrowing capacity on the Rangers revolver. She noted that a reduction in rights revenue is partially offset by lower revenue sharing and taxes, and expressed confidence in their ability to secure funds from other sources if needed, despite requiring lender waivers in a potential bankruptcy scenario.

Brandon Ross of LightShed Partners asked for an update on capital return plans, noting the company's deleveraging and increased cash balance, and questioned if the situation with MSG Networks impacts this strategy. He followed up by asking if a minority stake sale of the teams is still under consideration.

Answer

CFO and Treasurer Victoria Mink reiterated that capital priorities are liquidity, a strong balance sheet with debt paydown, and opportunistic uses of cash, noting the ~$185 million remaining on the share repurchase authorization. Regarding a minority stake sale, COO Jamaal Lesane stated that while they are confident in the teams' value and would not rule it out, they have 'nothing to report at this time.'

Brandon Ross inquired about the company's plans for smaller-scale Spheres, asking for details on the design, business model, cost, potential markets, and whether Sphere Entertainment would contribute capital.

Answer

Executive Chairman & CEO James Dolan explained that smaller Spheres will share a similar design and 365-day-a-year operating model with the Las Vegas venue. He detailed a capital-light, franchise-style business model where Sphere Entertainment would not be a primary investor. Dolan also noted that these smaller venues could be built faster, in just over two years, and would play all content created for the larger Spheres.

Brandon Ross of LightShed Partners attempted to ask about the company's new partnership with Google but was unable to complete the question due to technical issues.

Answer

The question was not answered due to audio problems. Later in the call, when Brandon Ross was called on again, Executive Chairman and CEO James Dolan gave a prepared statement on Sphere's overall business model, its disruptive nature, and its focus on growth and global expansion rather than returning capital to shareholders.

Brandon Ross asked for James Dolan's view on the best way to fix the challenged MSG Networks RSN business and sought elaboration on plans to drive cost efficiencies at the Sphere segment.

Answer

Executive Chairman and CEO James Dolan responded that the path to monetizing content like MSG Networks is not yet clear amid the changing media landscape, a challenge faced by all content providers. Regarding cost efficiencies, he stated that as a new business, Sphere has significant opportunities to improve its bottom line through more efficient operations, content production, and scheduling, with substantial improvements expected in the upcoming year.

Asked about the strategy for fixing the challenged MSG Networks (RSN) business and for details on plans to drive cost efficiencies at the Sphere segment.

Answer

The company is still determining the best path forward for the RSN business amid industry-wide challenges. For the Sphere, there are significant opportunities to improve operational efficiency and reduce costs, which are expected to lead to a much-improved bottom line in the coming year.

Brandon Ross inquired about the reasons for the softness in Exosphere advertising during the quarter and the outlook for that business, as well as an assessment of the VU2 immersive concert's performance and viability as a content category.

Answer

Executive Chairman and CEO James Dolan acknowledged a "structural issue" with Exosphere advertising that the company is actively working to improve. He noted seasonal softness in the July-August period but sees strong results picking up. Regarding VU2, Dolan described it as a successful "experiment" and a viable product, though the company is still refining the programming and marketing strategy. He emphasized the long-term value of creating a library of such immersive concert experiences.

Brandon Ross asked for the rationale behind ending the partnership with Oak View Group's Crown Properties Collection and how the company plans to manage sponsorship sales going forward.

Answer

EVP and CFO Michael Grau explained that after a year-long trial, the company concluded that its historical in-house sponsorship management model was a better long-term structure. He expressed confidence in the go-forward strategy, citing recent deals with Lenovo and Verizon, and stated an expectation for modest year-over-year growth in fiscal '25, with acceleration expected in the longer term.